Automated Trust and Wills Software

FAQs

WHAT IS YOUR PRIVACY POLICY?
All requested contact information is strictly for internal use. We take your privacy very seriously; any information you provide us will never be given, sold or transferred to any other company, organization or entity. If, at anytime, you receive an e-mail from us and you do not wish to receive any e-mails in the future, simply reply to the e-mail with the word "Remove" in the subject or the body of the message and you will be immediately removed from our database. All personal information is transmitted to our SSL secure server utilizing 128-bit encryption. Your privacy is guaranteed!
ARE THE DOCUMENTS "HIPAA" COMPLIANT?
All documents included in the program which may be needed for health care purposes are specifically HIPAA compliant and the HIPAA release provisions are made effective immediately. For more information on HIPAA, please click on Link to HIPAA.
HOW OFTEN DO YOU UPDATE?
We update approximately 5-7 times a year (as we add new templates, law changes, etc.). The annual (after the first year) update subscription is $250 for the Trusts & Wills template set and $100 for the Irrevocable Trusts set. This subscription is voluntary on your part since the software will continue to run whether you subscribe or not (as compared to our competition whose software will "lock-up" after each year unless you re-purchase it). Most, but not all, of our users do subscribe; but it is not mandatory for the software to continue work (obviously, any changes to the template, either for law changes or revisions, are the responsibility of the user if they do not subscribe).
DO YOU SEND A CD?
Our software is delivered strictly by download; we update so frequently that a CD would be obsolete almost by the time you received it (additionally, we would have to add shipping and sales tax to our cost). There is no problem with a computer crash or if you buy a new computer, we just email you the new download link and registration key (we do this all the time).
CAN I LOAD THE SOFTWARE ON MORE THAN ONE COMPUTER?
Our license is a little more realistic than most. The license is for one primary user on as many computers as he/she uses (i.e., office desktop, office server, laptop, home desktop) and for one assistant. The annual update subscription (after the first year) is the same. The User's Guide has extensive information on creating a network set-up or for configuring multiple computers.
I HAVE A MAC, WILL YOUR SOFTWARE WORK ON IT?
Our template set does not work with the Mac OS (actually, it is the underlying assembly software from HotDocs which requires a Windows OS). If you have a new dual-core Mac which supports both the Mac OS and Windows, the program will run in the Windows VM; however, the software and Mac alone does not work.
DO I NEED TO BUY HOTDOCS?
We are an authorized publisher for HotDocs and, therefore, we can include HotDocs Player with our template set. Player will run our program without any problems; you only need to purchase a "stand-alone" version of HotDocs if you desire the added ability to automate other documents in your office and/or edit the underlying templates in our template sets. If you want the added functionality of the upgraded HotDocs, the "Standard" edition is generally all that is required; this version is $300 plus shipping. There is a comparison between the different editions of HotDocs at www.hotdocs.com/products/HotDocs_Features.pdf. If you are not sure if you need HotDocs, I would suggest ordering the template set now and then waiting on HotDocs; as mentioned, the upgrade is not required to install and run the paid version of our software and can always be added at a later date.
CAN I HAVE A TRIAL OF THE IRREVOCABLE TRUSTS TEMPLATE SET?
If you have not yet done so, please go to our product page for a full description of the Irrevocable Trusts template set and the pricing (please note that we will be adding a Residential Medicaid Trust (a defective grantor trust) in the very near future. The best way to see the power of the software and the ease of use is to download the free, 30 day evaluation trial. Only the Trusts & Wills template set is available in the trial format; however, the Irrevocable Trust template set does come with a thirty day money back guarantee.
WHEN WILL THE TRUST ADMINISTRATION MODULE BE AVAILABLE?
Our Trust Administration Template Set is still under construction; it will hopefully be available Summer, 2008. For now we do have the Trusts & Wills and the Irrevocable Trusts template sets. For full product descriptions, please go to Products. The best way to see the power of the software and its ease of use is to download our free, 30 day evaluation trial of the Trusts & Wills template set (Trial).
WHAT IS THE PURPOSE OF THE IRA BENEFICIARY TRUST?
Naming a trust as the designated beneficiary of a client's IRA has several very important advantages over directly naming the beneficiaries. First, the beneficiary may be a minor, not prudent with money, have marital or creditor issues, or may be disabled. Second, if the beneficiary dies before distribution, the contingent beneficiaries may not be correct. Third, the beneficiary may intentionally or unintentionally withdraw the IRA. However, naming the client's revocable living trust as the beneficiary, even with the appropriate "conduit-trust" language, may create issues with the operative age for the "stretch-out" of the required minimum distributions. In 2005, the IRS issued Private Letter Ruling 200537044 (the "PLR") that approved a new type of revocable trust created solely to be the beneficiary of an IRA account. As a result of this PLR, it is now possible for your clients to create a stand-alone trust which provides maximum protection and flexibility.

