6 Reasons to Update Beneficiary Designations

As noted in the December 16^th Forbes article by Harper Willis, here are six reasons you might need to update your beneficiary designations:

1. You got divorced or remarried. Some states automatically eliminate former spouses as beneficiaries; others don’t. Check with an estate-planning attorney to find out the law in your state.

2. You changed jobs and rolled over your retirement plan. When you move money from your former employer’s retirement plan into your new one or into an IRA, your beneficiaries lose any claim to those assets. So you’ll want to ensure they’re named as beneficiaries on the new account.

3. Your primary beneficiary died. In this case, you’ll absolutely need to update your designation. If you had also named a secondary beneficiary, he or she will move up to primary status, but you’ll now want to name a new secondary, just in case.

4. Your financial institution changed ownership. These days, when banks, brokerages or mutual funds merge, they sometimes drop the beneficiary designations for older accounts.

5. You had a child or grandchild. One caution, here: Don’t designate a minor (a child under 18 or 21, depending on your state) as a beneficiary. If you do, the state will appoint a conservator of assets until the child comes of age.

Instead, if you want this child to inherit your financial assets, create a trust for his or her benefit and name the trust as the beneficiary. (This might cost around $1,000 or so.) That way you control the terms under which your child or grandchild has access to the funds.

6. Your beneficiary became disabled. In this case, you’ll need to amend the designation or risk jeopardizing the beneficiary’s eligibility for Social Security’s Supplemental Security Income (SSI) benefits. The SSI program provides income and Medicaid insurance to disabled people with less than $2,000 ($3,000 for a couple) in what are known as “countable resources.”

Set up a Special Needs Trust for the benefit of the disabled person and designate the trust as the beneficiary on your accounts.

You don't have to be rich to leave an estate gift

Below is an excerpt from an article posted in MyFoxDetroit regarding the including charitable giving in your will.

As we enter the season of giving, many people consider how year-end charitable donations can benefit their favorite nonprofits as well as their own income taxes.
More than 85 percent of Americans donate to charity while they are alive, but less than six percent leave an estate plan that benefits these same charities, according to the Partnership for Philanthropic Planning. Most people believe they do not have an "estate" large enough to create a legacy gift.

Fortunately for all concerned, they are mistaken. The Planned Giving Roundtable of Southeast Michigan is working to educate the public about the impact that private sector gifts can make to mission-driven nonprofits in an era of dwindling corporate support.

"It seems the word "impact" defines itself in the minds of many as something on the order of, just for example, $100,000," explains Bill Winkler, Roundtable communications director. "We believe impact can be defined in many ways and want to change the prevailing view that it is something only the wealthy can do."

Read entire article

The Gift of Education

In the National Law Review, Terri Stallard, a Kentucky estate planning attorney talks about ways grandparents can give to their grandchildren.

Many grandparents want to enrich the lives of their grandkids, but are not sure the best way to accomplish this with their estate plan. I encourage clients to consider helping their grandchildren with the future costs of education. The proper planning can help grandkids avoid hefty loans and be tax-efficient for the donor.

A grandparent may currently gift up to $14,000 per grandchild (or to anyone) per year tax free ($28,000 if a married couple gift-splits). Any gift over that amount requires the filing of a gift tax return.

However, if you pay for a grandchild's education expenses directly to the provider (i.e., educational institution), the gift is excluded from your annual exclusion amount. For purposes of this exclusion, the term "educational institution" covers a broad range of schooling, such as primary, preparatory, vocational or university institutions. This kind of payment is also exempt from the generation-skipping tax (which is too complicated to explain herein, but can significantly reduce a grandparent's gifting amount). In short, if you pay $40,000 to cover your grandchild's tuition directly to the school, you can still gift up to $14,000 tax free to him or her in the same year. Some institutions may even allow a donor to pay upfront the applicable years of education at a locked-in tuition rate, so as to avoid rate hikes.

Another option to consider is a 529 college-savings plan. One of the biggest benefits of this plan is that it can continue operation when the grandparent is no longer around to write checks to an institution. A grandparent can gift up to the annual exclusion per year tax free, or make up to five years' worth of the annual exclusion gift ($70,000 per single donor or $140,000 per couple) in one year to benefit a single individual. However, this has its drawbacks. If you gift the five year maximum amount in one year, any other annual exclusion gifts to that beneficiary for the next five years will incur gift tax consequences. Further, if you die within five years of the date of the gift, a prorated portion of the gift will be included in the estate tax calculation.

