Getting an estate plan is not as easy as just going to a lawyer and having him or her draft some documents for you to sign. Josh Bryant takes a much more comprehensive approach. If you have a trust, there are some assets that we'll place in trust while you are alive. However, some assets cannot be placed in trust and will require a designated beneficiary - someone who will automatically get the asset at your death. Here are four assets that need designated beneficiaries.
Checking, Savings, Money Market, and Other Bank Accounts
You can go to your bank and establish "Transfer on Death" (TOD) beneficiaries on those accounts. This is usually done by a simple form that your bank can provide you. If you do not have a beneficiary designation on these accounts, the assets will have to go through either small estate administration or probate. If you have a trust, it is usually easier to just go ahead and open up accounts in the name of the trust. However, there are often times that clients have a long standing bank account that they'd rather keep, in which case it is necessary to establish the trust as the TOD beneficiary. You can also list individuals as your beneficiary. Josh Bryant will help you make these decisions and get the proper paperwork signed.
Brokerage, Retirement, and Other Investment Accounts
You can also call your financial advisor and make sure that there is a TOD designation on your stocks, mutual funds, bonds, ETFs, and other investment vehicles. This is usually done on a form as well, but may require additional paperwork. Some of these assets cannot be transferred to a trust during your lifetime, making it that much more important to ensure your beneficiary designations on these accounts are in order. Without them, a probate proceeding is usually the only way to get the assets transferred to your heirs.
You should also call your insurance agent and make sure that your life insurance policies have a proper beneficiary designation. You would have established a beneficiary when you took out the life insurance policy. However, if you have a trust it will be necessary to update that beneficiary designation to ensure that the trustee of your trust is the beneficiary. That way, your life insurance proceeds are distributed under the terms of the trust rather than outright to named beneficiaries of the life insurance policy.
Arkansas is unique in that its laws allow you to file a "beneficiary deed" that will transfer your house to the beneficiaries listed in the deed at your death. Usually, it is simpler if you have a trust to just transfer all real estate into the trust rather than wait until after death to do it. However, there are always reasons why that might not be best for you, and as such you'd need a beneficiary deed to get the home into the trust. If you don't have a trust, a beneficiary deed is a great way to help keep real estate out of probate.
If you are a new or expecting parent, there is a lot to consider. Seeing a lawyer isn't exactly one that naturally comes to mind. But Josh Bryant believes that it is a perfect time to sit down with him and plan the next several years. Failing to do so could be catastrophic. Here are seven things you should consider if you are expecting or have recently delivered a baby.
Having a baby doesn't mean that your marriage gets put on hold. You've got to carve out some time for your and your spouse to recreate and talk. Who will baby sit? What qualifications should a baby sitter hold? What are the insurance implications of a baby sitter? What does the law say about paying a baby sitter? How old does my baby sitter have to be? How can I best protect myself and my child? These are all questions you'll need to address with attorney Josh Bryant if you are expecting or have a child.
The decision on whether to go back to work can be difficult. The ramifications of staying home or going back to work should be discussed with a lawyer. If both parents will return to work, who will provide childcare? What are the licensing requirements? What questions should I ask a childcare provider from a legal perspective? What type of insurance should they have? What happens if my child is injured at day care? You'll need to ask these questions of Josh Bryant too.
The most common reason people go to a lawyer after having a child is to update their estate plan. This is an absolute essential. In the event of your untimely death, who will care for your child? How will they be taken are of? Who has the authority to do what? What about grandparent rights? Josh Bryant reviews all of this with new parents. Typically, this is a decision described in a will. However, there are many other situations that a will does not address. For example, what happens if you are out of town on business and your child is injured?
Powers of Attorney
Josh Bryant uses powers of attorney judiciously to aid new parents in protecting their newborn. Certainly, he will ensure that you have a power of attorney to cover your own financial and medical decisions if you can't personally make them for yourself. However, many estate planners do not consider the fact that in that situation someone else will need the ability to spend money on behalf of your child and see to their medical care. As a parent of a medically fragile child, Josh Bryant does not.
It is never too early to talk about college. Governments have passed laws that make it easy and beneficial for you to start saving for college. While Josh Bryant does not give investment advice, we can talk about the tax implications of beginning to save for college now. There are also special things we can do with various types of trusts to prepare for college, if those special trusts are right for your family.
If you have a home or a child, you need a trust. The first reason is to avoid probate - there's simply no need to go through that mess. The better reason is to avoid a situation where a child or immature adult gets a lump sum in the event of your untimely death. Josh Bryant frequently recommends and drafts living trusts for new families that provide for structured payouts of the estate through young adulthood in addition to funds necessary to pay for everyday life, college, and so forth.
One of the common questions Josh Bryant gets is how much life insurance someone should have. There's no precise formula, but Josh usually advises enough to replace your salary for no less than three years as a minimum. However, many people want to make sure that they have enough life insurance to provide help throughout their child's school age years. Rarely would that ever require more than about $1 million in coverage. Rightly invested, $1 million could bring up to $60,000 per year in dividends, growth, interest, and so forth without ever dipping into the principle. Either way, there is no canned response to how much is enough. Josh Bryant will review this with you at your appointment.
Call Josh Bryant today to schedule an appointment to discuss these important issues about parenting a child. He can be reached at (866)597-5621 or firstname.lastname@example.org.
Imagine with me for a moment that you've run into a sum of money. Perhaps you received an inheritance. Maybe you got a settlement on an injury or got a big bonus. Maybe you just have some money sitting around, or maybe you even won the lottery. How can you do the most good with what you got while retaining an interest in the assets?
The answer may be what is known as a Charitable Lead Trust. Put simply, a Charitable Lead Trust (CLT) places those assets in trust, invests them, and then gifts a portion or all of the interest, dividends, or other gains and income on the assets to a charitable beneficiary. For example, let's say you ran into $100,000 and placed that money into a CLT in which your church was the beneficiary of one half of the income of the trust for a period of ten years. The other half of the income earned is paid to you directly as spending money. Let's also say that the investments that the trust has with that money earn 6% annually, compounded monthly. Every month, the trust would earn $500. It would then pay to the charitable beneficiary of your choice $250 and another $250 to you. Over the course of ten years, you will have given the charity $60,000, you would have received another $60,000, and the asset that was worth $100,000 would still be worth $100,000 that you could do whatever you wanted to with.
Why create a Charitable Lead Trust? For starters, it lets the charity of your choice know that you are going to invest for the long haul. It let's them know that a stable income will be coming in for the foreseeable future. At the same time, it can help provide you with an income and help preserve the underlying asset value. Depending on your other deductible spending, it can generate long term income tax benefits. Set up properly, the charitable deduction can offset the capital and other gains that your investment may incur as a result of its growth.
If you'd like to talk more about the features and options you have in a Charitable Lead Trust, give me a call at (866)597-5621. This is one of my favorite documents to draft. If you'd like to play around with some numbers and see just how far your money can go for you and your church or other charity, use the calculator below.
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I follow Christ. I have a beautiful wife Megan and three wonderful children, Harrisen, Rebekah, and Carter. I have an M.Div. from Liberty Baptist Theological Seminary, am licensed to practice law in several state and federal courts, and live in Rogers, Arkansas. I write a blog and produce a podcast. And I do it all that others may know Christ.