Self Directed IRA’s

Most people know that there are limits as too what you can invest your IRA money into set by the federal government. However many people want to invest in a rental house instead of a traditional stock investment. You see an IRA itself can own property and many other types of nontraditional investments. It can also own promissory notes to gold, oil, gas, and cattle, private equity, and other types of investments. Self-directed IRA’s can even give out loans to companies. Just as important to note is that your IRA cannot buy stock in S corporations, collectables, or insurance.

However the major financial institutions that run IRA’s generally limit purchases to stock bonds and other traditional investments. As a result of this you’ll need the help of a Lawyer to make your IRA a self-directed IRA. These are relatively uncommon only making up 2 percent of all IRA’s. You will also need a lawyer to make sure you don’t break any of the IRA rules as they can get quite complicated and you don’t have the same protective barriers in a self-directed IRA as you do in a traditional IRA. If you aren’t careful you might run into trouble with the federal government but an estate planning attorney can insure that this doesn’t happen.

When running a self-directed IRA it’s important to avoid self-dealing. This is directly using any IRA funds to benefit yourself or you family members. If you do self-deal then you might have to pay taxes on the IRA and penalties. Instead you must have the IRA issue a check to a trustee then the trustee must issue the check to buy the property. Here at the Morton Law Firm we excel at making and understanding trust rules. Often times a lawyer can get around the traditional rules to accomplish your goals with your self-directed IRA.

The other main thing you need to worry about with self-directed IRA’s is scams. Often times if someone comes to you and suggests using a self-directed IRA for “a deal you can’t afford to pass up” it can be a scam. By going through your lawyer you can catch these scams and stop them in there track. If a self-directed IRA sounds like it might be beneficial to you or if you have any other estate planning needs call Certified Elder Law Attorney Ronald Morton at 601-925-9797 and make an appointment today.

Why Is Retirement Planning So Important for Women?

 

Everyone can benefit from the process of estate planning, but it’s more important for women than it is for men, frequently because many women do not think about the estate planning process. First of all, women tend to live longer and despite advances in gender equality in the United States, women still shoulder much of the burden associated with child care. This means a non-existent or a reduced income and ensures that savings for the future is difficult.

As women tend to outlive men by five to six years, it is important for women to take crucial steps in the estate planning process that can help to position them to make an empowered decision should something arise. No one wants to find themselves in the position of failing to take the necessary planning steps and putting that burden on your loved ones. It can lead to unnecessary conflicts, court costs, and legal fees.

Articulating your own desires now and thinking about the intersection of your estate and your retirement planning will give you peace of mind in addition to helping you feel confident that your family members will understand your intention when the necessary time comes. Some of the crucial steps to take include:

  • Getting organized
  • Taking control of your finances
  • Planning your estate and considering elder law issues.

Don’t put off these simple, but effective steps in planning for your future and for your loved ones. Taking action now is important because it saves your family members time and stress down the road.

What You Need to Know If You Intend to Work Longer

Up to two-thirds of baby boomers intend to work beyond age 65. Some of these never expect to retire at all. Some of the most common reasons of delaying retirement or continuing to work after your retirement age include the health benefits sponsored by your employer and the need for additional income. Many people plan to stay involved in their career simply because they enjoy what they do. It is essential to take positive steps towards staying healthy, keeping your job skills up to date, getting further education and networking. It is also important to regularly monitor your projected retirement income need.long term care planning

These could be subjected to long-term care health expenses if you were to have a long-term care health event. It is also essential to have a contingency plan in the event that you’re compelled to retire for reasons other than you expected such as your health. A contingency plan can give you peace of mind that no matter when you ultimately enter retirement, you will have the resources necessary to support yourself.

Many people are forced into retirement earlier than they expected but an estate planning attorney help you navigate this complex situation can give you further peace of mind as well as the backup plan should something happens to you before you anticipated. Looking ahead to long-term care needs and projecting your retirement income are just a couple of the things you can do to protect your future as well as the value of any assets set aside for your beneficiaries.