Planning can help prevent estate tax issues

Many families, planning for a transfer of wealth is something they may think about, but never take the time to act upon. Unfortunately, this failure to establish a proper estate plan can significantly affect a family's long term financial stability and can lead to the payment of substantial estate taxes. Although this can be difficult for many families to understand - indeed, it can be a challenge to set plans for events that may not occur for many years. The following article written by Law Offices of Connie Yi, PC (an estate planning law firm in Alameda county)  -illustrates with the example of the recent death of a celebrity - just how important it is to work with a professional to craft an estate plan.

When actor James Gandolfini, best known for his role as Tony Soprano in The Sopranos, died in Italy earlier this year, it took many people by surprise. While his family and his fans mourned, reports arose indicating that nearly half of Gandolfini's estate, worth approximately $70 million, was set to be paid in estate taxes. Unfortunately, it appeared that Gandolfini, who was survived by his wife and two young children, had not taken steps to draft an estate plan that would have ensured the maximum transfer of his wealth to his family.

As further reports surfaced, experts determined that their initial assessment of Gandolfini's estate had been based on incomplete information. In fact, many people had estimated the actor's estate tax bill based solely on assets listed in his will. Fortunately, Gandolfini had taken the time to work with professionals to set up other estate planning vehicles. Although specifics have not been made public, many believe that Gandolfini had made arrangements for members of his family to have access to funds held in irrevocable trusts, life insurance policies and other accounts. At the end of 2012, Gandolfini had even drafted a new will designed to take advantage of the federal gift tax exemption, worth $5.12 million, that expired at the end of that year. It appears that early estimates that the actor owed approximately $30 million in estate taxes were significantly overstated.

Gandolfini's estate was larger than most families in the U.S., but case illustrates an important point for everyone. It is not enough to hope that everything turns out for the best when it comes to transfers of wealth. No matter the size of the estate, planning is essential. This may involve not only drafting a will, but also trusts, retirement accounts and other vehicles, as well.

For more information, contact an attorney like myself who specializes in estate planning, who can explain your options and help you achieve your goals.

Talking To Your Parents About Estate Planning

There are many ways to broach "the talk" with your aging parents about estate planning and the sooner you start the better, for all concerned.
A recent article in Huffington Post’s Business Canada suggests that getting a plan together when your parents are still in good health will prevent any stress or confusion that could result should their health falter later in life.

1.            Don't shun the talk. Discussing personal finances is often considered a taboo, but many barriers can be knocked down if you approach the conversation openly, lay out your goals, and check them off.

2.            Don't wait for a health crisis -- or any other crisis -- to talk to your parents about their estate plans. If you feel disingenuous using some ice-breaking strategy then just be upfront about acknowledging how uncomfortable the topic makes you feel. That in itself is an ice breaker.

3.            Don't be a bull in a china shop. Ensure your parents feel loved and in control of the situation. Don't forget the discussion is about them and how they want you to fit in. Listen to their ideas to get a strong understanding of what they want. If you have suggestions then offer them, but don't expect that they'll immediately accept them, if at all. It's about people skills and open communication. If you know that will be a hurdle from the start, then perhaps a visit to a third party such as an estate lawyer or financial planner can help take the edge off.

4.            What to talk about. Assets, wills, and how your parents want to share their legacy; be prepared with specific questions about all those topics. Beyond that, you'll need to talk to your parents about plans about their income, retirement investment plans, and health care. Some professionals suggest commonly cited questions including: should your parents have a living will? Does the Power of Attorney cover off what your parents want addressed? Does your parents' will and estate plan clearly lay out the transfer process to beneficiaries or deal with tax issues?

5.            Discuss where the documents will be kept. After figuring out exactly what your parents want in their estate plan there must be clear guidance on where those plans will be kept. Experts in the industry stress the importance of knowing where to easily find phone numbers and contact names, details, and documents including wills, investments, and personal information such as birth certificates.

"What do you mean I don't get it all? We were married".

Spouses are often shocked when they realize they aren't entitled to the entire estate just because they are married. People mistakenly think that because they are married, they receive the entire estate when a spouse passes away.
Unfortunately, a spouse can find themselves having to share a deceased spouse's estate in unanticipated ways.First, it is important to understand the difference between probate and non-probate assets. Non-probate assets are assets that are jointly owned, have a beneficiary designation or are owned by an entity such as a trust. Bank accounts that are in joint names or that have a payable on death beneficiary listed are examples of non-probate assets.
Probate assets are those that are title solely in the decedent's name and don't have a beneficiary designation. Since these assets don't have an obvious designated post-mortem owner, their ownership needs to be determined.

