Navigating through bankruptcy can be a daunting experience. Once the dust settles, you may find yourself wondering what steps to take next. You may feel vulnerable and anxious about protecting your remaining assets, property, and most importantly, the well-being of yourself and your loved ones. That’s where an estate plan comes in as a guiding light to help you navigate through the uncertainty of the future. By creating an estate plan, you can ensure that your accounts and property are protected, and your loved ones are taken care of, even in the most challenging times.

Protecting Your Assets from Bankruptcy

After filing Chapter 7 or Chapter 13 bankruptcy, it’s likely that you have less money and property than you did before. But some of your assets were protected under federal or state law during the bankruptcy process, and they still have value. It’s important to create an estate plan that protects these remaining assets, and here are some key elements to include:

1. Last Will and Testament

A will is a legal document that allows you to plan for what happens to your property and belongings after you die. In the will, you choose someone to be in charge of handling your affairs and distributing your money and property to the people you want to receive them. However, if you only have a will and you pass away owning property or accounts in your name alone without a beneficiary designation, your loved ones will need to go through a legal process called probate to transfer ownership of those assets.

2. Revocable Living Trust

A revocable living trust is a legal document you create during your lifetime to manage your property. You are the trustee, and you can choose a co-trustee or successor trustee to take over if you can’t manage the trust yourself. You transfer ownership of your accounts and property to the trust and retain the ability to use and enjoy them. The trust agreement outlines how the trust property should be used during your life and after you die. Unlike a will, a revocable living trust avoids probate court. However, it does not protect your property from creditors. If you are considering creating a revocable living trust, make sure your bankruptcy proceeding is closed first. Transferring property or accounts during bankruptcy could be seen as fraudulent or voidable.

3. Beneficiary designations

After bankruptcy, you may still have certain accounts or policies, like life insurance or retirement accounts. It’s important to properly fill out the beneficiary designations for these accounts, so the money goes to the people you want it to. If you don’t fill out these forms, the money could end up going to your estate, which means your loved ones would have to go through the probate process. This can be expensive and time-consuming. Also, if your retirement account goes through probate, it could end up with unintended income tax consequences.

How Can Estate Planning Help During Bankruptcy?

An estate plan is not just for planning for what happens after death, but also for making plans in case you become unable to make decisions for yourself. This is called incapacity. It’s important to think about who you would want to make decisions for you in such a situation, such as medical decisions or financial decisions.

If you don’t have a legally enforceable document that specifies your choices, a judge will have to choose someone for you according to your state’s law, and this person may not be who you would have wanted. Here are some serious questions you should consider:

• Who will make financial decisions for you if you are unable?
• Who will make medical decisions for you if you are unable?
• What are your wishes regarding end-of-life care?
• What medical treatment do you want if you are diagnosed with a terminal illness or are in a persistent vegetative state?
• Who will care for your minor children?

We’re here to support you in moving forward by safeguarding your assets for you and your loved ones. Reach out to us so we can talk about creating a personalized estate plan that meets your specific goals.

You’re creating an estate plan, excitedly making arrangements for your loved ones to inherit your assets and carry on your legacy. But wait, what happens if you suddenly find yourself filing for bankruptcy? It may not be the most pleasant thing to think about, but it’s important to consider what would happen to your estate in this scenario.

With over half a million bankruptcy filings in 2020, it’s not an unlikely situation. And what if one of your beneficiaries is going through bankruptcy or may be in the future? These are crucial questions to address in your estate plan, even if bankruptcy seems like a distant possibility. Don’t leave your loved ones with uncertain futures – plan for the unexpected.

What happens to my estate if I am in bankruptcy when I die?

There are two types of bankruptcy that individuals usually file for: Chapter 7 and Chapter 13. If you pass away during a Chapter 7 bankruptcy, the bankruptcy trustee will sell your property, except for certain exempt items, to pay off your creditors. Once the bankruptcy case is concluded, any remaining property or money can be distributed to your beneficiaries according to your will.

