An Attorney Represents Peace of Mind When Estate Planning

While there are many things that can be turned into a DIY project such as sewing your daughter’s dress or creating props for your son’s play, there are certain things that are best left to professionals.

One of these is with regards to estate planning.

Estate planning refers to the planning and preparation of transferring your assets and properties to your beneficiaries in the event of disability or death. This can help avoid issues or problems with regards to inheritance.

It is highly recommended to go through this process with the help of an expert and reliable attorney who specializes in this field.

But yes, it’s true that doing your estate planning on your own has its own benefits. These include the following:

  • Lower cost – It’s cheaper to create and formulate your own estate planning documents. There are online tools that allow you to set up the basic documents for only $40 to $250. This costs a lot less than hiring an attorney.
  • Convenience – Since you’re only doing the documents in your home, this spells convenience for you. No need to travel to the lawyer’s office to get things done.

Doing estate planning on your own is possible but only practical when you have a simple financial situation, which include but are not limited to the following:

  • You’re single
  • You’re traditionally married
  • You have not gone through divorces
  • You do not have stepchildren
  • You do not have adopted children
  • You only have very few assets being passed down to your heirs
  • Your assets are to be passed down to your heirs the same way

Now given that you have a situation that’s far from simple, it’s more practical in the long run to hire an attorney who will guide through each step of the way.

An estate planning lawyer is a type of lawyer who has obtained legal education as well as experience when it comes to matters of preparing the transfer of their clients’ assets to their beneficiaries.

Although it seems like a simple process, you have to know that it’s not. It’s not as simple as naming a beneficiary and expecting that you can transfer all your properties to this person with just a snap of a finger. You will need to go through various processes to get this done. The whole process becomes even more complicated when there are other things to consider such as if you’ve gone through divorces, if you have step children or adopted children and so on.

An estate planning lawyer will make sure that you go through the process as smoothly and as stress-free as possible. He/she will not only help you create a last will and testament, but will also help do the following:

  • Formulate a living trust
  • Develop strategies to avoid or reduce estate taxes
  • Ensure that your assets and savings are safeguarded against the creditors of your beneficiaries
  • Prepare power of attorney as well as healthcare instructions in case of your disability

An estate planning attorney will give you a peace of mind knowing that all your affairs are in order before your departure in this life.

Although there might be certain drawbacks, such as cost, which is the number one concern of many people, you have to know that hiring a lawyer actually saves you more money in the long run.

You will only need to shell out a significant amount on the onset to hire the lawyer but with his/her expertise and experience, you will get to save a lot more on taxes and other costs, which makes the initial investment definitely worth it.

Doing estate planning successfully is easier with the help of an expert and experienced estate planning lawyer. Do yourself a favor and hire one for your own peace of mind.

Living Trusts – Who Can Get a Copy of My Trust?

A living trust refers to a type of trust created by a grantor who entrusts the management of his/her property to a trustee on behalf of his/her chosen beneficiary. It is called a “living trust” as it is created while the grantor is still alive, rather than upon his/her death. With this trust, the trustee can transfer the assets and properties of the grantor while avoiding the complicated and expensive process called probate.

Types of Living Trust

There are two types of living trusts: revocable and irrevocable.

With the revocable type, the grantor can assign himself/herself as the trustee to be able to manage and take control of the properties in the trust. He/she can also make amendments and changes in the stipulations of the trust. In other words, at any time he/she can name other beneficiaries or make the trust null and void.

With the irrevocable type, the grantor transfers certain rights in controlling the trust over to the trustee. Simply put, the trustee is named the legal owner of the properties, allowing the grantor to reduce taxable estates. However, once the living trust is finalized, there are only minor and limited changes that can be made within the trust. The names of the beneficiaries cannot be changed.

Benefits of a Living Trust

Like a last will, a living trust is also a type of estate planning that allows you to plan what to do with your properties in the event of your death. But there are certain benefits provided by a living trust that you should know about.

For one, with living trusts, you can avoid the process of probate. This refers to the process administered by the court with regards to paying debts and distributing assets to the beneficiaries. As what most experts will tell you, this is not only very time-consuming but can also be very expensive. Your heirs will have to wait for months before they receive their inheritance. Plus, the assets are reduced significantly after paying for lawyer fees and court costs.

