How to Leave Large Sums of Money to Charity in Your Estate Plan

Giving money to charity through your estate plan is a great way to leave a positive legacy while also minimizing your potential estate tax burden. Estate planning can be a challenging process, but with the assistance of a skilled attorney you will be able to provide some significant funds to charitable organizations and make a positive difference in the world.

The following are some tips from our estate planning attorneys to make this happen:

  • Keep in mind the tax benefits: Your estate’s value does not include any money you leave to charity through your estate plan. Specifically, this money is tax-deductible up to 50 percent of adjusted gross income when the money goes to qualified organizations. You may use this to your benefit to significantly decrease your tax burden.
  • Donate throughout your lifetime to maximize tax benefits: If you regularly give money to charities throughout your life, it will both reduce the value of your estate and give you the added benefit of taking advantage of income tax deductions. By benefitting from these savings in your income taxes, you can actually leave behind more to charity after your passing, which is beneficial for both the organizations and your loved ones.
  • Give beneficiaries the option to disclaim: You may put certain provisions in your estate plan to allow your children the opportunity to disclaim at least a portion of their inheritance and give it to charity instead. You may choose from a variety of qualified charities to donate these disclaimed portions of inheritance to, and those disclaimed portions are not subject to taxation from the Internal Revenue Service.  
  • Create a charitable lead trust: A charitable lead trust can help you maximize the benefits of charitable donations in your estate planning process. A charitable lead trust must donate a certain amount of money to charity each year during your life for a specific time period, which you choose. The remainder of the money will then go to your children. A maximum, zeroed-out charitable lead trust would see no estate or gift taxes applied to that remainder. Upon your death, the issue simply becomes how old your children must be once they receive the remainder funds.
  • Create a charitable remainder trust: Another valuable estate planning tool for charitable donations is a charitable remainder trust. You may put low-tax basis assets into this trust and sell them off, which defers estate taxes and provides additional income. Charities must receive a minimum of 10 percent of the present value of the charitable remainder trust upon your passing. You also get an upfront income tax deduction by simply setting up this type of trust.

If you are looking for additional ways to donate to charity through your estate plan, meet with a knowledgeable estate planning lawyer to discuss the various options available.

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township. Schedule your free consultation today by calling 248-398-4665.

4 Safeguards to Prevent Your Will from Being Contested

As you work to create your estate plan, one of your goals should be to leave no doubts as to the validity of your will. In some circumstances, beneficiaries who feel they got spurned in the will might attempt to challenge its validity in hopes of ultimately receiving more of an inheritance.

By working with a skilled estate planning attorney, you can remove this risk. Experienced legal professionals understand how to craft key documents that eliminate potential loopholes or vulnerabilities that could leave a will open challenges.

The following are some safeguards you can put in place to prevent your will from challenges:

  • Get your will done early: Try not to procrastinate when it comes to writing up a will. The best time to start your estate planning process is while you are still healthy—not when there is any question at all about your mental capacity.

Will contests become significantly more common if an individual creates or alters it after beginning to experience symptoms of Alzheimer’s disease or dementia, for example. It becomes easier for a challenger to the will to prove the testator was not of sound mind when he or she created the document. Thus, you should create your will as early as possible and make regular updates as needed.

  • Add a “no contest” clause: You may include a provision that essentially blocks people from contesting the will for selfish reasons. Under such a clause, anyone who attempts to challenge the will would receive nothing from the estate. This does not prevent anyone from challenging the will at all, but if a person is acting purely out of self-interest, it could act as a powerful deterrent.
  • Share your estate plan with your loved ones: The people close to you will be much less likely to challenge the validity of your will if they know what it contains before you pass away. Sit down with your loved ones and explain your decisions. This gives you the opportunity to avoid your loved ones receiving nasty surprises after their death, while also allowing you to smooth over any potential arguments or points of contention from the start.
  • Regularly update your estate plan: Whenever the circumstances of your life have significantly changed, such as a new marriage, the birth of a new child, a new job or retirement, you should update your will to ensure it reflects your current situation. A will that appears to be outdated is more likely to see challenges, as someone could argue it did not reflect the true wishes of the testator.

These are just a few of the steps you may take to prevent will contests from becoming an issue after your passing. For more information and guidance on how to create legally binding estate planning documents, contact a trusted estate planning lawyer.

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township. Schedule your free consultation today by calling 248-398-4665.

How to Place Conditions on Assets Your Beneficiaries Receive

Many parents have legitimate concerns that their children, grandchildren or other heirs might not be responsible with their inheritance. If you are worried your beneficiaries will make poor financial decisions, spend the money on vices or engage in some form of manipulation, you can work with an estate planning attorney to attach conditions to your will or trust.

There are two basic options you have in this situation: you may disinherit the individual or place certain conditions on the assets you leave behind to that person.

Disinheriting a child

Although you may not disinherit a spouse, the law does allow you to leave nothing to your adult children. If you decide that this is the best course of action, you must expressly state this desire in your will. If you simply do not include your child in a will, he or she could challenge the will’s validity in court, with the hope of receiving an inheritance anyway.

You do not have to explain your reasoning for disinheriting a child in your will, although you may leave behind separate letters or estate planning documents attached to your will that give you the ability to provide further context into your decision.  

