Creating an estate plan can be a complicated, yet necessary, project. Each estate plan is unique to the individual who is creating the plan; however, there are elements of estate plans that are commonly used. Trusts, for example, are frequently used as part of an estate plan. Understanding the benefits and limitations of a trust can be of great help to you during the estate planning process.

A trust is a legal agreement created by a grantor. Other names for a grantor include trustor, settlor and makor. As the grantor, you must designate assets that will be used to fund the trust. A trustee needs to be appointed and beneficiaries named who will benefit from the trust. Aside from those basic elements, trusts can differ significantly in both function and form.

A trust created as part of an estate plan generally offers three common benefits. First, a trust allows the grantor to retain a significant amount of control over the assets even after death. Second, a trust allows the beneficiaries access to the trust assets or benefits without waiting for the grantor’s estate to pass through probate upon death. Finally, some trusts also avoid payment of estate taxes. An irrevocable trust, for example, legally transfers the trust assets upon creation out of the name of the grantor, meaning the trust assets are not legally owned by the grantor upon death. Since the trust assets are not legally owned by the grantor, they are not subject to the estate taxes paid upon the death of the grantor.

Individual state laws control the formation and administration of trusts. As a result, you should consult with an experienced estate planning attorney prior to the creation of a trust to be certain that you understand any legal limitations placed on trusts in the state where you reside. In addition, in order to receive the maximum benefits out of a trust, you may need to make the trust irrevocable, which limits your options regarding control over the assets once the trust is created. Once you have created an irrevocable trust, you are locked into the terms of the trust except under certain

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

If you are the parent of a special needs child, planning for the future may require petitioning to become the child’s legal guardian or conservator at some point in time. Parents sometimes make the mistake of assuming that they will continue to have legal authority over the child once he or she reaches the age of majority based solely on the parent/child relationship. Legally, this is not the case. In most cases, a child is legally treated as an adult once he or she reaches the age of majority, regardless of his or her ability to care for himself or herself. As the parent, you may need to consider petitioning to become guardian and/or conservator as the child approaches the age of majority.

The law does not attempt to determine whether or not a child is capable of taking care of herself or himself upon reaching the age of majority — usually 18 years old. In the eyes of the law, anyone who has reached the age of majority is considered an adult, and allowed to make adult decisions, unless evidence is presented to the contrary. This can be a vary dangerous situation in the case of a special needs child. Without the proper legal authority, for example, you may not be able to arrange for medical or psychological care, therapy, or housing for your child. Income to which your child may be entitled may be inaccessible as well. In order to prevent a situation such as this, consult an attorney about becoming your child’s guardian and/or conservator prior to your child reaching the age of majority.

Although state laws vary, a conservator is generally allowed to make decisions regarding the estate of the ward –in this case your child — while a guardian may make decisions regarding the ward himself or herself. As conservator, for instance, you may control your child’s finances. As guardian, you may decide here he or she lives. In order to become guardian and/or conservator, you will need to petition a court and convince the court that your child needs a guardian or conservator. If you foresee the need to be appointed guardian or conservator in the future, take the time now to discuss your options with an experienced attorney.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Caring for your child’s needs is often a full-time occupation, leaving you little time to prepare for all contingencies. As a parent, you’ve probably spent some time wondering who would care for your children if you become seriously ill or die while they are still young. The easiest way to ensure that your children will be looked after by someone you approve of is to nominate a guardian in your will.

A guardian is someone who is legally authorized to make decisions on behalf of a child or an incompetent adult. The simplest way for parents to nominate a guardian of his or her choice is to name that person in the parent’s last will and testament. By doing this you can ensure that a judge who hears the guardianship petition will know whom you choose as the guardian. There is no guarantee that a court will choose the person you nominate, but courts generally give preferential treatment to the parent’s choice for guardian.

