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Gig Harbor Estate Planning And Probate Blog

Know when to review your estate plan

One mistake that many people make is failing to update their estate plan. This isn't something that you can create once and then forget about forever. Instead, you need to look at the plan periodically so that you can assure it still represents your wishes.

There are certain times when you should check your plan. Major life changes might affect the terms of the plan, such as what assets need to be covered and whom you want those to go to. Making sure that your plan is up to date can help you to feel less stress and will provide guidance for your family members when you pass away.

Don't rush into purchasing a home without evaluating everything

Purchasing a home is a big step for anyone. Making sure that you've taken the steps necessary to get everything in order is important. You don't need to rush the process or you might make mistakes.

For many adults, buying a home is the biggest purchase they will ever make. It should be a place of refuge and not a source of major stress. Making sure you can afford the home and that you buy one that meets your needs are both essential.

Estate planning for adults caring for children and parents

Some adults are in precarious positions. Not only are they caring for their own children, they are also doing the same for their parents. Known as the sandwich generation, they have a lot on their plates. One thing that might fall by the wayside is estate planning.

The challenge that the sandwich generation faces is that they need to ensure that their children are cared for as well as their parents in the event that something catastrophic happens. Here are some important considerations for you to think about if you are in this position:

  • You may need to purchase your parents' home. You can turn around and lease it to them for a fair rental payment each month. This lets them access some of the home's equity but allows them to remain in their home. You will get to enjoy some tax breaks from the situation, such as one for mortgage interest.
  • Use your parents' medical bills to pay down the value of your estate. You won't have to deal with consequences on your taxes, and you can pay an unlimited amount. The only thing to know about this is that you have to pay the providers directly.
  • Help your parents out financially if possible. You can give up to $15,000 each year without having to worry about taxes. This annual gift tax exclusion is per parent, so you could give a total of $30,000 if you hand each one the maximum possible.
  • Think about long-term care planning. The cost of having to live in a nursing home or assisted living facility is expensive. Unfortunately, most medical insurance policies and Medicare won't cover all of these costs. Investments and long-term care insurance might be viable options to consider.
  • Create a comprehensive estate plan. You can include your parents in your estate plan through the will and trusts. If you decide to use trusts, make sure that you set them up to go to your children when your parents pass away. Additionally, include plans for your end-of-life care to make that easier for everyone if you can't make decisions yourself.

A quick primer on the basics of trusts in estate planning

A trust is a way that people can transfer assets to others without having to go through the probate process. There are many different types, each of which serves a specific purpose. You have to think about what needs to go to whom and determine how they might be affected by the inheritance. In some cases, such as when a person receives needs-based services like Medicaid, a special needs trust is necessary.

If you are considering adding trusts to your estate plan, you need to understand some aspects of the process. This information will help you choose an appropriate trust for the goals of your estate.

Review commercial leases carefully before signing

Finding a home for your business can be a real challenge. You might not be ready to buy a property, so you will have to find somewhere to lease. This is a bit different than residential leasing. Think about some different points as you are evaluating the possibilities for your company.

Your work is going to start before you even begin looking for a place to lease. Here are a few to get you started:

Estate planning concerns: Is your child irresponsible with money?

Imagine you have a $10 million investment account, but your child has never had more than a couple thousand dollars in his or her checking account, and every other week he or she is asking for a handout. You love your child until the end of the earth, but you're worried about whether he or she is fiscally responsible enough to manage such a large amount of investments.

If you find yourself in a circumstance like this, you might want to consider the creation of a spendthrift trust. A spendthrift trust essentially offers a way to protect your heirs from themselves and their poor money habits.

Single parents: Make a solid estate plan to protect your children

One of the biggest fears of single parents is that something will happen to them and they won't be around to raise their children. As horrific as this situation would be, it is actually a thought that can lead to positive action. Single parents need to be sure that they have a comprehensive estate plan.

The primary reason for you to have an estate plan set is so that you can ensure your children will have a good quality of life if something happens to you. There are a few components that you need to think about if you are a single parent. Here are a few to get you started:

Part of handling an estate is paying the decedent's debts

As a country, America has around $13 trillion in debt. People who are 45 to 54 years old have the highest debt average at $134,600. This brings up a point that many people might not think about very often -- the status of debts when a person dies. This can be a difficult thing to handle when you lose a loved one.

There are a few different things to remember about debts of a decedent. If you are charged with handling the estate after your loved one dies, you should make sure that you understand these.

Sound estate planning is important to prevent legal confusion

The more money your estate holds, the more complicated things will be for your heirs after you die, especially if you die without an estate plan. This is why it's essential for individuals who have substantial assets to create a rock-solid plan that will be followed after their deaths.

Estates in Washington that don't have any kind of estate plans associated with them could be substantially diminished in probate proceedings while relatives argue over who gets what. The ongoing, two-year estate battle regarding the late pop musician Prince's estate that's playing out in another state is proof of just how bad things can get.

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