Adding conditions for beneficiaries

If you would like to leave your child with money or assets, but are worried about his or her maturity, you may use several strategies in your estate plan to safeguard against potential irresponsible actions. The following are a few examples:

  • Leave money in a trust: Your child’s inheritance would go to a trust, and you would appoint a trustee to distribute and invest that money. The trustee should able to say “no” if your child has not met certain conditions and should be a generally reliable, trustworthy and organized person with at least some connection to your family. You may choose a friend, relative or your estate planning lawyer.
  • Establish conditions: You may add strings to an inheritance, requiring your child to meet certain conditions before the money gets distributed. For example, you may state that the child must reach a certain age, must complete a certain level of schooling or must become sober (if applicable).
  • Pay out in installments: Rather than leaving a lump sum of money to a child who has a reputation for spending quickly and recklessly, you may have that money pay out over a certain period of time. For example, your child could receive some money at ages 25, 30 and 35. You may set up this schedule as you see fit.

Again, you do not need to leave any explanation for why you decided to add these conditions to your will. You do have the option of including an explanatory letter with all your other documents, but you are under no legal requirement to do so. It may be a good idea to include some context to avoid hurt feelings and unnecessary challenges to your will, however.

Consult a skilled estate planning lawyer if you have further questions about this process or believe it may be a feasible option for you.

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township, and Bloomfield Township.

Schedule your free consultation today: (248) 398-4665.

Proper Planning Can Offset the Costs of Long-Term Care

As you grow older, one of your fears may be that you will need to enter a nursing home facility at some point in the future.

Although nursing homes often provide exceptional care to patients, they come at a significant cost — sometimes $100,000 or more per year. This can wipe out your life savings in a matter of months or few short years. Adding to the problem is the fact that the cost of most forms of long-term care are not covered by typical health insurance policies, Social Security Disability or Medicare benefits.

Using an Irrevocable Trust

Fortunately, there are options an experienced estate planning attorney will recommend to plan for the possibility of long-term care. One of the most highly used tools is an irrevocable trust, in which you place a large amount of your assets and property so that they will not be counted as resources when it comes to paying for nursing home care.

If done right, you can qualify for Medicaid benefits to cover most or all of your long-term care costs, while still distributing your wealth to your loved ones based on your wishes. You may also be able to keep your home, even though you will no longer own it.

To that end, one of the downsides to setting up an irrevocable trust is that once you place assets or property into it, you forfeit most control over them. You would name an executor to oversee the assets within the trust while you are still alive, and that person would also be responsible for ensuring the assets are properly distributed to your beneficiaries. This can make some people uncomfortable.

On the other hand, you may continue to draw income from the trust on a regular basis, giving you ample resources to continue your standard of living for the foreseeable future. Irrevocable trusts can be complex entities, so be sure to consult an experienced living trust attorney to learn about your options and if it’s the right tool for you.

Long-Term Care Insurance

An alternative to Medicaid planning is to purchase long-term care insurance, which essentially covers the cost of a nursing home if it becomes necessary for you to seek this type of care in the future.

Long-term care insurance can be expensive, and the costs may vary widely depending on the insurance company and your age. Nevertheless, it’s recommended that you look at a variety of options before settling on a policy. Providers may also deny coverage for those who are in poor health, so you should try to find a policy as early on as possible.

It’s worth noting that the decision to purchase long-term care insurance coverage should not be taken lightly. The choice you make will impact you well into the future, so you should work with a knowledgeable wills and trusts attorney to look at all of your options and determine the best course of action for your situation.

Schedule Your Free Consultation with Our Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham FarmsTroy, Farmington HillsRochester HillsSouthfieldWest Bloomfield Township, and Bloomfield Township.

Schedule your Free Consultation today: (248) 398-4665.

How to Give Gifts Through Your Will

As you establish your estate plan, one of your goals may be to provide certain gifts to your family members and friends. While there are some tax benefits to doing this while you are still alive, you may also pass on “testamentary gifts” through your will. Doing so can help your beneficiaries avoid many of the headaches associated with probate.

There are three different categories of testamentary gifts that a Farmington Hills estate planning attorney can help you arrange in your will. The following is a brief overview of each:

  • Specific gift: A specific gift is explicit about which assets or property go to which beneficiaries. You might, for example, specify that a loved one receives a certain collection or a specific piece of furniture you own. You may also use specific gifts to forgive debts others owe to you.
  • General gift: A general gift is not as easy to interpret as a specific gift, which is why individuals usually try to be as specific as possible when creating their wills. An example would be leaving behind “a motor vehicle” for a loved one. If you have more than one vehicle, that instruction might be too vague. Your executor may need to interpret and analyze the will to determine the likely intent behind a general gift.
  • Residuary gift: This is a gift of property left over after the executor has administered the rest of the assets and property. For example, after your loved ones receive all of the specific gifts outlined in your will, the rest of your property goes to a specific person or organization.

How should you leave behind these gifts?

You should discuss with your Rochester Hills estate planning lawyer exactly what gifts you want to leave behind to your beneficiaries, along with the strategies you will use to leave those gifts.

There are a few ways you can leave gifts, including:

  • Making gifts in an exact amount: If you are leaving behind money, you may specify an exact amount of cash — whether it’s for general use or a special purpose.
  • Designate a percentage of your estate to go to charity: You may choose to leave money or property to a charity or cause of your choice. Typically, you will designate the percentage of your estate’s value that will go to the organization in question.
  • Create special types of trusts: Trusts allow you to bypass the probate process and can shield your assets from estate taxes. This can be an important benefit if the value of your estate is hovering around the estate tax exemption limit.

You have the power to decide what will happen to your assets and property after you pass away. Meet with a professional at a Southfield estate planning law firm to guide you through the process.

Schedule Your Free Consultation with Our Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township.

Schedule your free consultation today by calling (248) 398-4665.