Tip 1: If your property changes, so should your plan.

When you first create your estate plan, you do so with the knowledge that your property may change over the years. You may, for example, leave your children an equal portion of your estate. However, any significant increase or decrease in property, or the acquisition of real estate property in different states, should prompt you to make changes to your plan. Also, if your estate was not large enough to be subject to estate taxes but has since grown, you’ll probably need to make significant changes to address the estate tax concerns.

Tip 2: If your family changes, so should your plan.

The birth of a child or grandchild, a divorce, remarriage or any significant change in family circumstances should also prompt you to change your estate plan. This is especially important if you become a parent or guardian of a minor child and your previous estate plan made no provision for appointing a replacement guardian.

Tip 3: If time passes, you need to review your plan.

Even if you don’t experience significant life changes, it’s important to regularly review your estate plan. A good rule of thumb is to review it on at least a yearly basis, though sometimes every other year may be appropriate. This is important because even though your life and desires may remain the same, the laws that affect estate planning are constantly changing and you may need to adjust your plan to take these new changes into consideration.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

Because of the manner in which her estate was structured, 2011′s top philanthropist, Margaret Cargill, died 5 years earlier in 2006. Her donation of $6 billion to different charitable organizations far outweighed every other donation made in 2011.

Though she inherited the bulk of the Cargill agribusiness fortune, few people in the country knew who Ms. Cargill was. Cargill is one of the largest privately owned companies in the nation, consistently ranking as the top most valuable private company since 1998, with the exception of only 2006 and 2007, when it came in second to Koch industries. The company produces food products, agricultural products and fertilizer, and in 2011 had revenues of over $100 billion.

When she died in 2006 at the age of 85, she left the charities her fortune because she had no children. However, she divided her ownership of stock in the Cargill company between the two charitable foundations. Because it was privately held stock, the charities were not able to effectively “cash in” until the company sold a large stake of stock in one of the publicly traded companies in which it had an interest.

The $6 billion gift provided by Ms. Cargill is more than 10 times the amount given by the second-place philanthropist, manufacturing tycoon William S. Dietrich II. Paul Allen, of Microsoft fame, was in third place with a gift of 372.6 million.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

You may have heard the recent story about the 48-year-old Florida multimillionaire who legally adopted a 42-year-old girlfriend. This would naturally cause you to question why, though the answer is a little complicated.

Let’s begin back in 2010 when John Goodman, the millionaire in question, was involved in a drunk driving crash that killed a 23-year-old man. Mr. Goodman reportedly drove through a stop sign, crashing into the younger man’s car causing it to flip over into a canal where the young man drowned.

Now consider that Mr. Goodman has two teenage children. Some time ago Mr. Goodman had created an irrevocable living trust for these children, and that trust is now estimated to be worth $400 million. Once the children turned 35 they can divide the trust as they wish.

Since the drunk driving crash, Mr. Goodman not only faces criminal charges but also a wrongful death lawsuit that can strip him of his wealth. The irrevocable living trust that Mr. Goodman established, however, is not subject to seizure under the wrongful death lawsuit. Once he adopted his girlfriend as his child, she therefore was also subject to the irrevocable trust and could receive a one third portion share of it since she was already over the age of 35. She could then go on to share that money with Mr. Goodman if she wants to. However, the probate court has ruled that the trust may be subject to seizure because of his chosen adoption, and lawyers for the children are seeking to have the adoption ruled fraudulent.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

If you’re like many people, you may be considering creating a revocable living trust.  This is a powerful planning tool that can have many benefits.  It’s important to carefully handle your affairs, including trust funding, so that you’re able to achieve all benefits.  This is especially true if you’re creating the revocable living trust to avoid probate.  Take a look at the information below, to learn more.

One of the main benefits of creating a revocable living trust is the ability to avoid probate.  This can save time and money, and can allow your beneficiaries to receive their inheritances more quickly.  This is why so many people choose to create this type of trust, in addition to their will.  In order for your trust to be effective, and to avoid probate, your trust must be fully funded.

This means that the assets held in your trust must be re-titled to reflect the name of your trust.  If you don’t fully fund your trust, you will not be able to take advantage of its benefits.  It’s important to carefully fund each asset and receive confirmation that the asset is now titled in the name of your trust.  This will allow your trust to work to the best of its ability.

If you’re just getting started creating a revocable living trust, it’s a good idea to work with an attorney.  This will allow you to get the best results possible, and can make it possible for you to avoid costly errors.  An estate planning attorney can assist with all aspects of your trust, including funding, while also helping your with your other estate planning affairs.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

While estate planning is a powerful and essential planning tool, only some choose to utilize it during their lifetime.  With a plan in place, it’s possible to be prepared for the future.  It’s important to understand how your affairs will be handled after your death, whether you have a plan in place, or not.  Take a look at the following information, to better understand what will happen after your death.