While naming a guardian in your will is always a good idea, it does not preempt the rights of the child’s other parent. For example, if you and your child’s parent are not married and you die, the other parent still has parental rights over the child. In such a situation the court typically does not appoint a guardian. However, if you and the child’s other parent were to die simultaneously, the court would consider the guardianship nomination of one or both of you. In this situation, if each parent names a different guardian, it would be up to the court to determine which nominee to choose. If the parents coordinate and nominate the same person as guardian, this makes it a much simpler task for the court to choose the appropriate person.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Though neither the prospect of dying or getting a divorce are exactly pleasant to think about, anyone creating a valid estate plan should consider what would happen in the event that you create yor plan and later get a divorce.

If you plan on getting a divorce and have already created an estate plan, you will necessarily want to review and modify this plan to reflect your new marital status. If you have created a last will and testament, for example, you will need to amend this document to reflect the divorce. Typically, this will require you to create either an amendment, known as a codicil, or create an entirely new will. Similarly, if you have created a living trust and have named your spouse as trustee or beneficiary, you’ll have to modify the trust as well.

Other estate planning considerations you need to address when getting a divorce include whether your current spouse is named as a beneficiary in any life insurance policies or retirement plans, as well as who will act as your power of attorney in the event of your disability. People commonly grant their spouses power of attorney in such cases, and you will probably want to change this if you get a divorce.

Because the laws governing estate planning issues differ so significantly between the states, you may have to consult an estate planning attorney for more detailed information about how to modify your state plan in preparation for a divorce.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

While the estate planning issues facing married couples are fairly straightforward, non-married couples face a more difficult task when they want to develop a comprehensive estate plan. Whether you have been in a long-term relationship, are living together or are a same-sex couple in a state that doesn’t recognize same-sex marriage or grant cohabitation rights, you can still ensure that your partner receives property upon your death by taking the appropriate steps. Estate planning issues for non-married couples can be rather complex, so you should always consult with an experienced estate planning attorney before attempting to devise your own plan.

Wills: Whenever you create a last will and testament you can choose to whom you wish to leave your property after you die. However, there is no legal requirement that you leave any property to a non-married partner regardless of how long you’ve been together or cohabited. If you are married, each spouse automatically stands to inherit property from the other upon death under state laws, but no inheritance rights are granted to non-married couples.

Retirement Plans and Insurance: Apart from your last will and testament, your partner may receive death benefits from your retirement plan or life insurance policies, but only if you take the appropriate steps beforehand. To ensure your retirement passes properly you must specifically designate your partner as the beneficiary in accordance with the policy terms. Similarly, some life insurance policies may require specific steps of you before you can name your partner a beneficiary.

Common Law Marriage: Some couples who have been together a long time may believe they meet the requirements for a common law marriage. In general, only a small minority of states, Massachusetts not being one of them,  recognize the ability of couples to get married through common law provisions. All common law marriage states have specific requirements couples must meet before they become married, and no state grants common law marriage as an automatic function based on the length of time the couple was together. Talk to an attorney if you have any questions about the common law marriage rules in your state.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Start the financial planning process now for long term care in order to offer protection to you and your family in the future. There is no single way of telling if or when long terms care is or is not going to be needed. However, it is a good idea to begin preparations now to ensure financial security and to avoid emotional heartaches. While we would like to believe our families will step up to the plate and bring us into their homes, the reality is paying for long term care is what happens.

Costs for long term care, or short term care in a nursing home, add up quickly. This is particularly true in the case of nursing home expenses. The stress associated with these costs can be averted, though, with proper financial planning in place. This allows for asset protection for you, as well as comfort for your family.

Speak to your estate planning attorney about which financial planning methods would work best for you, your current situation and your family. In some cases, it might be a good idea to start a savings account, or creating a trust might be a better idea. Keep in mind your estate planning attorney is going to go over many methods with you and they may suggest you use more than one. Avoid depending on just one option, like an insurance policy for example, because you may not qualify. Once you and your estate planning attorney have listed financial planning options, research them thoroughly to ensure they truly are good choices for your overall financial picture. During your research process, ask yourself the following questions:

• How soon do you believe you need long term care, and what would be the associated costs for home care versus nursing home care.
• What kind of assistance do you believe you’ll need?
• Have you suffered an accident or an illness that would bring up the need for long term care?
• Do you have family members living close-by that could offer help, or are your needs specially centered on professional assistance?
• Have you been diagnosed with a medical condition that may require long term care as it progresses?

