Estate Planning: Dividing Property Amongst Heirs

"When my father died he was 85 years old and had very little property of monetary value. He did have a number of sentimental items (paintings, jewelry, photo albums,etc) some of my siblings and I had given him over the years. After the funeral we went back to his home and started sorting through his belongings. For the most part, the process was friendly and gave us a chance to reminisce happier times. For the most part that is. We decided to divide up my father's belongings by returning each item to the giving sibling. I had given him a football signed by Johnny Unitas and some other sports related memorabilia. It became clear during the process that one of the siblings had given much less (i.e. nothing) to him than the rest. That particular sibling also received more financial assistance from my father than the others. As the night went on and we worked our way from one room to the next, that sibling started getting upset about the lack of items she had received. She started accusing me and my other siblings of being 'greedy, heartless and cold.' Our pleasant experience down memory lane was gone." The above account is real, and indicative of what can happen if you leave the decision about who gets what until after die. You can avoid this scenario if you plan ahead and discuss it with your heirs.

Discuss Who Gets What
One way you can avoid hurt feelings when you pass away is to discuss with your heirs who gets what before you die. These discussions will allow you to explain the things contained in your will and to share precious memories with your family in the process. You may find out that your youngest son would rather have your Navy flight jacket instead of your vintage automobile (this actually happened to one of my clients) or that your daughters would rather exchange with each other the items you had left to them. The homework desk your father made you when you were 7 may need to go to your grandson instead of your son.

Make a List Once you have decided who should get which item, make a list and keep it in a safe place with your Will or other estate planning information. You may also want to send the list to your attorney. If you end up giving away items off the list before you die, be sure to update the list, so there isn't any confusion.

Other Estate Planning Articles
Estate Planning and the Enhanced Life Estate Deed, The Difference Between the Enhanced Life Estate Deed, Warranty Deed and Quitclaim Deed, The Traditional Life Estate Deed, The Revocable Transfer on Death Deed and California's Revocable Deed.


Asset Protection: Four Important Techniques

The topic of Asset Protection from creditors is an important one. The following are four general techniques you should consider when deciding how to protect your assets:

(1) State and Federal Statutory Exemptions. A number of your assets are automatically protected from creditors by state and federal statutes. For example, some states do not allow judgment creditors to attach the home of a "head of household" to the judgment. The term "head of household" applies to a person who supports either a spouse or children or both. You should consult an attorney to determine which Statutory Exemptions are available in your state.

(2) Forming a Professional Entity. Forming a Corporation, LLC, PC or other professional entity can limit your individual liability. If you own rental homes or other rental properties you may consider forming a corporation or other professional entity and placing ownership of the property into the entity. If someone is injured on the property your personal assets will be exempt from any potential judgment against the professional entity.

(3) Domestic Asset Protection Trusts. A Domestic Asset Protection Trust will allow you to protect your assets by placing them into a trust. You can name yourself as the beneficiary, but prevent potential creditors from getting at trust assets.

(4) Transmutation Agreements. Transmutation Agreements are available in community property states and effectively convert a husband and wife's community property into separately owned property for more protection.
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