Other benefits of a living trust include:

  • Tax reduction
  • Financial privacy
  • Regulation of the use of assets in the event the grantor becomes disabled.

Since the living trust does not go through probate proceedings, it means that the documents submitted will be not become public record. So who gets a copy of the living trust?

Who Gets a Copy?


Of course, the first person will receive the copy of the living trust is the person to whom the grantor will entrust his/her properties. The trustee will then become responsible in overseeing and settling the trust. Before it is finalized, it is imperative for the trustee to review and understand the stipulations and instructions in the trust to avoid any issue or problems. He/she will also need to find out what the compensation is for carrying out this responsibility.


The beneficiaries who will be named in the trust can also get a copy of the trust in order for them to determine what properties and assets they will get, and how they will be able to get these. There are two types of beneficiaries: initial and secondary. The initial beneficiaries are entitled to the properties in the event of the grantor’s death while the secondary beneficiaries will only receive what is entitled to them after the death of the initial beneficiaries. For minors, the beneficiary’s guardian (natural or legal) will be the one to receive the copy on behalf of the minor beneficiary.

Other people who will receive a copy of the living trust

  • Heirs at law
  • Accountant
  • IRS

Similar to a last will, it can also be complicated to create a living trust without the help of a lawyer. Although there are many books that you can use to understand how it works, it is still best to consult an attorney to make sure everything goes smoothly and without a hitch.

How You Can Prepare for Your Estate Planning Meeting

Meeting with a lawyer is one of the first steps to forming your estate plan and putting together your will and trust.

An attorney who has years of experience and specializes in estate planning can assist you throughout the process and help ensure that you have all bases covered and can avoid inheritance conflicts.

But to be able to provide the counsel you need, your lawyer will require all kinds of information, from details about your personal life, finances and assets to your related goals, so you need to prepare accordingly.

Information to be provided

Many law offices will give you a list of documents to bring and a questionnaire to fill out before your first estate planning meeting. This is your chance to think through different aspects of your estate plan and to gather and compile all necessary files. Taking care of these in advance will help make the meeting easier for both parties.

The information that you will need to provide to your attorney usually relates to you and your family, your accounts and properties, and your plans and priorities. Common questionnaire items include:

  • Information about your family: names, ages and contact details of your partner or spouse, children, grandchildren, and other relatives who will serve as guardians, be designated as fiduciaries or be listed as beneficiaries (e.g., siblings, parents, nephews, nieces, cousins)
  • Information about your non-retirement assets: titling and order of magnitude of your bank accounts, annuities, bonds, mutual funds, stocks and U.S. treasury notes
  • Information about your retirement savings: asset type, corresponding employer or institution, and pension and beneficiary details of IRAs, 403(b)s, 401(k)s, 457s, TSPs and Roths
  • Information about your life insurance: insurer, exact amount of death benefit, policy type, ownership and beneficiary details
  • Information about your real estate properties: ownership interest (joint, sole, tenants-in-common), outstanding mortgage balance, market value and address of your main residence, vacation home, and any rental, business and investment properties you personally own
  • Information about tangible personal property such as antiques, art, automobiles, jewelry, family heirlooms and other things with intrinsic value
  • Information about inheritance you currently have or are expecting or receive as well as present or future interest in a trust, if any
  • Information about your business interests: type (e.g., closely held, family-owned, limited partnership) and location of any business you own or run

Things to consider

In addition to having the questionnaire and documents ready, you should consider or look into the following matters, which you can discuss in detail with your lawyer during the meeting.