What Happens When You Die Without a Will or Without Any Planning in Place

Unfortunately, many people choose never to plan, and they die without a will.  If you die without a will, this means that you will have no control in how your affairs are handled.

Without a will in place, state laws determine how assets are distributed to beneficiaries, and the probate court is responsible for making other important decisions.

For example, the probate court will choose a representative to handle your estate affairs.  This “administrator” locates, manages, and distributes your assets, and handles your estate’s financial affairs.

In addition, the probate court will also choose a guardian for your minor children.  This means that you will not choose who raises your children.

Plus, your assets will be distributed based on your state’s intestacy laws.  Depending on the size of your estate, your heirs may have to prove in court with witness testimony who is entitled to inherit from your estate.  This process can take several months or years, but at its completion, your estate will be settled.

What Happens When You Die With a Will

If you choose to create a will, you will have control over what happens after you die.  Your will is used to guide the probate court and your executor in how to settle your estate.

Your executor will need to find your will, and present it to the probate court.  He or she will also have to find and locate assets and notify beneficiaries that probate has begun.

Once your will is validated, it’s used to appoint a guardian for your children and to determine how your assets are distributed.  Even with a will, this process can take several months or years.  At completion of the entire process, your estate will be settled.

If you have any questions about your own estate planning affairs, consult with a qualified estate planning attorney.  Please checkout part 2 of Estate Planning:  What Happens After Death.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

A revocable living trust is often the center of an estate plan.  While it’s not all encompassing and is used in conjunction with other ancillary estate planning documents, a trust is incredibly beneficial for most estate planning clients.

Cindy had read several books on estate planning.  She did more online research and realized that she and her husband, Jack, needed a revocable living trust.  She emailed her CPA and asked for a referral to a qualified estate planning attorney and was pleased to receive an immediate response.

Cindy made an appointment for she and Jack to meet with the estate planning attorney who agreed with her conclusion that they would benefit from an estate plan including a revocable living trust.

After much thought and consultation, the estate plan was designed, drafted, executed, and implemented.  Cindy and her attorney were both very good at follow through; Cindy wanted to get everything in order before their third child was born.

Just a few months later, Jack was killed in a work accident.  He was electrocuted and never regained consciousness.  Cindy called the estate planning attorney who took care of everything so Cindy could focus on her family.  He kept Cindy abreast of all actions taken.

Through provisions in the revocable living trust, an asset protected family trust was set up with Jack’s share of the assets.  The trust benefited Cindy and her three children.  Cindy and the CPA were trustees.

On the way to playgroup just 6 weeks after Jack’s funeral, Cindy was distracted for a moment because the kids were crying and she was still distraught over Jack’s death.  She went through a red light and plowed into an SUV containing a family.  Everyone in the SUV was killed, but for one child in a car seat.

Lawsuits ensued.  All of Cindy’s assets were seized.  She and the three children would have been left with nothing but for the family trust which was asset protected and couldn’t be seized in any law suit.

To this day, Cindy is grateful that she and Jack did revocable living trust planning.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

Trusts are an essential estate planning tool. They are used by a myriad of clients to achieve estate planning goals. Below are some important trust facts.

1. Trusts are contracts. They are legal documents full of instructions.

2. There are many types of trusts: revocable living trusts (with family, marital, and beneficiary trusts), irrevocable life insurance trusts, charitable trusts, children’s/grandchildren’s trusts, and, even, pet trusts.

3. In trust administration, there are three important people:
• The trust maker: Sometimes called a “grantor” is the creator of the trust.
• The trustee: The legal title holder of the trust property and the fiduciary who carries out the instructions in the trust.
• The beneficiaries: Those individuals who receive distributions of assets either directly from the trust or on their behalf.

4. Trusts are used to organize assets, provide instruction to trusted helpers, save taxes, carry out charitable goals, pass on family legacies, and provide asset protection. Trusts are also used to care for surviving spouses, children, pets, and other loved ones.

5. The revocable living trust is by its very nature, revocable. Other trusts are irrevocable, meaning that once established they can’t be changed.

6. Revocable trusts are not independent tax entities. Taxes are filed on the trust maker’s 1040, using his social security number. Irrevocable trusts are separate tax entities, having their own EIN and having their income reported on a 1041.

7. All trusts, other than revocable living trusts, are irrevocable.

8. A succession of trustees should be named in case a trustee is unable or unwilling to serve. Trustees can be trusted family members and friends or a professional such as an estate planning attorney, CPA, or corporate fiduciary (bank or trust company.)

If you have any questions or concerns about trusts and trust planning, consult with a qualified estate planning attorney.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.