Expert Article from McManus featured in Trusts & Estates’ New Monthly Newsletter

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In February, Trusts & Estates/Wealthmanagement.com launched a new monthly newsletter that caters to financial advisors. The goal of the undertaking? Demystify the world of estate planning and encourage collaboration between attorneys and the more investment-focused professionals.

This month, an article from John O. McManus, founding principal of McManus & Associates and a top AV-rated trusts and estates attorney, was featured in the newsletter and published on wealthmanagement.com here. John’s article, “The New Frontier of Estate Planning,” puts the Generation-Skipping Transfer tax (GST) on the radars of financial advisors, pointing out that estate planning strategies have evolved along with the tax climate and political landscape.

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Conference Call: “Top 10 Signposts to Guide Planning for Estates under $10MM”

The American Taxpayer Relief Act of 2012 (ATRA) delivered transfer tax certainty, large indexed transfer tax exemptions, and portability. Taking into account new norms, McManus & Associates, an estate planning law firm based in the Tri-State Area, today released a new installment in its free Educational Focus Series, “Top 10 Signposts to Guide Planning for Estates under $10MM.” During a conference call for clients, the firm’s Founding Principal and top AV-rated Attorney John O. McManus shed light on estate planning strategies that should be considered today following recent changes to federal and state laws.

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Insure.com Calls on McManus to Find Out if Scheming Relatives Can Steal Life Insurance Money

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Have you ever wondered if scheming relatives can steal your life insurance money? Insure.com recently sought out the answer to this very question for readers.

scheming relativeTo understand what is often at the heart of inheritance wars – the “mysterious life insurance policy” – Reporter Ed Leefeldt turned to John O. McManus, McManus & Associates’ founding principal and top AV-rated attorney, for help. As recognized by McManus:

“Life insurance is an area where you can get cute, coy and clandestine,” warns John McManus, head of McManus & Associates, a New York City-based firm specializing in trusts and estates.

Leefeldt explains that assets such as homes, cars and furniture may be listed in a will, but others may not. Says McManus, “Life insurance, IRAs and joint bank accounts don’t show up as part of the estate because they’ve already been distributed,” says McManus. From the story:

Money from the life insurance policy is paid directly to the beneficiary, so other family members may not even be aware of a payout. The deceased also could have tucked away a life insurance policy in a trust that no one else knows about, McManus warns.

When it comes to contesting a life insurance beneficiary, the article notes that “it’s tough to prove that mom was bonkers when she signed the policy, especially if an insurance agent was present.” According to McManus:

“Even if the deceased walked around in pajamas talking to Elvis, they may still have had the capacity to understand what they signed,” says McManus. Hiring a psychiatrist could also prove futile, unless the doctor actually knew the patient.

The piece goes on to discuss the lengths to which insurers will go in order to find beneficiaries and why you don’t need to worry about the wrong person being paid. To read expert tips on how to avert family fights over intentions for the payout, check out the full story here.

For questions about how best to utilize life insurance to transfer wealth to loved ones, call us at 908-898-0100 or drop us an email at communications@mcmanuslegal.com.

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Insure.com calls on McManus for advice on life insurance trusts for child beneficiaries

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Navigating the terrain with life insurance trusts for child beneficiaries can be difficult, particularly when dealing with a special needs trusts for children that will likely never be on their own. Insure.com recently called upon McManus & Associates Founding Principal John O. McManus for guidance on trusts, “inherently complicated instruments” according to the story’s reporter Ed Leefeldt.

childThe article, straightforwardly titled “Life insurance trusts for child beneficiaries,” explains that life insurance companies often won’t pay the death benefit of a life insurance policy to a minor until he or she turns 18 unless a trustee or guardian has been named. Additionally, children may even face “estate taxes after a death, while the assets could be tied up in probate court” – trusts, however, ensure that life insurance money is “distributed according to your wishes, without delay.”

Trusts are also a useful tool for another reason. According to McManus:

A trust can also “protect children from themselves,” says John McManus, founder of an estate-planning law firm based in New York City. “If, at 18, a child gets it all, that could be a massively destructive injection of money,” he warns. Instead, the money can be earmarked for health, education or — with the help of a trustee — a lifetime trust.

The article suggests a revocable trust for those of average wealth, “which can be changed and/or revoked if necessary.” Of note: Sometimes you can simply write the name of the trustee on the beneficiary line of your life insurance policy, but always check with your life insurance company to make sure. For the wealthy, an irrevocable trust may be the best choice.

From the article:

This type of trust takes a bunch of assets, often including a life insurance policy, and “tosses them over the compound wall,” says attorney McManus. In effect, you create a separate corporation to manage them.

As explained by Leefeldt, an irrevocable trust needs a lawyer’s support; assets put in this trust can’t be taken out, regardless of how much one’s situation changes.

To learn how you can allow for changes in status when you create the original trust document (e.g., more kids, divorce, or a special needs child), check out the article in full. And to get help with the ins and outs of life insurance trusts for children and other loved ones, call 908-898-0100 to talk to the McManus & Associates team. Answers are a phone call away.

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Trusts & Estates/WealthManagement.com Publishes Article by McManus

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Trusts & Estates/WealthManagement.com this week published an article from McManus & Associates Founding Principal and top AV-rated Attorney John O. McManus. The piece, “Top 10 Considerations for Estate Planning with Life Insurance,” was also be blasted out in the publication’s e-newsletter on October 30th.

