Thursday, April 19, 2012 Whitney Houston's Will -- What We Learn From It
Forget about the inheritance tax issues on an estimated $20 Million estate. Whitney Houston's will was done in 1993 when her estate likely was much smaller. The will was one small click above a simple will in that it left the estate to her only child (now age 19) in a trust. The trust will gives her daughter 10 % when she reaches age 21, one-sixth at age 25, and the entire balance at age 30. Let's hope she doesn't have divorce problems or creditor problems when the distributions occur. From news reports, her daughter is having a hard time with her mom's death and drug use may be involved. Will the inheritance help or hurt?
An updated plan could have made adjustments for the growing size of her wealth, the inheritance tax problem, and the issue of giving wealth to a daughter who may not be ready for such a gift. We use lifetime trusts in our firm with a Special Needs Trust included in case our beneficiary is disabled, addicted to drugs, alcohol, or gambling. For more, click on this link: http://www.elderlawanswers.com/resources/article.asp?id=9770&Section=4&state==
Wednesday, March 28, 2012 Family Limited Partnerships
Many clients have formed Family Limited Partnerships (FLP) for reasons that deal with keeping a farm or business in a family. Others do it to gain a certain amount of asset protection from potential divorces and lawsuits against their beneficiaries. There are some wonderful estate tax benefits to be obtained as well. In recent years, some clients have found their real estate to contain valuable oil and gas interests below, and they see FLP protections as well.
The IRS has challenged many FLPs where they were formed incorrcetly, or where they were operated improperly (like using FLP assets to pay for personal, non-business expenses). Happliy for the taxpayers, the IRS has lost many of these challenges. Trusts & Estates Magazine highlights a recent case that illustrates why the IRS loses and the taxpayer wins. Click on http://trustsandestates.com/wealth_watch/solid_as_stone/?NL=TE-02&Issue=TE-02_20120328_TE-02_994&YM_RID=rudnitsky@rudnitskyhackman.com&YM_MID=1301131
Monday, January 09, 2012 Name Guardians for the kids NOW.
Here's great New Year's resolution for you and for your clients: Name Guardians for the kids NOW. So many of us put this off because we think it won't happen to us. But, it happens. It's reported in our newspapers all the time. Even young parents can get sick and die, or be the victim of a deadly crash. That's what happened to one of our firm's clients last fall at age 49. Some put it off because mom and dad can't agree on who to name. If you can't agree, a court will decide for you and who it pselects may not be who you would want.
A colleage in Virginia, Evan Farr, has a blog about this. Read that by cicking this link: http://blog.virginiaelderlaw.com/
Wednesday, October 05, 2011 Don't Bequeath a Digital Delay
Being tech savy, we use passwords that are clever and not easy for bad people to figure out. Right? Experts suggest we use a memorable sentence that has numbers and capitals in it. For example, "I got my pound puppy Jake at age 2" becomes "IgmppJaa2." Got it! But, what happens if you get very sick or die?
Digital delay comes when your executor or trustee cannot access your bank account, investment account and the like because she can't locate your passwords. Do you keep them written down where they will be found? We have suggested to our clients that they write them down and put them in a sealed envelope kept with their estate planning documents. We recently came upon a very good article on this published for the ABA. Click here to read it: http://apps.americanbar.org/lpm/lpt/articles/ftr03103.shtml Monday, September 19, 2011 Medicaid at Age 67?
Among the compromises being discussed in Congress is the raising of the age to qualify for Medicare to age 67. Turns out the nations hospitals would receive more reimbursement under private insurers than they recive from Medicare and, therefore, have turned to their lobbyists to argue for this as a way to help them and help the solvency of the program. For more on this, click on this link: http://www.elderlawanswers.com/resources/article.asp?id=9394§ion=4 Tuesday, September 06, 2011 Legal Zoom Settles the Case Last month, we wrote about a lawsuit of interest to attorneys and do-it-yourselfers. Legal Zoom was sued for practicing law without a license in the state of Missouri. The case has settled rather quickly and one might suppose Legal Zoom wanted no part of being required to produce a lot of written communications and give depositions. As lawsuits progress, lawyers get to ask a lot of questions that some may not want to answer. For more on the story, click on this link: http://www.elderlawanswers.com/resources/article.asp?id=8355&Section=4&state=%20Thursday, August 25, 2011 What to Keep (or not) in Your Safe Deposit BoxEver wonder if you're keeping the right stuff in your safe deposit box? I came upon an article written on the Penn State Develpment Office's website that has good suggestions. Some things need to be available quickly, like health care powers of attorney, and some things just need to be in a safe place, like stock certificates.
Let me add a suggestion to what the author wrote. Take your wallet to a copy machine and lay out every credit card, license, etc. on the face of the copier. Copy. Then, turn them over and copy the other side. Put this photocopy of your wallet in your safe deposit box and you will be able to more easily repalce the wallet's contents if it gets stolen or misplaced.
For more, click thi slink: http://www.plan.gs/Article.do?orgId=5701&articleId=17059 Monday, August 15, 2011 Ex-Spouse Gets Last Laugh: Beneficiary Designations MatterIn a case proving that attention to detail can really matter, it was held that the financial advisor was not responsible for keeping up with the customer's private life. Though the divorce divided assets, an IRA was apparently forgotten. The ex-wife was still named as the beneficiary when the husband died. She got the funds, and the estate made a claim against the financial advisor to try to get damages.
For more interesting reading, see http://insurancenewsnet.com/article.aspx?id=271363&type=newswires. Tuesday, August 02, 2011 Legal Forms On-Line
Ever wonder how Legal Zoom and similar companies can sell wills, trusts, and other documents on-line. Legal staionary stores have been available for generations and are perfectly legal. It gets dicey when the sellers of forms start giving guidance on how the forms are to be used: that becomes legal advice and only licensed lawyers can give that.
Now, a lawsuit againyt Legal Zoom is going to trial in a federal court. See more on this at:
- http://blogs.wsj.com/law/2011/07/27/class-action-claims-online-legal-forms-pose-threat-to-consumers.
Do-it-yourselfers are just trying to save money and who can blame them for that. But, when the matter is really important, one should get a real professional on their side so that they can sleep at night knowing their planning will actually work. Monday, November 23, 2009 1929 v. 2009
1929 Versus 2009. In 1930, President Herbert Hoover believed that the recession had ended and that 1931 would bring a strong recovery. It didn’t. Of course, the Federal Reserve at that time was raising interest rates while the administration took a back seat approach to the problems. Many, many banks failed and there were no bail outs. We had bread and soup lines for years. This time, we have historically low interest rates and the banks have been infused with cash from the government so they would not fail. Perhaps we averted another Depression. History will tell.
For now clients, estate planners, and financial advisors need to aware of the big opportunities presented to clients with such low interest rates. We are doing Grantor Retained Interest Annuity Trusts (GRAT) that pass along wealth to the next generation at the lowest possible gift tax rates. The low interest rate environment allows the parent to get an annuity at an historically low interest rate while the actual growth of the assets in the trust accrues to the children as remainderman at the end of the GRAT. Low interest rates also lead to lower valuations of business interests. These can be transferred at lower gift tax costs. When interest rates start their return to historical levels (let’s hope not to the 1970s level), it will be more costly to make these business interest gifts. |