ESTATE PLANNING

Estate Planning

Estate planning is the process of managing and controlling your assets while you are alive and well, planning for yourself and your loved ones if you become disabled or incapacitated, efficiently transferring your property to your beneficiaries at death, and protecting your loved ones and their inheritances after you are gone.

While all of these facets of estate planning may sound straightforward, there are many strategies that can be involved in a well-designed estate plan, and various legal tools may be utilized such as wills, revocable living trusts, irrevocable trusts, durable powers of attorney, health care powers of attorney, living wills, and other documents.

No one enjoys thinking about death or disability; however, establishing a proper estate plan is one of the most important steps you can take to protect yourself and your loved ones. Without a plan of your own, the State of North Carolina has one for you. The State’s plan involves the guardianship process, intestacy laws, and probate. In our experience, the State’s plan is not what most people would choose for themselves and their families. By planning ahead, you can replace the State’s plan with one of your own and ensure you and your loved ones are protected.

At Howes Law, we strive for a unique and rewarding client experience. Working closely with our clients, we design highly customized estate plans that focus on each client’s specific needs, concerns, goals, and objectives. Through getting to know our clients and listening to them, we are able to fully understand what’s really important to them. We then explain the various strategies that may be appropriate to address the client’s needs and concerns, and we work together to design a plan that accomplishes their goals and objectives. If you would like more information about estate planning, we invite you to contact us for a free initial consultation.

Common Components of Estate Plans

Many people are concerned that they may lose control of their assets with a particular type of estate plan—trust-based planning. The revocable living trust is a remedy for this specific concern. With a revocable living trust, the trustmaker retains full control over the assets funded into the trust. Not only can the trustmaker amend, revoke, or restate the trust, the trustmaker can also move assets into and out of the trust. With revocable trust planning, you retain full control of your assets.

Another benefit of a revocable living trust is that if you become disabled or incapacitated and can no longer manage your finances, the successor trustee can seamlessly take over control without court intervention. Moreover, a properly designed trust will provide instructions for the successor trustee to manage the trust to achieve your goals and objectives. Thus, a living trust can give you a level of control even after you are no longer able to manage your financial affairs.

If you become disabled or incapacitated, you may no longer be able manage your own financial affairs. Many people mistakenly believe that their spouse or adult children can automatically take over for them if they become incapacitated. However, without proper planning in place, court intervention (via conservatorship and/or guardianship) is a virtual certainty.

For others to manage your finances, they must petition a court to declare you legally incompetent and the court then appoints someone to manage your financial affairs. This process can be time-consuming, expensive, and stressful for your family. Even if the court appoints a family member, they may be required to post bond and/or account to the court how they are managing your affairs and show exactly how they are spending and investing your assets.

In addition to planning for your financial affairs, you should also plan for your medical care in a variety of scenarios. If you plan ahead, you can not only select trusted individuals to make medical decisions for you when you are unable to do so, but you can also provide guidelines to help them make decisions about your care. Parents can also select standby guardians for their minor children in case they become disabled and unable to care for them.

With proper advance planning, you can avoid court intervention. You can hand-pick trusted individuals to manage your financial affairs and make health care decisions for you. Moreover, planning ahead will allow you to ensure your appointed individuals will follow your specific instructions designed to meet your stated goals and objectives.

At Howes Law, we assist our clients in preparing the appropriate legal documents that enable them to retain lifetime control without court intervention. Through the use of trusts, powers of attorney, and health care directives (living wills), our clients are able to maintain control over financial, legal, and property matters; maintain control over healthcare and medical matters; and provide for the care and nurturing of minor children and other dependents.

Administering an estate after death can be costly and time-consuming, especially if there is no plan in place. Creditors, financial institutions, and other interested parties must be notified; funeral and burial arrangements must be carried out; debts must be addressed; taxes must be paid; tangible and intangible assets must be protected and eventually transferred to beneficiaries; and your overall wishes must be carried out to the extent they are known. Quite simply, there is a lot to do with regard to properly administering an estate.