In a Chapter 13 bankruptcy, you must actively participate in a repayment plan for several years. If you pass away during this time, your trustee and survivors must seek guidance from the court on what to do next. There are several options available, such as dismissing the case and allowing creditors to seek repayment through probate, converting the case to a Chapter 7 bankruptcy, or continuing the repayment plan with your heirs. Ultimately, the court will decide what is best for all parties involved.

If you want to protect your savings and property from potential future creditors, you can transfer them to an irrevocable trust. This means that you won’t be able to change the terms of the trust or get the property or money back easily. But the good news is that if you file for bankruptcy in the future, the property and money in the trust generally cannot be used to pay off your creditors. So your beneficiaries will still be able to receive the money and property you intended for them.

However, if you transfer money and property to avoid debt, this strategy won’t work. It’s important to implement this strategy proactively, before any financial problems arise that may lead to bankruptcy. If you transfer money and property within two years before filing for bankruptcy, the bankruptcy trustee may review the transfer and potentially undo it, making that property or money available to your creditors.

What happens if one of my beneficiaries is in bankruptcy when I die?

To prevent your hard-earned money and belongings from being used to pay off someone else’s debts, you can create a special kind of trust called a revocable living trust. When you do this, you transfer ownership of your money and property to the trust, but you still get to use and control them while you’re alive. This is important because it means that, even though the beneficiary of the trust technically owns the property, they can’t use it to pay off their debts because the trust can be changed or cancelled at any time before you die. This way, your money and property will be protected and won’t be taken away to pay for someone else’s financial troubles.

In addition, if you put your money and property in a trust and say that the person receiving it can’t control it or give it to someone else, then if that person goes bankrupt, the money in the trust can’t be taken to pay off their debts. After you die, the person receiving the money (the beneficiary) can get some of it as gifts from the trust, but only if the person in charge of the trust (the trustee) decides to give it to them. The trustee can only give them money for specific things like health, education, and living expenses. However, if the person receiving the money goes bankrupt and has already received money from the trust, that money might be taken to pay off their debts. This could happen up to 180 days after they file for bankruptcy.

Plan ahead today

No one can predict the future, and financial problems can happen to anyone. It’s important to take action now to protect your hard-earned assets and belongings, even if you’re not facing bankruptcy or financial difficulties yet. By creating an estate plan, you can safeguard your property and money, and ensure that your loved ones receive their inheritances as you intended.

Our team can help you design an estate plan that protects your property from creditors, regardless of your financial situation. Contact us today to start creating or updating your estate plan.

With love comes responsibility, and one of those responsibilities is managing your finances as a couple. You both have your own individual accounts and properties, but you also have shared assets that you’ve acquired together. The question then becomes, what happens to all of these accounts and properties when one or both of you pass away?

The answer is not an easy one, but fear not, because there is a unique estate planning tool that can help alleviate some of the stress that comes with making such decisions. It’s called the pour-over trust, and it’s specifically designed for married couples who think about their accounts and property as “yours, mine, and ours.”

What is a joint pour-over trust?

A type of trust that holds your and your spouse’s joint property. You can create this trust together and name yourselves as the current trustees. When one of you passes away, half of the joint trust’s accounts and property is distributed to the deceased spouse’s separate trust, and the other half is distributed to the surviving spouse’s separate trust.

To make sure everything goes according to your plan, you may need to create three trusts – the joint pour-over trust and one separate trust for each spouse. Jointly owned property goes into the joint pour-over trust, while separately owned property goes into each spouse’s separate trust. This allows you to provide different instructions for handling jointly and separately owned accounts and property.

Once the first spouse passes away, the joint pour-over trust has no more work to do, and it won’t require ongoing administration. This makes it an efficient estate planning tool for couples who want to simplify the process of managing and distributing their assets.

What are some other benefits of a joint pour-over trust?

Ease in trust funding and administration

A joint pour-over trust is a trust that you and your spouse can use to manage your shared accounts and property. It’s helpful because both of you can control it, and you can easily transfer your joint assets into it.

Avoids probate

Avoiding probate is a common reason why people consider creating a trust-based estate plan. If you and your spouse put your joint accounts and property into a trust, it can help your loved ones avoid probate in the event that you both pass away at the same time. Your chosen backup trustee can carry out the instructions without court supervision.

