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  • Planning For The Unexpected: How To Choose A Guardian for Minor Children or Dependents

    Article is courtesy of Everplans.com

    If there is one thing that almost all parents and parents-to-be have in common is that they are always planning and preparing for the next step –  but what happens when the unexpected happens?  That is why Nine Naturals is excited to partner with Everplans in the Planning For The Unexpected Series to help bring you helpful tips and information for everything from financial and medical planning to spiritual and grief counseling.

    If you have children who are under the age of 18 (“minor children”), you should name a guardian who will raise and care for your children in case you should die. The role of the guardian will essentially be the role you have now as a parent—caring for your children, acting in their best interests, and providing for them physically, emotionally, psychologically, spiritually, and culturally.

    If the child’s other natural parent is alive and competent, he or she will likely be granted guardianship, no matter who you name in your will as your desired guardian.

    Reasons for choosing a guardian for minor children

    By naming a guardian in your will you can have a voice in deciding who will raise your child if you should die. If you die without a will or fail to name a guardian for minor children in your will, the court will determine who should get custody over your children. If your child’s other parent is still alive (whether you’re married or not), the court will usually grant custody to that person. However, if the child’s other parent is unfit, unwilling, deceased, or otherwise unable to care for the child, the court will appoint someone they think will best serve the child. Naming a guardian in your will is your opportunity to make your opinion known and have a say in the matter of who will raise your child.

    What it means to name a guardian for minor children

    Naming a guardian in your will can be understood as suggesting the person you’d like to care for and raise your child if you should die. However, just because you’ve named someone as guardian in your will does not mean that the person you’ve named will necessarily end up being the child’s guardian. Unlike material possessions, a child is not property and cannot simply be bequeathed to another person, which is why the courts get involved in this issue. Even if you’ve named a guardian in your will, a judge (usually from Family Court, though possibly from Probate/Surrogate Court, Juvenile Court, or District Court) will have the ultimate say in deciding who will be your child’s guardian.

    As your child’s parent, your opinion on who should get custody of your child matters very much to the court, and the person you named in your will should take priority in the judge’s mind. However, if the child has another natural parent who is living and capable (even if that person is not your spouse or never was your spouse) he or she may necessarily be granted custody according to the laws of your state.

    Types of guardians for minor children

    There are two types of guardians for minor children: “Guardian of the Person,” who handles child rearing, and “Guardian of the Estate,” who handles the child’s finances. You may choose one person to fill both these roles or you may choose different people for each role.

    To learn more about the duties of a Guardian of the Person, see our article Guardian of the Person.

    To learn more about the duties of a Guardian of the Estate, see our article Guardian of the Estate.

    Deciding who to choose as guardian

    Choosing a guardian is not a decision that most parents take lightly, and it can be very challenging to think about who you would like to have raise your children if something should happen to you. Learning about the responsibilities and duties that each guardianship entails can help you as you choose someone to name as the guardian for your child or children.

    For advice on how to choose a Guardian of the Person, see our article How to Choose a Guardian of the Person.

    For advice on how to choose a Guardian of the Estate, see our article How to Choose a Guardian of the Estate.

    Naming a guardian for dependent adults

    If you are the parent or guardian of a dependent adult, you will want to name a guardian for him or her in your will. The guidelines and process for choosing a guardian for minor children also apply to choosing a guardian for a dependent adult.

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  • Planning for the Unexpected: All You Need To Know About Creating A Will

    Article is courtesy of Everplans.com

    If there is one thing that almost all parents and parents-to-be have in common is that they are always planning and preparing for the next step –  but what happens when the unexpected happens?  That is why Nine Naturals is excited to partner with Everplans in the Planning For The Unexpected Series to help bring you helpful tips and information for everything from financial and medical planning to spiritual and grief counseling.

    Who gets your kids? Who gets your stuff? What do you need to make it official? You’ve got questions, we’ve got this article.

    Why You Need One

    So your family/friends/business associates don’t spend the next decade fighting, in court and possibly in person…with fists. The fights can get even uglier if you have young kids, or lots of money and property, or both.

    Example of why picking a guardian is so important: If you don’t want your irresponsible brother raising your kids, and you don’t make it clear in your Will, and he’s the closest relative your kids have if you die, then the courts will most like give him your kids. If you want your responsible cousin to be the guardian, and put it in your Will, then there’s nothing your brother can do about it.

    Decisions You Have To Make

    Who Gets Your Stuff?
    Anyone you want. A beneficiary can be family, friends, pets, strangers, organizations, institutions. By identifying who gets what, you’ll relieve some of the stress your family will have to face when settling your estate. If not, your heirs have to make these decisions.

    We’re sure your family is incredible, but money can make people weird. Especially since they’re going through a tough time without you around. Isn’t it better for them to be able to blame any decisions they don’t agree with on you rather than taking it out on each other? Family feuds are so 19th century. Just ask the Hatfields and McCoys…if any of them are still alive.

    The Only People Who Get Nothing Are…
    The people who serves as witnesses to the signing of the Will. So make sure your brother or best friend isn’t a witness, unless you don’t want to give them anything. Then the jokes on them!

    The Person Responsible To Make Sure Everything You Want Gets Done
    This is an “executor” because they have to “execute” everything in your Will. Makes sense, right? This person is responsible for paying any debts or taxes on behalf of your estate and making sure that the people who are supposed to inherit your assets actually get them.

    Who’s Taking Care of Your Kids and Dependents?

    This is usually the toughest decision to make. Who’s going to raise your kids if you die? If you’re married it’s probably your spouse. If you’re divorced, it’s probably your ex-spouse. If you don’t have a spouse or your ex-spouse isn’t an option, then you’ve got some thinking to do. Most people have Godparents, but that could just be an honorary title you gave someone to make them feel better. It doesn’t mean you want them actually raising your kids. Odds are you already know who you want to serve as guardian but you have to make it legal.