This IRA Beneficiary Trust® insures that your client's beneficiaries (those who will receive the IRA's after the client's death) “stretch-out” their taxable, required minimum IRA distributions over a much longer period of time; with this trust, the age of each beneficiary becomes the operative age for that beneficiary's required minimum distribution. And, if they do it right, the IRAs can continue to compound for many years income-tax free - - and may literally grow to be worth millions of dollars! This type of trust is also called an IRA trust, an IRA Inheritance Trust, a standalone IRA trust, an IRA stretch trust or an IRA protection trust.

If children and grandchildren who inherit IRA funds keep the funds in the IRA over their lives and only take the required minimum distributions each year (the "stretch-out"), the amount of money that can be earned, accumulated and paid to the beneficiaries can be staggering. To illustrate how this compounding can works, I have calculated how much money a beneficiary can receive from a parent's $100,000 IRA account; I have used two different ages (10 and 35) for the beneficiary and have assumed that the account averages an annualized 8% return: for the beneficiary who is age 35 at the client's death, the total benefit is $1,228,630 and for the 10 year old beneficiary, the total benefit is $5,363,512!

This wealth accumulation strategy only works if the beneficiaries retain the inherited funds inside the IRA account. If a beneficiary takes all of the funds out of the IRA account (called a "blow-out" because it blows the stretch-out), this wealth accumulation technique will be lost. One of the reasons to create an IRA Beneficiary Trust® is because it can insure the stretch-out and can prevent a blow-out. This blow-out happens more often than you may think. The beneficiaries may not be aware of the tax rules and their distribution choices, so they may immediately withdraw the IRA's at the first opportunity (or worse yet, do a prohibited rollover!). Or the beneficiary, often influenced by his or her spouse, may just decide to withdraw the IRA's to foolishly spend it. If the “stretch-out” isn’t done properly by the beneficiaries and income taxes are paid up front shortly after the IRA's are inherited, your client's family may lose hundreds of thousands of dollars (or more).

Even if your client assumes that his/her/their beneficiaries will do the right thing – that is, keep the funds in the IRA account for their lives to maximize the income tax “stretch-out” of the IRA's - the IRA's may still be seriously exposed to one or more of the following threats that can arise years after the client is gone:

The beneficiary’s spouse may snatch half (or more) of the inherited IRA's in a divorce. The divorce rate is over 50% and a big pile of inherited money may become a divorce incentive for the ex-spouse. Even though inherited property is separate property, the beneficiary's ex-spouse's divorce lawyer will probably go after the IRA funds because the IRA account is frequently the largest asset and the lawyer knows there is a good chance the spouse who inherited the IRA will give a large portion or all of the IRA account just to end the divorce and to be rid of the ex-spouse.

The beneficiary's poor spending habits, creditors and lawsuits may grab all of an inherited IRA's.

The beneficiary could lose his or her needs-based government benefits (if he or she ever requires them), such as supplemental income (SSI) or long-term nursing care.

And even if the beneficiary never encounters any of these problems, he or she may get walloped with a huge estate tax when he or she passes the IRA's down to the next generation.

One of the big advantages to the IRA Beneficiary Trust® is the option to give a "Special Trustee" the right to elect out of a straight "conduit-trust" (i.e., where the MRD must be paid to the beneficiary on an annual basis) to a fully discretionary "accumulation trust" (i.e., where the trustee can hold the beneficiary's MRD inside the trust). This election must be made, if at all, by September 30 of the year following the client's death. Making this election may result in a shorter "stretch-out" because the age of the oldest "possible beneficiary" must be used (the Special Trustee is also given the power to limit such possible beneficiaries to minimize this issue); however, having this option to elect between the different forms of trusts provides the flexibility to consider all factors known at the time of death and up to the election deadline (e.g., creditor problems, disability, etc.) which may greatly out-weigh the increase in the income tax costs.