December 19, 2016February 23, 2022

Depression Era Trusts May Expire Soon

Many family dynasty trusts created during the Great Depression to avoid rising taxation, will automatically terminate soon. Trustees and beneficiaries need to be prepared.

One of the lasting legacies of the Great Depression will soon come to an end. In response to that crisis, the government greatly increased the gift and estate tax rates. Wealthy families responded, in turn, by creating dynastic trusts to hold their wealth and preserve it for future generations.

Most of the trusts created at that time have mandatory termination dates at which time the trust assets must be distributed to the residual beneficiaries.

Successfully carrying out that process will require some planning as the Wills, Trusts & Estates Prof Blog explained in “Preparing for Trust Termination.”

The first challenge for many trusts and trustees will be determining the residual beneficiaries. In many cases, they could be distant relations of the original trust settlors and not the same people who currently receive regular distributions from the trusts.

Once the beneficiaries are determined, they will need to plan for how receiving the trust assets, will impact their lives and financial futures. Depending on the amount of money received, the beneficiaries’ tax and estate plans could change dramatically.

Those who do not plan appropriately, could face negative consequences that could have been avoided.

If you are a residual beneficiary of a depression era trust, you should seek independent legal advice. It might not be a good idea to rely on the advice offered by the trustees and their legal advisors. Profit Law Firm, LLC can provide an independent consultation.

You need an attorney who will be acting only in your interests.

Reference: Wills, Trusts & Estates Prof Blog (Dec. 5, 2016) “Preparing for Trust Termination.”

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.”

December 15, 2016July 11, 2023

Making an Inheritance Work

If you receive an inheritance, it should not put you in a worse position than you were before. That happens all too often.

A common myth about people who inherit wealth is that it brings them financial security and they no longer need to worry about money. However, as is the case with people who win the lottery, people who suddenly inherit wealth are often soon in a worse financial position than they were previously.

Most of the time, inheritances do not grow a person’s or a family’s wealth.

They end up subtracting from it as Chase News & Stories reports in “How to make sure your inheritance is a boon, not a bust.”

The biggest problem is overspending, especially on unnecessary things. While it might be fine to splurge on one or two things, spending can quickly snowball until there is nothing left. There is always something more that can be purchased and heirs who are not careful, keep purchasing those somethings.

The best way to prevent this is to plan ahead.

Talk to your older relatives about what inheritance you might receive from their estate plans and ask for guidance in wealth management. Your relatives who have wealth, can teach you how they maintained that wealth.

If you do not know ahead of time that you will receive a large inheritance and get one suddenly, then you can still make plans if you are patient. Do not do anything with the inheritance for at least six months. You should take that time to think carefully and to get good financial advice.

Reference: Chase News & Stories (Nov. 23, 2016) “How to make sure your inheritance is a boon, not a bust.”

December 14, 2016February 23, 2022

A Charitable Legacy Requires Planning

If you want to be remembered for charitable giving, then you should get started with an estate plan.

At this time of year, it can seem like giving to charity is something done with little forethought. It can require no more than dropping loose change in a bell ringer’s bowl at the grocery store or putting a new toy in a designated box at the mall.

While anonymous giving like that is helpful, having a true charitable legacy requires more work and considerable forethought.

People who want to be remembered for being charitable benefactors, need to get comprehensive estate plans as the Port Huron Times Herald explains in “Plan today to make a difference tomorrow.”

With an estate plan, you can set up your charitable giving to be ongoing after you pass away. If you want, you can leave one time gifts in your plan but also create new legal entities that will continue to give to charity indefinitely. You can even dictate what charities these entities will give to and for what purposes. In essence, an estate plan gives you much greater control over how and what your charitable giving will accomplish.

The entities you use to accomplish charitable giving can be relatively simple trusts or they can be complex family foundations. We provide more information on charitable giving on the Profit Law Firm, LLC website.

Without proper planning, however, creating a charitable legacy is nearly impossible. Attempts to do so can easily fall afoul of the law and IRS regulations. Thus, if you would like to leave a charitable legacy, consult with an estate planning attorney to review your options. Profit Law Firm can help inform you about the various charitable trusts you can use to accomplish your goals.