    Who Handles the Money and Assets You Leave For Your Kids?
    Enter the Guardian of the Estate, who’s tasked with managing your child’s financial well-being. There may be a significant amount of money involved, especially if you have life insurance, and it’s this person’s duty to always keep your kid’s best interest in mind when making financial decisions.

    We already established that a court will name a guardian if you don’t. Well, that same guardian will most likely get all the money and assets as well. So if you don’t care enough about your kids to name a guardian, at least think of those sad, lonely piles of money getting into the wrong hands.

    It ain’t easy being an estate guardian but being fiscally responsible is paramount. Apart from managing the assets, he or she also has to make an inventory of the assets for the court, file annual reports detailing the value, income, investments and expenses of the estate.

    Just Because You Trust Someone To Raise Your Kids, Doesn’t Mean You Trust Them with Money
    You can choose different people to serve as a person guardian and estate guardian. Why?

    Example: Let’s say your sister is great with kids but horrible with money. And your brother is great with money but horrible with kids. See, now it’s all starting to make sense…

    If you opt for different estate/person guardians for whatever reason, make sure they can collaborate effectively and work together on the child’s behalf. Whenever the person-guardian needs funds for the kid, he or she needs to hit up the estate-guardian for the money. On paper this makes sense, but you won’t be around to manage the personal dynamics if things go south. So, choose wisely and let them know beforehand so it’s not a shock. Plus, if you sense any tension then you can choose different people.

    Do You Want to Use an Attorney or Do It Online?
    Quick and Clean: There are a bunch of online legal services that can help you create a basic and official Will that covers all the bases (beneficiaries, guardians, and an executor).

    More Involved: If you have complex financial arrangements, such as real estate, overseas assets, elaborate investments, or trusts, then you’re going to need some help. This means working with an attorney or an online service that offers advice from real lawyers. The best way to find an attorney isn’t much different than finding a good doctor, electrician or dog walker. Get recommendations from friends, family, or other attorneys. Once you have some options meet with the prospects and make sure you get along, approve of his or her working style and skills, and, of course, don’t forget the price tag.

    If You Die With A Will

    Think of your will as an eager flower that’s not allowed to bloom until a probate court gives it permission. But once it does it’s a thing of beauty. So beautiful we crafted the next section into a three act play:

    Act 1: Your executor presents the will to a probate court.

    Act 2: The probate proceedings can take anywhere from 3 months to 3 years, depending on your state’s laws and the complexity of your estate. In short, get comfy. You can’t distribute property, sell assets or pay off debts until the court grants approval.

    Act 3: The court validates the Will. Victory! Now the executor can get to work and start handing out assets to the beneficiaries.

    If You Die Without A Will
    The short of it: The court gives your closest surviving relatives everything, including assets and custody over minor children. (Also known as “succession laws.”) Your estate will still have to go through the probate process, and “intestacy laws” kick in to determine who gets what.

    Your Will, Your Say: What You Can Put In It
    You can create a Will as basic or elaborate as you want. If you want to keep it simple you can split all your money, assets, property, investments, dragons (just making sure you’re still awake) evenly between all your beneficiaries. If you want to make sure some people get more, and other get less than more, this is how you make sure your property is given to the people you want the way you want it.

    Keep Your Family In Check
    When money’s involved, things can get quite heated, even among the happiest of families. We’re sure your family is wonderful, but if you’re concerned about possible disagreements that can drag on for years, a Will helps avoid all the drama. You make the decisions so if they’re angry they can take it up with you and keep it out of court. And you’re not going to be too receptive to their complaints since you’ll be wearing a stylish halo and jamming out with Jimmi Hendrix.

    Property You Can Include in a Will

    • Actual property, such as real estate, land, and buildings. Oh, and don’t forget to include all the castles you own like the one pictured above. It’d be a shame if you left that out.
    • Cash, including money in checking accounts, savings accounts, and money market accounts, etc.
    • “Intangible personal property” such as stocks, bonds, and other forms of business ownership, as well as intellectual property, royalties, patents, and copyrights, etc…
    • “Unproductive property” such as cars, artwork, jewelry, and furniture, etc…

    What Happens to All the Leftovers?
    Who’s got time to itemize every single possession in your life? Enter the “residuary estate,” which is all the extra stuff you don’t think is worth listing out separately. (Example: Stereo system, end table, power saw, shoe collection, photo albums, lamp shaped like a tiger, etc…) For these miscellaneous items you designate a “residuary beneficiary” who takes charge over all the remaining assets you don’t leave to named specific beneficiaries.

    You may want to leave instructions so this person doesn’t feel the need to save everything as an eternal shrine to you, but can dole it out to friends and family as they see fit and donate the rest to charity or the local dump. Before you leave all your possessions to a residuary beneficiary, make sure you take a basic inventory of your assets to make sure you’re not including a few gems you want a specific person to have in the leftover pile.

    A low-fi solution: Put Post-It Notes or gift tags on the underside of the items with the person’s name. This makes cleaning out your residence after you’re gone a sort of scavenger hunter/second Christmas for your family.

    What if You’ve Got a Lot of Leftovers? “Pour” Them Into a Trust…
    A Pour-Over Will funnels any assets in your name into an already-created trust when you die. This is like having a holding room for any assets you may have forgotten about or intentionally left out of a trust that you would like to move into a trust after death. Hence the assets are “poured” into a trust.

    Unlike the “residuary estate” mentioned above, once these assets are poured into the trust, those assets will be subject to the terms and stipulations of the trust. The reason people create this is to help heirs avoid probate if it’s under $100,000, or at least make the probate process go faster. The laws vary from state-to-state so this is one of those things you want to speak with an estate attorney about.

