Black Friday and Protecting Your Assets

Posted by on Nov 26, 2021 in Legal News |

black fridayIf you know about Thanksgiving, chances are you’ve heard of Black Friday, too. Black Friday always takes place on the Friday after Thanksgiving. The shopping holiday offers great deals for consumers, and millions of people go out shopping on Black Friday, providing the economy with a huge boost.

Buying assets is great, but how are you protecting them? Estate planning provides a lot of ways you can protect your assets, especially from assets’ worst nightmare: a lawsuit. 

Lawsuits in America

America is a litigious society. Millions of lawsuits have been filed over the years, for issues both minor and major. Big money awards usually come from class action lawsuits, and the payouts have come from major companies like General Motors, BP, Volkswagen, WorldCom, and more.

While a lawsuit you face might not be Enron-level (the payout there was $7.2 billion), getting sued can still put a huge dent in your pocket, even if the claims are baseless. If you work in an industry where lawsuits are common, or you just want to protect your assets from the worst-case scenario, consider these legal tools.

Know Your Business Entities

Keeping your personal and business entities separate is important, and, if you don’t take the steps to create a separate business entity, a dispute can cost you everything you own. An LLC or corporation provide protection against liability if you’re sued. If you own a sole proprietorship or partnership, be careful, as they might not offer protection in the event that you’re sued.

Get Insurance

There are some professions that generate more liability than others. Professionals like financial advisors, doctors, real estate agents, and lawyers have to get insurance. Malpractice insurance isn’t the only way to protect yourself against lawsuits. You can also look into homeowners, commercial liability, worker’s compensation, and auto insurance. Shop around to get the best prices for your policy. 

Homestead Exemptions

In Florida, for example, a $25,000 is applied to the first $50,000 of your home’s assessed value. Your home has to be your permanent residence to meet this exemption, and you have to have owned the property as of January 1st of the tax year. States protect some level of home equity across the country. So, even if you declare bankruptcy, state law prohibits the courts from giving your home to creditors.

Get Rid of It 

Creditors can only seize assets that you own. No matter how bad the lawsuit or how much money you owe, a creditor cannot come for an asset that is not yours. If you are solvent and an asset transfer won’t render you insolvent, consider simply transferring ownership of your assets to irrevocable trust. You can also give away assets as gits. Tax laws allow for some amount of exclusion, based on how much you give. 

If an asset means a lot to you and you don’t want to see it taken away by creditors, giving it away might be your only choice. If it’s financially doable for you, it’s an option.

Don’t Wait 

Of course, you don’t want to wait to do any of this. It’s too late to transfer once the judgement is rendered. You want to take these steps now if you believe you’re at a high risk of lawsuits. Even if one doesn’t happen, preparedness is still the best option.

Even the word “lawsuit” is enough to make some peoples’ skin crawl. Luckily, there are ways you can protect yourself from going broke in the event of a lawsuit. Contact an estate planning attorney to put some of these tools into action.

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Thanksgiving: A Time to Be Appreciative

Posted by on Nov 24, 2021 in Legal News |

happy thanksgivingAccording to History.com, Thanksgiving started in the 1600s, when Plymouth colonists and Wampanoag First Americans shared a harvest feast. That was the first Thanksgiving celebration in the colonies, and, for the next two centuries, Thanksgiving was celebrated by individual states and colonies. 

It wasn’t until 1789 that Thanksgiving became an actual government holiday. President George Washington declared that November 26, a Thursday that year, would be the day of Thanksgiving celebrations. Since then, Turkey Day has always fallen on the final Thursday of the month. It is a time to be grateful, eat delicious food, and watch football.

When it comes to Thanksgiving, we are supposed to be appreciative for what we have. In most households, people go around the table saying something that they’re grateful for. While that’s an awesome tradition, you should take your appreciation a little further. In this article, we’ll talk about the best way to pass assets and wealth to your heirs. 

401(k)s and IRAs

401(k)s and IRAs are investment accounts that grow, free of taxes, while you’re alive. They continue this tax-free growth after being inherited by your beneficiaries. Some heirs, like spouses and people who have disabilities, are able to hold these accounts during their lifetimes. But note, most heirs have to empty 401(k)s within ten years.

Your Home

Your house is likely the most valuable, nonfinancial asset that you have. Depending on where you live, heirs may not have to pay a capital gains tax on the house, should they decide to sell it. The heirs will, however, have to keep up with upkeep and taxes, so make sure that whoever you choose is able to do so.