Reference: Port Huron Times Herald (Nov. 25, 2016) “Plan today to make a difference tomorrow.”

December 12, 2016

Family Squabbles Can Hurt Elderly Parents

When an elderly parent is approaching the end of life, the ability of the family to come together and agree on treatment and care is vital to ease the parent's suffering.

The last thing that most end of life patients want to deal with, is a family feud over the patient’s medical treatment and care. However, these family feuds are a common occurrence, especially when family members have other, pre-existing disagreements.

This was the subject of a recent article in the Washington Post titled "A united family can make all the difference when someone is dying."

Doctors have a name for one of the common problems that can arise. They call it the "Daughter from California syndrome." This can happen when family members compete with each other over who cares for the elderly patient the most. Often, someone who lives far away goes too far and is the source of disruptions.

Another source of problems for families is when the person who the patient put in charge of things goes too far and refuses to cooperate with others. For example, someone given authority in a health care power of attorney may refuse to listen to the opinions of other family members. This can create unnecessary tension, especially when decisions have to be made that are outside the scope of any advanced directives.

The best thing that a family can do to help an elderly patient at the end of life is to work together, communicate freely and come to consensus decisions concerning treatment and care. The patient can help this greatly, if he or she has previously executed detailed advanced directives that designate appropriate people to be in charge.

Reference: Washington Post (Nov. 20, 2016) "A united family can make all the difference when someone is dying."

December 9, 2016May 5, 2022

Remarriage Planning

Before you get remarried late in your life you should do some estate planning. Profit Law Firm has information on how you can do estate planning to protect everyone in your new blended family.

People who are at or near retirement age are getting remarried more often than ever before. Most elder advocates think it is a wonderful thing that people are finding love and comfort late in their lives.

However, there is a potential problem.

Not enough older people getting remarried are properly planning for what doing so will mean for their families and estates. Without proper planning things can quickly go awry as New Hampshire Magazine reports in “Navigating Late-Life Remarriage.”

The biggest problem is that people do not take the time to consider what a second marriage might mean for their children’s ability to receive an inheritance. Children from an earlier marriage can be left out of an estate entirely without planning.

By default, a person’s entire estate goes to a living spouse. It cannot be assumed that the spouse will make plans to leave anything inherited for stepchildren in his or her estate. There is no legal obligation for the spouse to do so and the law will not give the money to those children if the spouse passes away without an estate plan.

This, of course, does not mean that someone should not get remarried late in life. It just means that some planning needs to take place before doing so, in order to protect children. P

Before getting remarried visit an estate planning attorney who can assist with the proper legal plans to make sure your children are protected.

Reference: New Hampshire Magazine (Dec. 2016) “Navigating Late-Life Remarriage.”

December 8, 2016

It Is Time to Review Your Estate Plan

You should review your estate plan anytime something significant changes that could have an impact on your plans. That means that you should be reviewing it now.

Some things do get better with age. However, unlike fine wine and good cheese, estate plans do not improve after aging.

An estate plan can be viewed as a snapshot of a person's financial and life situation at the moment the plan is made. When something changes in a person's financial or life situation the snapshot is no longer an accurate representation. If the change was significant enough, then the estate plan itself could be ineffective.

For this reason, estate planning attorneys suggest that their clients review their estate plans every few years to make sure the plans are still good. Another reason to review estate plans is when there have been legal changes that could affect the plans. There have been recent changes in Maryland law and D.C. law in the past two years that mean residents of those states should review their plans. Maryland has enacted the Maryland Trust Act and D.C. has changed laws regarding wills and trusts as well.

Recent Treasury Department regulatory changes make it likely that your plan needs review as Wealth Management points out in "Remind Clients Importance of Updating Estate Plans."

Take some time to review your estate plan and consult with Profit Law Firm about whether you need to update your estate plan.

Make sure that it still does everything that you want it to do. Ask yourself if there have been any changes to your life and finances that are not reflected in your plan. Then, call your estate planning attorney and ask about any legal changes that have been enacted since you made your estate plan.

Once you are done with that and have an idea what needs to be changed in your estate plan, go to and have the changes made by your attorney.

