December 12, 2017

Do Not Neglect Estate Planning

If you do not have a will, it might be assumed that your assets will go to your spouse or children. But you might very well be wrong.

For centuries the only people who bothered to make detailed estate plans were the wealthy. Most people had very few assets and did not have a great need to make detailed plans. Some people chose to draft a simple will, but most did not do even that.

Even today people still tend to think of estate planning as something really only necessary for wealthy people. Other people with lesser means tend to assume that if they do not do any estate planning they do not need to worry. They think their spouse or children will inherit their assets and they do not need to bother actually drafting a will. In Maryland

That is a mistake as the Wills, Trusts & Estates Prof Blog explained in "Estate Planning Is Not Just for the Ultra-Rich Anymore."

If you do not have an estate plan, then any assets you have at the time of your death will be distributed according to the laws of intestate succession in your state.

In some states, that means your assets will pass to your spouse and your children. However, other states have different laws and they sometimes give assets to people who might not have been included in an estate plan, such as siblings and parents. In Maryland, without a will, 1/2 goes to the spouse and 1/2 to the minor children. Do you want your 5 year old to inherit half? If you want more control, then hire an estate planning attorney. In DC a spouse and minor children inherit, without a will, as well. In order to minimize the costs of probate, however, you will need an estate plan.

It is not difficult to get a will from an estate planning attorney.

There is no reason you should leave things up to state law.

Get an estate plan and make sure that your assets are distributed as you choose.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 16, 2017) "Estate Planning Is Not Just for the Ultra-Rich Anymore."

December 11, 2017

Endowments of Closed Schools

Every year wealthy people give money to the endowment funds of colleges and universities. What happens to the money, when a school closes its doors for good is complicated.

Some big name schools have gigantic endowment funds. Schools like Harvard and Yale have many wealthy alums who are happy to give to their alma maters.

However, wealthy people do not just give to their own former schools.

They often contribute to much smaller colleges and universities, with the hope that those schools can use the funds to educate younger Americans.

Some schools do not make it. In fact, this has increasingly been the case since the financial collapse in 2008.

Every year, hundreds of schools close their doors permanently but still have money in their endowment funds.

The Wills, Trusts & Estates Prof Blog recently discussed what happens to that money in "Orphan Endowments of Dead Schools Bedevil U.S. States."

The big problem?

When a school closes there are many people who would like to have the money that is left over in the endowment funds.

The descendants of wealthy donors would like to have the money, as would the bondholders and other creditors of the schools.

The Attorney General of the state has to figure out who gets the money and state laws are not always clear on the subject. That creates big headaches for people over what are often relatively small sums.

If you or an ancestor of yours has given money to a small school that has closed, you should know that you can try and get that money back.

Nevertheless, you should know that you are unlikely to be successful.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 17, 2017) "Orphan Endowments of Dead Schools Bedevil U.S. States."

December 11, 2017February 27, 2023

Estate Planning for Pets

One hundred years ago, it would have been considered extremely odd if someone left detailed estate plans for their pets. A will might have mentioned who should be given a beloved animal. However, it was not common to leave aside money for the pets or to leave detailed instructions for their care.

Many people today are often very concerned about what will happen to their pets, after they pass away.

As a result, they are planning for those pets more carefully than ever before.

The Wall Street Journal recently offered some tips about how to go about that planning in “Estate Plans Don’t Have to Be Just For People,” including:

• Think about who should be the caregiver for your pets and make sure your choice is willing to serve in that role.

• Figure out how much money your pets might need to maintain their lifestyle and set aside that money for them.

• Think about everything that needs to be done to properly care for your pets and make sure you have it all written down, so the caregiver will know what to do.

• Be sure to visit an estate planning attorney so you can formalize your plans. The attorney will help you decide the best legal instrument to make sure your plans will be carried out. In addition, the attorney will draft those documents so a court will accept them as valid.

Reference: Wall Street Journal (Nov. 5, 2017) “Estate Plans Don’t Have to Be Just For People.”

December 8, 2017March 7, 2023

Lesser Known Estate Planning Mistakes

There are many articles written about mistakes in estate planning. They often mention the same few things over and over again.

That is good.

The more often mistakes are mentioned, the less likely it is that people will make them.

However, it also means other estate planning mistakes do not get mentioned very much, despite the fact that people often make them.

The Ithaca Times recently discussed some of those lesser mentioned estate planning mistakes in “Key estate planning mistakes to avoid,” including:

• Forgetting to update an estate plan when a spouse or child passes away. It might not be the best time for you to change your estate plan, especially given everything you are going through. Not doing so, can result in problems later.

• Not reviewing and updating retirement plan and insurance policy beneficiaries for years.

• Many people have the mistaken belief that if they have a will, then their estates will not go through probate. That is almost never the case. If your objective is for your estate not to go through probate, see an estate planning attorney to learn how to accomplish that.

• People too often assume that once their children reach the age of 18, they will be able to responsibly handle any inherited assets. That may not be the case. You should plan for any minor children to have assistance with assets for longer than that.

Reference: Ithaca Times (Nov. 8, 2017) “Key estate planning mistakes to avoid.”

December 7, 2017July 11, 2023

Tax Inflation Changes for 2018

Every year the Internal Revenue Service adjusts tax exemptions and deduction limits to keep them in alignment with inflation. The changes that are made can have a big impact on estate plans, even if the actual adjustments are relatively small.

The IRS recently announced some of those important changes. They could make a difference for people planning their estates, according to the Wills, Trusts & Estates Prof Blog in “Estate Planning Inflation Adjustments for Tax Year 2018 & 2017-2018 Priority Guidance Plan.”

Changes include:

• Lifetime gift tax exemption increased to $5.6 million.

• Annual gift tax limit increased to $15,000.

• Annual gift tax limit to a foreign spouse increased to $152,000.

• Estate tax exemption increased to $5.6 million.

• Failure to file a return within 60 days of due date, to result in a penalty of $215 or 100% of amount due, whichever is lower.

If you have questions about how these changes could impact your estate plan, visit an estate planning attorney.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 8, 2017) “Estate Planning Inflation Adjustments for Tax Year 2018 & 2017-2018 Priority Guidance Plan.”

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December 6, 2017

Battle Over War Hero’s Remains

Paul Lewis Morigi fought for the U.S. during World War II. While in England, he met and fell in love with Olive Murphy.

The two got married in 1944. However, the marriage did not last long.

They divorced when Olive decided she did not want to move to America with him. She feared she would miss her family too much.

Morigi went on to be a successful banker and a very wealthy man. He also got remarried to an American, Muriel Morigi. They were married for 40 years and had two children together.

At the age of 92, Paul Lewis Morigi divorced Muriel and moved to England, where he remarried Olive Murphy.

He recently passed away and now the two widows are fighting, according the Daily Mail in "Widows at war: British and American wives of war hero banker both want him buried in their own local cemetery – on opposite sides of the Atlantic – so they can visit his grave."

For now at least, the dispute between the two women does not appear to be over Morigi's assets but over where Morigi should be buried.

They both would like him buried close to them, so they can visit his grave easily. Of course, this could easily turn into a fight over his assets later.

It is not clear whether Morigi left any instructions for where and how he would like to be buried. However, it is clear that he probably should have done so.

Reference: Daily Mail (Nov. 3, 2017) "Widows at war: British and American wives of war hero banker both want him buried in their own local cemetery – on opposite sides of the Atlantic – so they can visit his grave."

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Month: December 2017