Read more in NWI Times article by Christopher Yugo

Should you give your kids their inheritance before you die?

LearnVest’s Libby Kane explains that while the word "inheritance" typically conjures up images of a will being read after a loved one's passing, many people don't want to wait that long to give money to their children.

A recent study from U.S. Trust shows that the majority of wealthy individuals feel it's important to leave an inheritance of some kind. In fact, 64 percent of those ages 49 to 67, and 72 percent of those 68 and older say they want to leave the next generation money. And at the same time,  more than half say they have provided or are providing significant financial support to adult children.
Leaving money to family earlier than expected isn't uncommon. But is it for you? 

Why you should give early…

1. There may be tax benefits

2. You get to see the fruits of your labor

… and why you shouldn't

1.       You could come up short later

2.       Early giving can spur family drama
Read the full article
The bottom line: Like most financial choices, giving an early inheritance isn't always the right move. If it's on your mind, contact me to help you decide which option can best help you provide for your loved ones without compromising your own financial health.

Basic Estate Planning

Robert D. Schwartz, an estate planning attorney in Florida outlined some essential documents in any estate plan in a recent article for TCPalm.

Last Will and Testament - the most basic estate planning document.  A will is a legal document which allows you to direct exactly where your assets are to be distributed when you die. An issue to consider with a will is that when you die your assets must go through probate before they are passed on to your named beneficiaries. Most people want to avoid probate and the most common way to accomplish this is with a revocable trust, also referred to as a living trust. The trust acts similarly to a will. It allows you to direct or put conditions on who gets your assets and when they get them. The biggest advantage of a trust is that it avoids probate. This means that you avoid expensive court proceedings, you preserve the privacy of your estate, and you minimize the emotional stress on your heirs. The key to a revocable trust is that it must be funded prior to your death. That means your assets must be re-titled into the name of the trust. If they are not re-titled, then they must be probated.

The Durable Power of Attorney is another extremely important estate-planning tool. This legal document allows you to select someone to handle your finances in the event that you cannot. No one can predict the crises that can occur in life. If something happens that leaves you unable to handle the business side of your life, this document can allow someone you trust to step in. That person can pay your bills, keep up your investments, or make key financial decisions in your best interests. If you become incapacitated without naming a Durable Power of Attorney, then the court will have to step in and through an expensive and time consuming proceeding, name a guardian to act on your behalf.

A health care surrogate is a legal document which allows someone to make medical and health-related decisions on your behalf if you are not able to. It is sometimes known as a Medical Power of Attorney, commonly called the “Living Will.” It is a statement of your wishes for what kind of life-prolonging treatment you want, or don’t want, in the event that you become terminally ill and unable to communicate. It applies to all instances in which you are incapacitated.

Having a solid estate plan can set your mind at ease. It is not only for your benefit, but for the benefit of your loved ones. Give me a call to set up a meeting to discuss your estate plan.

Do I need a trust?

Julie Landry Laviolette in the Miami Herald tackles the age old question: “Do I need a trust?

”It’s not only heiresses and socialites who can benefit from a trust. Used in the right circumstances, a trust can be a helpful estate planning tool to pass assets to your children, take care of your affairs if you are incapacitated, or dole out your wealth — whatever its size — in a certain way.

Trusts can be part of a simple estate plan that includes a will, power of attorney and living will.

Deciding whether you need a trust or not can be confusing. What is a trust? It is a legal entity that allows you to put conditions on how your assets are distributed after you die. It can help minimize estate taxes and avoid probate. It can also be used to protect an heir’s assets from creditors.
Read the entire article to learn more about trusts can benefit the following people: 

A COUPLE WITH YOUNG CHILDREN

A SINGLE PERSON

A COUPLE WITH GROWN CHILDREN

FAMILIES WITH SECOND MARRIAGES

Make sure your estate plan is doing things for you (not TO you)

Estate planning is more than just having documents. It needs to be tied to long-term intent and aligned with your goals. What works for one person may not work well for the next, and what worked 10 years ago may not work now.

Geoffrey M. Zimmerman, CFP® practitioner, senior client advisor at Mosaic Financial Partners Inc., says many treat their estate plan like a transaction, even though the moving parts may have changed.

