“How to Choose a Guardian for your Children”

I am not certain through whose eyes they determined this. I look around and still see far too many families struggling to recover to consider it over.   And while I acknowledge things may be improving on some level, I still find it hard to objectively look at a parent who cannot find work or lost a huge chunk of a 401(k) plan to say our Country is officially in the clear.

The number of bankruptcies taking place right now equally saddens me.  For many families, bankruptcy may be the only way to break free from the mountain of debt that constantly rests on their shoulders.  Of course that’s not to say this decision is ever taken lightly by those who file, as the consequences of bankruptcy are long-lasting and sometimes severe—especially if you stand to inherit money.

Example: a family member passes away who left you a cash gift in a will or trust.  On the surface it seems like this would be a much needed and timely relief for a family going through bankruptcy.  However, Federal bankruptcy rules declare that if you inherit money from a person who dies within 180 days of the date you filed for bankruptcy, you must tell the courts.   In simple terms, that means the inheritance now becomes a part of your bankruptcy estate and will be distributed to your creditors as the courts see fit.

This also applies to items that you may inherit such as cars, jewelry or furniture.  All of these items are subject to the administration of the bankruptcy estate.  However, this doesn’t mean that items like this are certain to go up on the auction block.  You can claim exclusion on certain things and the bankruptcy trustee has a certain amount of discretion in choosing what to liquidate. However, it can be extremely stressful to think about a family heirloom that has been in your family for years going to auction.

Hopefully your loved one had a Charlotte wills and estates attorney who knew a thing or two about protecting their inheritance from things like bankruptcy, creditors, divorce and the like. Ideally, your loved one would have been advised to set up a trust so any inheritance passed down to their family members would be out of reach from creditors and the courts.  If they did not, and you have not filed bankruptcy yet, this may still be an option if your loved one is willing to have their plan looked at by a qualified Charlotte wills and estates attorney.

Planning to avoid giving your hard-earned wealth to creditors is not illegal or immoral either.  You should think of it the same way you would when considering tax planning.  Tax planning is legal, but tax evasion is not.  The difference is whether you play by the rules and are honest.  For example, not telling the courts you received an inheritance is illegal and you could face serious consequences.  However, you are not skirting the rules if you are the recipient of a spendthrift trust; that was not your choice.

If you or your loved one needs help facilitating such a trust to protect your inheritance from the claims of creditors, simply call our Charlotte wills and estates office at (704) 843-1446 to schedule a “Peace of Mind Planning Session” at no charge ($750 value).  We will walk you through the necessary steps that must be taken to protect your inheritance from a bankruptcy filing or any other creditor’s claim. However, these appointments are limited to 5 per month so call today!

When presenting to a group of younger families many of the questions are geared towards children, guardians and long term planning.  At my presentation on Saturday, most of the questions were related to:

1.  Can’t I just add my child’s name to my accounts?

2.  Isn’t a trust for people who have a large estate?  We don’t have much anymore as a result of the bad economy.

3.  Can we leave gifts to our grandchildren in our Wills?

These are all issues that pertain more specifically to individuals in their age range.  They are thinking about the grandchildren they already have and how a Generation Skipping Tax works.  They are thinking about the ultimate effect of having added their son or daughter to a bank account because they lost their spouse and wanted to make certain they had someone else in place to help.  They are trying to adjust their ways of living after having taken a big loss on their 401K and IRA or their home when they sold it.

Although these are questions that younger individuals may be thinking about now, they are not immediate current concerns as they are with an older, retired community.

Planning isn’t something you do once; it is an evolving plan that changes with your age, your needs, your concerns, your personal family situation and the continuous changes in federal and state tax laws.

If you have a plan in place and have not reviewed it in the last 3 years or if you don’t have a plan, contact us at (704) 843-1446 and we will guide you in making the best choices for you and your family.

Learning about estate planning isn’t like learning to make spaghetti sauce, where the proof of the value of the recipe and ingredients is in the eating of the finished product. And estate plan is intangible. To feel confident that you have an accurate and valuable estate plan you have to have faith in the attorney who created it for you. How do you find an attorney in whom you can place your trust and confidence? Author Deborah L. Jacobs has a few tips to help you find the perfect attorney:

• Ask your friends or other trusted advisors
• Research an attorney’s background before you jump in
• Meet with the attorney and pay attention to the chemistry

Jacobs knows that the decision to spend money on something as intangible as creating or updating an estate plan is a difficult one right now. Those who do feel the cost of estate planning is a worthwhile investment don’t want that investment wasted. Finding the lawyer who will understand your needs, work toward your goals, and give you confidence and peace of mind is essential.