The Finance Factor

Human beings are mortal; God has created a life cycle for all beings. As a child, you tend to take things for granted, like your parents, money, and necessities of life, but when you enter into your practical life, things change. It is good to operate with an optimistic state of mind, but one cannot altogether ignore the negative, or rather dangerous aspects of life. Cliché, as it may sound, this proverb rings true, “You may hope for the best, but prepare for the worst.”

You cannot stay young forever, so when you are of age, take control of your life, and plan! Consider the well-being of the people in your life, like your parents, wife, or children. Realistically, sit and think about the way they will make it in the world if something untoward was to happen to you.

Once you start thinking along these lines, you will automatically realise that a beneficiary trust is the best way to protect your loved ones when you yourself no longer can. There are various types of trusts that you can look into, generally speaking, such a trust will ensure that your beneficiary (in this case your family members) will have the right to enjoy whatever property or money you have left for them in a trust fund under the guidance of an appointed trustee. Continue reading ‘Helpful Advice About Beneficiary Trusts’ »

“He left me nothing but bills. Do I have to pay them?”

Unfortunately, many people who have lost a loved one soon find that the deceased had accrued substantial debt. Survivors are often then left with the challenges of dealing with this debt both ethically and legally. While the moral issue is something that should be understood, the legal obligation is what concerns most people. The most common question asked is “Do I owe the debt of a deceased family member?” The answer may surprise you.

If a deceased person originated a debt that he/she alone accrued, then he/she was responsible, and you are not. In this case you should rest easy because you would have no legal obligation to pay the debt. However the debt of a dead relative may affect you due to possible responsibility of their estate to cover those obligations, thereby leaving less inheritance to heirs.

There are really only two circumstances where you may be legally responsible for a relative’s debts. The first case is when you are a co-signer on obligations of the individual. This may happen when you and the deceased were co-signers on a loan such as a credit card account or a property mortgage. In those cases you were jointly and severally (together and individually) obligated. Just because one of the parties obligated for a debt passes away, it does not relieve the surviving party of their responsibility. Continue reading ‘An Inheritance of Debt’ »

Generation-skipping trusts aren’t just for the very wealthy — they’re a way to save any family’s assets from excessive taxation, ex-spouses looking for money, and creditors. Plus, they protect assets such as stocks that are likely to grow in value over time.

Generation-skipping trusts are a good way for wealthy families to transfer assets from the senior generation to their grandchildren and great-grandchildren without exposing those assets to several levels of estate taxes. Typically, if the second generation in a family is already comfortable financially, the grandparents set up a generation-skipping trust providing for all of their descendants as possible beneficiaries. Ultimately, any remaining assets will be distributed to grandchildren or great-grandchildren many decades in the future. This way, all of the descendants (children, grandchildren, and great-grandchildren) can benefit from the trust assets, but the grandchildren or great-grandchildren eventually receive the remaining funds without the imposition of estate taxes when the children die, and again when the grandchildren die.

Generation-skipping trusts can also be used to protect assets from creditors or a divorcing spouse, or to guard assets a trustee believes will grow substantially in value over time. That’s why most families should at least consider this type of trust. Continue reading ‘How Does a Generation Skipping Trust Work?’ »