“They may have a document that is doing things to them and to their beneficiaries, and not really working well for them,” he says. “That’s why it’s important to review the plan periodically. It might take a visit to your attorney and the cost of several hours of time to update it. But in terms of relieving the headache on a surviving spouse or beneficiaries, those can be dollars well spent.”
Smart Business spoke with Zimmerman about why your estate plan should be continually adjusted. Read the article…

If I can assist you in any way, please call me or contact me by email.  I’ve spent years developing my expertise in these areas of estate management, and I would enjoy applying my expertise to assisting you.

Learning from the mistakes of others

In the arena of estate planning, there’s a lot to be learned from the mistakes of others. Tim Cestnick, author of several tax and personal finance books, offers some examples.

1. Don’t die intestate.

Dying without a will is called dying intestate.

When Jimi Hendrix died at age 27, he didn’t have a will. Despite being very close to his brother, the laws of the jurisdiction where he lived dictated that his estate was inherited by his father, who left it all to an adopted daughter from another marriage.

Without a will, the intestacy laws of your province will dictate who gets what – which may not jive with your wishes.

If you’re unmarried, for example, but have a partner, he or she may not be entitled to any of your assets upon your death if you don’t have a will.

And keep your will updated. When actor Heath Ledger died in 2008, his will was five years old; he hadn’t updated it when his daughter was born, so she wasn’t mentioned in his will and he left everything to his parents and sisters (he wasn’t married).

2. Watch the impact of specific bequests.

A woman I once met left her cottage to her son and her investment portfolio to her daughter. She thought she was treating them equally. There was a sizeable tax liability owing on the cottage upon her death. The only liquid assets available to pay the taxes were part of the investment portfolio.

In the end, the daughter was short-changed since the tax bill was paid out of her inheritance. The woman’s will could have been worded differently to avoid this problem. When you leave specific bequests to certain beneficiaries (including by way of joint ownership or by naming individuals as beneficiaries under your registered plans, for example) your estate may be short on cash to pay taxes or debts, leaving the taxman or creditors chasing beneficiaries for the money.

3. Avoid the wrong executor.

A reader recently wrote me to share the story of a woman who died at age 86. This woman had named her best friend, who was the same age, as executor in her will. Within two weeks of the woman passing away, her best friend also died, leaving the woman’s estate without an executor. This caused additional costs and delays in distributing her estate. When you choose an executor, choose someone who is very likely to still be around when you die (generally someone much younger) and name an alternative executor in the event your named executor is unable or unwilling to act in that role.

4. Protect your kids from a first marriage.

A gentleman I knew was in a second marriage, but his children were from a first marriage. Upon his death, he left all of his assets to his second wife who, upon her death, left everything to her own children from her first marriage. The gentleman’s children received nothing. There are different ways to ensure your children do receive what you intend for them, including leaving assets to them outright upon your death, or placing assets in a spousal trust where your second spouse can access the income of that trust, but not the capital, leaving that capital to pass to your children upon your second spouse’s death. Pre-nuptial agreements can also play a role here.

5. Remember that promises aren’t binding.

Before his death, Marlon Brando promised his caregiver, Angela Borlaza, his house, but did not write it into his will. Ms. Borlaza went to court and had to settle with his estate. Even a letter of wishes, which details who you’d like to receive your personal effects, is not binding. The late Diana, Princess of Wales, prepared a letter of wishes that left certain assets to her children and godchildren. It wasn’t followed, and the godchildren received only trinkets. A letter of wishes is still a good idea, but if you feel very strongly about specific assets, you may want to distribute those assets by way of your will.

Estate Planning Made Easy: Establishing Trust Bank Accounts

Huffington Post’s guest blogger, Diane Morais of Ally Bank addresses the question “How can I ensure the financial security of my family after I'm gone?"

It's an important question that we all wrestle with -- and one that has fueled an expansive network for estate planning products and services to address this important concern. If you're like most people, chances are you've been working a lifetime to build a nest egg that you can pass along to your children and loved ones. An important element of the estate planning strategy is maybe the simplest component of them all -- how to handle common bank accounts.

With many Americans now able to save for the first time in years, many are evaluating bank accounts that are ideally suited for trusts -- often on the advice of their financial planner -- to firm up their own savings while simultaneously easing the burden on their beneficiaries. There are numerous benefits:

•   Assets secured in accounts for trusts can be transferred almost immediately and without extra costs to beneficiaries when necessary

•   Accounts for trusts can be established in any amount, and those established at Member FDIC banks are insured for at least up to $250,000 per depositor

•   Some banks that offer deposit products for trusts -- such as Ally Bank -- allow them to be established by converting an already-existing savings, money market, or CD account

•    Any individual -- or organization -- can be named as a trustee

Establishing a trust

Establishing accounts for trusts does require a few steps; however, the process is hardly painful. The first step is to set up a living trust agreement, which transfers some or all of your assets to someone who will manage the trust (typically, people name themselves as the trustee; this allows them to retain control of the trust's assets). As part of the trust agreement, you also name beneficiaries who will inherit the trust upon your death. Establishing a living trust requires some paperwork and it's recommended to involve a lawyer in drafting the agreement.

