Building Legacies that Last Estate Planning and Elder Law

How Michael Jackson’s Estate Plan Was A Success

Michael Jackson, the King of Pop culture, not only left behind such a legacy but also left behind a great estate plan. He made the sensible choice unlike Prince, Aretha Franklin, and Whitney Houston. With the help of his chief executor of his estate both his entertainment attorney John Branca and his music executive John McClain, he left an estimated over $500 million value of assets to his heirs. By having this money, his heirs, under Jackson’s will, his legacy be protected. In order for him to create this smart and sensible estate plan, he had to follow the steps which include: Writing A Will, Considering A Living Trust, Naming A Guardian, and Assembling A Good Team.

By Writing A Will, without confrontation between siblings, he ensured that his instruction for dividing his property were followed after he died. By Considering A Living Trust, it spared his heirs the hastle of going through probate court- an expensive and prolonged legal process.

By Naming A Guardian, for his kids, he ensured the right people would protect them.

By Assembling A Good Team, he was able to make sure his heirs got what he wanted them to have instead of setting a prolonged, expensive family fight in court. According to a close correspondent to the King of Pop, “He put two people in charge of the will and trust who he felt were sage, mature, and had a great deal of expertise in how to handle what are probably considerable assets. He couldn’t have put his estate in a better position.”

If you follow these steps, you will be able to achieve what Michael Jackson did, which is a “Good Estate Plan.” Overall, the bottom line is that Estate Planning is important and you should have one in place, just like Michael Jackson did. It will serve you well in the future and protect your family, future heirs and your business.

Michelle Profit is an estate planning attorney serving Maryland and the District of Columbia. A Harvard Law School graduate, she has worked in the financial services industry for over 20 years. A dedicated advocate for all of her clients, Michelle Q. Profit personally handles each client case from start to finish to meet the client’s needs and objectives. Michelle listens in the consultation sessions and works with any other client accountants or financial planners to create a comprehensive estate plan.

Family Wealth Does Not Always Last

Bigstock-Family-Portrait-At-Christmas-4881212[1]Even great amounts of family wealth, can easily be lost by future generations who do not preserve and add to it as the original wealth generator did.

James Jewett Stillman's greatest lasting achievement was running the bank that eventually grew into Citigroup. However, he had another legacy.

Stillman also had a large and valuable collection of art and an estate he wanted to be preserved for use by the public. If everything had gone according to plan, the art and the estate would have been preserved for generations.

However, everything did not go according to plan.

His heirs are now trying to auction off the art, because they need the money to save the estate, as Bloomberg reports in "New York Banking Royalty's Heirs Are Unloading Art to Save the Family Estate."

The source of the problem, in this case, appears to be that trustees who were charged with running the estate have squandered millions of dollars over the years. The estate's funds have run so low, that the heirs have no choice but to sell something.  Therefore, they have chosen to sell the art.

The immediate lesson to be learned? It is very important to choose trustees carefully and to make sure that trust documents are carefully crafted to make squandering money difficult.

However, there is also a more important lesson that wealth does not last forever, unless it is properly maintained. Had it not been the trustees who squandered the wealth in this case, it might have been the future heirs.

Reference: Bloomberg (April 4, 2017) "New York Banking Royalty's Heirs Are Unloading Art to Save the Family Estate."

 

 

 

Family Business Succession Planning

Business_meeting[1]If you have a family business that you want to leave behind for your children or grandchildren, it is important that you not only plan ahead, but that you also start easing the way for the transition.

Any estate plan is going to be more effective the more you plan ahead for what might happen and the more you prepare your heirs for what property and responsibility they will receive. However, for most estate plans that is not absolutely necessary.

Most estate plans will still work out fine if you wait to make plans and do not tell your family what will happen. But, estate plans that include a family business are different. They will not work out so fine.

It is vital that you plan ahead for them as the Wills, Trusts & Estates Prof Blog writes in "Preparing the Family Business for Succession."

For the family business to thrive after the current owner passes away, careful plans must be made for who will be in charge next. Everyone needs to know who will be in charge on day one and, to make that go as smoothly as possible, it is important that the next leader knows what he or she is supposed to do.

Ideally, the next leader should be groomed for the role by taking part in the business on a day-to-day basis and making decisions about it sooner rather than later. Even if all that is done, it is important to plan for any contingencies that might occur. A secondary plan for succession should also be in place.

If you have a family business, do not delay. Talk to an estate planning attorney about how you can make sure it succeeds when you are no longer running it.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 6, 2016) "Preparing the Family Business for Succession."

 

Estate Planning and the Family Farm

Bigstock-Extended-Family-Outside-Modern-13915094[1]Like any other business owner, farmers need to carefully plan how the farm will be passed on to heirs. However, farmers do have some unique estate planning issues to consider.

In the eyes of the law, a farm is just a type of business. Like any other business, it can be passed to other people when the current owner passes away. However, estate planning for farms often has issues that are not as much of a concern for other types of businesses. Most farms have a lot of valuable assets, such as land and equipment, which could add up to an estate tax liability. However, farms often do not have the liquid assets to easily pay those taxes. Ohio’s County Journal and Ohio Ag Net recently discussed some ways to plan for this problem in “Estate planning for farmers: Providing for liquidity concerns,” including:

  • Develop a plan to build up liquid assets that can be made available to the estate after the farmer passes away. This can be as simple as investing farm income in securities.
  • Life insurance can be purchased to provide cash to beneficiaries.
  • If the farm is held in partnership or as a corporation, then creating buy-sell agreements with other owners to purchase an individual’s ownership stake upon death can provide money for the deceased’s estate.
  • The likelihood of the farm estate having to pay the estate tax can be reduced during the farmer’s life in several different ways, including creating a gifting plan with the help of an attorney and selling off older equipment that is no longer needed.

An experienced estate planning attorney can help you to create a plan specific for your farm.

Reference: Ohio’s County Journal and Ohio Ag Net (July 19, 2016) “Estate planning for farmers: Providing for liquidity concerns