Tulsa World: Everybody’s going to die – so why not think about estate planning now and beat the rush?
Even if you’re not wealthy, it’s still important to plan for what will happen to your valuables and property after your death.
All the legal terms you’ll run into along the way to understanding the estate planning process will confuse and even overwhelm you – unless you use the Federal Citizen Information Center to bone up on the lingo and get ready to protect your wealth for your family.
CNN Money: Reality TV star Kim Kardashian isn’t often held up as a model of prudent behavior. But the recent reports that she and her fiancé, NBA forward Kris Humphries, are working out a prenuptial agreement make her the celebutante face of a practical new trend. Prenups are on the rise. And they aren’t just for the wealthy and famous these days.
A prenup is a legally binding contract that spells out how a couple’s assets will be carved up if their marriage fails. Nearly three-quarters of attorneys surveyed in 2010 by the American Academy of Matrimonial Lawyers said they had seen a marked increase in prenups in recent years. A key reason: The financial crisis left people anxious to protect what they have. A glance at marriage statistics underscores the importance of planning ahead. Almost half of all first marriages end in divorce, and the divorce rate on subsequent unions is even higher.
The Gilmer Mirror Online: The long-awaited Tax Relief Act of 2010 is providing an unprecedented opportunity through the end of 2012, for everyone-not just the ultra-wealthy-to benefit from short-term tax breaks impacting gifting and estate planning. The Tax Act, which was signed by President Obama in December of 2010, provided a number of short-term opportunities – the most substantial being an increase of the gift tax, estate tax and generation-skipping (GST) tax exemptions, which have been raised to $5 million.
Since the exemption is only valid until 2013, acting quickly and efficiently is necessary to completely take advantage of the Tax Act. It’s imperative for individuals to examine new retirement planning, wealth management and transfer opportunities that have been made available…
Are contingent beneficiaries allowed to stretch inherited IRA and 403(b) distributions over their lifetimes once they inherit them upon the deaths of both the account holder and also the primary beneficiary? Or do they have to draw down the proceeds within a five year timeframe? Does the age of the decedents, or whether they were already drawing Required Minimum Distributions, matter? Are there differences between how inherited IRAs versus 403(b)s are treated?
— Confused beneficiary
A. How retirement assets are passed can be a complicated topic, and you may be smart to enlist the help of an estate planning attorney or certified financial planner to make sure you don’t make any costly errors. If assets remain in the account on the death of the primary beneficiary, then two questions must be answered, said Mary Scrupski, an estate planning attorney with Greenberg, Dauber, Epstein & Tucker in Newark. You must determine who is entitled to the assets in the account, and what are the rules for withdrawal.
Although troubled during her life, Amy Winehouse got it right with her estate plan. Unlike many other celebrities like Anna Nicole Smith or Michael Jackson, Amy Winehouse left a well thought out estate plan that appears to distribute her assets just how she wanted.
Amy Winehouse’s heirs could have faced a significant battle had the singer not left such a carefully crafted estate plan. Since the British legal system tends to favor ex-spouses, Winehouse’s estimated $16.4 million fortune could have ended up in the hands of her ex-husband Blake Fielder-Civil, who is currently serving time in an English prison. Instead, Winehouse did the smart thing by amending her will after her divorce from Fielder-Civil. Now Winehouse’s will is said to pass her considerable assets to her parents and brother.
In light of all the nasty estate battles that we hear about in the news, it’s nice to hear of a celebrity who got it right. Had Winehouse failed to amend her will to omit her ex-husband, her ex-husband would have had a claim to her entire estate. That court battle could have gotten particularly messy since Fielder-Civil reportedly was the one who introduced Winehouse to drugs and the addiction she struggled with throughout her life. By making the smart decision to amend her will after her divorce, Winehouse might have saved her family from a long, public and expensive court battle.
A will can accomplish a number of things. In Winehouse’s case, it ensured her deadbeat ex-husband didn’t inherit her sizable estate. But you don’t have to rich or famous to benefit from making a will. If you have minor children, you absolutely must have a will. A will is the ONLY document where you can name a guardian to raise your children if you pass away or become incapacitated. Without a will, a court will decide who will raise your minor children and the court’s judgment may or may not reflect what you would have wanted. Also, a will serves the important function of determining who will be the personal representative responsible for administering a deceased person’s estate. Picking the right person is critical as the personal representative is responsible for gathering your assets and distributing property to your beneficiaries. Having a competent personal representative can be the difference between an efficient and timely probate or one that’s long, confusing and costly. To learn more about how you can benefit from a will, please read my article What Is A Will?.
