There can be many reasons to use a trust, and specific benefits can accrue from specific trusts. In general, there are four great reasons to initiate a trust.
1. Save money
Using a trust, you avoid probate, which can save you lots of money. Probate will generally take two percent-plus of your estate, and even “just” two percent of your entire estate can add up to a lot of money. Avoiding probate also helps you avoid fees, costs, and taxes.
2. Save time
Using a trust, you avoid probate, which can save you lots of time. Going through probate, even here in Iowa, can take several months, to a year, or even more. Your heirs and beneficiaries may not receive their inheritances until the end of this probate process. Again, with trusts, you bypass probate. With trusts, your beneficiaries can get their inheritances in mere days, or weeks, rather than several months.
3. Flexibility of distributions
Don’t want your 18-year-old to inherit half-a-million dollars in one fell swoop? I agree it’s not a good idea. Trusts offer flexibility for the payout of inheritances. You set the ground rules of when and how distributions are made. For example, you might decide your children can receive distributions at certain ages. (For example, one-third at age 25, one-third at age 30, and the remaining at age 40). Or, you might decide your children can receive distributions at the attainment of certain milestones, such as marriage, the birth of a child, buying a first home, or receiving a certain degree
4. Privacy
Probate proceedings are public. Your will, once you pass and it is filed in court, is a public record. Some desire privacy about financial matters (say, about their family business) even after death.
Also, privacy can prevent hurt feelings among family members. For example, do you really want your Cousin Joe to know he received significantly less than all the other cousins?
What are the drawbacks to a trust?
It’s more expensive to set up a trust than basic estate plan documents, although I would say those costs are greatly outweighed by the money you’ll save your estate in the end. It’s also a bit of an administrative hassle, as your assets (such as car, house, stock funds, etc.) have to be retitled in the name of the trust. Again, though, I believe this inconvenience is much outweighed by the smooth operation of a trust at death.
Have an asset that didn’t make the list of 101 items? It can probably still go in a trust (even if it isn’t chocolate related!). Sometimes it’s hard to know if a trust may be right for your personal situation. It certainly doesn’t hurt to take me up on my offer for a free one-hour consultation. Give me a call at 515-371-6077 or shoot me an email at gordon@gordonfischerlawfirm.com.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2017/08/WritingToDoList.jpg600900Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2019-03-09 06:19:112020-05-18 11:28:48101 Assets You Could Place in a Trust
You’ve probably heard it before on your favorite law show or movie court case, but do you know what “quid pro quo” actually means?
Quid pro quo (“something for something” in Latin) means an exchange of goods or services, where one transfer is contingent upon the other.
Quid pro quo can have different meanings in different areas of the law. For instance, we typically hear this phrase in relation to employment law. So, in the arena of philanthropy and nonprofits, what does quid pro quo mean?
A charitable donation is deductible to the extent the donation exceeds the value of any goods or services received in exchange. So what happens when you donate to your favorite charity and receive something tangible in return? This is the issue of “quid pro quo” in charitable gift law.
Quid Pro Quo Example
If a donor gives a charity $100 and receives an opera ticket valued at $40, the donor has made a quid pro quo contribution. In this example, the charitable contribution part of the payment is $60. The donor is entitled to a charitable deduction for $60, but not the entire $100.
Both the donor and donee have a responsibility here. The donor, of course, can only deduct the cost of the donation less the value of the goods/services received. The charitable organization must provide their donors clear, written documentation of the value of donations.
In fact, in these quid pro quo situations, under IRS rules, the nonprofit must provide a written disclosure statement. This required written disclosure statement must both:
• Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the value of goods or services provided by the charity.
• Provide the donor with a good faith estimate of the value of the goods or services that the donor received.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2019/03/Screen-Shot-2019-03-11-at-11.05.17-PM.png6501054Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2019-03-05 09:46:202020-05-18 11:28:48(Legal) Word of the Day: Quid Pro Quo
You know you need an estate plan, but you still don’t understand really what you need or where to start. What to do? I’m here to help and it’s one of my personal missions to break down estate planning so it’s as easy and accessible as possible.
Here are three blog posts, all relatively short and simple, that should help.
First, I provide the very basicsof estate planning which features the six “must have” estate planning documents everyone needs.
Trusts can be needed and utilized for a number of reasons. Perhaps someone’s assets are too large, too numerous, and/or too complicated and a trust is needed. Perhaps the person simply has a desire to avoid probate. Trusts can also provide a measure of privacy that, say, wills, do not.
Third, you may ask, how does someone go about actually getting these documents? What’s the process of putting together an estate plan? Well, probably every lawyer has a different estateplanning process. I naturally prefer mine – I think it’s very client-focused and client-friendly, and allows plenty of give and take between me and you. We’ll have an ongoing dialogue between us to ensure the best plan for you. Really, it only takes five steps to have a full and complete estate plan.
After reading these posts you may still have questions or will want to discuss your personal estate situations. I would love to schedule a time to meet or discuss over the phone. Shoot me an email or give me a call and we’ll start the conversation on what YOU need to leave a lasting legacy and secure future for your loved ones.
If you’re feeling good and want to get started on your estate plan, the best place to begin is with my free, no-obligation Estate Plan Questionnaire.
101 Assets You Could Place in a Trust
Estates & Estate Planning, Trusts, Wills, Trusts & EstatesJokes aside, you can fit just about any asset into a trust. Here is a “short” list of assets actually placed into trusts:
*Yes, this is a cry for help. I love sweets, especially chocolate, way too much.
Why put assets in trust?