If you have no plan or only have a will, everything you own in your own name will pass through a court process known as probate. This process can be expensive, time consuming, and stressful, and it opens private matters to the public. The probate court controls the process until your estate is settled and closed. This can often take many months or even years. During the probate process, your spouse could even be forced to apply to the probate court for money to pay current living expenses.

Proper estate planning addresses all of these issues, often avoids the probate process, and allows your assets to transfer to your beneficiaries in a quick, inexpensive, and private manner. Proper planning can also empower your family members to seamlessly retain control of and continue the operation of unique assets such as businesses, farming operations, or legacy assets (like a family cabin or beach house).

Knowing what needs to be done for a particular client requires a complete understanding of the client’s needs and goals as well as a thorough knowledge of the various tools and strategies available. Each client is different. Thus, no one technique works for everyone. At Howes Law, we work hard to ensure that our clients plan properly and utilize the appropriate tools to accomplish their specific goals and objectives in the most efficient manner possible.

Estate taxes are based on the size of your estate and how your estate plan works. At Howes Law, we utilize multiple strategies to reduce or eliminate estate taxes. If your estate is likely to be subject to estate taxes, it is easier and more efficient to plan early. The longer you wait, the more complex and costly it will be to effectively plan for estate taxes.

Although estate taxes generally only apply to larger estates, many people fail to consider the effect of income taxes on their estates and beneficiaries. Certain assets, such as retirement plans (401(k), IRA, etc.), can be decimated by income taxes if a proper plan is not in place. If you have a retirement plan, it is extremely important to structure your estate plan to minimize the effect of income taxes on your estate and ensure your beneficiaries receive as much as possible.

Without proper planning, the decision of who will raise your children and manage their inheritance will be determined by a court without any guidance from you. Even if the court chose the person or persons you would have chosen, they may have undue burdens placed on them by the court, such as having to provide annual accounting.

A proper estate plan will address the continued care and nurturing of your minor children. You may desire to design a plan that will allow your spouse to devote more time and attention to your children, without the obligations of working outside the home. Or you may want to provide special assistance for your spouse if he or she does not have experience handling financial or legal matters. If both you and your spouse were to die while you have minor children, you will certainly want to choose who would best serve as a guardian to provide care, love, and a nurturing environment for your children. You could even provide resources for the guardian(s) if they needed a bigger house or car to care for your children. Or you may want a different person than the guardian(s) to manage your children’s inheritance. With proper planning, there are many options to ensure your children are cared for as you desire.

In addition, you can protect your beneficiaries whether they are minors or adults. A proper estate plan will safeguard inheritances from divorce, creditors, lawsuits, predators, and a lack of experience in managing finances. You can also build into your plan incentives for your beneficiaries to encourage activities, lifestyles, work ethic, or other values that are important to you. If your beneficiaries are going to receive a large inheritance, you can also protect them from “affluenza” or “sudden wealth syndrome.”

Many people desire to benefit a charitable organization or cause or to leave part of their assets to a church or other religious institution. Charitable planning involves philanthropic, financial, estate, and tax planning. Not only can you benefit a cause important to you, but with proper planning you may also take advantage of tax and financial benefits for yourself and/or your family, such as a lifetime income stream or reduction in estate or income taxes. There are many considerations and methods of planning, from making cash gifts to structuring charitable trusts or setting up a family foundation. At Howes Law, we can help you plan your gifts strategically and integrate your generosity with your comprehensive estate plan.

If you have questions or would like more information about Charitable Planning, we invite you to contact Howes Law for a free initial consultation.

Whether you are just starting a business or have spent years building a successful company, effective business planning is essential to ensure that you reduce personal liability, preserve tax deductions, facilitate your retirement, maintain family harmony, minimize income, gift and estate taxes, and ensure your business will survive if you become disabled or die prematurely. Many business owners do not take the time to plan for these issues, primarily because they are busy running their company or just don’t know where to start.

Planning for how you will exit from your business should be an integral part of your business formation and estate and retirement planning. Proper planning now can provide you with retirement income, reduced income and estate taxes, and even let you benefit a charity if you so choose, regardless of whether you transfer your business to family members at discounted values, to employees, or to an outside buyer.

At Howes Law, we use an integrated approach to help business owners plan for these issues, including estate, retirement, insurance, asset protection, and tax planning. We also coordinate with our clients’ other professional advisors (bankers, accountants, attorneys, and investment counselors) to create an effective team working for our clients’ success. We have many tools and strategies at our disposal to help you achieve your goals, and our staff can help you sort through your options and plan to meet your specific needs and objectives. If you have questions or would like more information about Business Planning, we invite you to contact us for a free initial consultation.

If you have a child or loved one with special needs (such as mental or physical disabilities), you almost certainly have considered what would happen to them if you were no longer able to care for them. While you may be able to provide them money and assets, such a bequest may disqualify them from Social Security or Medicaid benefits.

Beneficiaries of government assistance who directly receive an inheritance risk losing their benefits. While government benefits provide for necessities such as food, clothing, and housing, these limited funds will not provide your loved ones with the resources that would allow for a better quality of life. Fortunately, you can leave assets in a Special Needs Trust or Supplemental Needs Trust that will not disqualify the beneficiary from Social Security or Medicaid. These trusts are designed to supplement, not replace public benefits, and can provide for a variety of life-enhancing benefits without compromising your loved ones’ eligibility.

Keep in mind that there may be other people who have your disabled loved one in their plans. Even if well-intentioned, if someone leaves money directly to your disabled loved one, it could jeopardize his or her government benefits. You can create a Special Needs Trust now to catch any gifts or inheritance that you or others may wish to make to your disabled loved one.

Howes Law is here to help you set up a Special Needs Trust or Supplemental Needs Trust to ensure government eligibility is preserved while providing assets to enhance the life of your disabled loved one when you can no longer provide their care. If you would like assistance with Special Needs Planning, we invite you to contact us for a free initial consultation.

Advanced Estate Planning

Advanced Estate Planning focuses on reducing estate taxes and income taxes, advanced asset protection planning, transitioning significant wealth or unique assets, and preserving family real estate for the next generation. Without proper planning, taxes can erode wealth, creditors can take inheritances, and cherished family assets can be squandered.

At Howes Law, we counsel families in North Carolina on the establishment and maintenance of a variety of sophisticated planning strategies, such as Family Limited Partnerships (FLP), Family Limited Liability Companies (FLLC), Qualified Personal Residence Trusts (QPRT), Irrevocable Life Insurance Trusts (ILIT), and a wide range of other advanced planning strategies.

 

A qualified personal residence trust (QPRT) removes a family’s home (or second home) from their estate. QPRT’s are ideal for people with large estates that sit above the estate tax exemption amount, or if the family is concerned about changes to estate tax laws that may negatively impact their heirs with regard to tax liability. When creating a QPRT, a family transfers their home to a trust for a period of time, usually 10 to 15 years. During the time that the trust holds ownership of the family home, the family may continue to live in the residence without paying rent to the trust.

At the conclusion of the 10 to 15-year term of the trust’s ownership of the residence, the family home transfers to the beneficiaries of the trust. If the original owners of the home wish to live in the home after ownership has been transferred to the beneficiaries of the trust, they may make arrangements to pay rent to satisfy the obligation of their occupancy. This allows a further reduction of estate taxes by transferring additional assets to the beneficiaries.

It’s important to note that if the maker of the trust dies before the trust term ends, the residence must be included in the estate just as it would without the existence of the QPRT.