These are just some of the questions to address when performing your research. Discuss each of your findings with your estate planning attorney. It may be necessary to bring your primary care physician into the conversation if they are the representative eluding to the fact that long term care could become a part of your reality in the future.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Do you or a loved one need to move into a nursing  facility in the near future? If so, do you understand how much nursing home expenses are and what these expenses cover? Have you planned for long term care, to include nursing home expenses in the event that it is necessary to move into one?

These questions are difficult to answer, there’s no doubt about that. Times are changing drastically, including our life expectancies and how often family members are able to step in and offer primary care. Because we are living longer and we can’t depend on family in comparison to decades ago, nursing homes are becoming more and more of a reality in a number of households.

Because children with aging parents are not taking them into their homes as they once did so commonly in the past, nursing homes have been depended on for long term care and other rehabilitation needs. Some of these nursing homes can be quite expensive, and could go up to $10,000 per month or more. Most households cannot afford such nursing home expenses, so they must plan ahead.

The first line of defense is securing an insurance policy that will cover long term care. These policies come at a premium, though, and are often difficult to afford. You must also meet certain health requirements in order to qualify. If you are not able to afford the policy or do not meet the health requirement (or both), are there other options?

Some individuals rely upon Medicaid to cover their nursing home expenses. Individuals must go through an enrollment process where they must show a medical need, they must meet the income standards and they must adhere to the assets standards. This is tricky for those who have accumulated a lot of assets in the way of collectibles or properties, but do not have a lot of regular income coming in.

Confer with your estate planning attorney about how to meet these criteria, as well as what other options you can explore. Also, inquire regarding what is included in these costs. There are suggestions in place to start planning for nursing home expenses early on in the form of creating a trust. That way, the funds are there to cover whatever your insurance policy does not pay for. Or, if you do not have an insurance policy, there are funds available to cover the nursing home expenses.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

There are a number of issues when it comes to estate planning beyond creating a will and the distribution of property. One of the many facets of estate planning is to plan for incapacity. This is when you are unable to make decisions on your own behalf due to medical reasons. What do you do when you are unable to make these decisions? What happens with regard to our final wishes if we become incapacitated?

It is widely assumed family members can step right in and speak on our behalf when we are no longer able to do so. This is incorrect unless you have done some incapacity planning first. Without a proper plan in place, not only will hundreds of hours be wasted on arguments or in court, but thousands of dollars will also. In addition, you will be saving your family members a lot of heartache. It does not take much time to put together this plan, and it is well worth the effort.

There are many goals involved with incapacity planning, the most important of which is ensuring family stays in control of your final wishes and the entire matter does not end up in court. The last thing anyone wants in these situations is a guardian/conservator appointed by court on your behalf. The types of control you want to keep in your family are control over your healthcare and control over your assets and properties. You do not want to lose power over any of these things, particularly when you are incapacitated.

For individuals who are parents of minor children, your incapacity planning should also include guardianship for your children. That way, none of your family members need to go through the difficult and expensive process of fighting in court to care for your children. If the battles are not won, the children will have to be placed with a court appointed guardian. That is not the best option, which is why it is highly advisable to include this step within your plan.

There are a number of documents your estate planning lawyer will create for you during your incapacity planning:

• Nomination of Guardian
• Durable power of attorney
• Medical power of attorney
• HIPAA release
• Advanced Medical Directive

In addition to these documents, you are going to want to plan for long term care and nursing home expenses. These funds can be placed into a trust, which can be drawn up the same time you write your will. Creating a trust like this ensures you are covered for expenses your insurance and Medicare does not pay for.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Are you or a loved one embarking upon the estate planning process and are concerned about estate taxes or inheritance taxes? Even when working with an estate planning attorney to help reduce or avoid estate taxes, individuals should still be aware of how estate taxes differ from state to state. Families are growing more and more concerned with regard to estate taxes, and with good reason.

