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What is a Lifetime Transfer Strategy?

May 5, 2023/in Estate Planning /by Michael Lonich

Are you seeking ways to manage and protect your family’s wealth and assets? A lifetime transfer strategy is an invaluable tool that allows for the planned process of transferring your assets throughout your life instead of upon your death.

What is involved in this comprehensive approach, and how is it crucial for preserving generational wealth?

What Can Be Transferred?

Lifetime transfers are a method of transferring and distributing assets to your designated beneficiaries during your lifetime rather than leaving them as part of an estate after death.

Assets that can be transferred during one’s lifetime typically include tangible items such as real estate, cars, jewelry, and furniture and intangible items such as stocks, bonds and company shares. Additionally, lifetime transfers can also involve the transferring of intellectual property, such as patents, trademarks, and copyrights.

What Are The Advantages and Disadvantages?

The primary advantage of a lifetime transfer is that it allows you to distribute your assets as desired during your lifetime, allowing you to control who will receive them and when. This helps to ensure that your estate planning goals are achieved in the most efficient way possible. Transferring assets during your lifetime often allows for more flexibility than a traditional estate plan.

On the other hand, there can be some drawbacks associated with a lifetime transfer strategy. One of the main drawbacks is that it may involve complex legal documents, which can be challenging to navigate without proper guidance. Additionally, applicable taxes or fees may vary depending on the value or type of assets being transferred. 

It should also be noted that transferring assets during one’s lifetime often means relinquishing control over them and, therefore, can limit your ability to change your estate plan if you choose to do so at a later date. 

Is There a Limit on the Amount You Can Transfer?

Generally speaking, there are no limits on the amount of assets you can transfer during your lifetime. But, any transfers over a specific monetary value may be subject to taxes.

As of 2023, you can transfer up to $12.92 million during your lifetime without incurring a gift tax. However, you can gift any individual $17,000 annually without incurring taxes or affecting the lifetime exception.

Can You Do a Lifetime Transfer Into a Trust?

When doing a lifetime transfer into a trust, it’s essential to understand the different types of trusts available and how they work. Revocable trusts allow the grantor (the person who creates the trust) to make changes or revoke the trust at any time. Irrevocable trusts cannot be changed once they have been created. 

Is a Lifetime Transfer Strategy Right For You?

A good lifetime transfer strategy maximizes the benefits of transferring assets during life while minimizing future tax liabilities and ensuring adequate provision for dependants and other beneficiaries over time. 

Because of the legal requirements and various regulations, it is essential to seek professional advice before proceeding with a transfer. Our attorneys at Lonich Patton Ehrlich Policastri have the expertise you need to create an estate plan that meets your specific needs. Call us today at 408-553-0801 or fill out our online form here to schedule a free 30-minute consultation. By making strategic decisions now rather than later, you can ensure peace of mind knowing that all matters relating to inheritance will be handled smoothly both during and after one’s lifetime.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

https://www.lpeplaw.com/wp-content/uploads/2023/05/bigstock-Control-Spending-Concept-Hand-457045781.jpg 900 686 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2023-05-05 23:40:012023-05-05 23:40:01What is a Lifetime Transfer Strategy?

How Mediation Works and When to Get It

April 6, 2023/in Estate Planning /by Mitchell Ehrlich

Mediation is when a neutral third party, known as a mediator, helps two or more disputing parties find a compromise. A mediator can be a beneficial aid in communicating civilly to reach a goal that best satisfies everyone involved. 

Mediators don’t take sides in disputes but provide support and solutions for a fair settlement. During negotiation, mediators aren’t present to issue commands or make final decisions. Their job is to moderate the discussion, find common ground and encourage resolution. 

Most commonly seen in divorce and child custody issues, mediation can also be utilized in family and business conflicts. When deciding if mediation is the most productive way to solve your dispute, consider how you’d like to communicate with the other party and if you’d be able to advocate for yourself in an open discussion. 

When is Mediation Necessary?

