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Lawrenceburg Indiana Bankruptcy and Estate Planning Blog

When do you need a trust?

An important part of estate planning is deciding exactly what to include in your estate and how to go about leaving your assets to your heirs. One option is a trust, which Charles Schwab explains is an agreement about asset distribution that can usually prevent the need for probate. There are many reasons why you may choose to create a trust.

You could use a trust to set up finances for an heir. For example, if you have a child who is not responsible enough to receive his or her full inheritance, you may want to develop a trust that distributes the inheritance over time and pays in full when your heir reaches a certain age.

Does Chapter 7 discharge recent credit card debt?

When you begin considering filing Chapter 7 bankruptcy in Indiana, likely one of your biggest reason is that you have too much consumer debt and Chapter 7 discharges virtually all of it, including your credit card debt. If, however, you plan to go on using your credit cards right up until the time you file bankruptcy, you may want to reconsider that decision.

As reported by Bloomberg News, the Bankruptcy Code contains a little known presumption against the discharge of recent credit card debt. Section 523(a)(2)(C)(I) states that any credit card debt of over $675 that you incur for the purchase of consumer goods within 90 days of the date on which you file bankruptcy should not be discharged.

What happens if I do not have an advance directive?

A typical healthcare visit involves you telling your doctor the medical problems you are experiencing and discussing with him or her the pros and cons of various treatment options. You then decide which option you would like to pursue, and the treatment begins. While this pattern may work most of the time, it will not work if a medical condition renders you unable to understand your healthcare options or communicate your wishes.

Advance directives are legal documents that address your wishes for medical treatment  when you cannot express your wishes for yourself. Indiana recognizes several different types of advance directives, but two of the most commonly used documents are powers of attorney and living wills.

Pros and cons of Chapter 13 bankruptcy

If you are an individual who has chosen to get out from under crushing debt in Indiana by filing for bankruptcy, there are usually two avenues available to you: Chapter 7 and Chapter 13 bankruptcy. Each works in different ways, each involves its own eligibility requirements and each has its own benefits and drawbacks. In this article, we at Miller Flannery Law invite you to take a closer look at the pros and cons of Chapter 13 bankruptcy.

Generally speaking, Chapter 13 is for people who have a steady income as a means of paying off debt but cannot afford current monthly payments. Chapter 13 allows you to reorganize your debt into more manageable increments and pay it off over a designated timeframe, usually three to five years. 

Should you use retirement savings to avoid bankruptcy?

Filing for bankruptcy in Indiana can be a momentous decision. No one expects to sink into crushing debt, and the decision to file can be traumatic for some. Due to the stigma associated with bankruptcy, you may feel tempted to go to extreme lengths to avoid filing. Perhaps you have even thought about dipping into your retirement savings in order to pay off your debts.

However, according to CNBC, financial experts advise against this course of action as it may only be a short-term solution with the potential to do further financial damage. If you withdraw funds from such an account before you reach the minimum required retirement age, you will not only have to pay taxes on the funds you have withdrawn but, except in a few special situations, you will also incur a 10 percent early-withdrawal penalty. Furthermore, there are protections in place that allow you to you to retain most, if not all, of your retirement savings even after filing for bankruptcy. Therefore, discharging your debt through bankruptcy with your retirement savings intact puts you on a more stable financial footing. 

Bankruptcy filings see only slight decline

As the new year gets off to a start, many people in Indiana may be wanting to focus on finding a solution to their debt in 2019. For some consumers, January can be exceptionally hard as the post-holiday spending spree can either propel them into debt or make an existing debt situation even worse.

Bankruptcy is not generally a first course of action for getting out of debt but there are situations when it may be the best choice. Many people avoid considering bankruptcy because they are afraid of the stigma they feel is associated with it. However, they need to know they are far from alone.

2018 holiday spending trends

People in Indiana who struggle with debt rarely end up in such a position from just one holiday season. Nonetheless, this time of year can definitely put a damper on a consumer's attempt to pay down debt or to avoid racking up more debt. Despite the best of intentions, buying during the holidays seems to be one of those things that is hard to resist. 

As reported by Supply Chain Brain, the 2018 holiday shopping season has been a strong one, at least from the point of view of major retailers and creditors. Mastercard is noted as experiencing an increase in sales by more than five percent. In total, their sales topped $850 billion, a figure that is higher than the company has seen in six years. Comparing 2018 holiday spending to 2017 holiday spending, Mastercard SpendingPulse notes a 19 percent increase this year.

What happens if you die without a will

If you die without having written a will, your estate is called "intestate" and Indiana has very specific rules about how your estate will be distributed. Without a will, your estate might not be distributed according to your desires. It also might not be distributed in a way you believe is best for your spouse or heirs. It's a one-size-fits-all law meant to treat everyone fairly when there's a lack of information as to your desires.

Can a family meeting prevent issues after you die?

Estate planning can be stressful. It is made even more so if you are dealing with difficult family members who you fear will cause trouble when you die. Nothing will stall probate in the Indiana courts as bad as arguing among family members over who gets what. To avoid this issue, Boston University suggests holding a family meeting.

A family meeting calls together everyone to discuss your estate plan. It enables you to explain what will happen when you die. Your family can ask questions. You can explain your decisions. It makes it very clear what your wishes are and why you made those decisions so that nobody can object when you pass away.

Estate plan review time

If you are like most people in Indiana, the holiday season can feel very all-encompassing and even distract you from other important things you need to take care of. As December moves closer to the end of the year, however, your attention may well turn to the new year and what you want to do to get it started well. One of the activities you should put on your New Year's list is to review your estate plan. 

As explained by Fidelity Investments, even the best and most thorough estate plan can be in need of updating now and then. This is because your life and the lives of your beneficiaries are very dynamic and subject to change. If you have moved and bought and sold a home, you may need to revise a trust if your old home was part of that. The birth, adoption or death of a family member may also necessitate amendments to a trust or a will.

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