Are you looking for a way to ensure that your wishes will be honored with regard to your funeral, making sure your family is not burdened with paying for your funeral, and sheltering money for Medicaid purposes? Consider creating a funeral trust which can accomplish all three goals, if drafted properly.

A funeral trust is a specialized trust that is aimed at paying your final expenses. As with any trust, you must name a beneficiary. In this case, the funeral home that handles your funeral and burial will be the beneficiary. You will sit down with them to create your funeral service and decide what type of burial you want. Everything from start to finish will be decided by you. You will then fund the trust with enough assets to pay for the services provided by the funeral home.

Although any type of assets can be used to fund the trust, a life insurance policy is a popular option. You can purchase a life insurance policy that names the trust as the beneficiary. Income earned by the policy may be tax-free as well. When you die, the policy then pays out into the trust. While you are alive, the assets held by the trust are not counted for purposes of the Medicaid program if you apply for long-term care.

Along with all of these benefits, you will also know that your loved ones will not be in the position of trying to figure out how to pay for your funeral at such an emotional time.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

If you have finally made the decision to sit down and create an estate plan, you are ahead of the majority of the people in America. Amazingly, even people with large estates often fail to create an estate plan before they die. Since you have made the important decision to create your estate plan, you should also make every effort to avoid some of the mistakes that people frequently make when estate planning.

Update, Update, Update: This cannot be said often enough. Don’t just create an estate plan and forget about it. Changes in both the laws and your life may warrant a change in your estate plan.

Stay away from kits: It’s tempting to save money by using a “do-it-yourself” Last Will and Testament kit or any of the other readily available forms you find on the Internet, but resist the temptation. Those forms often fail to take into account state specific laws, may be outdated, and often lack sufficient direction to ensure that the document will be valid when the time comes to use it.

Spread the wealth now: People often make the mistake of waiting to give everything away at the time of death. This can create a very large estate tax burden for some estates. If you have a lot to give, start gifting it now. Gift tax exemptions and trusts can help avoid a large tax obligation when you die.

Choose positions wisely: Although it is often hard to do, keep your emotions out of decisions that relate to important positions in your estate plan. For example, don’t nominate your adult child as the trustee of a large trust if he or she does not have the experience and expertise to handle the position.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

If your children are all young, then treating them the same throughout your estate plan makes perfect sense. If, however, your children are adults, this may not be the best position to take. Yes, it flies in the face of what most parents feel is right, but it may still be what is best. That doesn’t mean that you treat your children unfairly, just differently, if justified. Consider a few examples of why this may be the best course of action.

Executor: Only one person can be nominated to be the executor of your estate. If you feel that one of your children is the best qualified or lives the closest or has the most free time, then there is no reason to pick someone else just to avoid “picking favorites.”

Trustee: Just as with your Will, if you have created a trust as part of your estate plan and you feel that one child has the background, skills and abilities to be the trustee, then it makes no sense to appoint co-trustees just to avoid hurting someone’s feelings. Appointing more than one trustee often results in confusion and conflict anyway.

Bequests: If you wish to give each child the same amount under your Will, it doesn’t mean you must give it in the same form. If one child needs a home more than another, give that child your home and the other child the equivalent in cash. If one child has a history of drug problem, or mismanaging money, set up a trust and put the equivalent funds in the trust that you give to other children outright.

In the end, “different” doesn’t have to equate to unequal. Do what is right for your estate and your children.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

If you have a modest estate, you may think that the assistance of an estate planning attorney is not necessary in order to create an estate plan. After all, you can find information and forms on just about every conceivable legal topic on the Internet these days, right? Bad advice though typically leads to bad results. One common result of bad “do-it-yourself” estate planning advice is the loss of your home. This happens as a result of signing over the home in an attempt to avoid probate.

The thinking behind signing over the property goes something like this:

You know that you plan to leave your home to your _______ (son, daughter, grandchild, sister, brother) when you die anyway.

You trust this person to allow you to remain in the home until you die.

Signing over the home now will avoid the home having to go through the probate process when you die.

There are a number of things that can, and often do, go wrong with this plan. No matter how much you trust your loved one, a tragedy could result in the loss of the home. The home could be lost because of a loan default due to your loved one becoming disabled, for example. He or she could die intestate and the home could then go to a spouse or child. An accident could result in a judgment against your loved one that exceeds any liability insurance, putting your home at risk.

There are ways to avoid probate that do not put you at risk of being homeless as a result. Talk to your estate planning attorney about your options today.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Years ago, divorce and re-marriage were relatively uncommon. The concept of the blended family was not something that was widely accepted or discussed. Today, blended families have become more than common in the United States–they are the norm. If you have recently created your own blended family, your estate plan should reflect your new family. Naturally, each family is unique and will require slightly different steps when updating estate plans; however, the following steps are a good starting point.

Step 1. Review divorce decrees. Locate a copy of your divorce decree and read over it again. Pay particular attention to any terms that require you to maintain your current life insurance policy with your ex-spouse as beneficiary or that require you to keep your ex-spouse as the beneficiary of your retirement plan. These terms usually take precedence over any changes you might wish to make.

Step 2. Review existing estate plans. Locate your estate planning documents or request them from your estate planning attorney and make sure you know how things currently stand.

Step 3. Discuss plans with new spouse. Set aside time to have a long conversation with your new spouse to make sure you are in agreement with regard to how you both plan to handle your estate plans.

Step 3. Add new spouse to titles and accounts. Unless your new spouse is listed as an owner or a “pay on death” beneficiary, he or she may not have immediate access to property or accounts upon your death. Consider adding your spouse to these accounts.