Wealth Counsel Estate Planning Blog: It is no secret that the population throughout the U.S. is aging. According to the U.S. Census Bureau, the number of seniors 65 years or older currently exceeds 38.6 million persons. This number is anticipated to swell by over 24 million over the next decade. While the baby boomers continue to age, a myriad of resulting senior issues have arisen including an overall increase in estate litigation. Disputes arising out of the execution of an estate plan, or the management of an existing estate, have increased lockstep with our aging population. Nationwide statistics are unavailable; however, from my personal perspective, over the last ten years the probate courts in California have become inundated with estate contests. In speaking with colleagues, I have found that this phenomenon is symptomatic across the country.
The Probate Lawyer Blog: Civil rights icon Rosa Parks passed away at the age of 92 on October 25, 2005, in Detroit, Michigan. Almost six years later, her legacy is still tied up in a lengthy court battle. The case features allegations of abuse, cronyism and corruption by the probate judge as well as the two lawyers he appointed to oversee the estate and trust.
It also involves who will receive all of the considerable civil rights memorabilia owned by Rosa Parks when she was alive, and even the rights to use her name and likeness.
Parks’ will and trust left the majority of her assets to the Rosa and Raymond Parks Institute for Self Development, operated by Rosa Parks’ longtime friend, Elaine Steele. Parks and Steele had formed this Institute. Steele says she was close to Parks for 45 years and that Parks looked at her as the “daughter she never had.”
Investopedia: Being an executor [personal representative] for an estate comes with a lot of responsibility. The process can be daunting if you go into it unprepared. In this article, we’ll look at some simple steps you can take while the testator is living that will make your job as the executor much easier when the time comes.
Estate of Denial: It’s a Nashville saga worthy of its own country music song.
“Gentleman” Jim Reeves was a velvet-voiced country crooner famous for his tuxedos, his clean-cut good looks and lovelorn lyrics such as: “Put your sweet lips a little closer to the phone.”
He died in a fiery Brentwood plane crash in 1964 at the age of 39.
Today, the fate of potentially millions of dollars in current and future royalties from his singing career remains in question.
Estate of Denial: Two legal cases with central Texas ties provide interesting opportunity to discuss questionable probate actions. Anna Nicole Smith – and now her estate’s – pursuit of J. Howard Marshall II’s multi-million dollar estate has long made headlines and a recent court filing could open a new front in an action already ongoing for 15+ years. Meanwhile, the indictment of Waco attorney Ray Rushing along with former caregiver Melissa Adler presents an important example of another path by which alleged estate abuse can occur. While one case is a civil action and the other is criminal, while one involves a high-dollar estate and the other more modest asset values, the public must become aware of the dangers posed by Involuntary Redistribution of Assets (IRA) actions in which probate venues and probate instruments (wills, trusts, guardianships and powers of attorney) are used to divert assets from the dead, disabled, incapacitated and/or their intended heirs or beneficiaries.
Wills, Trusts & Estates Prof Blog: A reader of Money Magazine recently submitted the following question: “All of our children are adults. One is always asking us for financial help; the others manage on their own. Can we take this “extra help” into account when we divide our estate in our will?” A few of the reader opinions and the expert opinion given by the magazine are below…
Newport Richey Patch: A recent client had me write “mirror” wills for him and his wife. This means that if the husband dies first, the wife gets everything, and vice versa. The couple had a young son.
A month later, the wife past away. The husband found out that his late wife, previously divorced, did not change her 401(k) retirement account payable-on-death beneficiary. Now the widower is in a fight for money that never was intended to go to the former husband, but rather, toward a college education for my client’s son.
Most people believe that a will is for “old people.” An 18-year-old single mother could never use a will to try to suggest who would be the guardian of her child, right? A new professional family that has young children could never suspect that a catastrophe could occur, right? A family that just sent its kids off to college and started a new life could not believe that health problems would arise, right? I have been presented with all of these situations and more.
Estate of Denial: In the rush to button down an estate plan, people often spend most of their time focusing on the big questions and overlook small—but increasingly crucial—details.
