Many of our readers will already know that a blind trust is a vehicle which holds the wealth of a candidate (or a politician serving in office) in an effort to avoid any conflicts of interest. We thought this might be a good opportunity, however, to discuss trusts in general: Which trusts are out there, what are the differences between them, and what purposes do they serve?

Revocable Trust: A revocable trust is one of the most commonly used trusts because it is able to be revoked or changed so long as the grantor (the person who created the trust) is still living. There are many other trusts that fall under the category of “revocable trust”, including a pet trust (which addresses the physical and financial care of your pets), an education trust (which provides for your child’s educational expenses), and many more.

Irrevocable Trust: An irrevocable trust, logically, is one which cannot be revoked or changed after it has been signed. The irrevocability is what makes these trusts useful for tax planning and asset protection. Some types of trusts which fall under the category of “irrevocable trust” include life insurance trusts (which save the beneficiary on the policy from paying exorbitant estate taxes), spendthrift trusts (which reduce the beneficiaries’ estate taxes and protect trust assets from creditors’ claims), and more. It is important to note that any revocable trust becomes irrevocable upon the death of the grantor.

Charitable Trust: A charitable trust is one in which at least one of the beneficiaries is a charity or non-profit. These trusts allow the grantor to claim a portion of their contribution as a charitable deduction under income tax laws. A charitable trust can be either revocable or irrevocable to begin with, but if distributions will be made during the grantor’s lifetime the trust must be irrevocable.

Special Needs Trust: Sometimes also called a “Supplemental Needs Trust”, is a trust created for the benefit of a person receiving government benefits—this usually includes someone with a physical or mental handicap—and its purpose is to allow outside sources to provide the beneficiary with supplemental funds without endangering their right to receive government benefits. A special needs trust can be either revocable or irrevocable, but usually includes a clause instructing that the trust be dissolved if its existence disqualifies the beneficiary for government benefits.

We have only discussed some of the most commonly used trusts here, but there are many, many different kinds of trust which can be valuable for estate planning or asset protection. If you have any questions about trusts or estate planning, please contact our office.

Some of the common mistakes listed in the article are things that are very easy to fix once you’re aware of them—listing the wrong beneficiary on an old retirement account or life insurance policy, for example. All too often people get a new job or new policy and list the right beneficiary at the time, then that policy goes in a drawer or filing cabinet for years. During those passing years you may get married or divorced, or you may have children. Any of these big life events require changing those beneficiaries. Luckily, making that change is generally a quick and easy fix.

If you aren’t worried about your retirement or life insurance beneficiaries, consider what what will happen to your children in the event of an emergency. Many clients agonize over who to name as guardians of their minor children, but forget to review those decisions every few years. The energetic young couple you chose 7 years ago might now have children of their own, or have moved to another state, and may not be as ideal a choice as they once were. If you listed your parents 10 years ago you might decide in the intervening years that an aging couple is not quite as able as you thought to take on so much added responsibility.

The fact of the matter is that our lives are not static or stagnant, they are constantly growing and changing, and estate planning documents will need to grow and change with them. If it has been more than 2 years since you last reviewed your plan, it’s time to get out the magnifying glass and give your documents another good look. Chances are you won’t have any big changes to make, but those little details can turn into glaring problems when left neglected for too long.

1. Assessment. The first step to creating a plan that can protect your family, your future, and your family’s future begins with simply taking stock of what you have and where you are. Begin by making a list of all your assets, including your house, stocks, investments, bank accounts and personal property. Next consider your responsibilities and goals: what are your plans for the future or for retirement? Who do you wish to provide for in your will? Do you have a spouse or children who might benefit from a trust?

2. Implementation. Now it’s time to put all that information you gathered in step one into play. The particulars of your estate will have a great impact on how you build your estate plan: A small estate and straightforward inheritance plan may require only a well-drafted will, while a larger estate may benefit from the asset protections found with a trust. Your goals for the future and your wishes for your family will have an equally large impact on your choice of estate planning strategies as well, including whether to include an education trust for young students, a pet trust for your furry family members, or a retirement trust to protect your own investments. An estate planning attorney can help you understand your options and implement the strategy you feel works best for your family.