If you’re looking for a flexible process, mediation is an informal approach to conflict resolution. When parties are facing difficulties confronting each other, a mediator will help initiate the flow of conversation and guide them through the negotiation. 

When you choose to have a mediator, you are also choosing to compromise. Using a mediator means you trust the other party is committed to finding an agreeable arrangement. If the parties are reasonable and willing to agree, they will find mediation to be a worthwhile process.

The Pros and Cons

While mediation is a productive tool for negotiation, every dispute is unique. If one party is likely to take advantage of an informal situation, then mediation will not be effective.

As a voluntary process, mediation must be a consensual conversation in which everyone involved is a willing participant. Agreements through a mediator can also include non-legal matters that wouldn’t be addressed in court and are often more private than public court disputes. Other advantages of mediation include:

  • Saving time and money by avoiding litigation
  • Leading to a healthy relationship after the resolution
  • Allowing direct communication between parties
  • Maintaining control of the decision making
  • Resolving the dispute on your own terms

Although mediation can be effective for amicable parties, not every dispute can be resolved on friendly terms. The mediator is impartial, which means you will be responsible for advocating your agenda. If there is an existing hostile relationship between the parties, consider the disadvantages before moving forward with a mediator, such as:

  • Resulting in more issues if one party is unreasonable
  • Not being able to advocate specifically for your needs
  • Still leading to litigation if mediation is unsuccessful
  • Not receiving legal advice during the dispute

Furthermore, mediation does not guarantee a solution that everyone will agree on. 

At Lonich Patton Ehrlich Policastri, we can help you determine whether a mediator is appropriate for your case. We have decades of experience in San Jose and the greater Bay Area dealing with mediation in a number of cases. Contact us for a free 30-minute consultation at 408-553-0801, and one of our attorneys will guide you through the negotiation process.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

 

https://www.lpeplaw.com/wp-content/uploads/2023/04/bigstock-Woman-Gesticulates-To-A-Man-An-447492178.jpg 534 900 Mitchell Ehrlich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Mitchell Ehrlich2023-04-06 17:17:292023-05-11 18:21:06How Mediation Works and When to Get It

When do you need advanced estate planning?

April 4, 2023/in Estate Planning /by Michael Lonich

You probably already understand the need for an estate plan that includes your will, powers of attorney, and healthcare directives. However, that may not be enough. You may need to consider advanced estate planning strategies.

Several factors can come into play when determining whether or not you need advanced estate planning. By understanding them, you can be better prepared to make decisions about your financial future.

An Advanced Estate Plan Goes Beyond the Basics

The goal of an advanced estate plan is not only to distribute assets but also to minimize taxes and protect assets from potential creditors or lawsuits. It can be especially beneficial for someone with complex financial situations or a high net worth because it provides additional tools and strategies to help preserve and protect their wealth.

Advanced estate planning may involve setting up trusts or creating a business succession plan to ensure the smooth transfer of ownership and management of a family business. Trusts can also be used to minimize taxes by allowing for tax-free gifting or using charitable giving strategies to reduce taxable income.

An advanced estate plan can also address complex family dynamics and ensure that assets are distributed according to the individual’s wishes. This may involve setting up trusts with specific instructions for their allocation or creating a prenuptial agreement that protects them in case of divorce.

Proper planning can keep your estate from going into probate, which can be costly and time-consuming. In a traditional probate process, someone must file paperwork with the court and provide legal notice to creditors. This process typically takes six to eight months – or longer – before any assets can be distributed. Anticipating potential scenarios is part of an advanced estate plan that ensures your beneficiaries receive their inheritance exactly how you intended.

Finally, an advanced estate plan can address long-term care costs by incorporating Medicaid planning strategies. This may involve setting up living and irrevocable trusts to protect assets while still qualifying for Medicaid benefits. Or, it could be creating a special needs trust to provide for a loved one with disabilities without jeopardizing their eligibility for government benefits. It ensures that the individual’s needs are met without putting undue financial strain on the family.