Step 4. Consult with your estate planning attorney. Make an appointment with your estate planning attorney to make any changes to your Last Will and Testament as well as to any other applicable estate planning documents. This is also your chance to ask questions or get advice on how best to incorporate your new spouse into your estate plan.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Raising and caring for a special needs child can be an overwhelming task. It can take an emotional and financial toll on any family. If you have a special needs child, then you already know how expensive the care can be. You may also know a thing or two about how government assistance programs work–which may have made you leery of them. Programs such as Medicaid, SSI and public housing often have very complicated application procedures and can require the applicant’s household to have virtually no income or resources. Even if approved, they often fail to cover services that are important to the recipient. This is where a supplemental needs trust is beneficial.

A supplemental needs trust, or SNT, is a special type of trust that is geared specifically at special needs beneficiaries. Funds held by an SNT may be used to pay for things over and above that which the government pays. There are restrictions that prohibit the funds to be used for certain things, like housing and food, but many other important bills can be paid for by a SNT.

The best part of an SNT is that, when drafted properly, it will not prevent your child from being approved for government assistance programs. It can also be drafted so that it survives your death – thereby ensuring that your child will continue to be well protected even after your death.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Anyone who has assets to protect in the event of death should have a comprehensive estate plan in place. One tool that may be useful when creating that estate plan is the conservation easement. Often overlooked, this under-utilized tool can accomplish a number of goals at the same time such as protecting ownership of the property, minimizing your exposure to estate taxes, contribute to conservation efforts and produce an immediate tax benefit. So how can you use this tool?

Designate an unproductive or underused portion or tract of land that you do not plan to use in the future.

Locate a government or private organization that is willing to pay or that is interested in obtaining a conservation easement to the land.

Sell, or donate, the conservation easement. If you donate the easement, it may qualify as an immediate tax deduction. If you sell the easement, you may be able to use the funds to improve or develop other land.

Always discuss your plans with your estate planning attorney prior to going forward with them.

Once the easement has been granted, you will typically not be able to develop or improve the land; however, the land is still owned 100 percent by you, meaning it can be passed down to future generations. The estate planning benefit is that the land is now worth less than it was originally which will decrease your estate tax burden upon your death.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

People throughout America, and across the world, mourned the loss of American icon Dick Clark when the news was received of his death on April 18^th. According to reports, Clark’s death was the result of a heart attack following a medical procedure. Clark was an example of an American success story as well as proof that life doesn’t stop at age 65.

Clark is known to the over 40 set as the host of American Bandstand which ran from 1957 to 1987 and has the distinction of being the longest running variety show in American history. After American Bandstand went off the air, Clark went on to become the host the popular game show Pyramid as well as becoming the host of Dick Clark’s New Year’s Rockin’ Eve. As the voice of New Year’s Eve, Clark’s voice became synonymous with the ball dropping in Times Square at midnight which rang in the new year. In memory of Clark, reports are that confetti made from messages to Clark will be spread throughout Times Square this New Year’s Eve to commemorate the icon.

Clark entered his “golden years” almost two decades ago, yet never slowed down. Even after suffering a stroke in 2004, Clark was right back to being to voice of New Year’s Eve the following year despite suffering a speech impairment as a result of the stroke. The details of Clark’s estate plan are not yet known, but those close to Clark have described him as a workaholic and estimate that his estate will be worth in the hundreds of millions of dollars.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

We all know how important creating an estate plan is. Your estate plan is your chance to be certain your loved ones are financially secure in the event of your death. In order to make sure that your estate plan works according to plan, make sure you utilize the services of an experienced estate planning attorney from start to finish. Although this sounds like common sense, many people put a tremendous amount of thought into the details of their estate plan yet fail to seek the assistance of an estate planning attorney to ensure that the plan comes to fruition when the time comes.

Although all areas of the law can be complicated, estate planning is often more complicated than others simply because it attempts to satisfy so many goals at the same time. Estate planning must not only take into account state and federal laws as they relate to wills and trusts, but must also consider the tax implications of every detail of the plan. In addition, estate planning often tries to create a plan for while the creator is alive as well as one for after the creator’s death. Finally, there is no room for error–if a mistake is made, the creator of the plan will not be around to know about it, much less correct the error. In the event the plan does not work as planned, the people who were supposed to be protected under the plan will suffer.

Hiring an experienced attorney is always a good idea whenever you attempt to accomplish anything legal; however, given the importance of your estate plan and the consequences of making a wrong step, hiring an experienced estate planning attorney is virtually a must.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

In America, we are trained from an early age to plan for our retirement. Many of us start to fund retirement accounts as soon as we start working. While planning for your retirement is undeniably important, over-funding your retirement account can create an estate planning nightmare. Excess funds that are left over from your retirement account when you die could be subject to income tax and estate taxes. As a result, the amount left over could be reduced to a small percentage of its original value. The good news is that with proper estate planning, you can both adequately plan for your retirement and protect any excess from being lost to income and/or estate taxes.

Although experts voice opinions on a regular basis regarding how much money we will all need in order to sustain our lifestyle after retirement, the reality is that there really is no way to know how much money we will actually use after we reach retirement age. You have no way of knowing how long you will live or what your health care costs will be throughout your golden years. As a result, most people plan for the worst and hope for the best. This frequently leads to a significant excess of retirement funds upon death. If you have done nothing to prepare for this contingency, those funds could be taxed as income and then taxed again as part of your estate, resulting in the loss of well over half of the funds left.

By taking advantage of the numerous estate planning tools that are available to you, you should be able to create an estate plan that continues to allow you control over the assets while you are alive, yet protects them from over-taxation in the event you have over-funded your retirement account.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.