3. Follow-Through. Once your estate plan is drafted, signed, and tucked safely away you’ll want to ensure that it continues working as you intend it to. The best way to do this is to review your plan with your estate planning attorney every 2 or 3 years. Your family and financial situation is likely to change over the years—estate taxes and laws change as well—and all the hard work you put into creating your plan can be undone if you don’t keep up with the changes.

1. Create a nomination of guardians for your children. The single-most important step you can take to ensure the well-being of your children is to execute a nomination of guardians. This is the document that names who you believe are the best and most loving people to parent your children if something should happen to you. This document is your children’s best protection against unqualified guardians or the foster care system.

2. Talk to your attorney about protecting your children’s inheritance (and in some cases protecting your children from receiving an inheritance too soon) with a trust. With a trust you can ensure that your children will be provided for financially until they reach adulthood, as well as leave a legacy for your children which includes your financial, philanthropic, and educational values.

3. Invest in your child’s higher education. Education is more important than ever in our current economic situation, and parents can resolve in 2012 to secure their child’s education by setting up a 529 education savings plan. This is something that parents can contribute to regularly, as well as grandparents, aunts and uncles, and more. A 529 plan that you set up today will be there even if you can’t be. After all, protecting your child’s future doesn’t stop when they reach 18.

If you have other questions or concerns about how to protect your minor children please contact our office today. We can help ensure your children will be provided for—and that you will have the peace of mind you deserve.

1. Think about your medical future and put your wishes into writing. How would you like to be cared for in the event that you are incapacitated? How long (and by what measures) would you like to be kept alive if you were to be irrevocably injured or diagnosed with a terminal illness? Who would you like making these decisions for you if you were unable to make them for yourself? These are the issues addressed in an advanced healthcare directive or a living will—documents every adult should have not only for their own peace of mind, but for the peace of mind of their family and loved ones as well.

2. Execute a HIPAA to help protect your medical privacy. A HIPAA Authorization is the document that lets your doctors and other health care providers know who may receive information about your medical status and treatment. Not only does this protect your privacy, but it ensures that the people who should be informed about your medical status will have access to the information they need.

3. Consider your eventual long-term care needs and look into long-term care insurance as a safety net. There is no way to know for sure which of us will need long-term care, but as life-expectancy increases the chances that any of us will need long-term care increase along with it. You can plan for this eventuality and protect yourself and your family from being hit too hard by the expenses of long-term care by investing in long-term care insurance. There are a few options available for long-term care insurance, and our office can help you choose which plan might be best for you.

Times have been tough financially for a lot of people over the past few years, and although things are finally beginning to look up, many people will still be making New Year’s resolutions that focus on fiscal responsibility and financial security. Below are three financial resolutions that can help your family in 2012:

1. Take stock of your current financial situation. Being well-informed and keeping good records of your income, expenses, investments and assets is absolutely essential for good financial health. If something happened to you tomorrow would your spouse or family know what to do and have access to the documents or information needed to protect or pass on your estate? Make a list of all your assets and investments, including account numbers and contact information and keep it in a safe place where your financial agent (or someone else you trust) can find it if and when necessary.

2. Make an investment plan for the future. As with anything in life, it’s important to be prepared for what the future may hold. Having a five year, ten year, and fifty year plan for your financial future is one of the best things you can do for yourself and your family. When making your plans take into account your current situation, your future goals, and your wildest hopes and dreams for the years ahead. Consult with a knowledgeable financial advisor who can help you plan for and achieve these goals.

3. Protect your assets. We live in a litigious and uncertain world and protecting the assets you have is of the utmost importance. Our firm can help you evaluate and implement the many options available to you to protect your assets. The asset protection strategies you choose will depend on the nature of your assets, the situation of your family, and your goals for the future.

Taking the right steps in 2012 can mean a strong financial base now, as well as a bright and secure future in the years ahead for you and your family. Our firm would like to help protect that future. Call us today.

The author writes of his father—chronically ill, stroke survivor, suffering from mild but advancing dementia—who is currently staying in a nursing home, “where they’ve put him on a diet of pureed foods and thickened liquids, but he often refuses to eat, demanding to be taken home and fed the home cooking he’s always loved. It’s hard to tell him that may never happen, and that his options are increasingly grim. If my dad can’t eat, a feeding tube will be his only choice. Other than giving up the fight.”