There can be many reasons to use a trust, and specific benefits can accrue from specific trusts. In general, there are four great reasons to initiate a trust.
1. Save money
Using a trust, you avoid probate, which can save you lots of money. Probate will generally take two percent-plus of your estate, and even “just” two percent of your entire estate can add up to a lot of money. Avoiding probate also helps you avoid fees, costs, and taxes.
2. Save time
Using a trust, you avoid probate, which can save you lots of time. Going through probate, even here in Iowa, can take several months, to a year, or even more. Your heirs and beneficiaries may not receive their inheritances until the end of this probate process. Again, with trusts, you bypass probate. With trusts, your beneficiaries can get their inheritances in mere days, or weeks, rather than several months.
3. Flexibility of distributions
Don’t want your 18-year-old to inherit half-a-million dollars in one fell swoop? I agree it’s not a good idea. Trusts offer flexibility for the payout of inheritances. You set the ground rules of when and how distributions are made. For example, you might decide your children can receive distributions at certain ages. (For example, one-third at age 25, one-third at age 30, and the remaining at age 40). Or, you might decide your children can receive distributions at the attainment of certain milestones, such as marriage, the birth of a child, buying a first home, or receiving a certain degree
4. Privacy
Probate proceedings are public. Your will, once you pass and it is filed in court, is a public record. Some desire privacy about financial matters (say, about their family business) even after death.
Also, privacy can prevent hurt feelings among family members. For example, do you really want your Cousin Joe to know he received significantly less than all the other cousins?
What are the drawbacks to a trust?
It’s more expensive to set up a trust than basic estate plan documents, although I would say those costs are greatly outweighed by the money you’ll save your estate in the end. It’s also a bit of an administrative hassle, as your assets (such as car, house, stock funds, etc.) have to be retitled in the name of the trust. Again, though, I believe this inconvenience is much outweighed by the smooth operation of a trust at death.
Let’s talk about trusts!
Have an asset that didn’t make the list of 101 items? It can probably still go in a trust (even if it isn’t chocolate related!). Sometimes it’s hard to know if a trust may be right for your personal situation. It certainly doesn’t hurt to take me up on my offer for a free one-hour consultation. Give me a call at 515-371-6077 or shoot me an email at gordon@gordonfischerlawfirm.com.
(Legal) Word of the Day: Quid Pro Quo
Charitable Giving, From Gordon's Desk..., Legal Word of the DayYou’ve probably heard it before on your favorite law show or movie court case, but do you know what “quid pro quo” actually means?
Quid pro quo (“something for something” in Latin) means an exchange of goods or services, where one transfer is contingent upon the other.
Quid pro quo can have different meanings in different areas of the law. For instance, we typically hear this phrase in relation to employment law. So, in the arena of philanthropy and nonprofits, what does quid pro quo mean?
A charitable donation is deductible to the extent the donation exceeds the value of any goods or services received in exchange. So what happens when you donate to your favorite charity and receive something tangible in return? This is the issue of “quid pro quo” in charitable gift law.
Quid Pro Quo Example
If a donor gives a charity $100 and receives an opera ticket valued at $40, the donor has made a quid pro quo contribution. In this example, the charitable contribution part of the payment is $60. The donor is entitled to a charitable deduction for $60, but not the entire $100.
Both the donor and donee have a responsibility here. The donor, of course, can only deduct the cost of the donation less the value of the goods/services received. The charitable organization must provide their donors clear, written documentation of the value of donations.
In fact, in these quid pro quo situations, under IRS rules, the nonprofit must provide a written disclosure statement. This required written disclosure statement must both:
• Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the value of goods or services provided by the charity.
• Provide the donor with a good faith estimate of the value of the goods or services that the donor received.
Free Consultation
Thinking about making a donation or looking for guidance regarding gift acceptance at your nonprofit, no quid pro quo is required! I offer a free one-hour consultation, with absolutely no obligation. I can always be reached by email at Gordon@gordonfischerlawfirm.com, and by phone at 515-371-6077.
3 Must-Reads: Estate Planning Made Simple
Estates & Estate Planning, Wills, Trusts & EstatesYou know you need an estate plan, but you still don’t understand really what you need or where to start. What to do? I’m here to help and it’s one of my personal missions to break down estate planning so it’s as easy and accessible as possible.
Here are three blog posts, all relatively short and simple, that should help.
First, I provide the very basics of estate planning which features the six “must have” estate planning documents everyone needs.
For many, the six “must have” estate planning documents is enough. Some Iowans will also want or need a trust.
Second, here are the basics of what you need to know about trusts.
Trusts can be needed and utilized for a number of reasons. Perhaps someone’s assets are too large, too numerous, and/or too complicated and a trust is needed. Perhaps the person simply has a desire to avoid probate. Trusts can also provide a measure of privacy that, say, wills, do not.
Third, you may ask, how does someone go about actually getting these documents? What’s the process of putting together an estate plan? Well, probably every lawyer has a different estate planning process. I naturally prefer mine – I think it’s very client-focused and client-friendly, and allows plenty of give and take between me and you. We’ll have an ongoing dialogue between us to ensure the best plan for you. Really, it only takes five steps to have a full and complete estate plan.
Let’s Talk.
After reading these posts you may still have questions or will want to discuss your personal estate situations. I would love to schedule a time to meet or discuss over the phone. Shoot me an email or give me a call and we’ll start the conversation on what YOU need to leave a lasting legacy and secure future for your loved ones.
If you’re feeling good and want to get started on your estate plan, the best place to begin is with my free, no-obligation Estate Plan Questionnaire.