    If You’ve Got a Lot To Give, It Can Get a Little Complicated

    If you have significant property or assets, or particularly elaborate investments or financial arrangements, get help from an attorney to determine the best way to distribute said assets.

    The attorney can help identify tax-efficient ways make sure your beneficiaries are taken care of, which may include establishing a post-death trust (fancy name: “testamentary trust”) or using other financial and legal wizardry he or she learned in law school.

    On the flip side, if you don’t have significant or complex assets that require legal counsel, simply decide who will receive your assets, how they’ll be distributed and you’re done.

    Property You Can’t Include in a Will

    The short of it: If you don’t own something outright you can’t give it to someone when you die. What are those things? Glad you asked!

    • Any property you own equally with someone else (fancy name: “joint tenancy”). Example: You can’t give away a house you own with your spouse, since the property automatically transfers to the surviving owner.
    • Any trusts, retirement plans, or insurance policies that clearly state a beneficiary.
    • Stocks or bonds that are set to transfer to another party upon death, which is just like the bullet point above.

    Digital Property Still Isn’t Yours to Give
    While you may consider digital assets as your personal property–i.e. Facebook, Twitter, Instagram, Gmail, etc…—the law doesn’t agree with you. Most online media companies (including social media, email and communication, photo and image sharing, etc…) are legally forbidden from disclosing content or granting account access to a third party without the consent of the owner. If the owner of the content or account dies, the law generally agrees the family of the person who owned the accounts is not allowed to access those accounts.

    Solutions For The Digital Asset Dilemma
    Since laws and legislation have moved painfully slow regarding digital property, you have to get a little creative. Many people include login and password information in Wills in an attempt to transfer digital accounts to heirs; this doesn’t always work, since many companies claim the transfer of access violates the company’s terms of service. (This is buried in that endless scroll of rules and conditions no one ever reads but you’re forced to accept to access their service.)

    While it may be angering to know that a social media company can hold your account hostage beyond death, you probably don’t want to put this information in your Will for a different reason. A Will is a public document, and sharing login and password information here isn’t a secure. The Internet can be a mean place and who’s to stop some bored digital hooligan, or identity thief, from combing through Wills and accessing these accounts in hopes of causing all sorts of trouble.

    This doesn’t mean you should give up and accept defeat. There are ways. Check out our How to Create a Digital Estate Plan to get the low-down. Plus, different states have different approaches. Example: Indiana, Idaho, and Oklahoma allow executors access to email accounts, social networking accounts, and blogging accounts.

    Keep Your Eyes on the Prize
    It’s a good idea to periodically review beneficiaries to make sure the person or people named are still the ones you want getting the money or property. Things change over the course of your life–marriage, kids, divorce, cash windfalls, etc…–so it’s a good idea to keep everything current. Even if you’ve already named a beneficiary for certain assets–trusts, retirement plan, insurance policy, or stocks or bonds that are set to transfer upon death–it’s not necessarily set in stone. You’re allowed to change your mind and leave these things to somebody different.

    Once You Get A Will, Where Should You Keep It?

    One of the primary reasons we created this entire world of Everplans is to make the logistics surrounding death less of a confusing nightmare. Your Will should be digitally stored in your Everplan and physically stored along with other important estate planning documents in a secure, easy-to-access location. You should share this info with someone you trust–we call that person a Deputy–so it can be easily found when they need it.

    Places To Store It
    In your home in a personal safe, a locked filing cabinet, or any place you feel comfortable. If you store it in a location that requires a combination, password, or key for entry, you have to share that information as well or else it won’t be of much assistance when it’s needed.

    Storing Your Will with an Attorney
    Many estate attorneys and personal attorneys will be able to store your will in a secure location in his or her office. If you choose to store your will with your attorney, be sure to tell your family so they’re not tearing up the house looking for it.

    In Your Everplan, Of Course
    Not to toot our own horn, but we’re pretty good at this. After you create an Everplan you should upload a copy of your Will and share it with your Deputy or Deputies. You choose what you want to share, it could be everything, it could be specific things, it could be nothing. You also choose what they see while you’re alive and what they’ll have access to when you’re gone. You can add and delete Deputies as frequently as you choose.

    Don’t Store Your Will in a Safe Deposit Box
    Again, do not store your Will in a safe deposit box. Unless the box is jointly managed–and your survivors are authorized to access the safe deposit box–the bank will likely require a court order to access the box, and that could take a long time.

    Informing People Where Your Will is Stored
    Wherever you store it, make sure that important people you trust—your spouse, your adult children, your attorney, etc.—know where your will is located so that they can easily locate and access it if/when they need it.

    Enough Legal Talk, Let’s Get Personal

    You’ve been inundated with a lot of information and have made a lot of hard decisions. This is the part where you get to kick back and be yourself without any laws, statutes or other complicated aspects getting in the way.

    It’s called an “ethical will,” which is a terribly cold name for something with so much heart. At Everplans we call it “Letter To Your Family,” where you get the chance to let your family, friends and anyone else close to you in this world know who you are and how you feel about them.

    The thought of this letter gives us happy chills and misty eyes, because this is the culmination of all your hard work. Not just in getting a plan together, but in life and what you pass on to future generations. We’re fully aware people share so much through social media, but there’s something special about sharing personal thoughts directly to the people you love written directly from your heart.

    Everplans  is a leading online resource dedicated to empowering people to plan for and deal with  life planning, end-of-life planning and dealing with a death. The website offers step-by-step processes to help people understand the totality of the decisions they need to make and get things done. The mission of the company is to make life planning, end-of-life planning, dealing with a death, and supporting someone through their loss less confusing, more manageable, and easier to work through. Everplans was founded in 2011 by Adam Seifer and Abby Schneiderman, entrepreneurs with a passion for helping people and a proven track record of creating successful online communities.

