Tag: Estate Planning (6 articles found) - Clear Search

Trusts and Real Estate, Part 4 of 4: The Asset Protection Trust



The asset protection trust is more accurately called the Domestic Asset Protection Trust or “DAPT.” It is a highly protective, irrevocable trust and less than 20 states even allow them. Utah is one of the! Assets owned by this kind of trust can be protected from lawsuits, debt collection, judgments, bankruptcies and even divorce.

This is a different kind of trust than the family trust. In the family trust, you leave your assets to beneficiaries, like your children. In the DAPT, you actually leave the assets to yourself as beneficiary! That means they are still your assets; but they receive the protection as if you’ve already given them to someone else. That’s the key difference. However, it’s not for everyone.

First, this is a complicated and detailed trust. It’s usually more expensive to create and maintain than the other two types of trusts. Second, while you do have access to the income from trust assets, you cannot take “regular” distributions. So, if you need that income to live on and pay monthly bills, you can’t put those assets in this trust. There are also restrictions on who can authorize the permitted distributions. Read More...

Trusts and Real Estate, Part 3 of 4: The Family Living Trust


The family trust is to most common type of trust used in the United States. Most people have at least heard of this kind of trust and many have created one. The first thing I want to say is that EVERYONE needs a family trust! Whether you’re single or married, with or without children, or have small or large estate, you need a family trust.

The family trust is the core of your overall family protection plan because it is designed to own, control and allocate your assets after you die. Without a trust, your estate will end up in probate even if you have a will. Probate is an expensive, public court process. It typically costs more than a family trust. Your estate and property become public information. And the court will end up dictating who receives your assets.

Most family trusts come in an estate plan package of documents. You’ll get a “pour-over will” that works in coordination with the trust, powers-of-attorney and the health care directive. This last document is also called the “living” will that provides end-of-life instructions to family and doctors in the event you’re on life support. These documents are designed to function in different circumstances and at different times to help control your assets. Read More...

Trusts and Real Estate, Part 2 of 4: The Real Estate Trust



This article continues our discussion of trusts, specifically the real estate trust. First, only a couple of states, like Florida and Illinois, have true “land” trusts. I won’t get into the legal details on how they are different, as that gets complicated. Just know that unless you live in these states you are NOT using a land trust. This gets confusing as many investors attend educational events where these trusts are taught or sold without distinguishing them.

The rest of us have something a little different. We call these trusts real estate trusts, asset holding trusts, property trusts or the like. They are really just simple living trusts but should be created by a knowledgeable attorney. They are designed to hold title for privacy purposes and facilitate transactions such as wholesaling or even selling real estate.

Trusts are a kind of legal entity (like LLC) that can own things. They can be a named buyer on a purchase contract and be named on county land records. Because trusts are not registered with the state, no one will know who owns them. That’s where the privacy comes in. They do, however, have a trustee (think, manager) who will be named on county land records. So be aware of that. Read More...

Estate Planning for Real Estate Investors



"Go as far as you can see; when you get there, you'll be able to see further.” - Thomas Carlyle

When a person with assets over $100,000 passes away (as is the case with MOST business owners), their assets will be handled in one of three ways:

(1) if they had no will, their assets will be distributed as mandated by the state probate code through a court proceeding called probate;

(2) if the person had a valid will, the estate will still have to go through the probate process, but the court will carry out their wishes as stated in their will; or

(3) if the person had a valid living trust (and their assets were re-titled in the name of their living trust), their wishes would be carried out in private, without the court's involvement. 

So ... why does this matter to you, as a business owner?

Leaving aside the issue of what happens to the business itself (which is something very much worth its own strategy note -- forthcoming at some point), the answer to the question above depends on how much you care about what your loved ones have to deal with after you are gone and how much control you want to have as to who gets what, and when and how they get it.  Read More...

Preserving Your Digital Estate



"A man who does not plan long ahead will find trouble at his door." -Confucius

This isn't particularly a "fun" topic, but again, this day and age calls for it. If you have a lot of important business and data online (most of us do) let's ensure that nothing is ever lost.

Define "Digital Asset"

Before we go any further, the following could be considered digital assets in your name:

  1. Emails
  2. Social Media Sites
  3. Blogs
  4. Financial Accounts
  5. Music Files
  6. Photographs
  7. Videos
  8. Customer Database
  9. Cryptocurrency

The list goes on, but these are a few common personal online assets. Read More...

The Real Estate Investors Guide for Choosing an Executor of Your Estate Plan


We love what we do. 

I'm not sure if it's always obvious, but perhaps you can take a cue from the fact that I take the time to post you these sorts of notes on a regular basis, if not by other factors.

We love this stuff, and consequently, we work hard for our Salt Lake County clients.

Crafting elegant, tax-saving and easy-to-understand strategies to help you save on your taxes is a joy.And, of course, removing from our clients the annoying hassle of dealing closely with government paperwork, deadlines and personnel -- while not exactly a "joy" -- provides us with great satisfaction because we know that we get to serve our clients and help them not have to deal with stuff that isn't exactly "fun".

But sometimes (usually a rare instance), there are circumstances in which, despite great planning and implementation of strategy, things go sideways.

That is REALLY not fun.

A couple weeks ago, I wrote about Estate Planning, and I do want to touch on it one more time here today -- despite the fact that it isn't our primary area of service. It's such a critical part of a family's financial picture, but it doesn't really get focused on, occasionally only until it's too late.

You see, even the most well-crafted estate plan can be ruined by a poor choice of executor.

Of course, we can always do our best to help our Salt Lake County clients and and their families deal with it and navigate through this poor choice, once it becomes apparent -- we have definitely handled that sort of thing.

But it's always better if the choice is made well.

So, this week, I have some words about this, as you consider your current executor, and whether they fit the profile ...

And by the way, this is just as important for the single person as it is for those who have families to think about.  Last year I lost my brother-in-law, Thad.  He was an "old bachelor".  He had a trust, so we were able distribute his one asset, a Mazda Miata, without losing stride.

Janet Behm's Guide For Choosing An Executor Of Your Estate Plan
“Many receive advice, only the wise profit from it.” - Harper Lee

Whenever you have any kind of estate plan in place, your executor is the person who manages the process when it is actually "executed". They are what is called a "fiduciary", which means he or she must be someone who will act in good faith when handling your affairs. He or she cannot take advantage of his or her position, or unfairly profit from financial transactions from your estate. The executor will meet the standard of a fiduciary duty if he or she does a competent, honest job.
You want your fiduciary to be both trustworthy and capable of handling the tasks.You have to have complete faith in him or her. Make sure he or she understands the responsibility of the job and is willing to accept it. This obviously should require a discussion before you make your Will.

Oh, and if you make NO plan, the state will be the one who chooses your executor through a process called probate.
It sounds a bit strange, but name someone who is healthy and likely to be around after your death. To be secure, you should definitely select at least one successor executor to serve if your first choice is unable or unwilling to do so when the time comes.
For many people, the choice is obvious -- their spouse. Others select a close friend, a grown child or other close relative. If no obvious person comes to mind, make a list of your possible selections and use common sense (and this article as your guide) to make the wisest choice.

Remember, as I wrote last week ...

An executor must: