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1. Control distribution of assets – You wouldn’t hand over your car keys to a child who has not had proper preparation driving, and chances are you would not want to hand over all your assets to a teenager either. But if both parents die at the same time, or while their children are still minors, the children would inherit all the assets upon their 18th birthdays. A trust allows you to specify how and when you want your children to inherit.
2. Protect assets from creditors – Placing an inheritance in a trust ensures that those assets are protected from your heir’s, or their spouse’s, creditors. A properly drafted trust can protect all your assets throughout your beneficiary’s lifetime from divorce, liability, lawsuits, and other judgments.
3. Protect inheritance from spendthrift heirs – Not everyone is good with money. If your heirs fall into that category, you can use a trust to ensure the assets are not frittered away due to spendthrift behavior.
4. Provide for children of prior marriage or relationship – You can use a trust to both provide for your current spouse and any children from a previous relationship. By doing so, you can prevent pain, confusion, and arguing, which may exist in blended family situations.
5. Provide for a special needs heir – Leaving assets outright to an heir with special needs could disqualify them from receiving important government benefits. Leaving those assets in trust bypasses this potential risk.
6. Avoid probate – Assets can pass to heirs without going through probate by using a trust, saving beneficiaries the time and expense of the probate process. Probate is an expensive, public, and unnecessary court process you can keep your family from having to deal with.
7. Protect privacy – Once a will is entered into probate, it becomes public record, and anyone may access information on what someone inherited. A trust, on the other hand, is a private document that protects your family’s privacy.
If you need to arrange a consultation with an estate planning attorney, contact Adkins Law or call (704) 274-5677.
Did you know that having a will means probate, and potentially probate court? Without an estate plan, your estate cannot be settled without the delays and court fee costs - plus, your assets will be a matter of public record. With an estate plan, you can avoid the probate process entirely. Not only does this save your family legal costs and attorney fees, it makes the process much easier for your spouse and family.
What if your family is a blended family due to prior marriages? Without an estate plan, children from prior marriages may be accidentally disinherited. With an estate plan, you can support your current spouse and provide for your children from a prior marriage at the same time.
Filing for bankruptcy in order to avoid alimony is not always the best idea. An obligation to pay spousal support, also considered a domestic support obligation, is almost always not dischargeable. The general rule is that a debt for spousal support, or alimony, cannot be cancelled or forgiven.
What is Alimony?
Alimony is spousal support after a divorce ends a marriage. The support provided through alimony, from one former spouse to the other, is usually temporary. Alimony is often arranged when a marriage involved one spouse making majority or all of the income, while the other spouse took care of the home. The “stay at home” spouse is often the recipient of alimony in a divorce.
Changing Alimony During Bankruptcy
Getting alimony payments adjusted or discharged through bankruptcy is often a daunting undertaking. The supporting spouse should list the supported spouse as a creditor. While it is difficult for alimony to be discharged, there are still a few ways alimony can be changed. If the alimony and the supported spouse are not listed on the bankruptcy petition, alimony discharge becomes nearly impossible. Debt that is not listed in a bankruptcy petition cannot be discharged in bankruptcy court.
Although alimony cannot usually be discharged in bankruptcy, there are two exceptions to this rule.
The first instance that alimony can be discharged in bankruptcy is when the payment of debt is falsely named as being alimony. If a divorce decree states that an obligation to a spouse is alimony, but the obligation is not actually alimony, then the obligation has the potential to be discharged in bankruptcy.
The second instance that alimony could be discharged is if the obligation of debt has been turned over to a third party. For example, two people get divorced and one is obligated to pay the other a certain amount per month. The person in charge of making the payments stop, therefore, the individual relying on those payments must get them from a third party. That third party now owns the right to collect the alimony from the original spouse in charge of the payments. If the spouse in charge of paying alimony files bankruptcy, the alimony obligation can be discharged to the extent it has been legally transferred to the third party.
Bankruptcy can have a huge impact on one’s ability to pay alimony. A major factor the court utilizes in order to determine spousal support payments is the supporting spouse’s ability to pay – considering their earning capacity, actual income, assets, and standard of living.
The majority of Americans have heard of estate planning and know that it’s an important thing to think about before tragedy strikes. However, most people underestimate the value of their estates because they do not fully understand what an estate is and what it is comprised of. An estate is comprised of everything that an individual owns: a car, home, other real estate, checking and savings accounts, investments, life insurance, personal possessions. No matter how large or how modest, everyone has an estate and something in common, these material possessions get left behind when they die. By definition an estate plan the anticipatory act of preparing for the transfer of an individual’s wealth and assets after his or her death.
