June 14, 2017

Consider a SLAT for an Uncertain Future

It is currently difficult to know what the best possible estate planning method might be in the near future, since tax reform is uncertain. A spousal lifetime asset trust can be used as a way to plan around that uncertainty.

Given recent events in Washington, it is understandable if wealthy people are more than a little nervous about their estate plans. Just as it appeared that Congress was about to turn its attention to long-promised tax reform, President Trump has been distracted by ongoing investigations into his campaign.

While a special counsel has been appointed to oversee that investigation, a continuing steady stream of leaks has kept the pressure on lawmakers. This casts doubt over their plans for tax reform, since it is a contentious issue that has many in Congress deeply divided.

It is not clear what the President wants on some of the key items of reform.

All of this makes it difficult for many wealthy people to know how effective their estate plans might be and how to make changes to them.

Recently, Wealth Management offered a solution to the uncertainty in the form of a spousal lifetime asset trust in "SLATs Provide Flexible Plans for Many Clients."

Like any other trust, SLATs do not have to go through probate. They also offer estate tax and capital gains tax benefits.

They key thing about them, is that they are an extremely flexible form of trust. They are more adaptable to changing circumstances than many other trusts.

That makes them a great tool for uncertain times, when no one can be certain what the tax future will look like.

If you are interested in a SLAT or want to know what your other current estate planning options are, talk to an estate planning attorney.

May 15, 2017

The Danger of Wills

It is easier to get wills today than it ever has been, since forms can be downloaded and filled out on your own. However, that ease has led to many people not understanding the potential dangers of wills.

That everyone should have an estate plan is a principle which most people understand when the reasons are explained to them. Estate plans, even as simple as a will, at the very least can help prevent families from fighting over estates.

Since you do not know when you will pass away, you should go ahead and get an estate plan.

While most Americans still do not have a will, a greater percentage of Americans have them than ever before. It is easy and cheap to get wills today, since you can purchase downloadable forms from several different services.

However, there are some hidden dangers in doing that, as The New York Times explained in "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps."

The biggest issue is that the probate process is different in every state.

Submitting a will to probate for administration, in some states, is very expensive and can take a long time. That suggests that probate avoidance strategies should be used, which could lead some people to utilize a trust instead of a will as their primary estate planning vehicle.

Trusts, however, are more expensive to get than wills and in some states probate is relatively quick and inexpensive. Consequently, trusts may only be needed for people with larger estates.

There are other probate avoidance strategies that can be used, but they also have their drawbacks. For example, retitling an asset as joint property with a child, which is a common tactic, can make the asset vulnerable to the child's creditors.

The best thing to do is to hire an experienced estate planning attorney in your state, so that attorney can help you with the best estate planning strategy for your state and your estate.

Reference: New York Times (April 21, 2017) "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps."

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.”

February 2, 2017

George Michael’s Estate: Who Inherits?

Singer George Michael died suddenly on Christmas Day. He has no children of his own and it is believed that he made arrangements for his several godchildren to inherit vast sums from him.

George Michael died unexpectedly on Christmas Day. He was found dead from heart failure by his boyfriend.

Michael was known to have given generously to charities throughout his life, but he is believed to still have an estate worth at least £100 million (US$121.8 million).

The details of his estate plan are starting to leak out, according to the Daily Mail in "George Michael's £100M fortune 'will go to his Godchildren': Offspring of his celebrity friends could inherit tens of millions EACH after star died without heirs."

Michael did not have any children, but he was a godparent to some of his friends' children, including those of a former WHAM! bandmate and a former member of the Spice Girls. These godchildren will each inherit a large portion of his estate. He is also believed to have left provisions for his sister and his cousin's children, who are also his godchildren.

More details about George Michael's estate plan are likely to come out in the next few months, as the estate is settled by the courts in the U.K. If George Michael had lived in Maryland, his heirs would have to pay the Maryland inheritance tax. For more information about estate planning, contact Profit Law Firm.

Reference: Daily Mail (Dec. 27, 2016) "George Michael's £100M fortune 'will go to his Godchildren': Offspring of his celebrity friends could inherit tens of millions EACH after star died without heirs."

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 9, 2016October 25, 2023

Putting Your Home in a Trust

If you have decided to get a trust it often makes sense to put your big assets, such as your home, in the trust.

People who get living trusts always have questions about what kind of assets they should put in their trusts, especially whether or not to put their home in it.

Recently, FOX News discussed this in “Why Should I Put My Home in a Living Trust?”

To understand the answer to the question, it is important to understand the main purpose of most living trusts.

Most people who get living trusts do so to avoid having their estate go through probate after they pass away, which is necessary if someone passes away with or without a will.

Probate can be costly and time-consuming, especially when there is a dearth of practical information left behind regarding where the legal documents and assets are.

With a living trust people can use their assets while they are alive and then after they pass away those assets can be distributed to the beneficiaries of the trust without going through probate.

The trustee, not a probate court, is responsible for making sure everything is handled appropriately. It can be faster and cheaper. The most valuable asset for many people is their home, so it only makes sense to include that in the trust rather than having it go through probate.

