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Do I Need a Living Trust – Part 2

In last week’s blog we discussed what a living trust and addressed some of the most common claims made about living trusts.  This week we will take a closer look at some other issues that should be considered in deciding whether a living trust is right for you. 1.  Creditor Protection A Living Trust Can […]

In re Brandon Clark: Inherited IRA Exempt from Creditors

In In re Brandon C. Clark, Case No. 3:11-cv-00482-bbc, the United States District Court for the Western District of Wisconsin reversed the Bankruptcy Court and held that an IRA a debtor inherited from her mother was exempt from the debtor’s creditors. In August 2000 the debtor’s mother established an Individual Retirement Account and named her […]

In re Bowen: Bankruptcy Trustee Cannot Reach Cash Value of Private ROP Disability Policy

In the Illinois bankruptcy case In re Bowen, No. 11-71289 (C. D. Illinois)(Order entered September 23, 2011) the bankruptcy court held that the cash value of a private disability policy owned by a debtor was exempt from the claims of the debtor’s creditors, not as life insurance, but under the provision of Illinois law exempting […]

Feder and Fujishima: When It Comes to Life Insurance and Taxes, Dot Your I’s and Cross Your T’s

Two recent Tax Court decisions illustrate the danger (and cost) of not paying attention to the details when it comes to life insurance policies and taxes. In each case the taxpayer failed to dot their i’s and cross their t’s, which created adverse estate tax consequences in one case and adverse income tax consequences in […]

Designation of Client’s Living Trust as Beneficiary of Life Insurance Policy Forfeits Exemption

In North Carolina a creditor cannot reach the cash value or death benefit of a debtor’s life insurance policy on his or her own life provided the debtor’s spouse, children, or both are the beneficiaries of the policy. This right is guaranteed under Article X, Section 5 of the North Carolina Constitution and is also […]