Even the simple question of who your heirs will be is getting more complicated. Nowadays more people are considering pets and even children posthumously conceived from genetic material in their estate-planning mix, say financial advisers. That often means setting up trusts that just a few years ago would have been unthinkable.
24-7 Press Release: Charitable contributions are a vital source of income for most non-profit philanthropic organizations no matter what demographic the charity serves (low-income families, animals, the elderly or schoolchildren, among others) or what type of aid it provides (meals, bill-paying assistance, funds for spaying/neutering or sheltering families without homes, just to name a few).
In addition to making periodic donations to your favorite charitable organization, though, you can also make long-term gifts through the careful use of various estate planning tools. The Internal Revenue Service (IRS) recognizes the true importance of charitable giving, and the U.S. Tax Code contains provisions that allow tax breaks for both the person/company/organization gifting the money and the charity receiving it.
Probate Lawyer Blog: Ryan O’Neal is at it again. He and Craig Nevius, a Hollywood producer who used to work closely with Farrah Fawcett, are in the midst of more legal fighting against one another.
Initially, they both sued, each claiming the other had exploited Fawcett while she was sick from the cancer that claimed her life. Why? They both said the other had taken advantage of her to produce a documentary about her life and her sickness. Those lawsuits ended when Nevius ran out of money for legal fees.
Now, he has no choice but to continue fighting. Ryan O’Neal — Farrah’s ex and father to Farrah’s son — has sued Nevius again. What’s at stake this time? It’s all about the art.
Specifically, a certain, famed Andy Warhol painting of Fawcett in O’Neal’s possession. O’Neal says Warhol gave it to him years ago. Not everyone thinks he’s being honest though.
Forbes: Did dad know what he was doing when he signed a will leaving the bulk of his estate to his caregiver daughter, leaving her siblings with much less? Did mom mean to disinherit her only child or was it a mistake? Did grandma mean for her daughters to split her jewelry collection with their brother’s wife?
These kinds of questions are at the heart of estate fights. Whether it’s thousands of dollars at stake or millions, whether you expect a fight or anticipate peace among the beneficiaries of your estate, there are things you can do while you’re alive to avoid a protracted battle over your estate after your death.
Wills, Trusts & Estates Prof Blog: Twenty-two states and the District of Columbia currently impose a death tax on their taxpayers. These taxpayers have options when it comes to avoiding paying these taxes, however.
One option is to make a large lifetime gift. The current federal law grants taxpayers a $5 million gift exemption ($10 million for married couples). Another option is to make annual exclusion gifts. Taxpayers can give an unlimited number of people gifts up to the annual exclusion amount ($13,000, currently) without incurring a gift tax.
Examiner.com: Most estate planning law firms spend a considerable amount of time writing about wills, trusts, and guardianship documents, but when was the last time you read anything about healthcare directives? That will be the focus of this article, because healthcare directives (also called living wills) are integral to planning for your care, should anything ever happen that causes you to be incapable of making healthcare decisions for yourself.
A living will is a document that outlines your wishes for the kind of care and medical intervention that you want (or specifically do not want) if you become terminally ill or find yourself in need of life-support but are unable to speak or otherwise communicate, as could be the case if you fall into a coma.
If something happened to my husband and me, who would take care of our young children? We have heard that we need to appoint a guardian. However, we are confused and do not understand the necessary steps we must take. Would you please explain how we go about appointing a guardian and some of the issues we should consider? Cheryl
The Trust Advisor Blog: Even though 94-year-old Zsa Zsa Gabor is not dead yet, a super-size family dispute has begun. On one side her husband, on the other, heirs from 9 marriages. Each claim an inheritance they were promised from a sea of confusing estate plans experts say went way off course.
It’s just as well that Hollywood legend Zsa Zsa Gabor probably has no idea that her ninth husband and only daughter have started bickering over her estate while she’s still alive.
Investopedia: Trusts are commonly used by attorneys and financial advisors during the estate planning process. They aid in the distribution of assets, ensuring that everything goes to the correct people and entities. They can also minimize estate taxes. Essentially, they allow you to remove assets from your personal estate so that more wealth can be passed to your beneficiaries. You can even place a life insurance policy within a trust.
Wall Street Journal: Don’t die before leaving your heirs access to a list of your online user names and passwords, your military discharge papers and proof of any copyrights, trademarks and patents that you own.
