April 3, 2017April 15, 2024

Audrey Hepburn’s Sons Use Mediation to Settle Estate Plan Dispute

Audrey Hepburn’s estate planning mistake has led to a long legal fight between her sons. It appears that they have finally reached an agreement. Like many, she gave vague instructions to her sons about dividing her legacy and did not include any instructions for her sons on resolving disputes.

Audrey Hepburn starred in some of the most beloved movies of all time. She came to symbolize beauty and grace in mid-century Hollywood.

When she passed away in 1993, she left behind a gigantic amount of memorabilia from her acting career, including some of the costumes and jewelry that she wore in her iconic roles. These items have obvious value to collectors, but so far no one has gotten their hands on them.

Why?

The items have been the source of a long dispute between her two sons.

Hepburn specified in her estate plan that everything she owned should be split between those sons equally, but she left no instructions regarding just how that was to be accomplished.

Which son should get which item? This dispute could have been resolved without costly litigation if she included in her will instructions for mediation to resolve such disputes. Michelle Profit, an estate planning attorney, has written an article on how mediation can be used to peacefully resolve disputes.

Hepburn’s will was silent, however, so memorabilia has been contested in court for the last two years, but the sons may have finally reached an agreement, according to the Daily Mail in “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

The sons have agreed to submit the question to mediation and use that process to determine the distribution of particular pieces of memorabilia. However, this will not be the end of all battles concerning Hepburn’s estate, since a charitable fund she founded is now suing one of the sons for interference with its affairs.

Hepburn’s mistake was not including some way for her son’s to resolve any disputes about who gets what in her estate plan. She could have made provisions for a mediator to resolve the disputes. That would have saved a lot of headaches and legal bills for her family. Profit Law Firm, LLC can include dispute resolution in your estate planning documents to avoid these disputes, and reduce the cost of such disputes, when they occur.

Reference: Daily Mail (March 9, 2017) “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

January 6, 2017

Estate Planning With no Estate Tax

The federal estate tax might soon be a thing of the past. That does not mean that you will no longer need a will.

On January 20, 2017, the Republican Party will control the Presidency, the Senate and the House of Representatives. The party will quickly act on its long-stated goal of eliminating the federal estate tax.

If it does so, do not be tempted to think that you no longer need an estate plan. There are reasons to get one that have nothing to do with avoiding the estate tax.

At the very least, you still want to have a will as Forbes discusses in "Five Reasons You Need a Will (Even If the Estate Tax Is Repealed)!"

The reasons include:

In a will, you appoint an executor who is in charge of administering your affairs. The executor can make sure that all of your debts are paid and that your assets are handled appropriately.
If you have minor children, a will is used to designate who you want to have guardianship of those children in case something happens to you.
In a will, you can give specific bequests to people. That means if you want one of your children to have a specific piece of personal property for sentimental reasons, a will is the place that you do that.
While getting a will you can also get advanced medical directives that will determine how you should be cared for, if you are incapacitated and not able to communicate with doctors at the time.
A will is more efficient than allowing the courts to handle your affairs without your directions. Having a will is cheaper and faster than going to court. It also protects your estate by making sure that your property does not go to people you do not want to have it.

Reference: Forbes (Dec. 8, 2016) "Five Reasons You Need a Will (Even If the Estate Tax Is Repealed)!"

January 5, 2017

What Estate Planning Is

Do not be confused about what estate planning is and whether or not you need to do it.

Most Americans do not have estate plans. One of the reasons that they don’t is confusion about what getting an estate plan means and who should have them. The term "estate" often conjures up images of the palatial estates of the ultra-wealthy. However, the term applies to the property of anyone who passes away.

We all have estates. For that reason, it is important to know what estate planning actually does.

Recently, the Vail Daily discussed some basics in "Estate Planning."

If an estate is the property you have when you pass away, then estate planning is deciding what should happen to that property. It is you deciding beforehand who you want to have your property and the legal means by which they will receive it.

The two most common methods to have your property distributed are through wills and trusts.

A will is a legal document that is submitted to a court. The will sets out who should receive what. If the will is valid, the court will oversee the process of making sure that the property goes where you want it to.

A trust creates a new legal entity to hold and distribute property. It is not normally submitted to a court, unless it is a “testamentary” trust created under a will to manage the estate distribution. Another person known as a trustee, is charged with making sure that your directions are followed.

There are other aspects of estate planning you should address, including planning for your own end-of-life care. Visit an estate planning attorney if you have questions about wills, trusts, or any other aspects of estate planning. Profit Law Firm works with clients to find their goals and wishes and create plans that implement their desires.