Some years ago, family limited partnerships (FLPs) were used as a primary tool for estate tax and asset protection planning. Now, with the rise of limited liability companies, the LLC is a primary tool that generally yields better asset protection. Creating an FLLC can protect assets from an individual’s (member of the LLC’s) creditors and facilitate the transfer of assets to the next generation in a discounted manner.

As an example of FLLC planning, assume that a parent has formed an LLC with her adult children as fellow members, and she has contributed an investment account to fund the company. With a properly designed LLC, the interests gifted to her children may be discounted to reduce the size of the gifts. In addition, the LLC will provide asset protection for the assets held in the LLC. For example, if after the creation of the LLC, the parent has a car accident and is found responsible for the related damages, assets held within the LLC will not be subject to collection by the judgment creditor. While the creditor may obtain a charging order, they cannot take the member’s interest in the LLC, take any management control over the LLC, nor force her to sell that interest. The remedy would be limited to the charging order subjecting only distributions from the LLC to collection. Thus, the ownership interest in the LLC and the investments held within it are protected and provide leverage in dealing with the judgment creditor.

As with all planning, there are ethical considerations to be considered to ensure that a known creditor is not defrauded. However, for families looking for efficient ways to hold and protect their assets, and transfer assets to the next generation in a tax efficient manner, an FLLC may be an excellent option.

Irrevocable life insurance trusts (ILIT) are a valuable estate planning tool for business owners and others alike. Since buying life insurance can add to your taxable estate, ILITs are a core component of many estate planning strategies.

With an ILIT, an individual can structure their insurance needs completely free from federal estate tax upon death and, if married, upon the death of his or her spouse. This type of irrevocable trust purchases and owns insurance on the life of the trustmaker. Each year, the trustee pays the life insurance premium from money gifted to the trust by the trustmaker. When the person dies, the insurance proceeds are not included in the value of the estate and will pass to the the beneficiaries according to the terms of the trust, estate tax-free.

The terms of the trust allow the you to control the insurance proceeds and provide asset protection for the you, your children, and other beneficiaries. The life insurance proceeds can be used to purchase illiquid assets from your estate to pay taxes or achieve a fair estate distribution. These proceeds can also provide a tax-free inheritance to loved ones to replace assets that may have been given to charity during the life or in the estate plan of the individual.

Different types of retirement plans have different levels of protection during the account owner’s life. Certain plans, like 401(k)s, receive protections under federal laws, such as the Employment Retirement Income Security Act (ERISA), while individual retirement accounts (IRAs) receive protection under state law.

Inherited IRAs and Inherited retirement plans have no federal protection, and in most states, there are rather limited protections for inherited IRAs. Thus, in most states, the best way to protect an inherited IRA is with a retirement plan trust. North Carolina, however, is one of only four states that have unlimited creditor and bankruptcy protection for inherited IRAs.

Retirement plan trusts are also effective for other planning purposes, such as protecting spendthrift or special needs beneficiaries, or providing controls or incentives for the use of the inherited assets. They can be particularly encourage tax efficient distributions from the inherited IRA. Distributions from inherited retirement plans are treated as taxable income, so a beneficiary that blows through an inheritance quickly will pay much more tax and receive much smaller benefits from the inheritance. A retirement plan trust can ensure the inherited IRA will last over time and distributions are taken in a tax efficient manner.

The best way to protect assets for these issues is to utilize properly designed trusts as beneficiaries of the qualified plans and IRAs. The trusts will provide asset and divorce protection, allow you to provide distribution guidelines and instructions, and even provide for professional management of the money if desired.

Asset protection trusts (domestic and foreign) are excellent tools for preserving wealth for future generations. A domestic asset protection trust is a self-settled trust – where the grantor is also the beneficiary – created under the laws of a state that allows self-settled asset protection trusts. This type of trust protects the trust assets from the trustmaker’s future potential creditors. Foreign asset protection trusts provide even more protection because they are set up in other countries with very favorable creditor protection laws.

