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The KRASA LAW, Inc. Estate Planning Blog

Friday, April 28, 2017

Trusts as IRA Beneficiaries: Part II



In my last article I discussed the fact that while IRA’s should not be re-titled to your trust during your lifetime, you might want to consider naming a trust as a beneficiary of your IRA upon your death under certain conditions.  I also discussed the paramount importance of making sure that a trust that is to be named as a beneficiary of an IRA is structured in such a way as to qualify as a “Designated Beneficiary” under the IRS rules which will allow the trust beneficiaries to stretch Required Minimum Distributions (“RMDs”) over the oldest trust beneficiary’s life expectancy.  

The rule requiring that the oldest trust beneficiary’s life expectancy be used to calculate RMD’s creates two further issues: (1) How is the “oldest trust beneficiary” determined? (2) Can anything be done to prevent the younger beneficiaries from having to use the oldest trust beneficiary’s life expectancy?

(1)  How is the “Oldest Trust Beneficiary” Determined?

Assume that the Pop Star Trust is named as the 100% beneficiary of an IRA.  The Pop Star Trust names three beneficiaries to inherit the IRA in equal shares: Gwen, Kelly, and Meghan.  Gwen is 47; Kelly is 35; and Meghan is 23.
Read more . . .


Monday, April 24, 2017

Should Your Trust be Named as Beneficiary of your IRA?



With regard to a trust-based estate plan, you should re-title most of your assets to your trust.  This process known as “trust funding” includes transferring your bank accounts, taxable investment accounts, stocks, and real properties such as your residence to your trust. One key exception is your retirement plans: if you make the mistake of transferring title to your IRA or other qualified defined contribution plan such as a 401(k) or 403(b) plan while you are living, the IRS will take the position that you just cashed out your plan. Come April 15 you will have a very unpleasant surprise in the form of a major tax bill.

Instead of transferring title of your IRA to your trust while you are living, you should name specific beneficiaries of your IRA’s through each financial institution where you hold a retirement plan.
Read more . . .


Tuesday, March 28, 2017

Elements of a Comprehensive Estate Plan



Executing and maintaining a comprehensive estate plan is critical in order to maintain control of your personal and financial wishes in the event of your incapacity or death.  A thorough estate plan consists of several different documents that address specific nuances to accomplish a common goal.  Below is a summary of the various documents that should be part of any estate plan.    

Revocable Living Trust

A Revocable Living Trust allows you to address many aspects of your planning including the management of most of your assets in the event of your incapacity and the distribution of your assets upon death.  Furthermore, your Revocable Living Trust allows you to also address other issues that you might feel are important such as the management of inheritances for minor beneficiaries, divorce protection for your beneficiaries, asset protection for your beneficiaries and, in some cases, asset protection for your surviving spouse, if any, tax planning and Medi-Cal planning.
Read more . . .


Monday, March 20, 2017

The Roles, Responsibilities, and Duties of Parties to a Trust



A Trust involves three roles: (1) the Grantor (also known as the “Settlor,” “Trustor,” or “Trust-Maker”) who establishes the trust, (2) the Trustee (also known as the “Trust Manager”) who is given the responsibility to manage the assets of the trust in accordance with its instructions, and (3) the Beneficiary who receives beneficial enjoyment of the trust’s assets under provisions and circumstances as set forth in the instrument.  

With respect to a “Revocable Living Trust” which is used as a will and power of attorney substitute in basic estate planning, the same person (or married couple) will often occupy all three roles at the beginning.  The purpose of such a trust is to allow the Grantor to maintain control over the trust assets while he or she is living and has capacity, but to have a contingency plan in place in the event of the Grantor’s incapacity or death.  After such an occurrence, the roles of the Trustees and Beneficiaries will change in order to create an efficient adjustment to the new circumstances and to allow the Grantor’s intent to be carried out in a variety of circumstances.

In other situations, each role will be occupied by a different person.
Read more . . .