The Advantages of Having an Estate Planning Attorney
It is no secret that estate planning attorneys can be a costly investment. Some attorneys charge hundreds and sometimes thousands of dollars for an estate plan while legal document preparation companies charge as low as four hundred dollars. However, hiring an attorney who specializes in estate planning can be advantageous for a plethora of reasons.
First and foremost, and estate plan is an important legal document that will most likely effect an individual’s family for generations. With a document of this importance, it is best to trust an attorney who specializes in estate planning. Secondly, legal document preparation companies create attorney drafted legal documents that are similar to question and answer worksheets. Documents that are drafted in this fashion, are not tailored to a person’s specific situation. Though these documents are legally binding, due to their impersonal nature, there are key elements that can be missed. For example, an estate planning attorney will counsel individuals by listening to their concerns and goals for their families and future generations. A knowledgeable attorney will utilize their background in family law, community property, and real estate and taxes in estate planning meetings with their clients. Finally, at the conclusion of estate planning meetings attorneys will ask about the outcome of decisions that their clients have made to ensure that they feel prepared and empowered to provide for their families with their completed estate plan.
Funding a Living Trust
Upon meeting with an attorney and completing an estate plan, it’s important to begin funding the living trust. A living trust is funded when it owns something, real-estate, bank accounts, a business, or other personal property. A living trust owns something by transferring the title form the owner as an individual to the owner trustee of his living trust.
Making Estate Plans Bulletproof
Estate planning is an important tool in protecting an individual and their spouse in retirement and in leaving a legacy for an individual’s heirs. It would be a lengthy process to come up with an exhaustive list of the ways to make an estate plan as invulnerable as possible. Instead, listed below are common mistakes that people make when they construct their estate plans:
Remarriage of a dependent spouse will terminate court-ordered alimony under North Carolina law. This applies to divorces both before and after October, 1995. However, remarriage only terminates future alimony payments. It does not excuse any overdue payments from before the remarriage. If support payments are subject to a separation agreement between the parties that has not been made part of a court order, then the terms of the agreement apply. Such an agreement may or may not include a clause that terminates support upon remarriage. If the agreement is incorporated into a court order, then it is modifiable by the court and the support obligation may be terminated on remarriage.
In North Carolina, for actions filed after October, 1995, post-separation support and alimony will also usually terminate when a dependent spouse “engages in cohabitation.” Alimony terminates when cohabitation has an economic impact on the dependent spouse. Public policy dictates that a supported spouse should not be able to avoid in bad faith the termination of alimony that would result from remarriage while engaging in a relationship that has most of the characteristics of remarriage.
“Cohabitation” means continuous and habitual living together with evidence of “the voluntary mutual assumption of those marital rights, duties, and obligations which are usually manifested by married people.” A North Carolina court of appeals decision found that “cohabitation” existed when a couple had been in a monogamous relationship for ten months and slept over up to five times per week. However, a court might also (in a rare case) find cohabitation to exist when the parties did not ever spend the night together. Factors such as whether the parties maintain separate residences, and where they keep personal belongings, are factors courts can consider. The more “rights, duties, and obligations” associated with cohabitation, the more likely it is to have an economic impact on the dependent former spouse, and the more it will appear that the dependent former spouse is avoiding the formalities of marriage primarily in order to continue receiving alimony.
Factors include how the members of the couple share household chores and child care duties, whether they have co-mingled their finances, how they hold themselves out to society, whether they go out in public together and attend worship services together, whether they vacation and spend holidays together, and even whether they kiss when leaving for work in the morning. However, activities such as walking the dependent party’s dog, parking in that party’s garage, moving furniture into the party’s home, carrying in groceries, spending 11 consecutive nights together, etc. were help not to support a finding of cohabitation.
Whether a relationship is exclusive and monogamous is an especially important factor in determining whether cohabitation exists. Actual sexual intercourse between the dependent spouse and the new partner is not required in order for there to be cohabitation that will terminate alimony. Living with roommates or family members is not considered “cohabitation,” although this can reduce a party’s expenses and have an impact on the amount of support, as discussed above. One difficulty is that cohabitation, unlike remarriage, may not have a definite start date. At the latest, courts will date the cohabitation to the date that one party brings a motion to terminate support based on it.
If you need to speak with a family law attorney concerning alimony and/or termination of alimony, contact Adkins Law. Adkins Law is located in Huntersville and primarily serves the Lake Norman area and Mecklenburg County.
You are legally separated from your spouse if you move out of the marital residence with the intent of remaining separate and apart. Once you remain separate and apart from your spouse for a year and a day, you are eligible to file for an absolute divorce. Once the absolute divorce is granted, all bonds of marriage are terminated between you and your spouse. If you need to speak to a family law attorney in regards to a separation and / or divorce, contact Adkins Law. Adkins Law has locations in Huntersville and south Charlotte.