Categories Estate Planning

Estate Planning for College Students

Author fraserandallen Categories Estate Planning Posted on

As we prepare to send our children off to college, we busy ourselves with making sure all of the essentials are accounted for. We make endless trips to Target and other retailers in search of the necessities. Bedding, towels, laundry basket, three drawer plastic storage – check. Laptop, minifridge and noise canceling headphones – check. Credit card (with limit controls!) and reliable transportation – check. We covered it all, right? In the words of the incomparable Lee Corso, “Not so fast my friend!”

There are four essential estate planning documents every college-bound student should have. They are (1) a simple will, (2) a health care power of attorney, (3) a HIPAA authorization, and (4) a durable power of attorney. While none of us want to consider anything unfortunate happening to our children, ensuring our children have these documents in place – before leaving home – can put you in the best position to care for them in the event something does happen.

Simple Will

All college students should have a simple will in place that, at a minimum, disposes of their personal assets in accordance with their wishes. This relieves family members from the burden of determining how their lost loved one would have wanted their belongings to pass and provides them comfort in knowing their loved one’s final wishes are honored.

Powers of Attorney

One of the most important estate planning documents for your college-age child is a power of attorney. This document can grant one or more people legal authority to act on your child’s behalf in the event they are not able to. By designating someone to act on behalf of your child, you can avoid many potential legal problems, such as accessing financial accounts and making medical decisions. Every college student should execute a health care power of attorney and a financial power of attorney.

Health Care Power of Attorney

A health care power of attorney is especially important for college-age children because it allows them to make decisions regarding their own medical care in the event they are unable to do so. The health care power of attorney should be tailored to meet the needs of a college-age student and should include the ability to make decisions regarding treatment, organ donation, and end-of-life planning.

Most often, college students name a parent as their agent. A backup agent (e.g., a second parent) should also be named in the event the first agent is unable to serve.

Financial Power of Attorney

All college students should name an agent to handle their financial affairs by executing a financial power of attorney. There are two types, a springing power of attorney and a durable power of attorney. A springing power of attorney becomes effective (i.e., springs into action) upon the incapacity of an individual. This often requires parents to bring an action in the probate court to declare their child incompetent.

To avoid this unnecessary requirement, we advise clients to execute a durable power of attorney instead. A durable power of attorney is effective immediately, continues in the event a child is rendered incapable of handling his or her financial affairs, and it does not require an adjudication of incapacity. Your child should name a primary and secondary agent to serve in this role.

HIPAA Authorization

A HIPAA Authorization goes hand in hand with a health care power of attorney. This document allows you to receive medical information about your child, which you may need to make informed decisions under a health care power of attorney.

When children leave home and head off to college, we have enough to concern ourselves about, not the least of which is ensuring our children are taken care of while they are away. Helping your children put these four essential estate planning documents in place will give you peace of mind in knowing you have everything covered.

If you would like to discuss estate planning for your college-bound or attending child, please contact us today to schedule an appointment and put your mind at ease. Oh, and don’t forget the Easy Mac and ramen noodles – check and check!

Disclaimer

The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.

Categories Estate Planning, Trusts

Estate Planning With Spousal Lifetime Access Trusts (“SLATs”)

Author fraserandallen Categories Estate Planning, Trusts Posted on

Spousal lifetime access trusts, also known as “SLATs”, have become increasingly popular in estate planning in recent years. A spousal lifetime access trust is an irrevocable trust established between a couple, where one spouse places assets into trust for the benefit of the other spouse. The couple designates a trustee to manage the trust assets and usually the second spouse is a primary beneficiary. This can help couples establish a secure financial legacy while avoiding the hefty estate taxes that often come with passing assets between spouses after death.

While it might seem odd to create a trust with assets to benefit a spouse, SLATs can be a great way to ensure that both spouses get the most out of their estate. The funds placed in the trust can be used to provide the surviving spouse with income, pay for long-term care and other expenses, or used as an emergency fund. Additionally, SLATs can be used to fund charitable goals, such as setting up a charitable foundation or endowment.

