Don't Just Make Money— Keep It: Tips for Protecting Your Money with Law Mother (Pamela Maass-Garrett)
Money Rehab with Nicole Lapin
Deep Dive
Why should people avoid adding their children to the title of their property while they're still alive?
Adding children to the title of a property while alive creates a capital gains tax issue. The property's value will continue to increase, and upon the owner's death, the children will be taxed on the gain between the time they were added to the title and the time of the owner's death. This negates the step-up in basis, which would otherwise allow the property to be transferred tax-free.
What type of trust is recommended for most people to protect their assets?
A revocable living trust is recommended for most people. It allows for changes throughout the owner's life and avoids probate, ensuring the assets are transferred smoothly and tax-free to beneficiaries upon the owner's death.
What is fraudulent conveyance and why is it important to avoid?
Fraudulent conveyance occurs when someone moves assets after a harm has occurred to avoid paying a legitimate claim. It can lead to increased damages, asset freezing, and legal penalties. It's crucial to protect assets before any harm occurs to avoid such legal complications.
Why is insurance considered a key component of asset protection?
Insurance is foundational for asset protection as it covers various risks, from life and auto to liability and property. It ensures that financial losses due to unforeseen events are minimized, protecting both personal and business assets. For those without a substantial nest egg, term life insurance is particularly important to secure the financial future of dependents.
What should people consider when choosing an insurance policy to ensure comprehensive coverage?
When selecting an insurance policy, it's essential to review the exclusions page to understand what is not covered. Working with a professional who understands your specific risks and needs can help ensure you have the right coverage. For umbrella policies, it's crucial to verify that they provide the protection you expect, as common exclusions can leave you vulnerable.
What legal documents should expectant parents consider to protect their family's future?
Expectant parents should consider incapacity planning documents, including advanced directives and guardianship documents. These ensure that medical and financial decisions are made according to their wishes if they become incapacitated. Additionally, life insurance and wills should be updated to secure the financial future of their dependents.
Why is a prenuptial agreement important for high-net-worth individuals?
A prenuptial agreement is crucial for high-net-worth individuals to protect their assets in case of divorce. It ensures financial transparency and sets clear expectations about asset distribution, avoiding costly legal battles and providing peace of mind. It's a proactive measure to safeguard personal wealth and maintain financial stability.
What advice would you give to someone interviewing a prospective lawyer?
When interviewing a prospective lawyer, seek referrals from trusted sources, check online reviews, and verify their credentials with the bar association. Ask about their fee structure, conflict of interest policies, and ensure they communicate clearly and transparently. Trust your instincts; if a lawyer talks over you or uses excessive legal jargon, they may not be the right fit.
How can individuals protect themselves from being billed for emotional discussions with their lawyer?
For estate planning, opt for firms that offer flat fees to avoid hourly billing surprises. In litigation, contingency fees are common, where the lawyer charges a percentage of the settlement rather than hourly rates. For hourly billing cases, consider hiring a therapist or counselor for emotional support, reserving lawyer consultations for legal matters only.
What is the greatest gift individuals can give their loved ones in terms of legacy?
Beyond estate planning documents, the greatest gift is recording personal stories, values, and advice. These personal legacies are priceless and cherished by family members, providing a deeper connection to their heritage and the wisdom of their ancestors.
- Adding children to the title of a house while alive creates a capital gains tax issue.
- A revocable living trust avoids probate and preserves the step-up in basis, making the house capital gains tax-free for the beneficiaries.
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