  • Who will receive and who should not receive your property
  • Heirlooms that you would like to stay with your family
  • The executor of your will, the trustee for your trusts, the appointed guardian of your minor children, and corresponding alternates in case the person you pick for the job is unable to fulfill his or her role
  • The creation of a living trust along with a Durable Power of Attorney for health care
  • If you will assign someone powers of attorney over your financial affairs
  • Whether you will leave anything to a charitable organization, a church or a university or are interested in donating body parts to science
  • Instructions and arrangements for your funeral
  • Special circumstances that may affect your estate plan like a child from a previous relationship or marriage, an heir who has a disability, or a marriage agreement
  • The estate planning documents that will be included so you can request for an accurate estimate
  • Estate taxes that may be imposed so you can ask if there are ways to avoid these or, as with income taxes, minimize the amount you are required to pay
  • Overall goals and other wishes for your estate plan

This list is just an introductory guide to estate planning requirements. You may be asked to furnish additional information for your first meeting based on specific trust and estate laws. But taking the time to go through the items mentioned here can help speed up the process and make it more efficient. With proper and sufficient preparations, you can look forward to a comprehensive and personalized estate plan.

Post-Nup – The After Marriage Agreement

Also referred to as a post-marital agreement, a post nuptial agreement is a legal document that sets forth the conditions about how a couple’s assets will be divided in case of legal separation or divorce. It also indicates the amount of financial support (if any) that one spouse will provide the other at the dissolution of marriage agreement.

The stipulations in a post nuptial agreement are basically the same in a prenuptial agreement, except that in the former, the marriage takes place first before the document is drawn up.

Unlike prenuptial agreements, however, post nuptial agreements were practically unenforceable before the 1970s. This is due to the idea that the law views a married couple as a single entity and as such, cannot enter into a contract with itself. Things began changing in the ’70s when divorce became more and more common, and states started enacting “no fault” divorce statutes.

 When is it a good idea to enter into a post nuptial agreement?

Not all couples who enter into a post-marital agreement do so with the intent of getting divorced. There are many practical reasons why married couples would want this contract between them.

⦁    A post nuptial agreement can be drawn as a way of avoiding inheritance conflicts if there are children from a previous marriage.

⦁    When one spouse receives a significant increase in his or her assets or earning capacity, a postnuptial agreement can help protect the assets from uncertainties in the future.

⦁    Couples can use a post nuptial agreement to set clear boundaries about each other’s plans for the assets they brought into the marriage.

⦁    A post nuptial agreement can ensure that the spouse who decides to quit his/her job to stay home and care for minor children will have the financial resources to support themselves in the event of a divorce.

⦁    If one spouse has come across legal problems during the marriage or if he/she turns out to be financially irresponsible, a post nuptial agreement can protect the assets of the other spouse.

Requisites for a valid post-marital agreement

Like all contracts, a post nuptial agreement needs to meet the following requisites in order to be binding:

⦁    All post nuptial agreements must be in writing to be valid.

⦁    The spouses must sign the agreement voluntarily. If there is evidence of coercion or threat from one party to get the other to sign, the contract is void.

⦁    For a post nuptial agreement to be valid and enforceable, both spouses must make a full and fair disclosure of their assets, liabilities, and income.

⦁    The contract must be fair. In other words, it must not blatantly favor one spouse over the other.

⦁    A post nuptial agreement must be validly executed by having the signatures of both spouses notarized. Moreover, depending on the state where the spouses reside, there may be additional requirements that must be met.

Inclusions in a typical post nuptial agreement

While provisions included in a post nuptial agreement often depend on the governing state laws, the following are common:

⦁    How the properties and other assets will be divided when the marriage is dissolved

⦁    How marital debts, such as credit card liabilities and mortgage loans will be divided in case of separation or divorce

⦁    As part of estate planning, how assets will pass if either spouse dies while still married to each other

⦁    Whether one spouse should pay for spousal support and the length of time the support is to be given, which is important in the determination of income tax of ex-spouses in 2019

⦁    How custody and support of minor children will be determined in the event of a divorce

Discussions about the possibility of a marriage ending in divorce is often difficult. However, the intricacies of post nuptial agreement can be even more so. In this instance, marital mediation can help.

Crucial Things to Understand About Trust and Estate Law

Successful estate planning involves establishing tools that ensure how your properties will be distributed at death. One of these tools is a trust, which is a legal entity that controls and maintain property ownership.

Trust vs. Will

Trusts and wills are both estate planning tools that allow a grantor to pass assets to beneficiaries upon death. Your decision to choose one over the other depends on certain considerations:


One of the advantages of a trust over a will is that a trust allows you to avoid a probate, which can take a long time to complete, especially if there are inheritance conflicts. However, a will may be the better option if you live in a state where probate is not a burdensome or complex process.