However, as with all estate planning, it is important to consider the tax implications of establishing a spousal lifetime access trust. Generally, assets placed in a SLAT are subject to gift tax and, if the primary beneficiary is not the spouse, estate taxes could apply when the surviving spouse passes away. The trust beneficiaries are also limited to the trusts’ settlor (person who created the trust) and spouse, meaning individuals other than the couple would not be eligible for distributions from the trust.

Another important factor to consider is that SLATs require careful maintenance and monitoring to ensure that the trust remains valid. The couple must make sure that none of the trust assets are used as marital resources and that all distributions are kept separate from the couple’s joint possessions and assets.

Spousal lifetime access trusts can be an effective estate planning option for couples intending to pass their assets on to each other. However, couples should seek professional advice to make sure that their SLAT is properly established and structured in order to maximize its intended benefits. With careful planning and attentive maintenance, a SLAT can be a great tool to help couples manage their estate and provide financial security to both spouses.

Disclaimer

The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.

Categories Estate Planning

Estate Planning for the Elderly

Author fraserandallen Categories Estate Planning Posted on

Estate planning is an important step for everyone to take at all stages of life, but for the elderly it can be especially important. With new laws constantly being enacted, it’s important for seniors to stay informed about the changing estate planning landscape.

For starters, the federal gift tax exclusion from 2022 has increased to $17,000. This means that you can give up to $17,000 to anyone without having to pay taxes on the gift. However, gifts greater than this amount must be reported to the Internal Revenue Service (IRS) and will be subject to taxation. This amount is adjusted annually, so it’s important to stay up to date with the current maximum exclusion amount.

Another change to consider is the updated rules surrounding different types of trusts. The two most popular types of trusts are Revocable Living Trusts and Irrevocable Trusts. Revocable Living Trusts allow the grantor to make changes to the trust while still alive, while Irrevocable Trusts are not able to be modified once they have been created. It is important to understand the differences between the two types of trusts and to choose the one that best suits your needs.

The exemption for estate taxes has also been updated for 2023. The federal estate tax exemption has increased to $12.92 million for individuals, while the amount for married couples is up to $25.84 million. This means that if your estate is worth less than this amount, it will not be subject to estate tax. If your estate is worth more than this amount, steps should be taken to reduce its value through methods such as gifting and charitable giving. In addition, a deceased spouse’s unused exemption (commonly referred to as “DSUE”) is portable to and may be used by the surviving spouse.

With the changing landscape of estate planning, it is more important than ever for seniors to review their estate plans and make any necessary updates to ensure that their overall financial goals are met. It is a good idea to seek advice from an experienced financial professional to help navigate these changes and ensure that your current and future needs are met.

Estate planning can be a daunting task, but it is an important step for everyone to take. Seniors, in particular, need to stay informed of the changing laws and regulations surrounding estate planning to ensure that their final wishes are respected.

Disclaimer

The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.

Categories Estate Planning

Estate Planning for Blended Families

Author fraserandallen Categories Estate Planning Posted on

As modern families become more diverse and complex, estate planning becomes more important than ever. Blended families—where parents are married and bring children from former marriages into a new family unit—presents unique challenges as it relates to inheritance and other financial matters. An estate plan can ensure that everyone is taken care of in the event of death or incapacitation, while protecting the assets and future of both sides of the family.

When couples in a blended family create an estate plan, they should consider the needs of each family involved. This includes not only the children of their marriage, but any children or heirs from previous marriages. It is important that each side of the family is taken care of, and that inheritance goes to the designated heirs. It also helps to create a plan that does not cause any legal issues for the separation of assets among heirs.

Another issue to consider is the ability of the surviving spouse to manage the assets. Depending on the size of the estate, a surviving spouse may not be able to handle the complexity of managing it. An estate plan should include a trust that is designed to provide security and an orderly way to distribute assets. This will help ensure that all interests are taken into consideration and that the goals of the estate plan are met.

Taxes are also an important factor in estate planning for blended families. These tax issues can be complex, and should be addressed as part of the estate planning process. An estate planner or attorney can advise couples on the best way to approach taxes and inheritance when taking into account the needs of each family.

For blended families, estate planning is absolutely essential. It ensures that everyone’s interests are taken into consideration, and that assets are distributed in a way that is fair to everyone. By taking the time to create an estate plan, blended families can be confident that their wishes will be respected, no matter what the future holds.

Disclaimer

The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.