The second step is even easier -- contact a bank that offers deposit accounts for trusts and provide them with the documentation. The process will differ based on the bank you use, but many, including Ally Bank, will provide step-by-step instructions for establishing these accounts.

The short process more than makes up for itself when one considers that the primary benefit of an account for trust is the ability to bypass the probate process upon the grantor's death -- which may save quite a bit of money and time for trustees as well as protecting your privacy by avoiding the often public probate process.

Call for an appointment to learn how an account for trust might fit into your estate planning strategy.

Six step checklist of your estate plan

Steve Shaw an estate planning attorney practicing in South Carolina and Florida offers this Six-step checklist of your estate plan.

1. Define your goals

2. Gather and organize your data

3. Analyze your situation

4. Develop your strategies

5. Implement your plan

Read the full article for details on each step. Shaw on the Law: Six-step checklist of your estate plan

Elder Abuse: How to stop it

The following is an excerpt from a recent article in The Mercury by Kathy Martin regarding elder abuse.

Our aging population is increasingly vulnerable to abuse, with financial exploitation having risen to the third most common form of elder abuse (following self-neglect and caregiver neglect). The message is that we need to step up and report abuse, or suspected abuse, when we see it.
Elder victimization is most concentrated in the very old, most victims are Caucasian and female, and a large proportion of older adult victims have cognitive difficulties. These statistics on victims are not surprising since cognitive issues increase in frequency in direct proportion to age, and the more help someone needs in their home, the greater chance of exploitation. Perpetrators spend time with their victims, and this time and attention results in gaining the trust of the victims. Many older adults are socially isolated, and the family member or other person who spends time with the older person becomes their new best friend and lifeline.
Victims fail to report exploitation even if they realize it is happening. They might fear the perpetrator, or fear being taken to a nursing home, or even fear losing the attention and time that the perpetrator is giving them. People have the right to make their own decisions, even if that decision seems like a poor choice. However, sometimes those choices are made out of fear or undue influence, and it becomes an invisible but very real problem.
As people age, everyone has changes in cognitive ability, especially in processing new information. This change in ability to understand new information, or even a great deal of information at once affects financial decision making ability. Add any cognitive deficits such as from depression or early dementia, and the senior’s ability to make good independent financial decisions can be compromised. It is easy for bad intentioned family members, or scammers, or new “friends” to step in.
What can we do to help our older family members or friends? One step is to make sure that older persons have good Power of Attorney documents in place before signs of dementia start occurring. If there are early signs of dementia, such as new aggressive behavior, anxiety, depression and/or confusion, assist the senior in seeking help and early intervention. Power of Attorney documents can be abused, but it is more protection than allowing a thief to gain control of the senior’s assets by gaining their trust when incapacity is already evident.

5 Estate planning documents all parents should have in place

When you're a parent, you can't imagine a time when you won't be around for your children. The reality is, however, that there is a possibility that during your lifetime, there might be a time when you are incapacitated or otherwise unable to make decisions about your care or your assets.

With that in mind, the best gift you can give to your children is a well thought-out estate plan. Kelly Phillips Erb lists the estate planning documents all parents should keep in one place.

1.Will

A will is a formal document which controls the disposition of probate assets following your death. Probate assets are those things that you own in your own name; non-probate assets, such as joint accounts or life insurance, do not pass according to your will but rather by titling or designations of beneficiary.

“WILLS AREN'T JUST FOR THE RICH.”

Wills aren't just for the rich. In addition to the assets you associate with wills — like bank accounts in your own name — a will allows you to designate how your personal tangible property will be distributed. You can think of personal tangible property as things in your home you can touch — your jewelry, furniture, car and other personal items.

You also have the opportunity to name fiduciaries under your will. This would include an executor, who would be responsible for handling the administration and disposition of your estate — including the filing of any income and inheritance tax returns. This would also include a trustee, who would manage any trusts created under your will for your children, who might not be old enough to properly manage assets on their own. Finally, if your children are still minors, you are able to designate a guardian under your will, who would care for your children after you are deceased. The executor, trustee and guardian can be — but don't have to be — the same person or persons. All of your fiduciaries should be a person or persons that you trust to make decisions.