Reference: Vail Daily (Dec. 8, 2016) "Estate Planning."

December 21, 2016

What You Might Have Wrong About Wills and Trusts

Although wills and trusts have been standard legal documents for a long time, many people still have misconceptions about them.

Estate planning can be complicated by the fact that many people have misconceptions about the basics of wills and trusts and what having either one of them means. This problem is compounded by the Internet as people who are wrong, often share their misconceptions with other people online. The result is more confusion.

Recently, TCPalm discussed common misconceptions in "Common misconceptions about wills and trusts," including:

Having a will means that your estate does not have to go through probate. This is completely false. In most cases, wills have to be submitted to a probate court for administration in both Maryland and the District of Columbia.
If your estate is not large enough to pay the estate tax, then you do not need to have a will or trust. This is another falsehood since there are many other reasons to have a will or trust. The most important is that if you do not, then all of your property will be distributed according to statutory rules instead of how you might have preferred it to be distributed.
By putting your assets in a revocable trust, you lose the ability to have any control over the assets. This is not true. If you are the trustee of your trust and the trust is drafted properly, then you will still be able to do whatever you want with your assets during your lifetime.
You have to file a separate tax return for your revocable trust. This is also not true. As long as your trust is properly drafted, a revocable trust will not be considered a separate legal entity during your lifetime and you will not need to file a separate tax return for it.
Another misconception about revocable trusts is that they reduce your tax burden. They do not. Some irrevocable trusts do that. Call Profit Law Firm for a consultation and advice on using revocable trusts and irrevocable trusts.

Talk to a qualified estate planning attorney who will be more than happy to educate you on the realities of estate planning.

Reference: TCPalm (Dec. 2, 2016) "Common misconceptions about wills and trusts."

December 16, 2016January 16, 2023

Why Homemade Wills Do Not Work

Drafting your own will or using a form that you purchased online to create a will, might seem like a good idea that will save you money. However, those wills often fail to do much more than create large legal bills in probate.

Wills often sound like simple legal documents. In a sense, they are. They are just a legal way to write down who gets your possessions after you pass away.

When it comes to estate planning generally, wills are among the simplest ways to express your parting wishes. However, the truth is that wills are only simple from an estate planning attorney’s perspective. They are not so simple that anyone can just write their own wills or purchase a form online to fill in and use as a will.

Those homemade wills do not always work very well for a variety of reasons, as the Huntsville Item explains in “A humorous look at the danger of homemade wills.”

Some homemade wills do not work for very simple reasons of formalities. In most states, executing a will requires that a specific number of people be present to witness the will being signed.

People who create their own wills often fail to either have the right number of people present or they do not leave any indication of how a court can contact the witnesses, if necessary.

Other homemade wills do not work for less technical reasons. The directions in these wills are often contradictory or impossible to carry out.

Getting a will does not have to be a complicated process but it should begin with hiring an estate planning attorney.

Reference: Huntsville Item (Nov. 27, 2016) “A humorous look at the danger of homemade wills.”

November 25, 2016February 27, 2023

What You Should Have in Your Estate Plan

There are a few things that every single estate plan needs to have regardless of the exact legal instruments that you end up using as your primary estate planning tools.

Estate plans can take a variety of shapes. Some estate plans are small and simple. Other estate plans are large and contain many complex legal instruments. However, there are a few things every single estate plan needs to have.

Recently, the Catholic Register discussed what is necessary for all Canadian estate plans in “The must-haves of estate planning.” In the U.S. most of the same things are also necessary. They include:

Someone needs to be appointed as the executor of your will. Even if the primary instrument to distribute your property is a trust, your plan should still include a pour-over will for which you need to appoint someone trustworthy as an executor.
Your estate plan needs to include some basic tax planning, especially if you live in a state that has an estate tax of its own. Both Maryland and the District of Columbia do, so you need some basic tax planning in both these states.
If you have any dependents, then your estate plan needs to provide for their care. While you have some flexibility in your estate, you cannot simply disinherit a spouse or a minor child. Maryland and the District of Columbia, like other states, allow disinherited spouses to claim an elective share of the estate, regardless of an intent to disinherit.
Your estate plan should also include powers of attorney so you can appoint someone to look after your interests if you become incapacitated.

If you have an experienced estate planning attorney create your estate plan, then it will contain all of these things and much more that will make your estate plan as effective as it can possibly be. Schedule a consultation with Profit Law Firm to get the peace of mind that comes with proper estate planning.

Reference: Catholic Register (Nov. 6, 2016) “The must-haves of estate planning.”