As we explained in our Weekend Investor article “The 25 Documents You Need Before You Die,” leaving behind a will and an estate plan—and any other end-of-life instructions—isn’t enough. You also have to make your heirs aware of them and leave the documents where they can find them.
Letting a trusted family member know that you keep a list of user names and passwords with an attorney or in a safe-deposit box is important not just so they have access to bank accounts or so they can keep up with online payments, as we stated, but also in order to preclude online identity theft. The Federal Trade Commission estimates that nine million Americans are victims of identity theft every year.
Record Online.com: If you or a loved one is diagnosed with Alzheimer’s or another cognitive disease, it is important to meet with an elder law estate planning attorney as soon as possible.
An Alzheimer’s diagnosis is shocking and overwhelming to all concerned. Immediate care-giving and medical issues take center stage. But if legal matters are left untended, you risk losing your home and life savings as the disease progresses.
The Lowell Sun: Today, more than ever, charitable institutions stand to benefit as the first wave of the baby boomers reaches the stage where they’re able to make significant charitable gifts. If you’re like many Americans, you too may have considered donating to charity. And though writing a check at year-end is one of the most common ways to give, planned giving may be more effective.
What is planned giving? Planned giving is the process of thinking strategically about charitable giving to maximize the personal, financial and tax benefits of your gifts. For example, you may need to receive income in exchange for the assets you donate, or you may want to be involved in deciding how your gift is spent — things that typically can’t be done with standard checkbook giving.
Estate of Denial: Celebrity heirs fighting over the estate is far from uncommon … the Trial & Heirs Blog never has a shortage of material to cover. But, it is unusual when an ugly court battle starts before the celebrity dies and then only continues to grow more heated as time passes. That certainly has been the case with the Dennis Hopper Estate.
The Easy Rider star filed for divorce from his fifth wife, Victoria Duffy-Hopper, in January, 2010. Victoria is about six years younger than Dennis’ oldest child, daughter Marin Hopper. The two have been feuding for some time now.
Boom! Boomers & Beyond: Where there’s a will . . . there are relatives. This truth, proved time and again in probate proceedings and will contests, holds a clear lesson: Good estate planning is about more than taxes. It requires careful consideration of who should receive your assets, and how and when they should receive them, as well as a clear statement of your wishes and expectations.
Smart Money: You have to hand it to Congress: It’s doing its best to turn one of the more wearying parts of retirement planning — getting your estate in order — into something of a party. The challenge for you and me is to stay clearheaded.
The Tax Relief Act of 2010, passed in December, made headlines primarily for retaining the Bush-era income tax cuts. But lawmakers also approved changes in estate and gift taxes that left lawyers and accountants gushing. (“Unprecedented.” “Historic.” “Astonishing.”) Most notably, the gift-tax exemption jumps from $1 million to $5 million, which means Americans can now bequeath the latter amount without paying a dime in taxes. This exemption is separate from the annual gift-tax exclusion, currently $13,000.
Wills, Trusts & Estates Prof Blog: Owning a vacation home in Mexico or retaining Canadian citizenship are just two scenarios that can create complex estate planning and tax issues. Below are five scenarios that can affect estate planning in a global economy.
1. Owning a home in Mexico
A home in Mexico is likely acquired through a fideicomiso (similar to a trust), and the IRS considers fideicomios to be trusts that are subject to reporting requirements for foreign trusts. As a result, homeowners must file Form 3520 and 3520-A every year to stay in compliance with IRS regulations. Additionally, after March 18, 2010, homeowners who use or let relatives use the home are subject to income tax on the property’s fair rental value. Owners have until August 31, 2011 to come into compliance with the IRS regulations.
Wall Street Journal: It isn’t enough simply to sign a bunch of papers establishing an estate plan and other end-of-life instructions. You also have to make your heirs aware of them and leave the documents where they can find them.
Consider: At least 10 states have been investigating whether some of the country’s largest insurers are failing to pay out unclaimed life policies to beneficiaries. California and Florida have held public hearings on the issue in recent weeks.
Online Athens: The new estate tax laws have provided a false sense of security for those of us who do not have an estate worth more than $10 million. However, in 2013 we are going to be revisiting the issue of estate taxes all over again as the law sunsets back to the $1 million estate tax exemption. The sunset provision makes the estate tax law an average taxpayer’s problem again.
Since life insurance benefits often are the largest asset in an estate, I would like to address the great myth about the taxation of life insurance benefits.