Establishing an irrevocable life insurance trust is a way to avoid paying taxes on life insurance proceeds. Ownership of insurance policies are transferred to the trust and proceeds are exempt from estate taxation.
The irrevocable life insurance trust includes a contract which is used to distribute proceeds to designated beneficiaries. The trust itself is designated as the primary beneficiary. Upon death, proceeds are transferred into the trust and held to provide benefits to a spouse, children, or other beneficiaries. Read more…
When putting together an estate plan, a testator has several options available to most precisely create a testament that reflects his or her wishes. Although many people may only think the specificity is the goal of each estate plan, some testators may also aim to be intentionally vague with some of their wording. Known as facts of independent significance, certain terms in a will or trust may be modified naturally.
A fact of independent significance works on the basis that some language may intentionally be undefined. One example of facts of independent significance is when a testator leaves property behind for a largely unspecific group of beneficiaries. For example, if a wealthy benefactor creates a will that provides a special part of an inheritance to his or her house workers, that property will go to any workers at the time of the will’s execution. Anyone hired since the creation of the will may be permitted to receive this property, while anyone fired will be discounted. Read more…
If you have decided to explore the possibility that it’s time to set up a trust, your research may leave you overwhelmed with more questions than answers. A wide array of options is available and choosing the best one to meet your needs is essential. Some types of trusts are complex and contain options that can be combined in almost limitless ways. Some are extraordinarily expensive to create and administer. So, what trust is right for you? You may ultimately decide that you don’t need a trust at all. You may, however, decide that a simple revocable trust will meet your needs. What if, after your research, you still don’t know what’s best? Read below for some thoughts to help guide you in this extremely important endeavor:
Serving Your Personal Needs
If you’re merely trying to just take care of yourself, a simple revocable trust will most likely be your best bet for the following reasons: Read more…
In a wise, but surprising turn of events, the President has agreed with the Republican Congress and adjusted the estate tax levels for 2011 and 2012. For the next two years, the estate tax will be levied on all estates over $5 million for an individual and $10 million for a married couple and at a rate of 35 percent. Historically, Republicans have often been known for their disdain of excessive taxes and Democrats have been known as the party that favors big government and higher taxes. With the referendum against the Democrats in the last election and the heavy shift to a Republican House and Senate, the President had no choice but to cave to the Republican demand for a lower estate tax. If not, the amount of estate taxes paid by the families of middle-income voters would have been a hot button topic during the 2012 Presidential election, and could have been the cause of a loss of the White House.
So where does this leave us? While the estate tax is held in check for the next two years, there is no definitive answer as to where it goes after that. In 2013, we could have another year of no estate tax or we could have a 55 percent estate tax on everything over $600,000. Who knows? The only thing that we can do is hope for the best and prepare for the worst. A trust-based estate plan will ensure the most tax savings no matter what the estate tax number is in the year you die. In addition, there are more advantages to having a trust than just estate tax protection. Read more…
Appointing an estate administrator is an important decision. This person will be responsible for settling your estate upon death, so it is best to select someone who can be trusted to make decisions for the good of your loved ones.
Most people designate family as their estate administrator. For many, this is the most logical choice. However, if family strife exists, appointing family members can cause Administrators additional grief. Sadly, it is not uncommon for war to break out over inheritance property. Read more…
If you are facing debt that you cannot manage, you may be desperate enough to consider filing bankruptcy. Before you file, however, you should consider enrolling in a debt management plan, also known as debt consolidation, credit counseling, bill consolidation, credit card consolidation, or money management. This can help pay off your debt without the effects of bankruptcy, which can seriously damage your credit.
On one hand, bankruptcy does have certain benefits. In a chapter 7 bankruptcy, your unsecured bills, such as credit cards, department store cards, and medical bills, may be totally eliminated, and you may be able to keep assets such as your house and your car. Your creditors will stop calling, and you get a chance for a fresh start. Read more…
The question about whether or not you should be giving your money to other people or organizations while you yourself are trying to get out of debt is often a heated and contentious discussion. That being said, let’s discuss whether you Should Be Giving When You Are Erasing Debt.
When it comes to giving, there are 3 basic categories that come to mind:
1) Giving money to friends or family that are in need.
2) Giving money to your church.
3) Giving money to charity. Read more…
Debt is one of the biggest problems of today and everywhere you see, people are fighting to reduce debt and rid free of financial problems. But it does not accumulate over a single day and is rather the result of human negligence, poor financial planning and over expenditure piling over many months.
One of the main reasons for Debt accumulation is ill-planning of savings and expenditure of finances. Debt usually piles up when people spend more than they earn. The focus of reduction Help is to minimize by cutting short extra, unnecessary and whimsical expenditures. Money saved is money earned and this is one of the key elements of a reduction program. Read more…
Credit debt help is aiming towards not only suggesting solutions of bad credit but also providing opportunities for this purpose. Credit debt help is rescuing thousands of credit card debtors from clutches and vicious circles of massive unsecured debt which they incurred excessively mainly due to their greed. Their greed clutched them in fierce circles of unsecured debt and unfortunately these clutches became tighter due to financial tsunami.
By seeing this difficult situation, the federal government is compelled to offer credit debt help through different ways. Now debtors can avail numerous debt relief programs and come out of their debts. Among several debt relief options, consolidation and settlement are two most important, prominent and widely used programs. These programs are especially designed to meet specific needs of borrowers in specific manners. Each program has its own characteristics and advantages that is why they must be availed as per exact needs and requirements. Read more…
Over the past few years many people are suffering from the burden of massive credit card debt. The fresh hit of recession has really disturbed the whole financial situation of the people. When economic condition of the country was stable, people were not experiencing problems in making the payments to lenders but after the economic crisis people are not stable anymore and that is the main cause why they are facing many hurdles in paying back to lenders. Although process of settlement is present is market but people are not ready to adopt it.
Major reason for not adopting this method is that they are afraid of getting trapped by fake and scam companies. Actually the fake companies have destroyed the whole reputation of settlement business. Now people think twice before they actually go for settlement option. The fake and fraudulent companies are used to charge services fees in advance. At that time they assure the person about negotiating with the lender and bringing down the amount of debt but in real these illegal firms never bother to make contact with lenders. After some time they inform the individual about the failure of settlement process. At this stage when the person demands for the recovery of money, they refuse him by saying that it was non refundable. Due to these malpractices, people started losing their trust over this option. Read more…