Keep things separate

If you and your spouse have joint accounts and property, putting them into a joint pour-over trust can help keep them separate from your individual accounts and property. This makes it easier to manage your assets according to your wishes. However, it’s important to consider whether putting all of your accounts and property into a joint trust is the right choice for you. If some accounts or property have already been handled separately, combining them in a joint trust could make things more complicated and go against your wishes. It’s important to think through the pros and cons and make the decision that’s best for you and your family.

We can help

Just because you and your spouse have both joint and separate accounts and property doesn’t mean that you can’t plan for how those assets will be distributed after your death. By working together, we can evaluate all of your accounts and property and discuss your wishes for how they should be handled. We can then create an estate plan that takes into account your specific circumstances and ensures that your assets are distributed according to your wishes.

Reach out to us today and we can create a plan that works best for you, your spouse, and the rest of your loved ones.

When you are married to someone who is significantly older or younger than you, planning for the future can be different for each of you. To make sure you and your loved ones are protected, it’s important to have a detailed financial and estate plan. To make sure your plan works as intended, you should have an open and honest conversation with your spouse about important financial and estate planning topics.

About Employment

It is important to discuss your employment plans with your spouse. Your job may provide you and your spouse with health insurance and income, but it can also take up a significant amount of your time.

If you or your spouse are currently working, it’s important to talk about what you both want to do in the future. If one or both of you plan to retire or stop working soon, you need to consider how it will affect your lifestyle and future plans. Additionally, if you both have different aspirations for retirement, it’s important to discuss how you can compromise and find activities that you can enjoy together.

About Financial Management

When discussing retirement, it’s important to consider when you plan to retire and whether you can afford to stop receiving a paycheck. If you are unsure, meeting with a financial planner can help ensure your finances are in order. Additionally, you should consider whether there will be a period of time when both of you will be retired or not working, and whether you will have enough money from other sources to support your lifestyle during this time.

Another important topic to discuss is when you plan to withdraw the required minimum distributions from your retirement accounts. A financial advisor can help you determine the best strategy given your current account balances and your desires for the future. Finally, if there is a significant age difference between you and your spouse, it’s important to discuss whether the younger spouse is anticipating using the retirement funds from the older spouse for their lifetime as well, and whether there will be enough money to support both of you.

About Estate Planning

Creating an estate plan is important because it ensures that your loved ones are taken care of when you die. Without an estate plan, your state’s laws will determine how your money and property will be distributed, and who will make decisions for you if you are unable to make them for yourself. When reviewing or creating your estate plan, there are several important things to consider.

Firstly, you need to decide who will serve as your trusted decision-makers, such as your executor, successor trustee, agent under a financial power of attorney, and agent under a medical power of attorney. Because of the age difference between you and your spouse, it is advisable to name alternates to these positions in case your first choice is unable to act on your behalf. If you have children from a previous relationship, you should also consider if and in what order you want to name them to one of these important decision-making roles.

Secondly, you need to decide who you want to receive your property and money after you die. If your spouse is your beneficiary, you need to consider whether you want them to receive the inheritance outright or in trust. If you plan to leave an inheritance to your children, you need to decide whether they will receive it immediately after your death or after your surviving spouse’s death.

Lastly, if you have children from your current marriage and previous relationships, you need to consider if you want them to be treated the same when it comes to inheritance or if you want to give preferential treatment to one group. These are some of the important issues to think about when creating your estate plan.

Typically, when one parent stays at home to take care of the children and household, they are responsible for several tasks such as taking care of the kids, cleaning the home, driving family members to events, cooking meals, shopping for the family, and managing household tasks like scheduling appointments and planning events.

While these tasks may not be valued as much as paid work, they are still important and require a lot of time and effort. If the stay-at-home parent were to become unable to perform these tasks, it would be difficult for the other working parent to do it all themselves without sacrificing their job or free time.

A Comprehensive Plan to Secure Your Family’s Future

To protect your family and finances, it is important to plan ahead in case an unexpected event happens. It is important to have a team working with you when planning.