If you have minor children, a trust allows you to create provisions that specify when a child will be entitled to any trust assets. If you have beneficiaries with special needs, it may be best to limit their access or control over their inheritance. In this instance, a trust can also allow you to control their use of the property.


It is more expensive to set up a trust than a will since a trust needs to be managed actively once it is established.  Of course, a will can also be costly depending on how long and complex the probate process is.

Tax consequences

Setting up a trust with tax planning provisions is the better option if the value of your estate is higher than the current estate tax threshold. Nonetheless, the threshold for estate tax changes frequently so check with the IRS to know whether or not you should be concerned about estate tax.

Trust classifications

Trusts come in different types based on the specific need for which they were created.


A grantor creates a living trust during his or her lifetime by transferring properties to a trustee. In general, the grantor can change or revoke the trust until death, at which point the trust becomes irrevocable.


Also referred to as trusts under will, testamentary trusts are created by a will after the death of the grantor. A testamentary trust is established for various reasons, such as:

  • To protect the financial future of a spouse through lifetime income provision
  • To keep minors from outrightly inheriting property at the age of majority, which is typically between 18 and 21 years
  • To ensure children from a previous marriage will get their share of the assets
  • To provide for a special-needs beneficiary
  • To entirely bypass the surviving spouse as a beneficiary
  • To include a charity in estate planning


As the name implies, a revocable trust can be changed or modified by the grantor as long as he or she is living. The trust becomes irrevocable at the grantor’s death. A revocable trust is the other option apart from a marriage agreement for couples who want to protect their separate assets.


A non-modifiable or irrevocable trust cannot be changed once the trust is created.

Tax consequences of a trust

Some living trusts, such as those where the grantor and the beneficiary are one and the same retain the tax identification number of the grantor. Other trusts are considered separate from the grantor and, thus, need to obtain a federal tax identification number of their own. These trusts also need to file a yearly return, which may include income taxes.

If you decide that you need to establish a trust, be sure to contact a specialist to ensure that your trust not only offers the protection you seek but also meets the laws of your state. It may also be necessary to consider mediation if there are issues between the trustee and beneficiaries.

Benefits Of Using Mediation For Estate Planning

Even outside of estate proceedings, communication between family members is generally more difficult that discussions among strangers. Inevitably, families involved in an estate dispute who try to settle their disputes in court end up in a worse position.

Mediation is one of the alternative ways to resolve disputes. In a mediation proceeding, the mediator assists with communication, diffuses heated arguments, and offers suggestions and information to facilitate the resolution of differences between the parties.

How can estate planning mediation benefit the parties involved?

From a living trust to a post nuptial agreement, mediation can be advantageous. During an estate planning mediation, the parties can:

Avoid the delays and stress brought by lengthy court battles

Inheritance problems can usually drag the probate process longer than usual, especially when it goes to court. Mediation can make the resolution of disputes faster and through the help of experienced professionals, you and all the people involved in the process can save yourselves from the emotional toll of being tangled in a lengthy court battle.

Take advantage of significant financial savings

Probate can be a lengthy and costly process, but it can even be lengthier and costlier if there are disputes on the estate. Court battles that drag on for extended periods mean exorbitant legal and incidental fees. Mediation can help you save money that you can use to pay income taxes instead.

Achieve outcome that is agreeable to all involved

Parties who take their issues to court will have to be contented with what the court ultimately decides. In many cases, the court’s decision leaves one or both of the parties frustrated. With mediation, the parties have the opportunity to discuss and agree on a result that everyone is happy with.

Preserve relationship with family members

Court disputes involving family members are often a difficult process that could permanently damage emotional bonds. What’s more, heightened emotions and deep-seated anger can escalate any form of exchange between the parties.

A third party that has no personal stake in the estate can help create a neutral environment where family members can freely discuss their opinions, and whenever necessary, the mediator can help diffuse tension and offer rational and unbiased advice about how to proceed. This is why parties who decide to complete mediation over litigation have a better chance of moving past their misunderstandings.

Potential drawbacks of mediation

While mediation has plenty of benefits, there are potential drawbacks to consider.

