Protect Yourself from Identity Theft – Jan. 2012

What is identity theft?

Identity theft occurs when someone uses your personal identifying information, like your name, Social Security number or credit card number, without your permission, to commit fraud or other crimes.

How can you find out if your identity was stolen?

The best way to find out is to monitor your accounts and bank statements each month, and check your credit report at least once per year from each of the three major credit bureaus. You can request a free credit report at www.annualcreditreport.com.

You can minimize your risk of becoming a victim of identity theft by making it more difficult for identity thieves to access your personal information. Here are some tips from the Federal Trade Commission to help protect you from becoming a victim.
• Shred financial documents and paperwork with personal information, before you discard them.

• Protect your Social Security number. Don’t carry your Social Security card in your wallet or write your Social Security number on a check. Ask to use another identifier, if possible.

• Don’t give out personal information on the phone, through the mail or over the Internet, unless you know whom you are dealing with.

• Never click on links sent in unsolicited emails. Use firewalls, anti-spyware and anti-virus software to protect your home computer; keep them up-to-date.

• Don’t use an obvious password like your birth date, your mother’s maiden name, or the last four digits of your Social Security number.

• Keep your personal information in a secure place at home, especially if you have roommates, employ outside help or are having work done in your house.

• Purchase an identity theft insurance policy to recover stolen funds or to pay for legal and/or other fees associated with recovering your identity.

By using these simple tips as a precaution you can greatly reduce the chances of having your identity stolen. Be sure to share them with your friends and family!

Planning Your Estate with a Revocable Living Trust – Dec. 2011

No one ever wants to consider estate planning. (Mulling over your mortality doesn’t posses much appeal, as a rule.) However, properly ensuring that your loved ones will benefit from your estate while having to deal with as little trouble as possible is critical.

One key estate planning document you should consider is a revocable living trust (RLT). An RLT is akin to a will in that it describes and controls how your estate goes to your beneficiaries, but it differs from a will in many ways.

A primary difference is probate. A will essentially dictates to whom your estate should go to upon your death and how, but wills are typically held up in the process know as probate. Probate allows a judge to review and confirm the will, to ensure that that your last wishes are indeed being carried out to your specifications, and then your assets are moved to your beneficiaries. In some states, that process can last as long as two years and can require your beneficiaries to pay statutory fees before some assets, such as real estate, can be transferred to them.

But an RLT avoids this. An RLT is established by a person referred to as the grantor or trustor, and is managed by someone called the trustee, who is often the grantor, but not always. The trust could have multiple co-trustees, such as a husband or wife, or even an institution. A successor trustee is also established. This is the person who will manage the trust when the grantor dies or becomes unable to manage the trust due to some incapacity.

That is an important element to an RLT, because unlike a will, your beneficiaries are taken care of by an RLT even if you do not pass away. If, for example, you were rendered comatose, your loved ones would still be taken care of. Because of this RLTs are worth considering not just in cases of classic “what will happen in the event of my death” types of estate planning, but even for young married couples with children, and other individuals who have people depending on them.

This is another difference between an RLT and a will – the trust holds your assets while you are alive. When an RLT is established, you “fund” the trust by putting your assets into the trust, but you still have full control of your assets while you are alive and have your faculties. You are simply now controlling them as a trustee of the trust.

If you were to pass away, the assets are already part of the trust, and can then be transferred to your beneficiaries without having to go through probate. This is also helpful if children are involved. The trust can be set up in such a way to administer how they are benefited by the estate, so that the assets can’t be squandered or mismanaged. This also helps you avoid the need to establish a guardianship or conservatorship.

There are other benefits to an RLT, as well, such as being able to get the full benefit of estate tax exemptions, and keeping your estate out of the public view that would otherwise occur in probate. That said, RLTs are typically more expensive to establish than drawing up a will, because they involve more planning.

If you’re interested in learning more, make sure to contact an estate planner who can take you through the steps of establishing an RLT in greater detail. Making informed decisions about how your estate is managed might be a tough task to face, but you’ll rest easy knowing that you did.