WHEN TO REVIEW AND AMEND YOUR TRUST
My new video on youtube explains when to review and amend your trust. You can view the video by clicking: http://www.youtube.com/user/FamilyTrusts
Other videos on Estate Planning subjects are also available on the Family Trusts and Estates channel......
DWIGHT EDWARD TOMPKINS
Attorney at Law
This blog is intended for informational and educational purposes only and is not a substitute for legal advice from a qualified estate planning attorney in your jurisdiction.
Friday, October 23, 2009
Monday, October 12, 2009
Bank "Trust" Accounts
BANK "TRUST" ACCOUNTS:
Banks have a type of "trust" account which many people use to pass the account to a beneficiary when the account holder passes away.
The technical term for this type of account is a "Totten Trust". It is not a true trust in the legal sense of the word "Trust", because it does not set up a separate entity with a trustee in charge of the Trust.
A better description and more accurate term is to call these accounts "Pay on Death Accounts". This is because the account is designed to "pay" a named beneficiary "on death" of the account owner.
The account is an asset of the account holder and can be used as the account holder pleases until they die. Upon death, it goes to the person named.
It avoids probate, so it is not subject to either the account holder's will or their intestate estate.
The words "pay on death", "in trust for", and "a trust for" are often abbreviated in the account title; for example:
John Smith P.O.D. Mary Smith
John Smith I.T.F. Mary Smith
John Smith A.T.F. Mary Smith
The Totten Trust is a helpful tool in estate planning, but in most cases, should not be used as the exclusive estate plan device for several reasons:
* Many assets may not be owned in this manner.
* It also does not provide alternatives, such as what happens if the beneficiary dies before the account holder.
* It does not provide for estate tax avoidance or minimization of the potential estate tax.
* In a community property state such as California, if the account is a community property asset, and the beneficiary is not the surviving spouse, the distribution may be subject to challenge by the surviving spouse.
There are other potential problems with the use of a Totten Trust, and therefore, it is always best to consult with a qualified estate planning attorney before using a Totten Trust, especially as the primary estate planning tool.
If you have other questions about this subject please visit my website at:
http://www.tompkins-law.com
or email me at:
detlaw@juno.com
DWIGHT EDWARD TOMPKINS
Attorney at Law
This blog is intended for infomational and educational purposes only, and is not a substitute for legal advice from a qualified estate planning attorney in your jurisdiction.
Banks have a type of "trust" account which many people use to pass the account to a beneficiary when the account holder passes away.
The technical term for this type of account is a "Totten Trust". It is not a true trust in the legal sense of the word "Trust", because it does not set up a separate entity with a trustee in charge of the Trust.
A better description and more accurate term is to call these accounts "Pay on Death Accounts". This is because the account is designed to "pay" a named beneficiary "on death" of the account owner.
The account is an asset of the account holder and can be used as the account holder pleases until they die. Upon death, it goes to the person named.
It avoids probate, so it is not subject to either the account holder's will or their intestate estate.
The words "pay on death", "in trust for", and "a trust for" are often abbreviated in the account title; for example:
John Smith P.O.D. Mary Smith
John Smith I.T.F. Mary Smith
John Smith A.T.F. Mary Smith
The Totten Trust is a helpful tool in estate planning, but in most cases, should not be used as the exclusive estate plan device for several reasons:
* Many assets may not be owned in this manner.
* It also does not provide alternatives, such as what happens if the beneficiary dies before the account holder.
* It does not provide for estate tax avoidance or minimization of the potential estate tax.
* In a community property state such as California, if the account is a community property asset, and the beneficiary is not the surviving spouse, the distribution may be subject to challenge by the surviving spouse.
There are other potential problems with the use of a Totten Trust, and therefore, it is always best to consult with a qualified estate planning attorney before using a Totten Trust, especially as the primary estate planning tool.
If you have other questions about this subject please visit my website at:
http://www.tompkins-law.com
or email me at:
detlaw@juno.com
DWIGHT EDWARD TOMPKINS
Attorney at Law
This blog is intended for infomational and educational purposes only, and is not a substitute for legal advice from a qualified estate planning attorney in your jurisdiction.
Tuesday, October 6, 2009
What is an Estate?
WHAT IS AN ESTATE? AND WHAT IS INCLUDED IN MY ESTATE?
Your estate is simply ALL OF YOUR ASSETS. Your assets include assets which are held in your name alone, or jointly with other persons, such as your spouse.
The assets of the estate may include bank accounts, real estate, stocks and bonds, furniture, cars, jewelry, and other personal property of value (art work, collections, china, crystal, etc.).
Assets of the estate may also include life insurance proceeds (if you are the owner of the policy as well as the insured), retirement accounts, and payments that are due to you personally.
The value of the estate is equal to the "fair market value" of the different kinds of assets, after you have deducted your debts.
Because of the federal estate tax that is levied on estates which exceed a certain amount, the determination of the fair market value of the estate is very important.
Value of the estate is also necessary to determine so that the trustee, executor, or other personal representative can make the distributions required by the estate plan, if any.
For example, even a simple distribution plan such as equal shares or divisions to the children must be based on what is the value of the total estate so that equal shares can be calculated.
Good estate planning requires that an inventory and valuation of the assets take place as part of the planning process, even if it is an informal inventory and valuation.
Working with a qualified estate planning attorney is critical to this kind of planning so that the intent of the client is carried out.
If you have any questions about this or other estate planning matters, please visit my website at: http://www.tompkins-law.com
DWIGHT EDWARD TOMPKINS
Attorney at Law
This blog is intended for educational and informational purposes only and is not a substitute for legal advice from a qualified attorney in your jurisdiction.
Your estate is simply ALL OF YOUR ASSETS. Your assets include assets which are held in your name alone, or jointly with other persons, such as your spouse.
The assets of the estate may include bank accounts, real estate, stocks and bonds, furniture, cars, jewelry, and other personal property of value (art work, collections, china, crystal, etc.).
Assets of the estate may also include life insurance proceeds (if you are the owner of the policy as well as the insured), retirement accounts, and payments that are due to you personally.
The value of the estate is equal to the "fair market value" of the different kinds of assets, after you have deducted your debts.
Because of the federal estate tax that is levied on estates which exceed a certain amount, the determination of the fair market value of the estate is very important.
Value of the estate is also necessary to determine so that the trustee, executor, or other personal representative can make the distributions required by the estate plan, if any.
For example, even a simple distribution plan such as equal shares or divisions to the children must be based on what is the value of the total estate so that equal shares can be calculated.
Good estate planning requires that an inventory and valuation of the assets take place as part of the planning process, even if it is an informal inventory and valuation.
Working with a qualified estate planning attorney is critical to this kind of planning so that the intent of the client is carried out.
If you have any questions about this or other estate planning matters, please visit my website at: http://www.tompkins-law.com
DWIGHT EDWARD TOMPKINS
Attorney at Law
This blog is intended for educational and informational purposes only and is not a substitute for legal advice from a qualified attorney in your jurisdiction.
Subscribe to:
Posts (Atom)