Wednesday, March 15, 2017

A General Overview of Trustee Fees


One of the first issues you must examine when closing a Trust Administraiton is how much the trustee should take in compensation.  Often the trustee will ask you for counsel in this area.  The trustee assumes a great deal of responsibility and liability and thus should be justly compensated for his or her work.  At the same time, it is important that the trustee not take a fee that is too high or that will raise questions from the beneficiaries on whether or not the fee was justified.  As a result, counseling the trustee on the proper fee is critical.
Read more . . .


Friday, February 17, 2017

Ephemeral or Set in Stone? The Difference between Revocable and Irrevocable Trusts



A revocable trust is a trust in which the Trust-Maker (“the Grantor”) may amend or revoke at any time.  In essence, it is a trust that is “not set in stone” and may change at the whim of the Grantor.  A revocable trust is often used as a will and power of attorney substitute.    The idea is to create a plan for the management and distribution of the Grantor’s estate in the event of incapacity and upon death.  The Grantor might include provisions in the trust that dictate a gift of a certain asset to a specified Beneficiary upon the Grantor’s death.
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Monday, February 13, 2017

Your First Estate Planning Meeting



You have made the decision to address your estate planning because you want to maintain control over your personal and financial decisions in the event of your incapacity or death.  You have found a competent estate planning attorney who is licensed to practice law in your community.  You have even taken the big step of scheduling your first appointment with your new attorney.  What should you expect at the first meeting?  Different attorneys have different approaches.  Below is a description of my typical agenda for a first estate planning meeting.


Read more . . .


Wednesday, February 8, 2017

Kyle A. Krasa Nominated for "Best Attorney" by Monterey County Weekly "Best of 2017"


Local estate planning attorney Kyle A. Krasa has been nominated as "Best Attorney" for the Monterey County Weekly's publication, "Best of 2017." 

"It is quite an honor to be nominated for this category," said Krasa. "I am humbled by the recognition." 

You can vote for Krasa as well as many other nominees in a variety of categories here: Read more . . .


Friday, January 6, 2017

Explaining Lawyers' Explanations



Lawyers are not known for their clear and understandable explanations of legal issues. In fact, the language most lawyers use in attempting to communicate legal concepts is often referred to as “legalese.” Merriam Webster defines “legalese” as “the language used by lawyers that is difficult for most people to understand,” or more precisely, “legal jargon.” Although legal language is important to communicate complex legal concepts and principles, such language is not easily understood by laypersons. To paraphrase Lord Byron’s Don Juan, most people wish lawyers would “explain their explanations.
Read more . . .


Friday, December 23, 2016

The Most Important Gift



At its core, estate planning is not something that you necessarily do for yourself.  Instead, estate planning is something that you do for the people you love.  Often the primary motivating factor for clients to engage in their estate planning is the unpleasant experience of administering a decedent’s estate that was not addressed properly.  In addition to having to grieve your loss, a poorly execute estate plan – or no estate plan at all – can leave your loved ones mired in years of unnecessary confusion, delay, expense, and frustration.  Conversely, a compressive, up-to-date, and detailed estate plan will serve as one of the best gifts you can make to those you care about.
Read more . . .


Friday, December 9, 2016

The Distribution Trustee: How Bifurcating Trustee Duties Can Provide Control and Protection


 
A paramount goal of estate planning is to protect and preserve your hard earned assets for your loved ones.  Most basic estate planning focuses upon specifying the beneficiaries of your choice, mitigating taxes, and providing an efficient method for the transfer of assets upon death without the unnecessary delay and expense of a formal probate.  A revocable living trust is often the best vehicle for accomplishing these goals.  However, most basic estate plans focus only on the transfer process and do not focus on providing continued protection after your beneficiaries have received their inheritances.    

To provide continued protection for your beneficiaries, you might want to consider providing an “in-trust” inheritance.
Read more . . .


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KRASA LAW assists clients with Estate Planning, Elder Law, Pet Trusts, Asset Protection, Special Needs Planning and Probate / Estate Administration in Pacific Grove, CA(93950), Monterey (93944, 93940, 93943, 93942), Salinas (93901, 93905, 93906, 93907), Hollister (95023,95023) Pebble Beach (93953), Carmel By The Sea (93921), Seaside (93955) and Carmel (93923, 93922) in Monterey County and San Benito California.

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