These types of trusts must have an independent trustee and they must be irrevocable. The distributions of assets to beneficiaries must be at the discretion of the trustee and not mandatory in nature. Beneficiaries are restricted from transferring their interest in the trust to creditors.

Currently there are 15 states that have domestic asset protection trust statutes including Alaska, Delaware, Nevada, and South Dakota. Common to most of these states are provisions that the independent trustee must be an individual who is a resident of the state, or a bank and trust company licensed in that state, and that some or all of the trust assets must be located in the state. While North Carolina is not currently one of the states that allow for asset protection trusts, North Carolina residents may establish domestic asset protection trusts in states that allow them, or foreign asset protection trusts in foreign jurisdictions.

Dynasty trusts are created to pass wealth across multiple generations without leaving assets vulnerable to estate and gift taxes, spendthrift beneficiaries, beneficiaries’ creditors or divorcing spouses. They can be designed to last indefinitely, depending on the state law of the trust situs. Dynasty trusts are most often utilized for large estates that are likely to last for multiple generations. The trust is also very flexible in the terms of distribution. For example, you could include very specific instructions about the distributions that are permitted and not permitted, include incentives to encourage certain behavior, or give the trustee broad discretion in making distributions. Another common use of a dynasty trust is for family heirloom property such as jewelry or a vacation home that the grantor wants to stay in the family for generations.
Grantor retained annuity trusts (GRAT) are effective estate tax planning and business planning tools. A GRAT is a type of irrevocable trust that permits an individual to make a lifetime gift of assets to an irrevocable trust in exchange for a fixed payment stream for a specified term of years.

This strategy works well for income-producing assets and business assets, especially if the asset is expected to significantly increase in value. The GRAT reduces estate taxes by removing assets from the individual’s taxable estate.

So how does it work? An individual creates a GRAT. She transfers her business or other type of asset into the trust. She then receives income payments for the specified trust term. At the end of the trust term, the trust assets, called the remainder interest, are transferred to her beneficiaries. During the term of the trust, the trustmaker can be the sole trustee of the trust with complete control over all decisions of the trust and the assets in the trust.

When the trust terminates, the assets go to the beneficiaries of the trust. Because the beneficiaries do not receive the income and do not receive the business interests until the end of the trust term, the value of the gift has been reduced for estate tax purposes. Note: if the individual dies before the trust ends, some or all of the assets may be included in her estate.

Closely related to GRATs are grantor retained unitrusts, or GRUTs. These trusts work the same way as GRATs, but allow for fluctuations of income taken from the trust, rather than providing for fixed amounts.

When creating a charitable remainder trust (CRT), an estate planning attorney will draft an irrevocable trust, and then the client will make a gift of property to the trust. The property can be real estate, stock, or any other appreciated asset. The terms of the trust allow for the client to receive income from the trust for either a term of years or for life, depending on the terms of the trust. At the conclusion of the trust, the named charity is the final beneficiary of the “remainder” of the trust assets.

CRTs delay the impact of capital gains taxes, allowing the asset to be sold inside of the charitable trust and permitting the full value of the asset to be reinvested. Charitable remainder trusts also create a partial income tax deduction based upon an IRS formula, reduce estate taxes (since the remaining assets are distributed to charity), and create a family legacy through charitable giving.

A charitable lead trust (CLT) gives those with philanthropic estate goals a different vehicle for consideration. With a charitable lead trust, the individual still makes a gift of property to an irrevocable trust. However, with a CLT, the charitable organization is the income recipient and receives either an annual fixed percentage of the net fair market value of trust assets or an annual fixed amount for a certain period of time, or the life of the donor or another individual. At the end of the trust term, trust assets are passed to individual’s beneficiaries.

CLTs allow individuals to contribute to charities during their lifetime, as well as transfer their assets to their heirs with significantly reduced estate or gift taxes.

 

If you have questions related to any of these advanced estate planning issues, we invite you to contact us for a free initial consultation.