There are currently twenty-two states, as well as the District of Columbia, that imposed estate taxes, inheritances taxes or both. This occurred as of February 15, 2011. The verbiage for such taxation is confusing for those without experience with such matters, which is cause for additional concern within the states in question. These states (with Washington, D.C. included as its own listing) include:

1. Washington: Exemption Amount: $2 million, Top tax rate: 19%
2. Oregon: Exemption Amount: $1 million, Top tax rate: 16%
3. Nebraska: Exemption Amount: $10,000, Top tax rate: 18%
4. Iowa: Exemption Amount: none, Top tax rate: 15%
5. Minnesota: Exemption Amount: $1 million, Top tax rate: 41%
6. Illinois: Exemption Amount:  $2 million, Top tax rate: 16%
7. Indiana: Exemption Amount:  $100, Top tax rate: 20%
8. Kentucky: Exemption Amount:  $500, Top tax rate: 16%
9. Tennessee: Exemption Amount:  $1 million, Top tax rate: 9.5%
10. Ohio: Exemption Amount:  $338,333, Top tax rate: 7%
11. North Carolina: Exemption Amount:  $5 million, Top tax rate: 16%
12. Maryland: Exemption Amount:  $1 million, Top tax rate: 16% (for inheritance tax, exemption amount is $150, and top rate is 10%)
13. Delaware: Exemption Amount:  $5 million, Top tax rate: 6%
14. Washington DC: Exemption Amount:  $1 million, Top tax rate: 16%
15. New Jersey: Exemption Amount:  $675,000, Top tax rate: 16% (for inheritance tax, no exemption, top rate is 16%)
16. Pennsylvania: Exemption Amount:  none, Top tax rate: 15%
17. New York: Exemption Amount:  $1 million, Top tax rate: 16%
18. Connecticut: Exemption Amount:  $2 million, Top tax rate: 12%
19. Massachusetts: threshold Amount:  $1 million, Top tax rate: 16%
20. Vermont: Exemption Amount:  $2.75 million, Top tax rate: 16%
21. Rhode Island: Exemption Amount:  $859,350, Top tax rate: 16%
22. Maine: Exemption Amount:  $1 million, Top tax rate: 16%

Source – CCH, a Wolters Kluwer business

Speak with your estate planning attorney about what these numbers mean specially to you and your estate planning situation if you live within any of these areas. It is important to have a full understanding regarding what estate taxes are, and if there are ways you can work within your estate plan to reduce these taxes.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Creating a will is the beginning phase of estate planning. Financial planning is also an integral part of the process, and one that is already a part of our everyday life. Therefore, thinking about adding a financial plan to your estate plan should seem like second nature, right? Not necessarily, which is why it is essential to have regular discussions with your estate planning attorney regarding these matters.

Throughout your life you may choose to make investments, maintain savings accounts, make investments and start retirement accounts. What does any of this have to do with an estate plan, you might be wondering. Quite a bit, to be honest because, when financial planning and asset protection planning is not put in to place, it is possible to lose a considerable amount of this money at the time of your passing.

For those who do no have a will at the time of their passing, court fees add up quickly from those attempting to divide your estate up for beneficiaries. There are probate court fees, probate attorney fees, and estate taxes each eating up the worth you created during your lifetime. This is all avoidable through precise and specific estate planning, and will put your beneficiary’s minds at ease.

As mentioned previously, a will is just the beginning to estate planning. What if you experience medical issues? What if one of your beneficiaries passes away? How can you protect your assets from taxation? These are just some of the questions you are going to have to face during your estate planning process. Everyone needs additional asset protection, therefore your estate plan should answer the following questions in addition to those listed above:

1. Should I create a last directive outlining whether or not artificial life support should be used or not in the event that I’m incapacitated and that decision needs to be made?
2. Are there ways I can protect my estate if I become disabled, or diagnosed with a disease that prevents me from being able to actively make my own decisions?
3. How should my assets and properties be divided and distributed following my passing? Do I want to create a trust or is creating a will enough? How is trust administration handled? Who should be the trustee?

A qualified estate planning attorney can assist you in addressing these important questions.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.