Mediation offers a quick resolution

One of the goals of mediation is the resolution of disputes at the quickest possible time. This can be done because there is no court, no judge, and no lawyers involved and only the parties decide on the outcome. Solving problems quickly may seem beneficial but for people who like to take their time before making a decision, mediation is not the best solution.

Mediation is legally binding

Despite not involving the courts, the decision the parties arrive at is considered binding by most judicial systems. As a result, some of the parties may be uncomfortable with the idea of signing any agreement without having their lawyer take a look at it first.

Any of the parties can withdraw anytime

In litigation, only the plaintiff can withdraw from the proceedings by dropping the suit. In a mediation, however, any of the parties can withdraw anytime, which affords no protection for the party that may be at a disadvantage.

Mediation is not the only solution to all estate disputes. In fact, it is only one of the alternative dispute resolution option. However, when done by someone who knows trust and estate law, it is one of the most efficient and cost-effective ways of settling problems between parties, especially among family members.

Recommendations For Minimizing Inheritance Conflicts

Big or small, conflicts are normal when discussing inheritance. However, these are way to minimize problems.

Regularly update your estate plan

A change of circumstances prompts a change in estate plan. One example of such a change is divorce. Under the matrimonial laws of most states, will provisions and beneficiary designations that favor former spouses are considered invalid. However, the powers of a former spouse regarding financial or medical powers of attorney are unclear. Therefore, in case of divorce, former spouses should be stripped of all decision-making powers and be disinherited immediately.

Consider a pre- or post-nup agreement

Remarriage is one of the causes of conflicts related to inheritance. To minimize the problems at death, draw up a pre- or post nuptial agreement that indicates, in clear and specific terms, the claims of the beneficiaries, including the spouses as well as children from the previous marriage/s.

Keep away from joint ownership

Joint ownership, as in naming a beneficiary as a joint owner of a property, is inefficient and could put the donor in an uncertain position, such as exposure to the liabilities of the co-owner. Additionally, joint ownership that bestows irrevocable lifetime rights takes away the donor’s right to change his or her mind.

Leave clear instructions regarding personal properties

Because of its nature, personal property can often give rise to issues among the beneficiaries. To avoid conflicts, it is best to create a list that specifies personal property items and who will get each item as inheritance. Remember to describe each item in detail.

Identify gifts and loans clearly

Children undergoing financial difficulties sometimes seek help from their parents. Financial help given by the parents could be considered as gifts or loans and deciding which is which is the prerogative of the parent/s. However, unpaid loans can be a source of conflict between siblings so the estate plan should clearly indicate how lifetime advances are to be treated. Take note that gift taxes may apply.

Appoint a fiduciary committee

Instead of appointing one fiduciary to settle your estate, name a committee. Having two or more people divide the responsibility of gathering your assets and settling tax obligations and other debts will minimize misunderstandings between the fiduciary committee and beneficiaries. As long as the members of the committee could work well together, this is something to consider. If appointing a committee is not possible and you don’t want to place all the hard work on one individual, mediation could be the answer.

Keep estate plans private

As the author of your estate plan, you are under no obligation to reveal its contents to your beneficiaries. Except for your living will, the specific details of your estate plan should be kept private while you are still living so you are free to change the provisions in any way you deem fit. In fact, being open to the possibility that your estate plan isn’t final until you can no longer change it is one of the keys to successful estate planning.

Take out a PPI insurance

A Payment Protection Insurance ensures there will be money to pay monthly repayments on credit cards, mortgages, loans, and others. Taking out a PPI insurance will help avoid questions as to who must shoulder these payments while the probate process is ongoing.

Plan funeral details in advance

Planning one’s funeral seems morbid to most people, which is probably why not many do it. However, leaving clear and written instructions about funeral arrangements and form of interment can help avoid conflicts.

It’s hard to think about leaving your loved ones behind, but the idea of having your loved ones fight over their inheritance is even harder. Minimize inheritance conflicts through careful estate planning.

Is an Inheritance Loan Worth It?

Also called an estate or probate loan, an inheritance loan is not actually a loan but the act of transferring the right to your inheritance to a lender/purchaser.  The biggest drawback in taking out an inheritance loan is that the purchaser often charges a hefty sum because of the risk that the estate may not have available funds to pay the borrowed money.