Creating an Advanced Estate Plan

If you are looking to go beyond the basics with additional tools such as trusts, charitable giving strategies, and tax planning, then you will want to consider an advanced estate plan. Our attorneys at Lonich Patton Ehrlich Policastri are experienced estate planners and can help you create a plan that fulfills your needs. And afterward, we will work with you to ensure it is kept up-to-date in the face of ever-changing complex tax laws. 

Now is the time to start planning for the future financial security of your loved ones. The peace of mind you get from knowing that your affairs are taken care of is invaluable. If you live in San Jose or the greater Bay Area, contact us for a free 30-minute consultation. Fill out the online form or call us at 408-553-0801.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

 

https://www.lpeplaw.com/wp-content/uploads/2023/04/bigstock-Estate-Planning-Documents-Li-406019003.jpg 600 900 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2023-04-04 21:01:592023-04-04 21:01:59When do you need advanced estate planning?

When to Write Your Will

March 23, 2023/in Estate Planning /by Michael Lonich

Most people know that a will is a legal document that outlines how your assets are to be divided and distributed when you pass away. A will is the most widely utilized and well-known aspect of estate planning and is vital to have. Without a will, the state gets to decide who gets your assets in the event of your death. Even though most people are familiar with how important this legal document is, nearly two-thirds of all Americans don’t have a will in place. Making a will can be uncomfortable because it means addressing your mortality, but having your will in place is a crucial part of estate planning.

Who should have a will?

In a nutshell, everyone. You don’t need to wait until you have a significant amount of assets, or until you retire. Wills can (and should) be updated regularly to reflect your current place in life. Events that would result in changing your will can include getting married, getting divorced, having children, or gaining more assets. For people who have minor children, it is especially important to make a will so you can determine who will receive custody of the children in the untimely event that both guardians pass away. This requires having some difficult conversations but will provide everyone with peace of mind knowing that there are steps in place that will ensure the welfare of the children. In California, unless you make a will that states otherwise, your spouse will receive all of your community property as well as a portion of your separate property, and your children will receive the other portion of your separate property. If you don’t have a spouse or any children, then your property will be distributed amongst your relatives. If no relatives can be located, then your property will go to the State. 

What should be included in a will?

In addition to the custody of children and the division of financial assets, a will can outline who will receive any and every item in your possession. This can include pets, vehicles, furniture, and pictures. Your will can also dictate if your belongings will be left directly to your heirs or be left to them via a trust. By placing their inheritance into a trust, you can lay out specific rules and provisions for how they use or spend it. You will also determine who will be the executor of your will. This person will act as the administrator of your will and should be someone you trust. 

Call LPEP Law today.

At Lonich Patton Ehrlich Policastri, we understand the importance of having a skilled attorney draft your will. We want to give you peace of mind knowing that all of your wishes are documented in a document that will hold up in court, giving you and your loved ones peace of mind. Call us today at 408-553-0801 or fill out our online form here to schedule a free 30-minute consultation.

 

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

 

https://www.lpeplaw.com/wp-content/uploads/2023/03/bigstock-Notebook-glasses-magnifying-Gl-336494722.jpg 602 900 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2023-03-23 17:50:292023-03-23 17:52:09When to Write Your Will

Estate Planning Tips to Keep Money in the Family

March 16, 2023/in Estate Planning /by Michael Lonich

Estate planning for a family is essential to ensure your funds and assets are handled correctly when you pass away or become incapacitated. And, like many people who have spent years building their wealth, it probably upsets you that the government will take a substantial cut of that wealth before distributing it to your heirs.

But it doesn’t have to be that way. A carefully crafted plan will help protect your property, so it passes directly to your beneficiaries.

The Probate Process

There is no inheritance tax in California, and it is only in effect at the federal level on estates valued at more than $12.92 million will have an estate tax.

But what if your estate goes into probate? That is typically a lengthy process that often requires court supervision and involves multiple complicated steps like locating assets and undertaking ownership transfers.

Therefore, California has attorney probate fees based on the estate’s value:

4% on the first $100,000

3% for the next $100,000

2% on the next $800,000

So, a $1 million estate may have a $23,000 attorney probate fee; a number of other fee’s and expenses are chargeable in probate.

