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.
It's hard to believe that in less than a month everyone will be back in school from kids like my daughter who will be starting Kindergarten to doctoral students and everyone in between. College students have very unique legal needs that many people don't think about, so let me as you a few questions.
What if I or my college student get's sick?
If you are a college student and you get sick and end up in the hospital, who will make medical decisions for you if you can't make them yourself for whatever reason? Or if you are a parent, how will you get information about your college student's medical condition so that you can help where needed? Do you have proper powers of attorney in place?
What if I or my college student gets into financial trouble?
If you are a college student and can't pay your bills because of an accident or illness, who will make sure your rent gets paid? If you are a parent, will your college student's bank work with you to ensure that his or her financial health is protected? Do you have proper powers of attorney in place to ensure your ability to help or get help?
What if I or my college student need to bring in others to discuss my education?
If you are a college student and need the dean or administrative offices to discuss your education with your parents, will they? If you are a parent, will your college student's educational investment be protected such that you will never need to discuss educational issues with his or her college? Do you have proper powers of attorney in place?
College Student Powers of Attorney
Don't go to or send your college student off to college without these important documents. They could save someone's life, health, and financial freedom.
The common question is simple and profound: do you have proper powers of attorney in place? At age 18 and the graduation from high school, a person is legally an adult. That means banks will not deal with the parent of a college student legally. It means that doctors and hospitals will not legally discuss the health of a college student with the student's parents. It means that colleges and university personnel will not discuss a college student's accounts or educational investment with the student's parents. The only way to change that aspect of the law is through three properly drafted powers of attorney.
College students and their parents should seriously consider getting these powers of attorney drafted and executed by a qualified attorney. Josh Bryant offers all of these documents at a discounted rate for college students - less than $20 - to any Arkansas resident or student attending a university in Arkansas. These documents can be prepared by Josh Bryant remotely and emailed to you with instructions on how to properly execute them and put them on file with doctors, banks, hospitals, educational institutions, and more. Your investment in your education, health, and financial future is too important. Click below to get a template document that you can fill out on your own, or let Josh Bryant help protect those investments by preparing them for you. Call (866)597-5621 to get these documents in order.
People frequently ask me why they need their estate plan reviewed every year. The answer is simple. Things change on a daily basis sometimes, and certainly every year. New children or grandchildren are born. Assets increase or decrease. Different types of assets come into the picture. Goals and desires change. Laws change. As such, touching base with your estate planning and elder law attorney on an annual basis is just a good idea to make sure your plan and documents align with your goals. But more importantly, every life stage has a different strategy in estate planning and asset preservation. As such, every year you need to visit with your estate planner to discuss what life stage of the plan you are in, what needs to happen next, and how best to preserve the assets you've worked so hard for. That's what this blog post is about.
Young Single Adults (18-30)
In this life stage, you will have no children (although you may be married). The goal of an estate plan in this phase is simple: control where the assets go in the unlikely event of your death without probate. You'll want something set up to ensure your spouse, family, or others get assets without having to go through an "intestate" probate proceeding. A simple will with well established beneficiary designations can usually take care of this. However, you may also need a trust in place if you have assets over $100,000 or assets spread across multiple states. In this phase, we'll also discuss other end of life decisions and draft documents such as powers of attorney and living wills. We'll also make sure that your investment time goals align with your estate plan.
Young Parents (25-40)
In this life stage, you will have children that you want to provide for in the event of your death. Parents must have a trust. It can be a testamentary trust that is set up in your will, but most of the time I encourage a living trust (also known as a revocable trust) so that as your assets increase over time you have a pre-established means of avoiding probate. In a trust, you can control how the assets are spent on your children's behalf while they are still young. You can provide for their education, health, maintenance, and welfare. You can control how quickly they have discretionary access to the assets so that they don't inherit a decent amount of money as an 18 year old and blow it in a few weeks or months. If you start estate planning in this stage, we'll take care of your powers of attorney and living wills, and we'll still be making sure that your investment goals align with your estate plan and vice versa.
Middle Ages (Age 40-55)
In this life stage, we start paying very close attention to the potential for estate tax liability. The first reason we do this is because by this point in life many people have begun accumulating substantial assets. Secondly, even if you are no where near the estate tax exclusion limits right now, the law changes every time there is a shift of power in Washington (yet another good reason to have an annual touch base with your estate planner). Ultimately, the goal here is to structure assets between several types of trusts, establish charitable giving and other gifting strategies, and take other steps to minimize your federal estate and gift tax liability by maximizing deductions, exclusions, and credits in estate and gift tax law. This is a complicated and ever-changing area of law that requires routine visits and updates with your estate planner. Of course, if this is where you start estate planning we'll most definitely take care of powers of attorney and living wills. At this point, we'll work with your financial advisor to make sure that you have enough income in retirement, and probably get a head start on the next phase of estate planning: asset preservation.
Young Seniors and Beyond (Age 55+)
As you get nearer to the end of life, detailed planning becomes even more important. Life spans are getting increasingly longer, and as such the need for skilled nursing care later in life is becoming more and more necessary. However, skilled nursing care is extraordinarily expensive. One way to pay for it is Long Term Care Insurance. However, many will need to engage in certain asset protection strategies to prevent Medicaid from requiring you to exhaust almost your entire estate before paying for long term skilled nursing care. You've spent a lifetime paying Medicaid taxes; why spend your entire estate just so Medicaid will kick in? This planning phase should start before retirement so that your retirement income can be taken into account first. We'll continue working with investment advisors to that end. Through retirement, a very close eye must be kept on estate size (have I mentioned the need to have routine checkins with your estate planner?). Once we know you'll have the income you need for retirement, we'll start putting assets in specialized irrevocable trusts through which you can still take some income if needed. We'll start establishing giving patterns and routines to further clear your estate. Keep in mind that Medicaid will look back five years to determine what gifts must be recovered before it will pay for your care. In short, you must be well ahead of the game here. Of course, we'll stay on top of any powers of attorney, living wills, and other documents you need as well.
For me, it's all about relationship. I don't want to charge clients thousands upon thousands of dollars and then send them on their way. That's why it's just $1,000 per year to get all of this and more. If I can be of any assistance, please reach out.
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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.