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Tips for estate planning in nontraditional families

California families in which there are stepchildren, adopted children, cohabiting unmarried adults, single parents and other nontraditional configurations may find that traditional estate planning advice does not cover their situation. Even trusts, which can be used in a number of complex situations, might need some provisions and adjustments.

With a traditional trust, there is generally a beneficiary who receives income from it until death. At that point, the remainder passes to another beneficiary. A more useful arrangement might be a flexible schedule with an institutional trustee who has the discretion to make distributions.

Families generally don't work together on estate planning

A survey from Key Private Bank polled 122 financial advisers to see how often future generations are involved with a person's charitable giving. Of those that responded, about 80% said that only some of their clients did so. However, it may be beneficial for parents and grandparents in California to talk to their younger relatives about their philanthropic goals. This is because different generations tend to have different ideas as to what causes are the most worthy to support.

Older Americans generally want to give their money to religious organizations while younger Americans want to help the environment. Ideally, parents and grandparents will learn to respect the opinions of their descendants and cater to their wishes whenever possible. Furthermore, it can be a good idea to step back at times and let them decide how the family will donate its time or money going forward.

Administrating a deceased loved one's estate: some challenges

Besides the tax issues, there are various challenges that individuals will face if they are handling estate matters for a loved one in California who has died. First, a lot depends on who the executor is. If the loved one died intestate, the probate court will appoint an administrator. If there was a will, it most likely designates an executor. If there was a trust, it will have designated a trustee.

Those who do not feel that they need a professional executor may want to think twice, especially if there are unreasonable heirs to contend with. If a person does take on the role of executor, they must prepare for time-consuming work and for short deadlines.

Including grandchildren in your estate plan

Thinking about estate planning requires that you engage in emotional reflection and consider who is important to you. Additionally, you need to think strategically about how you can maximize the benefit that you can provide your loved ones at the end of your lifetime.

It is common for people who are planning their estate to have a desire to include their grandchildren in their estate plan. This is a great way to ensure that they will be able to use your assets to improve their lives in key ways in the future, from paying college fees to buying their first home. However, it is particularly important to ensure that your grandchildren do not use their inheritance for the wrong reasons. This is why provisions can be put in place to ensure that inheritances are used responsibly.

How to account for art in an estate plan

Parents and grandparents in California may have no problem keeping track of how much cash they have or the value of their stock portfolio. However, it may be more difficult to keep track of how much an art collection is worth or to determine the fair value for other family heirlooms. Determining the value of a painting, sculpture or other tangible asset is important because it may help to determine how to best to insure it.

Knowing how much an item is worth can also make it easier to decide who gets the asset or how to otherwise incorporate it into an estate plan. Ideally, assets will be appraised by a professional from an accredited organization such as the American Society of Appraisers. Relying on online price guides or the words of the original seller is more likely to result in an inaccurate valuation.

Questions to ask while creating an estate plan

An estate plan can help a person account for an illness or other event that could leave that individual incapacitated. It can also help a person in California or anywhere else account for what happens to assets after he or she passes. The first thing an individual should do when creating an estate plan is gather an inventory of physical and financial assets. This could include a mortgage statement, bank statement or anything else that helps a person determine his or her net worth.

From there, it may be possible to create a strategy that can keep those assets out of a creditor's hands in the future. Those who are creating estate plans should also account for any taxable events that could occur when an item is gifted or handed down. Finally, knowing how much money a person has can make it possible to ascertain if surviving family members will be all right financially after the testator passes.

Four kinds of business litigation

Sooner or later, most businesses get to know a good business law attorney. Hopefully sooner, since building an iron-clad agreement from the start of a relationship almost always prevents expensive and nasty disputes down the road.

Here are just a few kinds of business disputes attorneys help clients settle or, even better, avoid in the first place.

Benefits associated with a dynasty trust

California estate owners who have a desire to pass along assets to subsequent generations may consider the benefits of creating trusts. It's an appealing option because of tax advantages and the ability to have more control over how assets are distributed. A dynasty trust is simply an estate planning tool meant to last longer than one generation below that of the trust's creator (grantor).

If specific asset limits are exceeded, a generation-skipping transfer tax is imposed on assets transferred to grandchildren or other descendants. It's levied in addition to gift and estate taxes. However, trust assets are often protected from this type of taxation. What a dynasty trust does is remove family wealth from the tax transfer system. This protection continues for as long as the trust exists and its income and principal are passed along to subsequent generations.

Estate planning for the chronically ill

There are over 130 million people throughout the the United States who have a chronic illness. By the time 2020 arrives, there will be almost 157 million people in the country living with a chronic illness. People who have a chronic illness should make sure that their estate plan properly addresses the issues that come with health and aging complications.

The estate planning documents for the chronically ill should be completed as soon as possible after people have received a diagnosis. Depending on the progression of their illness, their ability to fully comprehend and sign legal documents may be impaired. The documents will be no different that the documents needed for the estate plans of most people. However, they should be modified to effectively answer the challenges they may face.

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