Of course there are many other reasons to get a trust, such as for estate tax purposes. There are also many different types of trusts that can be used for other purposes.

If you would like to know more about living trusts and what you can do with one, talk to an estate planning attorney.

Reference: FOX News (October 5, 2016) “Why Should I Put My Home in a Living Trust?“

November 4, 2016

Adopting an Heir

To make sure that someone they love receives a portion of their estate some people decide to adopt the loved one. That is unnecessary and can create other complications.

When it comes to the law, having limited information can be dangerous.

For example, what if you know there is a default rule that says your children will inherit your estate if you do not have a living spouse. So what if you reared someone as if he or she was your own child and you would like to make sure they receive an equal share of your estate? Does that mean you should adopt that person?

That is what one person recently wrote and asked My San Antonio, as reported in "Should adoption be used to ensure an inheritance?"

In that situation adopting the person would work. However, there is a far simpler way to make sure someone receives an inheritance.

If you create an estate plan, then you can give an inheritance to anyone you want. The only restriction is that you cannot cut out your spouse or minor children completely.

On the other hand, adoption can create complications, since it severs the legal relationship between the adopted person and his or her biological family. It could potentially create other legal obligations for you and the other person.

Before adopting someone for inheritance purposes, visit an estate planning attorney.

In the end, getting a proper estate plan created may be an easier method of leaving your assets for another person than adopting them.

Reference: My San Antonio (Oct. 13, 2016) "Should adoption be used to ensure an inheritance?"

November 2, 2016

Get a Will at Walmart?

Legal services can be expensive, which leads many to seek out cheaper options than traditional attorneys. Now, some people can get a will in Walmart, but should they?

If you are reading this, then you probably know there are several services that allow you to purchase and download a form you can fill out to create a will. While doing that is cheaper than going to an estate planning attorney, it is also risky.

If the form is not correct or if you do not fill it out correctly, then chances are it will be very expensive for your family to handle your estate in probate and your wishes regarding what happens to your property might not be followed.

In some places, there is now an intermediate option between a downloadable form and an estate planning attorney according to KY3 News in "Now get a divorce, other legal services at Walmart."

Wills and other legal services are now available at three Walmart locations in Missouri. The company behind these new services, The Law Store, hopes to offer the services nationwide eventually.

It is not clear how good the wills are that are being made available, so they should not be dismissed out of hand.

However, the best way to get a will or other estate planning documents is still to contact an estate planning attorney directly. It may cost more now, but it will save money in the long run.

Reference: KY3 News (Oct. 14, 2016) "Now get a divorce, other legal services at Walmart."

November 1, 2016

Is an Inheritance the Same Thing as Love?

Parents who are considering leaving their children unequal inheritances often struggle with the notion that those children will believe they are not loved equally as a result.

Parents have many good reasons for wanting to leave one child a larger inheritance than another child. The most common reasons are that one child needs the money more or that one child has been given more financial support than the other previously.

Recently, Washington Post columnist Michelle Singletary discussed these reasons and others in an article. She receive some pushback from readers, which she discusses in another column reprinted in the Ventura County Star as "Michelle Singletary: Will does not equal parental love."

Singletary's readers pointed out that children who receive a lesser inheritance than others often come to believe that means their parents loved them less or that they have done something wrong.

Sometimes the unequal inheritances even lead to bitter family disputes.

Singletary responds with a plea to those who inherit less. She encourages them not to assume they were loved less by their parents, but to consider the valid reasons for inequality.

While that debate is interesting, there is another thing that needs to be pointed out. A lot of the problems unequal inheritances cause can be avoided. Parents can discuss their estate plans with their children before they pass away and let the children know why there is a disparity.

Consult a qualified estate planning attorney to help you through this delicate process.

Reference: Ventura County Star (Oct. 12, 2016) "Michelle Singletary: Will does not equal parental love."

October 24, 2016

Step-Family Estate Planning

One of the most difficult things to navigate with estate planning is dealing with blended families. If not done well, then the people you want to inherit your estate could be left out.

Americans are continuing to get divorced and remarried at a high rate. This has led to an increasing number of blended families where the spouses have children from previous marriages.

Despite this new reality the default estate laws have not kept up. They still reflect the general idea that people will get married only once in their lives. That means if you pass away without an estate plan, the laws of intestate succession will presume your spouse is also the parent of all your children.

In most states, the spouse will get everything, but the spouse will be under no legal obligation to pass anything on to his or her step-children.

The Wills, Trusts & Estates Prof Blog recently wrote about this issue in "Estate Planning for your Step-Family."

When attempting to deal with step-families, it is vital that you have some sort of formal estate plan. At a minimum you need a will. Even better would be a more elaborate estate plan that specifically includes the names of everyone you consider to be in your family and precisely what you want them to inherit.

It should also include those people you do not consider a member of your family, such as former step-children.

If you have a blended family, you should see an estate planning attorney without delay to make sure the people you want to inherit your property are those who actually do.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 7, 2016) "Estate Planning for your Step-Family."

Suggested Key Words: Estate Plan, Blended Family

Building Legacies that Last Estate Planning and Elder Law

Tag: Estate Plan