Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries?

1. Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries?

2. Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries? Calvin was a single man living in Colorado. Near the end of his life, one of the primary things on Calvin’s mind was who would own his home after he died. Eventually, Calvin decided to sign a deed that gave the property to three of his closest friends. When Calvin died, he had no estate plan -- no living trust and no will. This meant that Calvin‘s estate would pass according to Colorado’s intestacy laws. Legacy Assurance Plan Of America

3. Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries? Colorado’s intestate succession rules, like most states, seek to distribute assets to the closest living relatives of the deceased person. Calvin had no living spouse or children. In fact, his closest living relative (under the standards of the intestacy laws) was his half-sister. This was true because the statute only looks at levels of kinship, not personal relationships. In real life, Calvin and his half-sister were far from close. They last spoke at their father’s funeral, which took place more than 20 years before Calvin died. Nevertheless, the half-sister asked the probate to name her as the personal representative of Calvin’s estate, and the court granted the request. Legacy Assurance Plan Of America

4. Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries? After becoming the personal representative, the half-sister sued to invalidate the deed Calvin executed transferring his house. The deed was executed before Calvin died, meaning that the house was not part of his intestate estate. However, if the court wiped out the deed, then the ownership would revert back to his estate and would go to his sole legal heir, the half-sister. Ultimately, the friends prevailed in the courts. The trial court stated that the half-sister’s case was “groundless” and backed up by a “dearth of evidence.” Legacy Assurance Plan Of America

5. Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries? In this case, the deceased man’s estate planning goals were upheld. His planning, as limited as it was, involved getting his home into the hands of his three friends, which was what happened in the end. Whether Calvin had executed a deed a few months before his death, or a will a few months before his death, the legal standard would have been the same: did he or did he not have testamentary capacity when he signed the document? Legacy Assurance Plan Of America

6. Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries? Nevertheless, Calvin’s approach was still less than ideal. Simply giving his home to his friends by signing a deed meant that the friends lost the possibility to receive the “stepped up basis” in the home. This loss could be costly if they chose to sell the property, as it would likely mean that they would owe a much greater amount of capital gains taxes. Additionally, simply deeding over the home could also have potentially negative gift tax implications, as well. Had Calvin merely executed a will or a living trust that directed his trust or estate to transfer the home to the three friends, Calvin could have achieved the same goal without same degree of potentially harmful tax implications. Legacy Assurance Plan Of America

7. Legacy Assurance Plan Of America - Choosing Non-relatives over Relatives as Your Beneficiaries? For More Information About Legacy Assurance Plan: http://legacyassuranceplan.com/ https://www.linkedin.com/company/legacy-assurance-plan legacyassuranceplan.blogspot.com https://www.youtube.com/watch?v=pDwCDT0E-AE https://www.facebook.com/legacyassuranceplan/ https://twitter.com/AssurancePlan