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  • Planning for the Unexpected: All You Need To Know About Trusts

    If there is one thing that almost all parents and parents-to-be have in common is that they are always planning and preparing for the next step –  but what happens when the unexpected happens?  That is why Nine Naturals is excited to partner with Everplans in the Planning For The Unexpected Series to help bring you helpful tips and information for everything from financial and medical planning to spiritual and grief counseling.

    Set up trusts to minimize estate taxes, avoid probate, and seamlessly transfer your assets to your heirs.
    Simply put: A trust is a legal arrangement in which a certain amount of property or assets is held by a person or entity (e.g. bank) for the benefit of one or more other people.

    Why Would You Create One?

    • To maintain control of assets in the event of incompetence (if you become unable to manage your assets due to a decline in health or mental fitness)
    • To save on estate taxes
    • To avoid probate
    • When significant amounts of assets are involved, trusts may also be established to maintain control over assets even after the original owner has died. For example, a trust may be set up with the sole purpose of paying college tuition for a grandchild. In this scenario, the money in the trust cannot be used for any purpose other than paying college tuition and cannot be used on behalf of anyone other than the grandchild.
    • Determine the Type of Trust That You Need

    Trusts can accomplish a range of goals, including avoiding probate, minimizing estate taxes, and making sure your heirs receive as much of your money as possible as quickly as possible. The type of trust you set up will depend on what your goals are.

    Do It Online Or With an Attorney

    There are many online legal services that can help you create a trust. Since trusts are incredibly complicated, you may want to consider working with a trust and estate attorney. In addition, there are online services that offer personalized online legal advice from an attorney, which can be a more affordable option.

    Online: Factors to take into consideration when choosing an online legal service include cost, completion and delivery time, and the services offered by the site. For example, some online legal services will submit your documents to review by a paralegal after completion, while others will not.

    Attorney: The right trust and estate attorney will be someone with significant experience in handling the issues you’re dealing with. Talk to friends, family members, and other attorneys to get recommendations. Meet with the attorney you’re considering before hiring him or her.

    The Four Main Participants In a Trust

    Grantor: the person who creates the trust (also known as “donor,” “settlor,” or “trustor”)

    Trustee: the person, people, or entity (such as a bank) that agrees to hold the property or assets (the grantor may be the trustee)

    Principal: the property or assets themselves, including money, which is held in the trust and managed by the trustee

    Beneficiary: the person or people who ultimately receive the property or assets in the trust

    The Main Types of Trusts

    There are many different types of trusts, and depending on the type of assets you’re trying to protect or the your goals in setting up a trust, there may be some trusts that will better meet your needs than others.

    Living Trusts

    When a trust is created and then immediately become effective, it is known as a “living trust.” [Dig Deeper: Living Trusts]

    Testamentary Trusts

    When a trust is created and then does not become effective until after your death, it is known as a “testamentary trust.” In the case of testamentary trusts, you, as the person creating the trust, are called the “testator.” Testamentary trusts are often created within wills.

    How Do You Fund It?

    Testamentary trusts are generally funded only after your death, and are often funded with the assets of the your estate. In order to fund a testamentary trust, language in the will must explicitly state that all estate assets should be moved into the trust upon your death. The estate assets can then be distributed and managed according to the terms of the trust. [Dig Deeper: Testamentary Trusts]

    Living Trusts vs. Testamentary Trusts

    All trusts are set up by you, the grantor, during your life. However, not all trusts immediately go into effect. Depending on when the trust becomes effective, it is either a living trust or a testamentary trust.

    Revocable Trusts

    You retain ownership and control of the property in the trust and can change the terms of the trust, including the trustees and beneficiaries.

    How Do You Fund It?

    If you are setting up a revocable trust, you will likely be the sole trustee of your trust. As the sole trustee, you can move assets into the trust and out of the trust at will, without too much hassle. Because of this, many people with revocable living trusts put a large portion of their assets to be held in trust, including real estate, financial accounts (stocks, bonds, etc.), and even bank accounts, such as a savings account. [Dig Deeper: Revocable Trusts]

    Irrevocable Trusts

    You give ownership and control of the property in the trust to others (trustees) and therefore no longer own or control the property, thus making you unable to enact changes to the the trust.

    How Do You Fund It?

    By putting assets into an irrevocable trust, you are essentially giving up ownership and control of those assets, so choose these assets carefully. Which assets will be used to fund an irrevocable living trust are generally determined by the goals of the trust. Choosing a funding method that supports the goals of the trust is something that you should decide with the help of a trust and estates attorney. Transferring property to an irrevocable living trust also requires that a formal transfer or property be completed, meaning that the property must be re-titled in the trustee’s name. An attorney can help you complete and manage a re-titling of property. [Dig Deeper: Irrevocable Trusts]

    Fun Fact (that’s not really all that fun): All trusts are either revocable or irrevocable.

    An Even Funner Tip: Living trusts trusts must be funded during your lifetime; testamentary trusts are funded after your death.

    Reasons For Choosing a Revocable Trust vs. an Irrevocable Trust

    Depending on the goals of the trust that you’re establishing, there may be some benefits to creating either a revocable trust or an irrevocable trust. For example, if the primary goal of the trust is to avoid excessive estate taxes, you will likely want to set up an irrevocable trust, as you would not pay taxes on property held in an irrevocable trust. However, if the primary goal of the trust is to maintain control of assets in the event of incompetence, you will likely want to set up a revocable trust, as you will retain control over the assets in the trust and the beneficiaries of that trust until you die. In addition, the rules of the particular trust that you’re establishing may dictate whether a trust must be revocable or irrevocable. If you’re unsure whether you want to establish a revocable or irrevocable trust, you should consult a licensed trusts and estates attorney in your state.