Special Needs Planning

If you have a child or loved one with special needs (such as mental or physical disabilities), you almost certainly have considered what would happen to them if you were no longer able to care for them. While you may be able to provide them money and assets, such a bequest may disqualify them from Social Security or Medicaid benefits.

Beneficiaries of government assistance who directly receive an inheritance risk losing their benefits. While government benefits provide for necessities such as food, clothing, and housing, these limited funds will not provide your loved ones with the resources that would allow for a better quality of life. Fortunately, you can leave assets in a Special Needs Trust or Supplemental Needs Trust that will not disqualify the beneficiary from Social Security or Medicaid. These trusts are designed to supplement, not replace public benefits, and can provide for a variety of life-enhancing benefits without compromising your loved ones’ eligibility for government benefits.

Keep in mind that there may be other people who have your disabled loved one in their plans. Even if well-intentioned, if someone leaves money directly to your disabled loved one, it could jeopardize his or her government benefits. You can create a Special Needs Trust now to catch any gifts or inheritance that you or others may wish to give to your disabled loved one.

Howes Law is here to help you set up a Special Needs Trust or Supplemental Needs Trust to ensure government eligibility is preserved while providing assets to enhance the life of your disabled loved one when you can no longer provide their care. If you would like assistance with Special Needs Planning, we invite you to contact us for a free initial consultation.

Uses of Funds in Special Needs Trusts

  • Annual check-ups at an independent medical facility
  • Attendance of religious services
  • Supplemental education and tutoring
  • Out-of-pocket medical and dental expenses
  • Transportation (including the purchase of a vehicle)
  • Vehicle maintenance
  • Hobbies and recreational activities
  • Travel and vacations
  • Funds for entertainment (such as movies, shows, or ballgames)
  • Purchase of life-enhancing goods and services (such as computers, video games, furniture, or electronics)
  • Athletic training or competitions
  • Special dietary needs
  • Personal care attendant or escort

Planning for Minor Children

All parents want to ensure their children are provided for if something happens to them while their children are still minors. Grandparents, aunts, uncles, and other relatives may also want to leave gifts to young children upon their deaths. However, good intentions and poor planning often have unintended results. In addition, many parents delay estate planning because for one reason or another. In failing to create a proper estate plan, many parents fail to adequately protect their children. When planning for minor children, there are two essential issues to address:


Selecting a Guardian

All parents, whether or not they have substantial wealth, should have an estate plan that sets forth their wishes for their children if they die or if they become disabled and can no longer care for their children. This plan should include appointing a guardian for your minor children in yourWwill. In North Carolina, you can also appoint a “standby guardian” to care for your children if you become disabled and are unable to care for them yourself. If there is no plan in place, the court will appoint a guardian to raise your children based on what it determines to be in their best interest. Unfortunately, the guardian appointed by the court may not be your first choice, and in some cases, could be your last choice. From just a few brief court hearings, it is difficult for the courts to determine who is best suited to care for your children in your absence.

In some cases, where a guardian is not clearly named, the court may send a child to Child Protective Services to remain with a foster family until the court decides on a suitable guardian to care for the child. For many parents, this possibility is reason enough to create an estate plan to protect their children.

Nominating a guardian can be a very difficult decision that should be made with serious consideration. The guardian should provide stability for your children during the difficult transition and should be someone you trust to continue caring for your children in a manner with which you are comfortable.

It is also highly recommended that you name at least one, and preferably two, backups in case the guardian you select is unable to raise your children after you are gone. This will ensure your children will be raised by trusted relatives or friends and not end up in the court system.

Inheritances to Minors

Many parents think that if they name a guardian for their minor children in their Wills and something happens to them, the named guardian will automatically be able to use the inheritance to care for the children. This scenario couldn’t be farther from the truth, with regard to the inheritance. When the Will is probated, the court will appoint a guardian to raise the children (usually the person named by the parents in their Wills). But the court, not the guardian, will control the children’s inheritance until the child reaches legal age (usually 18). At that time, the child will receive the entire inheritance.