November 22, 2016February 23, 2022

Do You Want a Will or a Trust?

One of the first things that people have to decide when they start thinking about estate plans is whether they want to use a will or a trust. Both have their advantages.

If you start asking your friends and family or look on the Internet for estate planning advice, then you are likely to receive a lot of conflicting advice. Should you get a will or a trust? Nearly everyone seems to have an opinion one way or another. You can find out more about the basics of estate planning on our website.

Normally, the opinion of non-attorneys is rooted in which of the two options was best for the person giving the advice. It may or may not be the best advice for you.

To help decide the better option to use as the primary legal instrument in your estate plan it is helpful to know the basic differences between the two.

This was the subject of a Motley Fool article titled “Wills vs. Trusts: Which Are Better?” We also

A will determines who gets your possessions after you pass away. It has no legal effect until then. It is a roadmap for what you want to happen later. The rules for wills vary from state to state, but they need to go through probate court and the details are made public. For people with small estates they can be cost-effective.

Trusts, on the other hand, have legal effect as soon as they are executed. Property is placed in the trust while you are still alive. While trusts can be more costly to obtain and maintain, they do not ordinarily have to go through probate after you pass away and the details are not made available to the public. Trusts are normally preferred to wills for larger estates.

If you are uncertain whether a will or trust is a better option for you, that is okay. You probably should not decide between the two before talking to an estate planning attorney who can help you make the decision. Schedule a consultation if you would like to learn more.

Reference: Motley Fool (Nov. 8, 2016) “Wills vs. Trusts: Which Are Better?”

August 17, 2016October 25, 2023

Is a Trust Appropriate?

Wills and trusts are the two pillars of estate planning and determining how assets will be passed on to future generations. You need to know whether or not you need one, the other or both.

The two main ways that people pass their assets to their heirs are through a will and through a trust. They both serve the same basic function of transferring assets—but in very different ways. Wills normally go though probate court while trusts are handled privately. It is important to know if you need one or the other. For wills, that is a simple question to answer. Everyone needs a will. Even if you have a trust, you will need a will to deal with any assets inadvertently or intentionally left out of the trust. Trusts are more complicated. Recently, the Brainerd Dispatch discussed some considerations about whether a trust is necessary in the article, “Commentary: When does it make sense to add a trust to your estate plan?” Things to consider include:

Privacy – Wills are normally made available to the public, but most trusts can be kept private. If you do not want other people to know the details of your estate, then a trust is what you need.
Property in Multiple States – If you have property in more than one state, then a trust might be best. Otherwise, your estate may have to be probated in each state to deal with the property.
Control – Trusts can offer you much greater control over how your heirs will inherit your assets.
Charity – Trusts are generally a better tool for giving part of your estate to charity. If set up properly, you can even get a tax break now, keep control of your assets and have the assets go to charity after you pass away.

For help determining what is necessary for your situation, consult an estate planning attorney. For consultation on your situation contact Profit Law Firm, PLLC.

Reference: Brainerd Dispatch (July 23, 2016) “Commentary: When does it make sense to add a trust to your estate plan?”

August 16, 2016August 15, 2022

Planning Your Own Estate

In the past few years, many services have sprung up that offer to help people create their own estate plans—such as by offering them downloadable forms. These services are often inexpensive but also risky.

You can find a lot of advice on the Internet that will tell you that estate planning really is not that complicated. In a sense, that advice is correct. The core of estate planning can be very simple. However, that advice makes it too easy to be deceived into thinking that you can create your estate plan on your own without the help of a professional. What an individual client has to do to create an estate plan can be—and often is—simple, but that is only because experienced estate planning attorneys do most of the complicated work. Recently, the Northwest Indiana Business Quarterly discussed the problems of creating an estate plan on your own in “Dangers of DIY Estate Planning.”

The article discusses many potential pitfalls of creating your own estate plan, but they all essentially boil down to the simple proposition that if you do not have professional expertise in estate planning, then you are likely to make mistakes that could cost you and your family. These mistakes can range from very simple oversights, such as not knowing how many witnesses are needed to make a will effective, to very complex mistakes, such as failing to properly understand how your estate planning choices effect the taxation of your assets after you pass away.

It actually does not matter very much whether the mistake you make is simple or complex because dealing with the mistake will almost always cost your estate more money than you saved by creating your own estate plan.

Do not risk these mistakes. Meet with an experienced estate planning attorney to discuss your needs.

Reference: Northwest Indiana Business Quarterly (July 25, 2016) “Dangers of DIY Estate Planning”

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Category: Wills