The best way to avoid these fee’s is by keeping your estate out of probate, and there are a few ways you can accomplish that goal.

Trusts

Trusts are a common way for people to avoid probate. They are powerful tools in estate planning that can be immensely beneficial. Creating a trust can help ensure your estate passes to your heirs according to your wishes without going through the probate court process.

There are different types of trusts available that may suit particular situations. An irrevocable trust, for instance, is one where the terms cannot be changed once established, whereas a revocable trust allows for alterations of its terms. Other common trusts include charitable trusts and special needs trusts. Each of these serves a specific purpose based on your goals.

Joint Ownership

Joint Tenancy, or Joint Tenancy with Rights of Survivorship, is another arrangement that allows a property to pass directly to co-owners without going through probate court. But it’s important to remember that if your estate plan changes for any reason due to marriage, death, or other circumstances, it is necessary to make modifications accordingly.

Designate Beneficiaries

You can also use payable on death (POD) designations so that your beneficiaries can receive their inheritance promptly without going through the probate process. By setting up a POD designation for your bank accounts, investment portfolios, real estate, motor vehicles, and any other type of asset ownership you may possess, you can expedite the transfer of those assets to your chosen beneficiary or beneficiaries.

Creating Your Estate Plan

There are numerous ways to protect your estate from probate fees, from strategically structuring your assets ahead of time to drafting a will or trust. Our attorneys at Lonich Patton Ehrlich Policastri can provide estate planning advice to ensure money in your family is dispersed according to your wishes.

Contact us for a free 30-minute consultation by filling out our online form here or calling 408-553-0801. Together, we will create a secure future for you and your loved ones.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

https://www.lpeplaw.com/wp-content/uploads/2023/03/bigstock-Family-Budget-Planning-Concept-464940263.jpg 569 900 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2023-03-16 16:50:242023-03-16 16:50:24Estate Planning Tips to Keep Money in the Family

What’s the Difference Between a Will and Estate Planning?

March 9, 2023/in Estate Planning /by Michael Lonich

We all know it’s important to plan for the future. Maybe you have made some wise investments and want to make sure your assets get passed on to your children. Or, if you have a special needs child, you might be wondering how to ensure they’re well taken care of if anything happens to you. Although it might be unpleasant to think about a future when you won’t be around to care for your family, it is important to make decisions now to protect your family later.

If you’ve started thinking about making a will, you might have a few questions. Is a will all you need to cover everything? Is a will the same thing as estate planning? What happens if you don’t have a will?

What is included in a will?

A will is a written document that provides details and instructions for:

  • How you want your assets to be distributed after your death, including gifts to family members, friends, or charities. 
  • Who should be the guardian of your minor children.
  • Management of any assets left to minor children.
  • Designation of an executor, or person responsible for administering your estate, including payment of debts, taxes, or expenses after your death.

What is estate planning?

Although they are related, a will is not the same thing as an estate plan. Estate planning is the process of organizing your estate to help you make decisions about your finances, taxes, medical issues, debts, and business, etc. A will is part of this process, but an estate plan is much broader, allowing you to:

  • Maximize your enjoyment of your estate during your life;
  • Help protect your assets in cases of divorce or bankruptcy;
  • Minimize the impact of taxes;
  • Ensure that you can provide continuing care for your loved ones after you are gone;
  • Provide instructions related to healthcare decisions such as the use of life support or organ donation if you become incapacitated;  
  • Be certain that your decisions and final wishes regarding distribution of your assets are carried out after your death.

Because your estate encompasses all of your property and assets, including financial accounts (bank, life insurance, retirement); investments (stock, bonds); real property (house, real estate); and personal property (cars, jewelry, furniture), estate planning is essential for everyone, not just individuals with large estates. Families, specifically, benefit from estate plans because they can help plan for funeral expenses and determine custody and guardianship issues for minor dependents, including children with special needs.

What happens if I don’t have a will or estate plan?