Most parents would prefer to not only select someone besides the court to manage their children’s inheritance, but also that their children not receive their entire inheritance at age 18. Without comprehensive planning, you have no choice; the court will oversee the inheritance until the child reaches legal age and then distribute the entire inheritance in a single lump sum.

In some circumstances, a custodial account is established for a minor child under the Uniform Transfer to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA). These accounts are usually set up through a bank and a

custodian is named to manage the funds. In any event, the minor will still receive the full amount of the inheritance upon attaining legal age.

Another option in planning for children is a trust, the preferred option for many parents and grandparents. A trust allows you, not the court, to select who will manage the inheritance for your children or grandchildren. A trust also allows you to provide guidelines to support your children, provide for their education, and accommodate each child’s unique needs and circumstances. A trust will also provide asset protection from creditors and even divorce.

Although most parents hate to think about leaving their children before they are adults, their well-being is only ensured by proper planning. If you have not yet created a plan that adequately protects and provides for your children, we invite you to contact us at Howes Law for a free initial consultation.

Planning for Pets

One of the primary goals of estate planning is to provide for loved ones, and for many of us, the term “loved ones” certainly includes our pets. However, most people don’t plan for what will happen to their pets when they are no longer able to care for them due to disability or death. While you may think a friend or family member will look out for your pet, they may lack the means or space to properly care for them, and without proper planning, there may not be a backup plan to care for your pet.

Under North Carolina law, pets are considered property. Thus, an individual cannot leave money outright to a pet, as property cannot own other property. You can, however, leave an outright gift of money in your will to a caretaker with the request that the caretaker care for your pet for the rest of your pet’s life. However, if the gift is made outright, no one is responsible for ensuring your pet is receiving the care it needs. In short, there is nothing to stop the caretaker from taking your pet to the shelter and keeping your money. Also, even if the caretaker plans to care for your pet, the caretaker’s creditors or a divorcing spouse could take the money left for your pet’s care.

In addition, your Will must go through probate before it takes effect. The probate process can be time-consuming and could take months or years before distributions are made. Since your pet needs food, water, shelter, and love every day, a probate situation may not be the best way to provide for your pet.

Many pet owners are now using a “pet trust” to provide for continuing care for their pets. A trust can specify who will care for your pet (and successors if the person you name is unable or unwilling), provide funds for care, and also give specific directions about how you want your pet cared for. In addition, a properly drafted pet trust will provide for someone to ensure your pet is receiving the care you intended.

If you have questions about planning for your pets, we invite you to contact us at Howes Law for a free initial consultation.

Considerations When Establishing a Pet Trust

While Your Pet Is Living:

  • Choosing caregivers
  • Standard of care
  • Payment for caregivers

Upon the Death of Your Pet:

  • “Thank-you” bonus for caregiver
  • Distribution of remaining assets

Asset Protection Strategies

In today’s litigious society, more and more people are concerned with protecting their assets and the inheritances they leave their children. Business owners and professionals such as doctors, dentists, lawyers, and accountants, as well as property owners, in particular, should be aware of the risks associated with conducting their business, practicing in their respective fields, and being responsible for others’ actions.

At Howes Law, we work with clients to implement proven, legally sound strategies designed to empower our clients facing the potential of future liability. With our background experience in litigation, we are able to effectively represent professionals, small business owners, and property owners to protect their assets from potential litigation, judgments, liens, and fraud.

Insurance alone does not always protect against all of these threats. Although revocable living trusts can be designed to provide asset protection to beneficiaries after the trustmaker dies, they do not provide any asset protection for the trustmaker during his or her lifetime. We help our clients protect their assets by utilizing a variety of asset protection strategies, including specially designed trusts, business entities, and other legal arrangements, so that our clients are able to enjoy the highest level of confidence in the security of their accumulated wealth.