    How Do You Create One?

    Setting up trusts can be done online or with the help of a trust and estate attorney.

    Understanding the Laws

    There are many state and federal laws that must be carefully followed when setting up a trust. While some states will allow you to set up a trust on your own or set up a trust using an online legal service, other states require that an attorney work with you to establish a trust. Even in states where residents are able to establish trusts on their own or online, it’s always a good idea to consult with an attorney before finalizing the documents.

    Setting Up Trusts Online

    Many legal websites offer tools for setting up trusts online. The trusts you can set up online are generally simple trusts that achieve the basic goals of naming trustees and beneficiaries. If you choose to set up a trust online, you should consult a trust and estate attorney before finalizing any trust documents. Whether you go directly to an attorney or use an online service that offers the ability to get advice from real attorneys, having a lawyer look over your documents can help you make sure that they’re legally binding, and that they achieve all your legal goals.

    Trust Cost

    The cost of establishing a trust can vary based on the type and complexity of the trust, and the method of establishment. Online legal services can charge anywhere from $30-$300 to set up a trust, while consulting with a lawyer can cost anywhere from $1000-$3000, generally. While the cost of consulting with a lawyer may seem very high, a lawyer can make sure that the trust you’re setting up is completely valid and legally sound, which can potentially save you or your heirs money later.

    Tax Implications During Your Life

    With a revocable trust you are still treated as the owner of the property in the trust, and can therefore be taxed on that property during your life. With an irrevocable trust, you give up ownership of the property in the trust and are therefore no longer liable for that property and cannot be taxed on that property.

    All You Need To Know About Trustees

    Trustees are responsible for managing, investing, and distributing the property in the trust. This includes administration and accounting, paying any taxes on behalf of the trust, working with beneficiaries to determine their goals for the trust, and working fairly and with transparency around issues of management, investments, and distributions.

    Managing Trust Assets

    The trustee is responsible for the accounting and administration of the trust. This includes preparing and filing income tax returns for the trust, paying those income taxes from the trust, and adhering to any and all applicable state and federal laws around trust administration. The trustee must also keep accurate records of all trust-related transactions.

    Investing Trust Assets

    The trustee is responsible for investing the trust assets so that those assets earn income for the beneficiaries. Depending on the needs of the beneficiaries, the trustee is responsible for determining whether to invest the principal to earn income, to grow the principal in the trust, or other goals that the beneficiaries might have.

    Distributing Trust Assets

    The trustee must follow the instructions of the trust in distributing income or property to the trust’s beneficiaries. The trustee must make these distributions in a timely and responsible manner.

    Who Can Serve as a Trustee?

    The trustees of your trust can be yourself, your family members or friends, professionals (accountants, attorneys, etc.), a bank or a trust company, or any combination of these people. [Dig Deeper: Duties of a Trustee]

    Successor Trustees

    If you are naming only a single trustee, you will want to be sure to name at least one successor trustee. In case the primary trustee that you name is not able to serve as trustee for any reason, the successor trustee can serve. If you are the sole trustee you’ll also want to name a successor trustee so that the trust can continue to be managed after your death.

    If you’re establishing a revocable living trust, you will likely name yourself as the sole trustee.

    How to Choose Trustees

    These are the qualities you want in your trustee…

    • Attention to detail
    • An understanding of his or her duties, and a commitment to taking those duties seriously
    • An understanding of finances and perhaps investing, accounting, or law
    • Good communication skills
    • Aligned with your morals and values
    • When choosing trustees, it’s important to think about the structure and goals of the trust and the specific requirements of the trustees of that trust. While some trusts may require trustees with extensive experience in investing or accounting, other trusts may benefit from trustees who have close personal relationships with the beneficiaries or the grantor.

    In some cases, the person best suited to be a trustee may not be your closest friend or family member, but instead may be a friend or colleague who you believe to be competent, honest, and intelligent. You may also appoint someone close to you to act as a trustee and specify to that person that you would like him or her to hire professionals to advise on certain aspects of the process.

    Appointing a Professional as a Trustee

    If you don’t feel like you have anyone in your personal life who you would like to entrust with the role of trustee, you may appoint a professional that you have a relationship with, such as an attorney or an accountant. These people may require a fee for their services as a trustee.

    The End Result: Beneficiaries

    Beneficiaries of a trust are the people or organization(s) who are named as the recipients of any benefits of the trust. The beneficiaries can be anyone you like, but will usually depend on the goals of the trust.

    Choosing Beneficiaries of a Trust

    If you’re setting up a trust that is intended to avoid probate and seamlessly transfer assets to your family, you’ll likely want to name your family members as the beneficiaries. If you’re setting up a trust that is intended to hold assets for your grandchildren, will likely name those grandchildren as the beneficiaries. A trust that is intended to provide support for a charitable organization will likely name the charity as the beneficiary.

    Beneficiary Distributions

    Based on the goals of your trust and the number of beneficiaries you name, you can decide how you would like those beneficiaries to receive distributions. For example, if you have three children you may name all three of your children as equal beneficiaries or you may name them as unequal beneficiaries, with each child receiving different distributions from the trust.

    Descendants

    You may also decide whether or not the beneficiary designation applies to linear descendants—that is, whether or not your children’s children would become beneficiaries in the event that one of your children should die before the assets in the trust are fully depleted.


    Everplans  is a leading online resource dedicated to empowering people to plan for and deal with  life planning, end-of-life planning and dealing with a death. The website offers step-by-step processes to help people understand the totality of the decisions they need to make and get things done. The mission of the company is to make life planning, end-of-life planning, dealing with a death, and supporting someone through their loss less confusing, more manageable, and easier to work through. Everplans was founded in 2011 by Adam Seifer and Abby Schneiderman, entrepreneurs with a passion for helping people and a proven track record of creating successful online communities.