If you do not have a will or estate plan upon your death, a judge will appoint another person to take control of your assets in accordance with laws in California. Usually, your estate will be distributed to a spouse or domestic partner first, followed by immediate family. Any close friends or charitable organizations would be ineligible to receive benefits.

Start planning today

The estate planning attorneys at Lonich Patton Ehrlich Policastri offer a full range of legal services related to estate planning and are experts in preparing wills, revocable living trusts, special needs trusts, and other documents used in charitable giving and transference of wealth. Call us today at 408-553-0801 or fill out our online form here for a free consultation. We can help you make the important decisions that will help you and your family today and in the future.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

https://www.lpeplaw.com/wp-content/uploads/2023/03/bigstock-Woman-Signing-Papers-Last-Will-470503309.jpg 601 900 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2023-03-09 17:37:342023-03-21 23:52:25What’s the Difference Between a Will and Estate Planning?

Estate Planning: The Difference Between Revocable vs Irrevocable Living Trusts

January 26, 2023/in Estate Planning /by Michael Lonich

You have worked hard to get where you are in life. Maybe you started a business, own a home and property, or have made wise investments. As you think about the future, it’s important to decide how you want those assets distributed and to make a plan to ensure those decisions are implemented. Sometimes people choose to establish a living trust, which is a written, legal document that helps protect your assets while you are still alive and provide for your family after your death. Essentially, you put your assets into a trust and assign a trustee (which can be yourself) to manage the trust property and administer your estate for your benefit during your lifetime and to manage the distribution of those assets after your death. 

Although there are several benefits to having a living trust, arguably the most important is that you will protect your estate from the probate process, which can take over a year and incur significant legal fees. A living trust, on the other hand, can usually be settled within weeks. Other advantages include avoiding the probate process in other states if you own out of state property and providing the opportunity for a trusted family member or friend to manage the trust if you become incapacitated. In addition, some individuals choose living trusts because they are more difficult to contest than a standard will.  

What assets should be in a living trust?

Generally speaking, you will want to include several different types of assets in your living trust, including: 

  • Bank accounts – checking, saving, and money market
  • Real estate – homes and property
  • Investments – stocks, bonds, and mutual funds
  • Personal property – family heirlooms, jewelry, furniture, etc.
  • Life insurance policy

Revocable vs. Irrevocable Living Trust

There are two types of living trusts – revocable and irrevocable. Each has its own advantages and drawbacks. The main differences between revocable and irrevocable living trust are: 

  1. Flexibility: Revocable living trusts are most commonly used in estate planning since they allow you to amend, add to, or even completely revoke your living trust as the need arises, if your circumstances or finances change. As the name suggests, an irrevocable living trust is less flexible than a revocable living trust, requiring court or beneficiary approval for any changes once it has been notarized and executed.
  2. Ownership: In a revocable living trust, the person who created the trust continues to have ownership or control over the assets in the eyes of the law. Trust property in an irrevocable trust, on the other hand, belongs to the trust itself, rather than the individual.
  3. Asset Protection: Because assets in an irrevocable trust are controlled by the trust rather than the individual who set up the trust, they are better protected against creditor claims than assets in a revocable trust, which are still owned by the individual. If you don’t need to worry about creditors, however, revocable trusts are usually a better choice since you maintain control and can make changes easily.
  4. Tax Savings: Once assets are transferred into an irrevocable living trust, they are no longer considered a part of an individual’s taxable estate. Therefore, your beneficiaries may pay less estate tax after your death. This benefit is especially important for people with more extensive estates or assets. 

