December 19, 2017

Plan for Death to Live Better

It might not seem intuitive. However, if you make plans for your death, you can sometimes live a better life.

People do not ordinarily engage in “death” planning. We tend to think there might be something wrong with people who do.

We might think they are overly morbid, if not suicidal.

If they are a friend or family member, we might even encourage them to get professional help. However, there is a type of death planning that is good and one people should consider doing.

In fact, it can help them live more fruitful lives, as the Wills, Trusts & Estates Prof Blog explains in "How Planning For Your Death Can Help You Live A More Purposeful Life."

What is meant by good death planning is planning for what will happen to your assets after you pass away and planning for how you want to be remembered after you are gone.

We call these “estate” planning and “legacy” planning.

Estate planning starts with deciding who you want to have your assets and personal possessions after you pass away. After that, you can go to an estate planning attorney who will prepare legal documents to make your wishes enforceable.

Legacy planning is not quite as simple. It requires thinking about what is important in your life and figuring out how to impart that to the people you will leave behind.

If you do undertake estate and legacy planning, then you will have a better understanding of what will happen after you pass away.

That, in turn, will help you to live better now.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 23, 2017) "How Planning For Your Death Can Help You Live A More Purposeful Life."

December 15, 2017

Wealth Planners

Wealthy people have so many different advisors for different aspects of their lives, that it is often a good idea to hire someone who can coordinate all of them and keep them on the same page.

If you have a lot of money, it is likely that you pay a lot of people to manage various aspects of your wealth.

You have financial advisors. You have business consultants. You have accountants. You have estate planning attorneys. You have business attorneys. You have a lot more than that.

It can be difficult to keep all of your advisors coordinated and all working toward the same goals.

The advice you get from the different advisors can be contradictory.

While it is good to get a variety of opinions, it might be a good idea to hire someone to help you manage it all, as Forbes discusses in "Estate Planning For the Ultra Wealthy – The Role of A Family Wealth Advisor."

The idea is fairly simple.

Estate planning attorneys who have the expertise to plan how wealth can be transferred down within families for generations can also act as wealth planners. They coordinate the activities of all of the other advisors and make sure the wealthy client's ultimate estate planning goals are always kept in mind.

Estate planning attorneys can make sure that the other advisors are all working toward the one ultimate goal.

Not everyone needs a wealth planner.

Those that do would be well advised to talk to their estate planning attorneys about the benefits of having one.

Reference: Forbes (Aug. 29, 2017) "Estate Planning For the Ultra Wealthy – The Role of A Family Wealth Advisor."

December 13, 2017

Duke’s Will to Be Unsealed

The Duke of Windsor's will has been sealed since his death in 1972. The will of the man once known as King Edward VIII has been ordered unsealed, so copyrights can be determined for a television show.

It is considered one of the biggest acts of romantic love in modern history. King Edward VIII of England abdicated the throne in 1936, so he could marry a divorced American woman named Wallis Simpson.

His title changed from the king to the Duke of Windsor. He passed away in 1972.

The contents of his will were quickly sealed by the court and have never been made public, despite great public and historical interest in them. People are curious whether the will might shed any light on the man's decision to abdicate.

A court in the U.K. has now ruled that the will is to be unsealed as the Daily Mail reports in "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

The Duke's will is only to be unsealed for a limited purpose.

The writers of the Netflix show The Crown would like to use the duke's letters in their show. However, they first need to know who owns the copyrights to those letters, so they can get the necessary permissions to use them.

It is not likely the will's other details will be made public.

For a former king's will to be sealed, is probably a simple matter.

For other people, it is much more difficult since wills are generally a matter of public knowledge.

People who would like to keep their estates private, should see an estate planning attorney for more information about how to do that.

Reference: Daily Mail (Nov. 15, 2017) "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

December 13, 2017

Using a Trust for Educational Funding

Educational costs have risen so high, that accumulating the money to pay for a child or grandchild to attend college can take years. There are a few different ways to do it.

You might have heard the nightmare stories about people with college degrees who end up owing more than a hundred thousand dollars to the government in student loans. That is becoming such a common scenario, that the majority of Americans now support the idea that public colleges should be tuition free.

However, tuition free college is probably not a realistic scenario in the near future.

Families who do not want their younger generations to have to pay back gigantic student loan debts are making plans to have parents and grandparents pay for school.

There are a couple of different options as the Wills, Trusts & Estates Prof Blog discussed in "Funding Education? Consider A Trust Instead of a 529 Plan."