 Why take out an inheritance loan?

When the estate is going through the trust administrative process, you will not be able to access the assets. Nonetheless, situations could arise and create the need for cash settlement that the inheritance loan may be able to provide.

Heirs have divided interests

If there are several heirs to a property, such as a piece of land, it’s possible that despite mediation there may be differing opinions about what to do with it. For example, you may want to keep the inheritance within the family while others may prefer to sell it so they can get cash instead. Proceeds from the inheritance loan can be used to pay off the interest of the other heirs.

Obligations need to be settled

It’s common for an estate to have obligations, such as funeral costs, legal fees, and repairs for properties. An inheritance loan can help settle these debts, which generally need to be paid immediately. For other types of debts, check if the deceased took out a PPI insurance.

Beneficiaries have payments to make

In the course of finalizing your inheritance, it’s likely that you will incur expenses, such as purchasing a home, medical bills, and paying off a debt with high interest. You can pay off these obligations through an inheritance loan.

How to take out an inheritance loan

Before you begin the process of borrowing against your inheritance, speak to a lawyer for estate planning who can check state laws as well as the wording of the deceased’s will to verify whether you can assign your inheritance or not.

  1. To determine if taking out a probate loan is worth the income taxes and interest, check how much you stand to inherit and compare it to the amount you need. It’s also necessary to inform the estate administrator of your decision to assign your inheritance so the funds can be properly allocated to include payment to the lender.
  2. Contact several lenders and request for details regarding their standard terms, particularly the interest rate they charge. Then, talk to the estate administrator about the possible tax consequences and overall costs of assigning your inheritance. Because purchasers charge high rates, remember that taking out a probate loan means significantly less inheritance for you. If you have no provision regarding inheritance in your marriage agreement, the amount you are entitled to will be even lower.
  3. Prepare the necessary documents the lender may require. While the specific documentation you will be asked to provide will vary among lenders, you generally need the following:
  • Your identification
  • A copy of the will
  • The official death certificate for the deceased
  • Documentation of the appointment of the administrator of the estate
  • The administrator’s certification of the amount of your planned inheritance
  • Any probate court letters or documents
  1. Compete the loan application. The agreement needs to indicate a passage where you assign the rights to your inheritance to the lender. The exact amount of the advance you will receive as well as the lender’s fee should also be included in the agreement.

Before anything else, be sure to read the loan application carefully and see if the provisions correspond to what you and the lender have previously discussed. Do not be tempted to hurry this part of the process so if there are points you want to clarify, do so.

Beneficiary and Fiduciary Liability for Income, Gift and Estate Taxes

If you are one of the beneficiaries of an estate or if you are the trustee of a trust, you need to understand the liability that comes with your role to prevent inheritance issues or personal liabilities.

Liabilities of a beneficiary

Taxes related to trust and estate law

If the beneficiary received assets from the estate or trust before the claim of the government has been paid, he or she will be liable for the unpaid claims of the government. However, the extent of the beneficiary’s liability will be based on the value of the asset transferred to them.

Taxes related to gifts or donations

In general, the donor is responsible for gift taxes. However, if the donor fails to pay the applicable tax on the gift, the recipient will be personally liable for the gift tax, up to the value of the gift.

Liabilities of a fiduciary

According to the tax code, the fiduciary has the responsibility to:

  • file the deceased final income and estate tax returns
  • represent the estate in all tax matters upon filing the required Noted Concerning Fiduciary Relationships
  • pay federal tax deficiencies first before settling other debts, in the event the estate or trust doesn’t have enough assets to pay all its obligations

Non-payment of the estate tax will give rise to an IRS lien, which is a legal claim by the government against the assets of the estate.

The IRS may require the fiduciary to pay the tax if as a result of the fiduciary’s actions, the assets in the estate or trust are no longer sufficient to settle its federal tax obligation. The IRS will follow normal deficiency procedures to assess and collect the tax once it ascertains that the fiduciary is personally liable for the tax deficiency.