Reference: Wealth Management (Nov. 21, 2016) "Remind Clients Importance of Updating Estate Plans."

December 7, 2016

Prince Record Label Sues Jay Z

As expected the dispute between Prince's estate and Jay Z has resulted in a lawsuit.

How Prince's estate will manage to pay its hefty estate tax bill has been a source of much speculation. It was assumed that one way to do so would be to sell the rights to Prince's unreleased recordings. Rapper Jay Z had offered a reported $40 million for those rights. However, the estate turned that offer down and it has come up with a possibly different answer.

It can raise money by suing Jay Z, as it hinted it might do in a statement made after rejecting Jay Z's offer.

Through Prince's record label a lawsuit has been filed against Jay Z's company Roc Nation, according to TMZ in "Prince to Jay Z No Free Rides in My Little Red Corvette … Record Label Sues."

The lawsuit alleges that prior to his death, Prince had negotiated a deal with Jay Z to allow Jay Z to stream Prince's last album on the Tidal service, which Jay Z owns through Roc Nation. However, instead of just streaming that album, Jay Z assumed that he had permission to stream all of Prince's music and in June of this year began streaming all of Prince's best-known songs.

The lawsuit does not state the amount of damages that the record label is seeking, but it is likely to be extremely high given the popularity of Prince's music.

This is a case that both copyright attorneys and estate planning attorneys will keep a close eye on. The latter will be interested to learn if it sheds some light on how Prince's estate plans to pay estate taxes.

Reference: TMZ (Nov. 15, 2016) "Prince to Jay Z No Free Rides in My Little Red Corvette … Record Label

December 6, 2016

Elder Abuse Costs Rising

A new study suggests that the total costs from elder abuse in the U.S. continue to rise at an alarming rate.

Elder abuse is a serious problem in the U.S. This has been known for a long time. As more people live longer while suffering from some form of cognitive impairment due to age or disease, fraudsters have more and more incentive to target the elderly.

What is not often known by the general public is how frequent financial abuse of the elderly is and how costly it can be.

Recently, the Wills, Trusts & Estates Prof Blog discussed the results of a recent survey that helps to answer those questions in "Elder Financial Abuse Is Costing Americans."

The numbers are alarming: 37% of elderly caregivers report that the person under their care has been the victim of financial abuse. The average cost of the abuse to the elderly victim is $36,000. That is up 20% from two years ago when the average cost per victim was reported at $30,000.

Given the large number of elderly people in the U.S., these numbers show that a significant amount of wealth is being taken from the elderly in abuse incidents.

If you suspect that an elderly person you know is the victim of elder abuse, it is vital that you contact an elder law attorney and alert authorities. While it is often difficult to recover the lost funds, it can be done if the proper people are informed in time.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 16, 2016) "Elder Financial Abuse Is Costing Americans."

December 5, 2016

Attorney-Client Privilege Is not Absolute

When you go to an estate planning attorney you expect that what you tell the attorney will be protected by attorney-client privilege. However, that might not always be the case.

Attorney-client privilege is one of the most important legal doctrines in the U.S. It allows people to be open and honest with their attorneys without fear that the attorney can later be forced to use any information obtained against the client. This doctrine even has an important place in estate planning.

To properly plan an estate a client needs to be able to tell the attorney what his assets are. The client would not be willing to do so if the attorney could later be forced to testify in a different legal dispute about those assets.

However, there are exceptions to attorney-client privilege as the Wills, Trusts & Estates Prof Blog reports in "Treasure-Hunter's Documents Might Be in Deep Water."

In the case discussed, a former treasure hunter hired an attorney to create an offshore trust. The client then got financing for an expedition in which he recovered gold from a sunken ship. However, he refused to pay the people who had financed his treasure hunt.

They are asking the judge to force the attorney to reveal the trust documents so that they will have an easier time recovering the money.

The judge in the case, while not making a decision, has acknowledged that the crime-fraud exception to attorney-client privilege might apply in this case. In other words, if the attorney's services are knowingly used to commit a crime or a fraud, attorney-client privilege does not apply.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 17, 2016) "Treasure-Hunter's Documents Might Be in Deep Water."

Building Legacies that Last Estate Planning and Elder Law

Author: Profit Law Firm