We Can Help You Protect Your Family’s Future

Estate planning is one of the most important things you can do to protect your loved ones and ensure your long term wishes are carried out. If you’re wondering whether a revocable or irrevocable living trust is right for you, or have other questions about estate planning, our attorneys at Lonich Patton Ehrlich Policastri can help. Please call us today at (408) 553-0801 to set up a free, no-obligation consultation and discuss how our estate planning attorneys can customize our services to your unique situation and needs.

https://www.lpeplaw.com/wp-content/uploads/2023/01/RevocableLivingTrust.jpg 516 1278 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2023-01-26 21:52:452023-01-26 21:54:24Estate Planning: The Difference Between Revocable vs Irrevocable Living Trusts

Why Estate Planning is Essential for Parents of Children with Special Needs

November 15, 2022/in Estate Planning /by Michael Lonich

As the parent of a child with special needs, it can be difficult to think about the future when you will no longer be able to personally provide the loving care your child needs and deserves. One important way that you can continue to provide for your child, however, is to have an estate plan in place to ensure they have the legal, financial, and other support they need both now and in the future when you are no longer able to advocate on their behalf. 

What An Estate Plan Includes

Estate planning is not contingent on having a substantial amount of wealth and is not limited to distribution of your assets alone. Rather, estate planning is the process of organizing both your financial and personal affairs to ensure that your final wishes are honored and your loved ones are taken care of after you are gone. For families, estate plans can allow you to assign insurance beneficiaries, plan for funeral expenses, and establish guardianship for living dependents, which is vital if you have young children or children with special needs who might never be in a position to effectively manage an inheritance on their own.

Special Needs Trust

If you are the parent of a special needs child, you must balance giving your child a portion of your estate with ensuring that those finances do not negatively impact your child’s eligibility to receive needs-based public benefits like Medicaid, Social Security Income, or the Supplemental Nutrition Assistance Program. Many of these benefits are only available to low-income individuals with limited assets, so leaving a lump sum of money as an inheritance to your special needs child might not be in their best interest. Instead, you should consider setting up a special needs trust (SNT), which allows you to leave the property and other assets to your child without disqualifying them from government-funded benefits. Setting up an SNT has the added benefit of allowing your loved one to receive assets from other people, including family members, as well.

If you choose to set up an SNT, you must also appoint a trustee to manage the funds on your child’s behalf. Your trustee will use the funds to support your special needs child’s quality of life, paying for anything he or she might require in the future, which could include, among other things:

  • Food 
  • Transportation
  • Rehabilitation 
  • Clothing 
  • Medical care
  • Entertainment
  • Vacations 
  • Hobbies 

It is important to include specific instructions in your SNT documents about how you want your appointed trustee to distribute the funds to properly care for and support your child. 

Are You the Parent of a Child with Special Needs? We Can Help Protect Their Future.

The best time to begin estate planning, especially if you have a special needs child you want to provide for, is now. Although it can be uncomfortable to consider the inevitable, developing an estate plan can help ease your mind that your wishes will be carried out, and that your family will be protected in the future. Navigating all the different components of a comprehensive estate plan can be daunting, but the estate planning attorneys at Lonich Patton Ehrlich Policastri Law can help guide you every step of the way. In fact, our attorneys have particular expertise and experience in developing special needs trusts. Call us today at 408-553-0801 to schedule your free consultation. 

https://www.lpeplaw.com/wp-content/uploads/2022/11/ParentWithSpecialNeedsChild.jpg 757 1920 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2022-11-15 20:59:472023-03-20 21:47:41Why Estate Planning is Essential for Parents of Children with Special Needs

What Happens When You Inherit an IRA?

October 12, 2022/in Estate Planning /by Michael Lonich

The short answer is: it depends. Navigating what happens after inheriting an IRA (individual retirement) account can seem overwhelming, but we at Lonich Patton Ehrlich Policastri are here to help you know your options and determine your next steps. Estate planning is one of our areas of expertise, and we are more than happy to help you make decisions regarding your new inheritance.

Know what kind of IRA you have inherited.

The very first thing to do upon finding out you have inherited an IRA is to figure out important details such as what type of account it is. There are multiple types of IRAs, but the most common two are a traditional IRA and a Roth IRA.

  • With a traditional IRA, you contribute money before you are taxed on it. The money contributed might be able to be deducted from your taxes, and the money invested grows tax-deferred until withdrawing the money. Oftentimes retirees are in a lower tax bracket when they were working, the money might be taxed at a lower rate when they do begin withdrawing funds.
  • With a Roth IRA, you are taxed in your contributions before investing them. This means that when you do begin withdrawing money, you will not pay taxes on it, as long as you meet certain requirements.