Term Life Insurance

For loved ones who rely on your caregiving and income, term life insurance can be a godsend. You can get a lot of insurance coverage for, comparatively, not much money. Term insurance is a variety of life insurance that covers people for a set term of years. If someone dies within that term, a death benefit is paid. You can make your loved ones your beneficiaries.

Note that if you don’t die during the term, you won’t get the money back. But, that’s not necessarily a bad thing. After all, you’ve purchased home insurance, but that doesn’t mean you want your house to burn down. Term life insurance is an affordable way to safeguard your loved ones who depend on you.

Whole Life Insurance

Whole life insurance is a simple form of permanent life insurance. It covers your entire lifespan, as long as you pay the premiums. When you die, this life insurance death benefit is paid out to your beneficiary. These policies not only provide a guaranteed benefit upon death for your heirs, there is also a cash-value component that you are able to access for long-term care, emergencies, or other needs. Whole life insurance can be more expensive than term life insurance, and you should avoid borrowing against your policy, as that can backfire pretty badly.

Annuities

Simply put, an annuity is a contract that you sign with an insurance company. You make a lump sum payment or a series of payments. In return, you get periodic payments that last for life. You can put your beneficiaries onto an annuity, ensuring that they get a steady stream of income. Annuities that have a death benefit can also provide a huge lump sum for your beneficiary, if you die. 

Contact an estate planning attorney to set up these documents, as doing them yourself could lead to legal mishaps and unenforceability. Discuss your estate plans with your loved ones sooner than later, especially if you plan to leave a large amount to charity or leave different people different amounts. 

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Making a Difference in Your Own Life

Posted by on Nov 10, 2021 in Legal News |

veterans day Every year, Veteran’s Day is held to commemorate the sacrifices of U.S veterans. Veteran’s Day takes place on November 11th, and we’re able to honor the men and women who defended our country in armed conflicts. This holiday replaced Armistice Day in the 1950s and, ever 1954, it has been a sacred time of remembrance. 

Veteran’s Day honors the men and women who have made a difference in our lives with their bravery. How are you making a difference in your own life? Contact WFP and consult an estate planning attorney to get your must-have documents in place. A comprehensive estate plan improves your sense of security and peace of mind. 

Must-Have Documents

In this article, we’ll discuss some must-haves for estate planning, including: beneficiary designations, letter of intent, durable power of attorney, wills, trusts, healthcare power of attorney, and guardianship designations. 

Beneficiary Designations 

There are different assets that can pass to your heirs without you having to dictate them in the will (i.e. 401(k) plan assets). For this reason, it’s important to maintain both a beneficiary and contingent beneficiary on these accounts. Insurance plans, for example, should have a beneficiary and a contingent beneficiary, in the event that the assets pass outside of the will.

Letter of Intent

A letter of intent is a document that you leave to your executor or beneficiary. The letter of intent defines what you want done with your assets after you die or if you are incapacitated. Other letters of intent contain special requests and funeral details. Though letters of intent are not legally binding, they’re informative of your intentions and can have an impact in probate court.

Durable Power of Attorney

A durable power of attorney is someone assigned to act on your behalf if you are unable to do so. If you don’t have a durable POA, a court might decide what happens to your assets in the event you’re found incompetent. That decision, in turn, might not comport with your views.

Wills

A last will and testament is a finale expression of what you want to happen with your assets when you die. Wills and testaments have to be written according to the legal rules of the state in which you live; otherwise, they will not be legally enforceable and could be challenged in probate court, where they have to be authenticated.

Trusts

Trusts are a three-party fiduciary relationship. You, the grantor, transfer title of an asset to a trustee. The trustee, a secondary party, holds the title until you want the beneficiary, the third party, to have it. For example, a beneficiary might get title after you die. Often, trusts are vaunted above other estate planning documents because they don’t require you to go through probate court.

Healthcare Power of Attorney

Much like a durable power of attorney, a healthcare power of attorney makes decisions on your behalf if you become unable to do so (if you fall into a coma, for example). The healthcare POA’s decision-making arena involves medical decisions, and they will uphold your wishes for your healthcare, even if you can’t voice them yourself.

Guardianship Designations 

If you have small children, it’s important to include guardianship designations in your estate plan. This paperwork will ensure that your kids have a legal guardian if something happens to you and your spouse. Talk with your proposed guardian before filing a designation to make sure that he or she is on board with this major responsibility.

If this all sounds confusing, don’t worry. Estate planning can be complicated, but, if you have an attorney to help you, it will make more sense. You’ll be able to complete your estate plan efficiently and thoroughly with the help of an estate planning attorney.

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