Monday, February 25, 2013

Getting Started with Estate Planning

If you're like most people, you have put off estate planning for a rainy day. The problem with procrastinating about this task is if you postpone it too long then your family will have quite a mess to clean up in the midst of their grief.

One of the first steps of estate planning is deciding which methods are most suitable for your life situation. An easy solution is to get help from a law firm. Attorneys can guide you through the maze of Wills and trusts and help determine the best course of action.

Everybody needs a Will. It doesn't matter if you own few assets or many. This document is used for many reasons. It identifies a personal representative who will be in charge of reconciling the estate. Wills also name beneficiaries who are entitled to estate assets, as well as legal guardians for minor children.

Estate representatives record the Will through probate court and must follow directives provided in the document. When people die without preparing a Will their relatives have to abide by state probate law. Most often, heirs have to hire a lawyer to help them through the process and ensure everything is in compliance.

Although Wills can expedite the probate process it's better to avoid it altogether. There are several ways to keep property out of probate court. One of the more effective is transferring property to trusts.  

Living trusts are a popular strategy because they are effective, yet easy to arrange. Any property that is owned by the trust is not considered as part of the estate and therefore exempt from probate.

People fund trusts by transferring ownership of assets. They maintain control over property by designating their self as the Trustee. It isn't very hard to setup trusts, but it can be confusing. It's advisable to obtain legal counsel to minimize risk of estate settlement issues.

Trusts are accompanied with power of attorney, healthcare proxy, and last Wills. Establishing power of attorney is necessary to let other people take care of important duties. This can include a range of things, but typically encompasses financial transactions and healthcare decisions.

There are quite a few POA documents and each can be used for multiple reasons. It's a good idea to talk with a law firm and find out which form is most suited for your circumstances.

General power of attorney is frequently used because it lets agents take care of many duties. Limited power of attorney is another popular form and is used when agents only need to perform a limited number of tasks.

Medical power of attorney is needed to put specific instructions surrounding healthcare in writing. Also known as healthcare proxy or medical directive, this form authorizes a personal agent to make decisions for you if you cannot communicate with physicians.
Putting together an estate plan is one of the greatest gifts you can leave behind. Working together with estate planning lawyers, such as Craton and Switzer, will ensure everything you've worked hard for is protected and can easily be passed along to heirs. 

Monday, February 18, 2013

Benefits of Creating Power of Attorney Documents

Individuals are often unclear about how to use power of attorney documents and the benefits they provide. While there are different kinds of forms with varying uses, they all provide privileges to another person to perform actions for your benefit.

Power of attorney documents can be used for personal or business reasons. Common uses include authorizing agents to conduct banking transactions, transfer ownership of titled property, and to become involved in medical decisions.

People are not allowed to perform tasks that involve another person's property or possessions unless written permission is provided. The only way individuals can carry out financial transactions or sign documents for someone else is by way of POA forms.

The kind of form used is based on the type of duties involved. Some documents provide sweeping powers which extend for life. Others grant limited powers for specific tasks and powers are terminated once duties are completed.

General power of attorney gives agents broad powers which enable them to carry out multiple jobs. They are often used by business owners as part of succession planning and to authorize colleagues to take over in the owner's absence or to manage financial or investment transactions.

Another use is authorizing a business or individual to act as their representative in negotiations. As an example, people can hire a tax accountant to negotiate deals with the Internal Revenue Service or creditors. Or, a private investor could permit realtors to buy or sell investment properties or work as their property manager.

In most instances it is unnecessary to file power of attorney documents with local courts. However, if forms are affiliated with real estate dealings then chances are they will need to be recorded. Also, a new POA form has to be filed if privileges are terminated at a later time.

Special power of attorney is commonly used whenever agents need to perform a limited number of transactions. Agent privileges are instantly terminated once the tasks are completed.

Responsibilities can include a range of tasks that can be as simple as reconciling bank accounts to complex jobs like selling a house. Generally speaking if a deal or contract requires a legal signature than it's advisable to create a power of attorney to let another person take care of it if you cannot. 

Medical power of attorney forms are an essential part of estate planning. These forms let people retain control of medical choices even if they are unable to communicate. Also known as a healthcare proxy this form permits agents to participate in health related matters when a person is incapacitated.

Healthcare proxies provide written directives pertaining to medical procedures you agree to or oppose. They are often included as part of trust funds and other types of estate planning strategies. It is important to talk about choices with your healthcare representative so they can make important decisions that align with yours.  

Most people find it beneficial to discuss their situation with an estate lawyer and decide the most appropriate power of attorney. Getting professional advice will ensure you have satisfactory protection in case the unimaginable takes place.

Monday, February 11, 2013

Things You Should Know about Trusts

Trusts are widely used to prevent probate and lessen estate taxes. The majority of people find this estate planning method to be somewhat overwhelming due to the different varieties of trusts and their uses.