A creditor who initiates litigation against a person who has placed his or her assets into a properly designed trust, foundation, or other entity may find there are very few collectible assets actually owned by the person they wish to sue. Placing assets into an asset protection entity may also have the added benefit of removing those assets from the person’s taxable estate. Asset protection planning should also incorporate a client’s overall estate planning objectives.

The specific strategies employed in any particular situation may vary depending on the client’s needs and concerns, the nature of the assets, the location of the assets, the tax laws that apply to those assets, and the client’s overall estate planning goals and objectives. If you have questions about Asset Protection Planning, we invite you to contact us at Howes Law for a free initial consultation.

 

Common Risks Causing Asset Vulnerability

  • Professional malpractice liability
  • Personal liability of corporate officers and directors
  • Lawsuits by former business partners
  • Personal injury suffered on premises you own
  • Personal injury resulting from a motor vehicle accident
  • Liability as guarantor for the debts of another
  • Liability arising from misconduct or negligence
  • Catastrophic medical bills resulting in bankruptcy

The transfer of firearms from an estate to an heir requires careful planning, especially with regard to those weapons regulated by the National Firearms Act (NFA). The NFA regulates six types of firearms, including machine guns, destructive devices (such as grenades), sound suppressors (commonly referred to as silencers), short-barreled rifles, short-barreled shotguns, and “any other weapons”, a subcategory further defined by the NFA. The federal government, via the NFA, requires a separate permitting and acquisition process for these types of firearms, including sign-off from local law enforcement and payment of tax stamps.

Since it is expressly illegal for anyone other than the licensed individual to possess an NFA-regulated firearm, owners have committed what’s become known as an accidental felony, by conveying ownership upon death to an unlicensed family member or other heir. To remedy this situation, the legal community has created the gun trust, a mechanism used to acquire, maintain, and distribute NFA firearms safely and effectively.

The legal mechanism for a gun trust is actually the commonly used revocable living trust (RLT). As a responsible gun owner, you can work with Howes Law to create a gun trust to assist you with regulated firearms purchases, maintenance of your collection, and distribution to heirs upon your death. In addition to planning benefits, these types of trusts also may decrease documentation requirements for certain purchases.

If you have questions about firearms planning and gun trusts, we invite you to contact us at Howes Law for a free initial consultation.

Firearms Planning and Gun Trusts

The transfer of firearms from an estate to an heir requires careful planning, especially with regard to those weapons regulated by the National Firearms Act (NFA). The NFA regulates six types of firearms, including machine guns, destructive devices (such as grenades), sound suppressors (commonly referred to as silencers), short-barreled rifles, short-barreled shotguns, and “any other weapons”, a subcategory further defined by the NFA. The federal government, via the NFA, requires a separate permitting and acquisition process for these types of firearms, including sign-off from local law enforcement and payment of tax stamps (as of July 13, 2016, law enforcement signoff will no longer be required).

Since it is expressly illegal for anyone other than the licensed individual to possess an NFA-regulated firearm, owners have committed what’s become known as an “accidental felony,” by conveying ownership upon death to an unlicensed family member or other heir. Accidental felony occurs when executor is required under state law to take possession of property but is prohibited under federal law from possessing an NFA regulated firearm. To remedy this situation, the legal community has created the gun trust, a mechanism used to acquire, maintain, and distribute NFA firearms safely and effectively. Gun trusts can also facilitate sharing of NFA firearms during the lifetime of the owner.

A gun trust is a specially designed trust for the purpose of owning and managing firearms, especially NFA regulated firearms. As a responsible gun owner, you can work with Howes Law to create a gun trust to assist you with regulated firearms purchases, maintenance of your collection, and distribution to heirs upon your death. In addition to planning benefits, these types of trusts also may decrease documentation requirements for certain purchases.

For owners with large gun collections who want to keep the collection in the family for generations, a multi-generational gun trust is the best way to do so. If you have questions about firearms planning and gun trusts, we invite you to contact us at Howes Law for a free initial consultation.