It is never easy to consider the prospect of what might happen to your if you were to become incapacitated but having all of your legal documents in line makes things much easier for your loved ones.

 

This Estate Planning Mistake Could Leave You with Significant Consequences

If you realize after the fact that you and your spouse did not have your account set up properly, all of the estate planning that you have done prior to that point may become invalid. If you have a will as well as a trust, bear in mind that nay beneficiary designations you have on separate accounts will override what your trust and your will says.

It is simply not enough to set aside a meeting with an estate planning lawyer to talk over your options and to determine who you want your assets to be passed down to when it’s from your 401(k), IRA or from your life insurance policy. That’s because these companies keep their own records of your beneficiary designations. You’re still eligible to make your own decisions about who should receive these benefits should something happen to you. But all of the good planning in the world associated with your trust and your will can fall apart relatively quickly if you do not have these other elements in place.

Make sure that you set aside time to analyze your beneficiary designations on all of these accounts on an annual basis. It is as simple as contacting the company and identifying your current beneficiaries. In the event that you need to update this material, you can use the forms provided by these companies. Make sure you also provide a copy of this information to keep one for yourself as one to your estate planning attorney. Your estate planning attorney can assist you in putting together a plan that is aligned with your individual needs as well as the beneficiary designations you have listed on these separate accounts.

 

The Dangers of an ‘I Love You’ Will

In the event that you want to ensure that your spouse gets access to your wealth after your death, this may be referred to as an ‘I love you’ will. In this situation your spouse will receive the assets outright and it will initially appear as if those assets will be handled according to the spouse’s current estate plan when he or she passes away.

However, that surviving spouse could alter their estate plan at any time. That means that any verbal agreements about what will happen with those assets could disappear immediately.

There are several other negative aspects of ‘I love you’ wills that should prompt you to consult with an experienced estate planning attorney about other strategies. These include:

  •       These wills will still have to go through the probate process.
  •       Basic planning could mean very little or no asset protection.
  •       Basic plans put more assets into survivor’s estate, possibly leading to increased taxes.
  •       Inadvertent disinheritance can occur.
  •       Conservatorship or guardianship involvement may be necessary.

A lifetime beneficiary trust is a better option than outright inheritance because it avoids all of the disadvantages associated with ‘I love you’ wills.
Your New Jersey estate planning lawyer can help you with this process.

What You Should Know About Revoking Your Will

One of the most common ways for a will contest to emerge is to have a track record of changing or revoking your will. This is not to say that you cannot update materials you’ve put together previously, but simply that you should do so with care. Your will should be reviewed on a regular basis to ensure it’s still in line with your wishes, but it’s important to verify that you’re following the best practices in the industry when revoking your will so that it would be difficult for someone to argue down the road that your current will is invalid. last will NJ

One of the primary reasons why you might want to change your will is because your relationship with charities, friends, and family members are capable of changing all the time. When you initially put your will together, it may be part of a clear plan to leave behind certain assets to particular people. Over time, however, these needs may evolve. An old will that is mostly full of outdated information should be revoked. The good news you should be aware of is that it’s typically easier to revoke a will or to change one than to create one from scratch. Sitting down with your estate planning attorney can help prompt questions about why you want to revoke the old will and what your new document should contain instead.

Revoking a will makes the old one invalid. It’s a good idea to set up an appointment with your estate planning lawyer if you intend to move forward with this step. If you do not put together a valid will, people may allege after you pass away that your new will is inaccurate and therefore your old will may still remain viable for pursuing the distribution of your property. Making a big change like revoking your will is something that should be done with the guidance of an experienced estate planning lawyer in NJ who can tell you more about what you need to consider both when terminating the old will and putting together the new one. Details matter in this process, so it’s important to have a lawyer you can trust.