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  • Planning for the Unexpected: All You Need To Know About Naming a Power of Attorney

    If there is one thing that almost all parents and parents-to-be have in common is that they are always planning and preparing for the next step –  but what happens when the unexpected happens?  That is why Nine Naturals is excited to partner with Everplans in the Planning For The Unexpected Series to help bring you helpful tips and information for everything from financial and medical planning to spiritual and grief counseling.

    A power of attorney, or POA as people in the know say, is someone you pick to speak for you, legally and financially, when you can’t speak for yourself.

    With Great Power Comes Great Responsibility…

    Your Power of Attorney, or POA for the cool kids, is a person who is given the legal right to handle all your legal and financial matters if you’re unable to do them yourself. This includes paying bills, managing bank accounts, overseeing investments, and preparing and filing tax returns on your behalf.

    How Long Does it Last?

    When you die, the POA dies with you. Well, not the person you named. The legal power he or she has over your estate is no longer in effect after death.

    This Important-Sounding Title Has Three Variations

    Durable Power of Attorney: This type goes into effect the moment the paperwork is signed and kicks in if you’re deemed mentally incompetent. However, as long as you’re deemed competent you can change it at any time.

    Springing Power of Attorney: This is like the durable POA, but it kicks in–or “springs” into action–if you become seriously ill or injured.

    Non-Durable Power of Attorney: This is used when you need someone to take care of a specific financial or legal goal and expires if or when you’re declared mentally incompetent. Like if you’re out of the country and need someone to stand in for you on the closing of a house. Yeah, it’s not an everyday occurrence, but at least you now know what it is.

    What Makes a POA A-Ok?

    • Attention to detail
    • An understanding of his or her duties, and a commitment to taking those duties seriously
    • An understanding of finances and, ideally, business
    • The ability to collaborate with attorneys, accountants, and other parties, if necessary

    Do It Online or In Person

    There’s a bunch of online legal services that can help or you can work with a lawyer.

    Online Route: Factors to take into consideration when choosing an online legal service include cost (usually between $15-$50), completion and delivery time, and the services offered by the site. For example, some online legal services will submit your documents for review by a paralegal after completion, and others don’t.

    Lawyer Route: You’ll need a trust and estate attorney with significant experience. Talk to friends, family members, and other attorneys to get recommendations. Meet with the lawyer you’re considering before hiring him or her.

    One Thing To Note: You’ll most likely have to get the final documents notarized, which you can get at a bank, post office or local government office. Well, if they’re not on a lunch break.

    Everplans  is a leading online resource dedicated to empowering people to plan for and deal with  life planning, end-of-life planning and dealing with a death. The website offers step-by-step processes to help people understand the totality of the decisions they need to make and get things done. The mission of the company is to make life planning, end-of-life planning, dealing with a death, and supporting someone through their loss less confusing, more manageable, and easier to work through. Everplans was founded in 2011 by Adam Seifer and Abby Schneiderman, entrepreneurs with a passion for helping people and a proven track record of creating successful online communities.

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  • Planning for the Unexpected: All You Need To Know About Life Insurance

    Article is courtesy of Everplans.com

    If there is one thing that almost all parents and parents-to-be have in common is that they are always planning and preparing for the next step –  but what happens when the unexpected happens?  That is why Nine Naturals is excited to partner with Everplans in the Planning For The Unexpected Series to help bring you helpful tips and information for everything from financial and medical planning to spiritual and grief counseling.

    The primary purpose of life insurance, as with any insurance, is peace of mind. If you should suddenly or unexpectedly shuffle off this mortal coil, the beneficiaries named in your policy–often your family members–get the benefits of the policy.

    How It Works

    You buy a policy and pay the monthly or annual fees (a.k.a: premiums) on time. If you die the insurance company pays your family, or whoever you named as the beneficiaries, the amount of money specified in the policy. Like the lottery, there’s a choice to receive the money all at once (lump sum) or in installments (annuity). Unlike the lottery, this is an investment that actually pays off.

    Types of Life Insurance: There are two main types of life insurance: term and permanent (or whole life).

    Term Insurance covers you for a set amount of time. If you have a 20-year plan, and you keep up payment and cease to be living within those 20 years, YAHTZEE! Your beneficiaries get the money. If you’re still around after those 20-years the plan expires then you have to get a new policy if you can still qualify.

    The Upside: You’re still alive!

    The Downside: All that money you spent was for nothing.

    Permanent Insurance (a.k.a. Whole Life) never expires. You either pay it all at once, which is very expensive, or in installments, which is also very expensive, but it lasts forever.

    These policies have an investment element, meaning that some of the money can be invested in the stock market or taken out as a cash loan, so you still have the option to access the money while you’re still alive.

    Where Can You Buy It?: If you’re a full-time employee are interested in purchasing insurance, check with your boss to see if the company offers life insurance as a benefit. Also, if you happen to have eyes and have ever glanced at a TV, you’re well aware that insurance companies aren’t exactly laying low. They advertise non-stop. Feel free to hit one up and find out what they charge.

    Who Should Have It?

    • If you have kids, you should have it.
    • If you support your spouse, you should have it.
    • If you’re the type of person who is concerned about being dumped in a terrible nursing home because you can’t afford a good one, look into Long-Term Care Insurance.
    • Everyone else can just go on about their business.

    How Much Do You Need? Be realistic and ask yourself: How much money will your family need in order to live comfortably after you’re gone? You know how people always complain that athletes make too much money? Well, some do. But most have a limited window to make as much as they can so it lasts the rest of their lives. The smart ones with legit financial planners have breathing room to live comfortably and support their family while they transition into a new career after retirement.