The family is now struggling to decide if a feeding tube is the right course of action, what their father would (or does) want, and how involved he should be in the decision considering his current state of mental health. “We worry… that with mild but advancing dementia, my father won’t be able to fully comprehend the implications of being fed through a tube implanted in his gut. And if he declines it, is he competent to make that decision?” These are the heart-breaking decisions that can leave loved ones asking themselves for years after, “Did we do the right thing?”

We often shy away from talking about these issues with our family members and loved ones. We think that they are too sad, too depressing, or too far into the future to worry about yet. The only thing that can make these decisions even the tiniest bit easier, however, is knowing for certain what your loved one would want; and the only way to know for certain is to talk about your feelings with your family, and to put your wishes in writing with a living will or healthcare directive. Our office can help you do this.

More often than not the best that can be hoped for in a situation like the one discussed above is that some measure of peace is attained. We wish this for the author of the article and his family, and we wish this for any of our readers involved in similarly difficult and painful circumstances.

According to this article on the CNN Money website, you can benefit from a trust “if you have a net worth of at least $100,000 and meet one of the following conditions…

“* A sizable amount of your assets is in real estate, a business or an art collection;

* You want to leave your estate to your heirs in a way that is not directly and immediately payable to them upon your death. For example, you may want to stipulate that they receive their inheritance in three parts, or upon certain conditions being met, such as graduating from college;

* You want to support your surviving spouse, but also want to ensure that the principal or remainder of your estate goes to your chosen heirs (e.g., your children from a first marriage) after your spouse dies;

* You and your spouse want to maximize your estate-tax exemptions;

* You have a disabled relative whom you would like to provide for without disqualifying him or her from Medicaid or other government assistance.”

The article goes on to explain that depending on your assets, your family, and your goals you may have a number of different trust options to choose from. The article gives very helpful explanation of the various types of trusts you may have available to you, and will give an idea of just how powerful and flexible a trust can be.

What the article doesn’t mention is that some of these trusts can be used in conjunction with each other, to provide layers of protection and control of your assets. The world of trusts is complex, but full of potential. Please contact our office (or your own local estate planner) to learn more about trusts, and determine how a trust might be good for your family.

This article in Investment News discusses what Jobs’ trustees or heirs might choose to do with his valuable investments. According to the article Jobs had billions of dollars invested in Apple and Disney stock. Now, “under the U.S. Tax Code, his heirs may sell shares of Apple and Disney, and avoid $867 million in capital gains taxes. If Apple’s late co-founder left his estate to his wife, Laurene Powell Jobs, the family won’t be liable for the 35% estate tax until she dies or gives money to others, according to estate planners.”

An executor or trustee has a responsibility not only to follow the wishes of the grantor of the trust, but also to look out for the best interests of the beneficiaries; which in this case may include selling or diversifying investments Jobs had chosen to hold onto for sentimental reasons.

Additionally, any executor or trustee will have tax laws to consider–not only the laws in place right now, but any changes to the estate or capital gains tax laws being considered by Congress for 2013. “The capital gains tax is set to rise to 20% in 2013, from 15%, and high-income Americans also will be subject to a 3.8% levy on unearned gains.” This means that advisors and heirs won’t want to wait too long before making any decisions.

The estate of Steve Jobs may be larger than most, but the same issues and questions will face the executors, trustees, and heirs of estates of all sizes. Whether you are a grantor, executor, heir or trustee, our office can help you through any questions or concerns you may be facing. Don’t be afraid to contact us.

Before you roll your eyes at the idea, consider this: An estate plan is something every person needs, whether it’s your single younger nephew, your older sister with her two young children, or your retired, aging parents. Furthermore, although everyone needs an estate plan, many people (wrongly) consider it a luxury, and put off creating one—often until it’s too late.

You may be thinking, No, an estate plan is too personal (too expensive, too morbid) to give as a gift. But we can safely say that not one of these excuses is true. If you feel an estate plan is too personal a gift, we recommend giving a gift certificate good for the cost of a basic plan, which the recipient can then design and add to according to his or her needs. If you feel an entire estate plan is too expensive a gift, you may want to consider paying for a portion of the plan, or for the first consultation with an attorney, just to get your loved one started. And if it’s morbidity that you’re worried about, perhaps giving a “Loving Family Legacy Plan” sounds more appealing.

This year, don’t give a gift that will impress for a moment but be forgotten within a week; instead, give the gift that will protect your loved one—and their loved ones!—and will last for years to come. Give the gift of an estate plan.