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 3, 2016

Tupac’s Pendant for Sale

If you would like to purchase a pendant that Tupac Shakur was wearing when he was shot, you can. You might get sued though.

The deceased rapper Tupac Shakur remains one of the biggest stars of the music genre years after his death. Fans still cannot get enough of his music, but his personal items have not been nearly as accessible to interested collectors.

A single piece of memorabilia has now appeared.

According to TMZ in "Tupac Bullet-Dented Pendant. . . Up For Grabs For $125K," a bullet-dented pendant the rapper was wearing when he was shot in New York City two years before his death is up for sale at a fixed price of $125,000

The pendant was allegedly given to a memorabilia dealer for the sale by an unnamed family member. It is not certain why it is a sale for a fixed price when most high value celebrity memorabilia is put up for auction.

What does seem clear is that this sale is very much a buyer beware situation.

Tupac's estate has declared that no one, including family, has been authorized to sell any merchandise. The estate has threatened to sue anyone who sells or buys the pendant.

Until more details come out, it cannot be determined whether the estate has the right to block the sale of this pendant.

If the family member who gave it to the dealer was given the pendant as part of the estate, then it is not clear what grounds the estate has to sue on. However, if the pendant was improperly acquired, then the estate has a much better case.

Reference: TMZ (Oct. 16, 2016) "Tupac Bullet-Dented Pendant. . . Up For Grabs For $125K."

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 31, 2016

To Leave an Inheritance or Not

Many people struggle with the question whether it is better to leave their children an inheritance or not. It is not an easy question to answer.

Recently, FOX Business reported on a survey that found some 23% of retired Americans would prefer to spend all of their money and not leave their children an inheritance in "Should You Leave Your Kids an Inheritance?"

They asked Dave Ramsey for his opinion on the subject. Ramsey suggested that if you have bad kids, then, leaving an inheritance for them just rewards their misbehavior. He went on to say that if you have good kids, then not leaving them an inheritance teaches them money is evil. However, that is not the entire story.

It is understandable why a parent would not want to leave an inheritance to a child who has an unhealthy lifestyle. No parent wants to give a child money that would just fuel a drug habit, for example.

With good estate planning, however, a parent can actually leave an inheritance that encourages the misbehaving child to straighten up and does not give the child funds for bad behavior.

Another possibility is to skip the child with bad habits or behaviors and instead give the inheritance to grandchildren or other relatives.

There are several options for estate planning around a misbehaving adult child.

Visit an estate planning attorney to learn more about them and how you can use them.

Reference: FOX Business (Oct. 12, 2016) "Should You Leave Your Kids an Inheritance?"

October 28, 2016

Giving Charity to Specific People

If you would like to make a charitable gift to a specific individual, you can. However, you should be aware that there are rules that need to be followed.

There are all kinds of people in the world who are in need of charitable assistance. Fortunately, there are many others with the means and desire to provide that assistance.

The normal method of donating is to give to an established charitable organization and to let them sort through the people requesting assistance and donate to those most worthy. What if you have found a particular individual you would like to help directly? Certainly you can give to him or her. However, if you hope to deduct the donation from your taxes, then you do need to be aware of the rules.

The Wills, Trusts & Estates Prof Blog discussed this issue in "Charitable Giving to Individuals."

If you are hoping to give to someone directly, then they need to have a private foundation pre-approved for the purpose. Furthermore, you need to be able to prove that you chose to give to them in a fair and non-discriminatory way. You cannot, for example, just give to someone who a co-worker knows needs money for educational expenses and deduct it from your taxes.

To best cover yourself you will probably need to have developed a grant application for the person to fill out.

You might consider just using your gift tax exemption to give to specific people as that would be a lot easier. Make sure you talk to an estate planning attorney first because large gifts should only be made with your estate plan in mind.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 5, 2016) "Charitable Giving to Individuals."

October 26, 2016

After Divorce and Remarriage

If you have been divorced and remarried, do not consider yourself done with all of the legalities when your divorce is finalized and your marriage license filed. You still need to do some estate planning.

For most people, getting divorced is a legal headache. There is all sorts of legal and financial paperwork that must be gathered, filled out and filed with the court. You might have to go through multiple meetings with attorneys, formal mediation and several court hearings before the process is over. It can take months and in some cases years.

If you go to get remarried, then you have even more legal and financial paperwork that needs to be filled out and filed. While you might want that to be the end of all the legal things you have to do, it is not.

As Splitopia points out in "Protect Those You Love in Divorce, and Remarriage," there are other details you need to mind or avoid them to your peril.

These other things you still need to do include:

· Change Your Estate Plan – Your estate plan likely had your former spouse receiving much of your property. It should be changed immediately after your divorce is final. It should be changed again to include your new spouse when you get remarried.

· Update Beneficiaries – If you have any life insurance policies, retirement accounts or transfer on death bank accounts, then you need to make sure those are changed as well to make sure your former spouse is a beneficiary on them and to include your new spouse if you want to.

After getting divorced and remarried you probably do not want to deal with attorneys for a while. However, estate planning attorneys are only there to assist you and you need their help at that time. Visit with one.

Reference: Splitopia (Oct. 5, 2016) "Protect Those You Love in Divorce, and Remarriage."

October 25, 2016May 1, 2023

Family Business Succession Planning

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.”

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

Author: Profit Law Firm