    If your family has no money coming in, how long could they continue to live in the style they are used to? If you are have ongoing expenses, such as college tuition or a mortgage, how long could your family make those payments? Take a moment when you’re paying the monthly bills, or when you’re doing your taxes, and get a general idea of how much you spend. House payments, car payments, utilities, etc… By considering how much money your family will need to live, you can determine how much life insurance you should buy.

    You Can’t Go It Alone: Get An Agent. While the concept of life insurance is not necessarily complex, in reality life insurance can be incredibly complicated and requires a licensed agent. Their job is to help you understand how much insurance you need in terms you can easily understand.

    What Life Insurance Agents Do: When they’re not solving crimes or working on their rock-hard washboard abs, a life insurance agent’s only goal in life is to help you find a policy that best meets your needs in terms of your family obligations, finances, health, and personal circumstances.

    You should be presented with a number of options that meet your criteria, and the agent should clearly explain the details, advantages, and drawbacks of each option. If you have questions, they should provide understandable answers. You should never feel pressured into making a purchase. Once you’ve purchased a policy, the agent should be available to review the details of the policy, including beneficiary designations, every few years.

    Judge Your Agent in Three Steps

    1. Is the agent properly licensed? They must have a current up-to-date license issued by the state in which they sell insurance. Just ask them. If you’re still unsure, which is a red flag in itself, check with your state’s insurance department. If your agent claims to have a “license to kill” that means he’s James Bond. Hire him immediately!
    2. Are they experienced? Not in worldly affairs, but in working with people in your situation. In some cases, the agent may be able to provide you with client references.
    3. Does the agent have lots of official looking initials after their name? Many insurance agents complete additional training and courses to obtain advance credentials. Some popular credentials include:
    • Chartered Life Underwriter (CLU)
    • Chartered Financial Consultant (ChFC)
    • Certified Financial Planner (CFP)
    • Financial Services Specialist (FSS)

    These advance credentials often signal a commitment to the profession and ethical business practices.

    Who Gets The Payout? Beneficiaries Do. The beneficiaries you name in your life insurance policy are the people who will receive the money from the policy if something happens to you. Who could these people be?

    Oh, would you look at that. We compiled a list of possible beneficiaries in your life. How handy and helpful of us:

    • A person or a group of people, such as a family member or multiple family members
    • A Trust you’ve established
    • A charity or nonprofit organization
    • Your estate

    Warning: Some states have restrictions on who can be named as a beneficiary. This is where your charming local insurance agent can clear up any questions.

    If Your Beneficiaries Die Before You…: Enter the contingent beneficiaries (aka: secondary beneficiary). This is the person who gets the money if your primary beneficiary isn’t alive if/when you die. If the primary beneficiary is alive at the time you die, the contingent beneficiary gets nothing. However, if the primary beneficiary has died, the contingent beneficiary will receive the benefits of the policy. If this were an episode of Columbo, then it’s quite obvious the contingent murdered the primary to get the loot. But since this is real life, that doesn’t happen.

    <Everplans starts to leave the room before nonchalantly turning back around>

    Just one more thing…

    Always Review Beneficiary Designations

    It’s a good idea to review who you’ve chosen as beneficiaries every few years, as well as after major life events in case you want to make changes (births, deaths, marriage, divorce, etc…).

    Creating A Trust To Pay For Insurance and Avoid Taxes

    Take our hand as we guide you through the magical world of ILIT.

    An Irrevocable Life Insurance Trust (ILIT) is used to avoid estate taxes on insurance payouts. By establishing one of these and paying policy benefits directly into it, beneficiaries don’t have to pay income or estate taxes.

    Yep, insurance policy cash is subject to estate tax. To avoid it you must create a Trust. Do you want to know how that works?

    Of course you do. Fear not, we’re here to keep things simple. And simple we shall be!

    Step 1: Establish an Irrevocable Trust. Hmm, seems easy enough. A trust is like having a thriving business that doesn’t make you money. Sorta like Internet. You do paperwork with an attorney, open a bank account in the trust’s name, transfer money into that account from one of your savings or checking accounts, and only use that account to pay your life insurance premiums each year.

    Step 2: A trust requires someone to look after it, which is called the Trustee(s). This is most likely your spouse or children, who also serve as beneficiaries of the trust.

    Step 3: The insurance policy is transferred to the trustee so you no longer own the policy. This means that any future payouts can’t be counted among your assets. You can no longer claim to have a $5 million policy because it’s not yours anymore. The trust has it now.

    Step 4: This is where things start heating up. The ILIT is named as the beneficiary of your life insurance policy. BOOM! Not your spouse or kids. That bank account you set up receives the entire payout. This way the beneficiaries of the trust–spouse and/or kids–can receive the benefits of the life insurance policy without having to pay income or estate taxes.

    Postscript: This isn’t as easy as it sounds…mainly because it’s not really easy at all. There are lots of moving parts and small details to deal with (example: bank fees can be a real nuisance). If you screw any of it up this could all be a massive waste of time and money.

    However, if you have one of these in place and something happens to you it’s a huge benefit for your family. This is where contacting a local trust and estate attorney to help you make these arrangements is quite beneficial. But at least now you know how it works.

    Easy Riders

    Insurance policies offer a basic level of coverage with basic conditions, restrictions, and requirements. Like a car you buy directly off the lot.

    Insurance riders are additional provisions added in, usually at a cost, that customize a standard policy. This is like adding power windows, satellite radio and heated seats to the car. It’s not necessary but it makes it a lot more comfy. Let’s get into the various types.

    Accelerated Death Benefit

    This provides financial assistance if you become diagnosed with a terminal illness.