Knowing the account type is significant because the tax treatment remains the same for the heir as it was with the original owner. The beneficiary will typically have to move the assets from the original account over to a newly opened inherited IRA in their name.

What type of beneficiary are you?

Anyone is able to inherit an IRA, but the rules for what they can do with it differ depending on whether the heir is the spouse of the deceased or not. Due to the passage of the SECURE Act of 2019, non-spousal heirs who inherit an IRA on or after January 1, 2020, now have even more limited options than before. Funds must be spent within 10 years of the original account owner’s passing, regardless of account type. Spouses tend to have more freedom with how they manage their inherited IRA.

Other factors that come into play include when the account was opened and if the original investor had begun taking out their required minimum distributions (RMD) for a traditional IRA.

There is no one-size-fits-all explanation for inheriting an IRA.

Each situation is different, and every heir faces different circumstances. Here at LPEP Law, we have highly qualified trust and estate lawyers on staff who are eager to help you determine your next steps once you inherit an IRA. Click here to schedule a free 30-minute consultation with us, or give us a call at 408-553-0801. We are more than happy to equip you with the knowledge of how to proceed as a beneficiary. We are committed to treating every individual client with the utmost respect and professionalism, and to making this journey as easy as possible for you.

https://www.lpeplaw.com/wp-content/uploads/2022/10/InheritedIRA.jpg 415 900 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2022-10-12 19:14:392023-03-20 21:41:09What Happens When You Inherit an IRA?

Estate Planning: When Should You Begin?

August 16, 2022/in Estate Planning /by Michael Lonich

When should you begin starting your estate plan? The short answer is: if you’re reading this, it’s time. There are many misconceptions about the estate planning process and we are here to break it down so you don’t have to. While a portion of estate planning does refer to the management of any of your assets (including your house and retirement funds), that is not all an estate plan is for.

Estate plans can also be used to assign insurance beneficiaries, plan for funeral expenses, and establish guardianship over any living dependents. Keeping all of that in mind, it can be overwhelming to think about creating an estate plan. Making decisions for an estate plan is something that is easy to put off in favor of other, more pressing matters. However, an estate plan does not need to be created all at once and can easily be updated to reflect your priorities. Keep reading to discover when to begin estate planning and how to establish a timeline that is comfortable for you.

When to Begin Thinking About Your Estate Plan

The general rule for estate planning is “the earlier, the better.” Even if you do not consider yourself to have many assets, starting your estate plan as early as possible can save you time down the road. Assets to consider including in your estate plan at the start can be your bank account, any of your personal belongings, and a life insurance policy. Beginning your estate plan early makes it much easier to edit and add on to your estate plan as the nature of your assets change.

When to Make Changes

Estate plans cover vital information, so it makes sense that they can be changed to reflect your life situation. Significant life events, such as getting married, can be a great opportunity to reevaluate and update your estate plan. Updating your estate plan after having or adopting a child is also crucial. Estate plans include the ability to assign guardianship over dependents, allowing you to secure your child’s future. Buying property or switching jobs are also examples of events that are good triggers for estate plan evaluation. Major life events are not the only time you can update your estate plan, though. Making sure your plan is up to date prior to any large vacations or international travel is also a great idea. Evaluating and updating your estate plan frequently is an excellent way to make sure that all of your assets and loved ones are accounted for.

Estate plans are essential for ensuring that your decisions about your assets are known and respected. Estate plans are meant to be thorough and starting the process can feel daunting. At Lonich Patton Ehrlich Policastri, our experienced estate planning attorneys are here to guide you through creating an estate plan tailored to your needs. Call us at 408-553-0801 to get started today with a free consultation.

https://www.lpeplaw.com/wp-content/uploads/2022/08/EstatePlanningGavel.jpg 406 900 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2022-08-16 20:27:582023-03-20 21:26:23Estate Planning: When Should You Begin?
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