The contribution shares the following 10 questions for advisors to discuss with clients:

  •  If a life insurance policy is owned by a trust, what’s the ongoing maintenance required for the strategy to succeed most effectively?
  • What are Cristofani beneficiaries and how can they make a life insurance trust even more gift tax efficient?
  • How can insurance be used to facilitate a business succession plan?
  • Term, whole life, 2nd to die–from a layman’s standpoint, what are the unique benefits of each?
  • How can ownership and beneficiary designations for a life insurance policy affect the taxable assets of the estate?
  • How do non-citizens avoid qualified domestic trust (QDOT) requirements with a life insurance trust?
  • What are some strategies to avoid the three-year look-back period when existing insurance is transferred to a trust?
  • Annual exemption gifts can fund a life insurance trust gift tax-free, but what about generation-skipping transfer (GST) tax issues? How is the trust affected?
  • When the terms of an irrevocable trust don’t reflect the wishes of the parties, what options are available?
  • How can life insurance be used as a wealth replacement strategy with charitable giving?

To find out what advice John had for each of the above, check out his full article here.

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Mommy Blog Brings Estate Planning Advice to Readers

motherhood moment

Motherhood Moment, an advice mecca for moms, recently shared with readers guidance from the latest McManus & Associates’ educational conference call (we love the idea that moms can benefit from our focus series, because our practice not only provides asset protection, but helps continue a legacy of family values through generations). In a Motherhood Moment post titled, “Thrifty Thinking: Estate Planning with Life Insurance,” it’s noted that the use of life insurance in one’s estate plan can provide significant protection for loved ones, whether as a wealth replacement strategy combined with philanthropic giving or as a safeguard to cover expenses and taxes.

The post highlights the most important considerations when planning with life insurance and lists the 10 questions below for which Motherhood Moment readers should find answers:

  1. If a life insurance policy is owned by a trust, what is the ongoing maintenance required for the strategy to succeed most effectively?
  1. What are Cristofani beneficiaries and how can they make a life insurance trust even more gift tax efficient?
  1. How can insurance be utilized to facilitate a business succession plan?
  1. Term, whole life, 2nd to die – from a layman’s standpoint, what are the unique benefits of each?
  1. How can ownership and beneficiary designations for a life insurance policy affect the taxable assets of the estate?
  1. How do non-citizens avoid qualified domestic trust requirements with a life insurance trust?
  1. What are some strategies to avoid the three-year look-back period when existing insurance is transferred to a trust?
  1. Annual exemption gifts can fund a life insurance trust gift tax-free, but what about generation-skipping tax issues? How is the trust affected?
  1. When the terms of an irrevocable trust do not reflect the wishes of the parties, what options are available?
  1. How can life insurance be used as a wealth replacement strategy with charitable giving?

For more tips and tricks for families, visit Motherhood Moment here.

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Professor of Law Points to McManus’ Guidance on Using Life Insurance in Your Estate Plan

Gerry W. Beyer

Gerry Beyer, Professor of Law at Texas Tech University School of Law, recently featured on his blog McManus & Associates’ latest educational conference call, “Top 10 Things to Know to Make the Most of Life Insurance in Estate Planning.” As pointed out by Beyer, using life insurance in your estate plan can provide significant protection for your loved ones.

To see the top 10 questions to ask yourself when estate planning with life insurance, read Beyer’s post. And check out more hot topics related to estate planning by visiting “Wills, Trusts, and Estates Prof Blog,” a member of the Law Professor Blogs Network sponsored by Wolters Kluwer.

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Conference Call: Top 10 Considerations for Estate Planning with Life Insurance

Whether as a wealth replacement strategy combined with philanthropic giving or as a safeguard to cover expenses and taxes, use of life insurance in your estate plan can provide significant protection to your loved ones. This useful planning tool has several unique benefits, which should be considered in every wealth transfer plan. John O. McManus, founding principal of McManus & Associates, recently held a conference call with clients to review the most important considerations when planning with Life Insurance.

LISTEN HERE: “Top 10 Considerations for Estate Planning with Life Insurance”

Find answers to the questions below and more by listening to the free recording.

1. If a life insurance policy is owned by a trust, what is the ongoing maintenance required for the strategy to succeed most effectively?
2. What are Cristofani beneficiaries and how can they make a life insurance trust even more gift tax efficient?
3. How can insurance be utilized to facilitate a business succession plan?
4. Term, whole life, 2nd to die, from a layman’s standpoint, what are the unique benefits of each?
5. How can ownership and beneficiary designations for a life insurance policy affect the taxable assets of the estate?
6. How do non-citizens avoid qualified domestic trust requirements with a life insurance trust?
7. What are some strategies to avoid the 3-year look back period when existing insurance is transferred to a trust?
8. Annual exemption gifts can fund a life insurance trust gift tax free, but what about generation skipping tax issues? How is the trust affected?
9. When the terms of an irrevocable trust do not reflect the wishes of the parties, what options are available?
10. How to use life insurance as a wealth replacement strategy with charitable giving.

McManus & Associates would be happy to discuss how these strategies apply to you and yours. Give us a call at (908) 898-0100.

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