    How It Works: If you become terminally ill, you can take out a portion of the death benefit from your insurance policy as cash, which can then be used to cover the costs of medical expenses, treatments, or long-term care. You’re borrowing against your policy and any cash that’s taken out of the policy is subtracted from what your beneficiaries get when you die.

    Reasons For Buying: It’s a good idea if you have a family history of illness. If you’re already sick you usually can’t buy it anymore.

    Accidental Death Benefit (Double Indemnity)

    If you’ve seen the classic movie you know what this is. For those that haven’t, your beneficiaries receive an additional payout, often double the amount they’d normally receive, if your death occurs as the result of an accident.

    Reasons For Buying: If you work in a potentially dangerous environment (heavy machinery, remote location, etc…) or drive more than average (either professionally or as a commuter), an accidental death benefit rider might be a good idea.

    Reasons It May Be Voided: If the death results from service in the armed forces or injuries sustained in war, illegal activities, self-inflicted injuries, or “hazardous hobbies” (such as skydiving, deep sea diving, motorsports, mountaineering…). Remember, it’s “accidental death benefit” not “staring death in the face on a weekly basis and hoping you walk away in one piece benefit.”

    Family Income Benefit Rider

    This is if you’d like benefits to be paid out in installments over time on a monthly basis, for a set number of months.

    How It Works: Benefits are usually paid out to beneficiaries in a one-time lump sum, though you may have the option of distributing benefits in installments. If that’s what you want, then this is the rider for you.

    Reasons For Buying: This rider mimics a steady income for beneficiaries. If there are concerns about the beneficiaries’ ability to successfully manage money, this can help achieve those goals indirectly.

    Long-Term Care Rider

    This adds coverage for potential long-term care needs that otherwise wouldn’t be part of the the initial policy. This is for people who want long-term care coverage but don’t want to buy a separate dedicated long-term care (LTC) policy.

    How It Works: This kicks in and helps out if you can no longer able to take care of yourself due to disabling medical, physical, or cognitive conditions. Unlike health care, this focuses on basic activities of daily living, such as getting dressed, getting in and out of bed, using the bathroom, eating, and so forth. An LTC rider can cover many different forms of care, including in-home care, nursing home care, adult day care, and long-term care facilities, among others.

    Reasons For Buying: We hate to bring up stats, but we just can’t resist. Statistically speaking, at least 70% of people above the age of 65 will require some amount of long-term care. This means most seniors should be prepared to enter and pay for long-term care at some point. Without insurance, the costs of long-term care can be overwhelmingly expensive, and can quickly deplete savings. For example, in 2011 the average monthly cost for assisted living was $3,477, which translates to over $40,000 per year.

    Difference between the rider and stand-alone LTC plan: The cost of a long-term care rider is significantly less than the cost of a dedicated long-term care insurance policy, while providing many of the same benefits to the insured. If you are worried about needing long-term care at some point, purchasing a long-term care rider can help lessen any anxiety you may be feeling about how to pay for that care.

    Still A Bit Costly: The addition of a long-term care rider often results in a significantly higher premium. That said, the cost of a long-term care rider is usually much less than the cost of a separate long-term care insurance policy.

    All You Need To Know About Long-Term Care Insurance

    Long-term care insurance (LTC) can provide care and services if you should become unable to manage your own care due to disabling medical, physical, or cognitive conditions. An LTC policy can cover many different forms of care, including in-home health care, nursing home care, adult day care, long-term care facilities, and Alzheimer’s care facilities, among others.

    Reasons for Purchasing Long-Term Care Insurance: Long-term care insurance can help you pay for the care you need should you no longer be able to care for yourself, ensuring that you are not a burden to your family and that you get the services you need.Statistically, at least 70% of people above the age of 65 will require some amount of long-term care, which means that most seniors should be prepared to enter and pay for long-term care at some point. Without insurance, the costs of long-term care can be incredibly expensive, and can quickly deplete any savings.

    As long-term care is very expensive, it’s a good idea to look into long-term care insurance (either as a policy or as a rider on a term life insurance policy) to help you cover the costs of care and to avoid going broke trying to take care of yourself in old age. LTC insurance can significantly reduce the cost of care, as well as protect other assets against being spent on LTC. In addition, if you have any anxiety around being able to cover the cost of care that you think you might need, LTC insurance can help relieve that anxiety, as you can feel confident knowing that you’ll be taken care of in an affordable way.

    Does Health Insurance Cover Long-Term Care?: While some health insurance policies may cover some of the costs of long-term care, most health insurance policies, including Medicare and Medicaid, will not pay for a full range of LTC services. A certain amount of “skilled nursing” (short-term care in a nursing home) is usually covered by health insurance, Medicare, or Medicaid, but this does not include home care or assisted living facilities. LTC insurance can make sure that if you need long-term skilled nursing care, you can afford that care.

    Long-Term Care Insurance Cost: Long-term care insurance tends to be fairly expensive, and should only be purchased if the policyholder has the ability to pay the annual premiums on the policy. LTC policies are generally most affordable if purchased before age 60, as the insured’s age plays a role in determining the premium.

    In addition, a long-term care policy has no “surrender” value, meaning that if you never require long-term care, the money that you’ve put into the policy is gone.

     

    Everplans

    Everplans  is a leading online resource dedicated to empowering people to plan for and deal with  life planning, end-of-life planning and dealing with a death. The website offers step-by-step processes to help people understand the totality of the decisions they need to make and get things done. The mission of the company is to make life planning, end-of-life planning, dealing with a death, and supporting someone through their loss less confusing, more manageable, and easier to work through. Everplans was founded in 2011 by Adam Seifer and Abby Schneiderman, entrepreneurs with a passion for helping people and a proven track record of creating successful online communities. 

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