A 529 plan is a great way for families to save for education.

It allows for tax-free investments for educational expenses. However, the investment opportunities can be somewhat limited and people can only sign up for plans that are made available from state governments.

People with more money would be better off using trusts for educational expenses.

With trusts there are more investment options and if the money is not needed for educational expenses, then it can more easily be used for other things.

If you would like to make paying for the education of future generations of your family part of your estate, then talk to an estate planning attorney about the best way to do that.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 16, 2017) "Funding Education? Consider A Trust Instead of a 529 Plan."

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 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.”

Estate Planning Attorney

November 22, 2017March 7, 2023

Parents Should Explain Finances to Their Children

If you are a typical parent then you probably expect that your children will inherit your assets.

You probably also expect that when you get older and are unable to handle everything for yourself, your children will assist you.

That is what happens in most families.

However, most families also make a pretty big mistake when it comes to these expectations. They
assume the children will be able to step in immediately and take over for the parents having little or no prior knowledge about any details.

This can lead to big problems, which is why parents should talk to the adult children about the finances as TC Palm discusses in “Acquaint grown children with your financial affairs.”

You do not need to tell your adult children every last little detail about your finances.

Nevertheless, they need to know enough so that they can take over with few problems.

They certainly need to know where to look for details regarding your assets. While you are at it, make sure your children are familiar with financial concepts that they might not know.

What do they know about basic “financial planning”?

One great way to make things easier for your children is to get an estate plan. Going through that process can give you an idea of what you need to let your children know.

Reference: TC Palm (Oct. 30, 2017) “Acquaint grown children with your financial affairs.”

November 21, 2017February 27, 2023

Common Marriage and Estate Planning

In most states, the idea of common law marriage has been abolished for a long time. Only a small
number of states recognized the concept until recently.

Courts in some states are beginning to recognize these marriages again.

Why? Probably because more couples are choosing to live together for long periods of time and acting
like married couples, despite never making it “official” through the process of formally getting married.

By recognizing the existence of a common law marriage, the courts are then able to treat the couple as
they saw themselves when it comes to divorcing or settling an estate.

Not all states will recognize these marriages though as the Wills, Trusts & Estate Prof Blog points out in
“Why Common Law Couples Need an Estate Plan (New York).”

What makes a valid common law marriage varies from state to state.

Normally, if the couple holds itself out to the public as married or tells a government agency that they
are married, then a common law marriage exists. For example, if the couple files a joint tax return with
the IRS, then the existence of a common law marriage will be recognized in those states that allow them
and the couple will be in trouble with the IRS in other states.

Since not all states recognize common law marriages, it is important that you understand that you will
still need an estate plan to protect your common law spouse’s interests in some states.

Even if you act like you are married, you are not actually “married” in most states and you need to
account for that in your planning.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 25, 2017) “Why Common Law Couples Need an Estate Plan (New York).”

November 3, 2017March 7, 2023

Little Things That Cause Estate Problems

When families fight over estates, it is not always over things of great importance. They often fight over the little things.

Much of the discussion about how to avoid family feuds over estates focuses on major items. The focus is on making sure that everyone gets his or her fair share of the estate’s wealth, so they will be satisfied and not challenge the estate.

That is an important discussion, but little items of personal property can also be a problem, as CNBC discusses in “7 Ways that cheap Tweety Bird figurine can screw up your estate.”

Potential problems include:

• Items that do not have great monetary value can still have great sentimental value to family members. If two people want the same item, it can be difficult to resolve that dispute.

• Do not tell anyone verbally they can have a piece of personal property without putting that in writing in your estate plan. If other people want the same item, the person you want to have it will have no way of proving that you said they could have it.

• Do not just let your family divide all your assets between themselves when you pass away. It is most likely that they will fight over who gets what.

• Even if you have given someone access to a safety deposit box and told them they can have the contents after you pass away, you still need to make that official in your estate plan.

• Make sure that any unusual items have been planned for, such as digital media accounts and frequent flyer rewards.

• Items regulated by the government can be complicated. You should plan accordingly.

• Your executor will need to have the authority to change the locks on your door. You would be surprised how often people simply walk in and help themselves to items that they want.

Reference: CNBC (Oct. 10, 2017) “7 Ways that cheap Tweety Bird figurine can screw up your estate.”

Building Legacies that Last Estate Planning and Elder Law

Tag: Estate Planning