Start by figuring out how much it would cost to replace the stay-at-home parent’s work if they were no longer able to do it. A financial advisor can help you with this and guide you on making contributions to retirement accounts.

Next, it’s important to meet with an insurance agent to determine the right amount and type of insurance you need, both for life and in case the stay-at-home parent becomes disabled or incapacitated.

Then, your certified public accountant or tax preparer can help you make sure you’re claiming the right credits and deductions and maximizing your family’s single income on your annual tax returns. By working with this team, you can create a comprehensive financial and estate plan that protects your family’s future.

A properly drafted estate plan can ensure that your money and property are protected and used in a way that matches your ultimate wishes.

Protecting Your Proceeds from Creditors and Predators

Our goal is to protect families like yours, and one way we do this is by ensuring that your life insurance benefits are safeguarded from creditors and others who might seek to take advantage of your beneficiaries. To achieve this, we recommend naming a trust as the beneficiary of your life insurance policy.

There are two types of trusts that can help protect these benefits:

1. Revocable living trust

A type of trust that you can create while you are alive, and you can change it until you pass away or become unable to manage your affairs. Usually, you are the person in charge of managing the money and property in the trust, and you can use it during your lifetime. If you become unable to manage your finances, someone else that you chose beforehand can manage the trust for you.

If you have accounts and property that are valued below the current lifetime estate tax exemption amount or if you have already created a trust, naming a revocable living trust as the beneficiary of a life insurance policy can be a good option. When you name the trust as the beneficiary, the life insurance policy’s death benefit will go to the trust after you pass away. The trustee will then use the money according to the instructions in the trust agreement, which we can help you create to better protect the money from any undesirable people, such as creditors or divorcing spouses of your beneficiaries.

2. Irrevocable life insurance trust

A way to protect your life insurance policy from estate tax and ensure the money goes to your beneficiaries according to your wishes. You can create this trust by transferring ownership of an existing policy to the trust or by having the trust purchase a new policy. You make cash gifts to the trust each year to pay the insurance premiums.

When you pass away, the trust receives the death benefit, and the trustee distributes the money according to the instructions in the trust document. This strategy is helpful for people who have assets valued close to or above the current lifetime estate tax exemption amount. By using this strategy, you can remove the value of the life insurance policy and death benefit from your taxable estate, which can save your loved ones money on estate tax.

We are passionate about safeguarding families and would be happy to assist you in protecting your own. Give us a call to schedule an appointment or schedule a meeting with us below.

A resume is a document that shows employers what experience, skills, and education you have, and how you might perform in a job. If you haven’t updated your resume in years, it might not accurately show your abilities. Similarly, estate plans need to be updated regularly to reflect changes in your life and the law. If you don’t update your estate plan, it might not work the way you want it to. So, just like with resumes, outdated estate plans won’t be very helpful.

Take a Moment to Reflect

Take a moment to think about all the things that have happened in your life since you last signed your will, trust agreement, and other estate planning documents. Have there been any changes that could impact you, your helpers, or your beneficiaries? If so, then your estate plan might need to be updated to account for those changes.

Here are some examples of significant changes that would require an estate plan review and possible updates:

• A new family member that you want to provide for in your estate plan
• You, a trusted decision maker, or a beneficiary got married or divorced
• A loved one passed away or is now disabled
• You or a loved one is now suffering some health challenges
• Your trusted decision makers is now incapacitated
• Your financial status has changed either for better or worse
• You, a trusted decision maker, or a beneficiary moved to a new state

Don’t Procrastinate on Estate Planning

Most people tend to put estate planning at the bottom of their to-do list and forget about it once it’s done. However, estate planning is not a one-time task, it requires ongoing attention and review. It’s important to take the time to review your estate plan regularly, just like you would update your resume or meet with your doctor or financial advisor. By doing this, you can make sure that your estate plan is up-to-date and reflects your current needs and the needs of your loved ones.

To make sure that you actually follow through with this, you should schedule an appointment with us to review your estate plan. This way, it will be on your calendar and you won’t forget about it.

Updating your estate plan is the best way to make sure it will accomplish exactly what you want it to do.