Fiduciary liability prerequisites

The IRS determines whether or not the fiduciary is personally liable to pay federal tax based on the following conditions:

  • The IRS has a claim for taxes.
  • Despite knowledge of the claim, the fiduciary distributed the estate’s assets to a beneficiary or paid a debt, such as medical bills, state income tax, and unsecured debts (other debts may be covered by a PPI insurance) of the deceased.
  • The distribution of asset and payment of the debt happened when the estate or trust was insolvent or the distribution or payment gave rise to the insolvency.
  • The IRS has filed a timely assessment against the fiduciary personally.

How to reduce a fiduciary’s liability

As long as the estate or trust has enough assets to pay all tax liabilities, the fiduciary can make a partial distribution to the beneficiaries or pay the deceased’s creditors without being held personally liable for estate tax deficiencies.

The fiduciary needs to file IRS Form 4506 with the IRS. The fiduciary’s letters of administration and a Power of Attorney should also be included in the request. Additionally, the fiduciary may file IRS Form 4810, which is a request for prompt assessment, to expedite the process.

How to be discharged from personal liability

After filing the deceased’s federal income tax return(s) with the IRS, the fiduciary may write a request for release from personal liability for gift and income taxes. The fiduciary may also ask to be discharged from personal liability from federal estate tax via a written request.

The IRS has nine (9) months from the filing of any of the requests to inform the fiduciary if any tax (income and gift tax or estate tax) is due. Once the nine-month period expires or when the tax is paid, the fiduciary will be discharged from personal liability.

In order to avoid tax liabilities, beneficiaries and the fiduciary need to make sure that the government gets its claim on the assets before anything else. Proper estate planning can also help prevent such problems.

Secrets of Successful Estate Planning

Did you know that over half of American adults do not have any form of last will? What most people do not realize is that this usually causes different times of problems within the family in the event of death or disability.

For example, if both parents die suddenly in an accident, this can leave the fate of their children to the hands of the judges. The children may not be in favor of the situation that they will end up in but they cannot do anything about it.

Now if you are injured and incapacitated during an accident, the medical care choices may not be the ones you prefer but you have no control over it because you will no longer be able to express your preferences.

These and other problematic scenarios can be avoided with estate planning. Even those that do not have massive wealth or assets should still get their affairs in order. This is actually the best gift they can leave behind their loved ones.

To do estate planning the right way, here are some pointers to keep in mind:

Make an inventory of all your assets and liabilities

By doing this, you will be able to determine your net worth and at the same time, all the components that make your entire estate. You will also need to find out if you are dealing with assets such as life insurance policies that can be exempted in the probate process. It’s important to do your homework prior to consulting an estate planning lawyer to make the planning easier and less time consuming.

Make a list of your beneficiaries

Decide how you want to distribute your assets. Make a list of the people you want to receive your assets. Then determine how you want them to receive these assets. Do you want them to receive the assets directly or through a trust? If you have minor children, you would want to assign a trustee who will manage the money and assets for them before they reach 18.

Assign a trustee

You need someone whom you can trust to oversee and carry out your estate plan in the event of your demise or disability. Do you want the trustee to be one of your family members? Or do you prefer to leave these affairs to a lawyer or even a corporate trustee? Usually, the decision will depend on the types of assets that you have.

Choose a type of plan

For most people, writing a will is the preferred option. But there are those who would rather opt for the living trust. You need to determine the pros and cons of each option so that you will be able to make the right decision. For example, the living trust provides the benefit of excluding most assets in the probate process and at the same time, reducing taxes.

Hire an estate planning lawyer

Most experts agree that estate planning should not be turned into a DIY project. While it’s true that there are now many online tools that you can use to set up basic estate planning documents and that this will save you money upfront, it’s also true that estate planning is a highly complicated task best left to the hands of someone who’s experienced and knowledgeable.

Hiring an attorney who specializes in this area will actually save you more money in the long run. He/she will walk you through each step of the process to ensure that you don’t encounter any issues and problems.

You can ask relatives and friends for referrals, or you can also check out the services offered by the state bar association. The American Bar Association also provides a directory of lawyers that you can contact for this purpose.

Do not let your estate cause any problems within the family. Consult a lawyer and do this before the unexpected happens.