Simplistically, trusts protect estate assets while you are living and after death. While there are different kinds, the basics of each remain the same. Each type requires a Trustor or Grantor to establish the trust; a successor trustee to manage and distribute contents to heirs; and beneficiaries who receive inheritance property.

Trustors have to fund trusts by transferring ownership of assets. This is done by acquiring new property titles and changing the name on financial investments and bank accounts.

Certain types of trusts allow Trustors to use a portion of the money for personal expenditures or financial investments. Capital gains can be returned to the trust and used to fund future investment opportunities.

Trusts are classified as either living or testamentary. Living trusts are created during a person's lifetime, while testamentary is created after a person dies. Additionally, trusts are either revocable or irrevocable. Revocable trusts can be altered whenever necessary, while irrevocable trusts cannot be modified without attending a court hearing.

All property that is transferred to living trusts is exempt from probate, while property transferred to testamentary trusts has to first pass through probate. Information pertaining to living trusts is a private matter, but Wills associated with testamentary trusts become public record.

While there are numerous kinds of trusts, a few of the most well-known include family trusts, credit shelter trusts, life insurance trusts, special needs trusts, and trusts for children. Some of these are established specifically to safeguard possessions. Others are arranged as a tax shelter or to minimize estate taxes, while some are specifically established to supply cash to charities. 

It's important to consider the sort of property that will be transferred into trusts and become familiar with steps required to transfer ownership. For instance, real estate, automobiles, and any property that requires a legal title have to be re-titled in the trust's name.

While it is normally helpful to transfer ownership of real property to trust funds there are occasions when it is better to make a deed that transfers the property to beneficiaries. It's always a good idea to consult with a lawyer

Business assets can be safeguarded in trusts. The way it's created is determined by the filing status of sole proprietor, partnership, limited liability company, or corporation. Trusts are often part of business succession plans as they ease transition if owners retire or pass away.

Certain kinds of assets can't be transferred into trusts, such as life insurance policies, individual retirement accounts, and cash. Automobiles and motor craft can be put in trusts or transferred to beneficiaries by means of a transfer-on-death title. Not all states authorize this type of transaction so speak with an attorney to ensure it's legal.

Although trusts are an exceptional estate planning method they aren't necessary for everyone. Talking with an estate planning law firm, such as Craton and Switzer, can provide the answers and help you decide what strategies are suited for your individual circumstances.

Monday, February 4, 2013

How Succession Planning Protects Company Interests

Companies that engage in succession planning are better able to safeguard interests and more easily make transitions through growth periods. This type of plan helps owners identify staff members who will be groomed for senior management positions or take over when owners retire.

Succession planning details the steps required to move the business forward. Choosing team members and establishing their current and future positions provides a blueprint of advancement strategies and the order in which they must take place.

There are many approaches to creating business succession plans. Much depends on the industry and overall goals of the company. Most owners find it easier to work together with a business lawyer. Attorneys can prepare legal documents to pass along the business to heirs; create partnership agreements; or grant authority to others to conduct business transactions.

A large percentage of owners would rather promote employees from within in lieu of employing new staff members. This is a sensible approach as it provides the opportunity to train employees from the ground up.

One major advantage of putting together a succession plan is the company can continue operating in the event anything happens to senior executives. One example is if the owner were to encounter a medical problem that prohibited him from working the named successor could take control.

Business succession plans ought to also take into account personnel changes that will occur when key staff members retire. It doesn't matter if a company is established as a corporation or sole proprietor. It's imperative to designate a successor who can take over business operations when owners are ready to retire.

Developing succession plans will vary dependent on the unique circumstances of the company. Owners will need to decide if they will promote from within or hire outside the company, as well as establish roles for executive positions. They also need to determine who will inherit the company or take over at retirement.

The benefitsof preparing a succession plan are abundant. One of the most valuable is key personnel are identified early on and conditioned to fill their intended position when asked. Furthermore, employees fully understand their role within the company and given goals to help them advance.

It is a well known fact that staff members perform their job more efficiently when they knowingly have commitment from the company to advance them through the ranks. Employees typically put forth greater effort to ensure the company is successful when owners acknowledge and reward their endeavors.  

To ensure plans are solid and effective necessitates advanced planning. This allows personnel time to become trained in their job functions and let owners figure out techniques needed to advance the company.

Lastly, succession plans ought to be incorporated in estate planning strategies to assure the company is protected in the event tragedy strikes the owner. Both estate and succession planning are especially important for family-owned businesses which are intended to be passed along to future generations.

As with most things in life there are advantages and disadvantages of succession planning. Always consult with a business law firm, such as Craton and Switzer, to find out which methods are best suited for your individual circumstances.