S Corporations and Shorter Built-in Gains Periods

S corporations are most popular as a tax vehicle because it allows for only one layer of tax instead of the double layer of tax usually imposed on a typical corporation. Rather than the S corporation paying tax, the S corporation’s taxable income passes through to the shareholders and is reported on those shareholders’ personal tax returns.shutterstock_304978883

The corporation generally is able to distribute a company in profits to the shareholders free of federal taxes. To avoid corporations attempting to convert over to an S corporation and then sell their assets off, the internal revenue code mandates a 10 year built-in gains tax on S corporations. If the S corporation sells assets within this period, the corporate level tax normal rate is paid.

In early January, legislation was introduced to officially reduce this 10-year period down to 5 years, retroactive to tax year starting on January 1, 2015. For S corporations, this is great news and highlights an important time to return to your planning attorney to discuss your options.             

Is a Revocable Living Trust the Best Way to Provide Asset Protection?

Although a revocable living trust is one of the most commonly recommended by an attorney when you are crafting your will or taking other estate planning steps, you need to carefully consider the own circumstances of your estate to determine whether it’s truly the best fit for you. The primary purpose of a revocable living trust is to avoid the frustration and expense of probate after you pass away. While this is a worthy goal for your beneficiaries, you need to consider whether a revocable living trust goes far enough if one of your goals is to protect assets. Don’t let your loved ones find out too late that creditors can relatively easily access assets inside a revocable living trust. Even though the trust is a legal entity, for legal purposes you are established as the owner of the trust assets allowing creditors’ potential access to these assets. If you set up a typical revocable living trust, you will name yourself as the trustee. This gives you complete control over the assets transferred into the trust so that you can take property in the trust, take it out, sell it or give it away without any restrictions.shutterstock_264000620

For legal and practical purposes, the property is still yours. Bear in mind though that having control over these assets also means that a creditor might be able to tap into it in the event of a lawsuit. You may need to speak specifically with your asset protection planning attorney to shield assets from creditors. Planning for asset protection has become of increasing importance in recent years and finding a law firm that can help you do this is easier than ever.

Make sure to ask questions about their experience in asset protection so that you feel confident about the role they are playing for you.

3 Questions About Safe Deposit Boxes

As I speak with clients about their wills and trusts, I find that many people are confused about what a safe deposit box should be used for.

I’ve created a video that will answer the three most common questions regarding safe deposit boxes:

  1. Do I need a safe deposit box?
  2. What should I keep in a safe deposit box?
  3. Who has access to my safe deposit box in the event of my death or incapacity?

First, Watch This

Then, Call Me

For more information or for help with your will or trust, visit my website or call us today at: 866-925-9797

~ Ronald Morton

 

Estate Planning Parent Fears: Passing On Assets Without Spoiling Children

This is an issue that many of our clients express during their first meetings with us. Parents with wealth are concerned about leaving just enough to their children to allow the children to succeed without leaving too much so that the heirs would become “spoiled”.  shutterstock_113853856

When it comes to setting children up for success without making them too spoiled, parents can do a lot to install traits and virtues that promote behavior the opposite of spoiled. These virtues include generosity, thriftiness, patience, curiosity, perspective, and perseverance. How can parents promote this from birth? According to financial columnist Ron Lieber, who developed this list, parents can select balanced vacation options, reduce materialism on a daily basis, provide allowances that are not based on chores, and have clear conversations about money with children from an early age.

It’s not just about selecting the right estate planning tools, but determining what tools will work in combination with the example set forth for children. The first stage of doing this involves putting in the time and the effort to think about this fear of having spoiled children and what can be done to avoid it. The second stage is in developing clear statements about goals and values for the children. Once you have accomplished this, it’s time to put together an action plan that lays out how these goals can be achieved.

Working together with establishing goals and confronting fears, estate planning can be an empowering process that puts parents in the right perspective to think about their legacy. We can help you accomplish this process- call us today at (601) 925-9797.