2. General power of attorney

A general power of attorney is a document that allows you to name an agent to handle your financial affairs in the event that you become incapacitated or are unable for any reason to administer your finances during your lifetime. There are two kinds of powers of attorney — a durable power of attorney, which survives incapacity, and a nondurable power of attorney, which is generally used for limited transactions such as the sale of a home. A power of attorney can be immediate or springing — an immediate power of attorney is effective at signing while a springing power of attorney is effective only upon a triggering event, such as incapacity.

3. Healthcare power of attorney

A healthcare power of attorney is a document that allows you to name an agent to make health care decisions for you in the event you are incapacitated. A healthcare power of attorney only acts on your behalf if you are unable to do so and have not otherwise communicated your wishes. It's important to keep in mind that a healthcare power of attorney does not supersede your living will (see immediately below). Your healthcare power of attorney doesn't have to be a family member and should be someone you trust to understand your wishes and act accordingly.

4. Living will

A living will doesn't involve your assets at all, but rather focuses on your end-of-life care.

Also called an advance directive, health care directive, or a physician's directive, a living will allows the people you care about and your medical professionals to know what type of care you do (or don't) want to receive should you be permanently unconscious. A living will is only effective when you are not able to express your own wishes.

5. Temporary guardianship

In some states, you can also execute a temporary guardianship for your children. If you need to turn over the care of your children temporarily to another adult because you are having a medical procedure or are out of town on business, you may want to set up temporary guardianship. A formal temporary guardianship allows another person the right to approve medical treatment, sign permission slips for school or otherwise make decisions for the benefit of your children while you are not able to care for them.

Nobody wants to talk about estate planning when you're young. But you should — especially if you have children. Do yourself and your family a favor and make sure you have your estate planning documents in place now so that you don't force your family to worry about it later. If you need assistance with these documents, I’m available to meet with you.

Estate planning: it's ok to be charitable

Christopher W. Yugo, Times Business Columnist answers a frequent question in estate planning:

Q: I intend to leave all of my money to two charities but I'm concerned that my children will object. I'm worried they will challenge the will. Is there anything I can do to make sure that my wishes are carried out? Should I name someone other than a child executor?

A: First off, you can leave your property to whomever you want. If you want to leave it to a charity or the neighbor, you can do it. Now don't get me wrong, I understand why a child might be upset they are excluded. However, that doesn't mean that you can't or shouldn't do it.

As I've written before, will challenges are rare and successful will challenges are even rarer than that. There really needs to be a compelling reason to set aside a will. For example, a will can be set aside if it can be shown that the testator was subject to undue influence or if he wasn't competent to execute a valid will in the first place.

I wish there was a magic bullet to prevent a will challenge, but there isn't. If your kids want to challenge your will, they can do it. Fortunately, or unfortunately if you are the child, will challenges are expensive. That in itself could be enough to discourage a challenge.

I suggest you discuss your options with your attorney. He or she will be able to help you plan for trouble. Your attorney may suggest you obtain a letter from your doctor demonstrating your competency or perhaps suggest a video recording of the will signing be made. The attorney will almost certainly want to meet with you alone so the chances of a successful undue influence claim are greatly reduced. The key is bringing your concerns to your attorney's attention.

As for naming someone other than a child personal representative, I'm kind of torn. On one hand, naming a child personal representative may help your family understand why you were so charitable. On the other hand, it seems a little twisted to request a child you disinherited to administer your estate. If you decide to name someone other than a family member, you could contact your bank's trust department and inquire about it serving as personal representative. The bank will do its best to assure your instructions are carried out.

Finally, you might consider discussing it with your family ahead of time so they aren't surprised when you pass. Maybe explaining to them why you are leaving your property to the charity will help them understand and perhaps avoid hard feelings, and possible litigation.

Protecting your future: Inheritance can come with unintended consequences

Some people might want to avoid difficult conversations about inheritances by keeping silent and allowing family members to find out facts only when the estate is settled. However, waiting until the end opens the door to potential feuding and costly legal challenges.

The goal of proper planning is to make transfers as seamless and efficient as possible. Meeting that goal requires others to know what to expect when the time comes.

The article titled “Protecting your future: Inheritance can come with unintended consequences” by Bonnie Kraham, an elder law estate planning attorney in Wallkill, NY talks about how sometimes an inheritance can be unwelcomed, in which case the recipient can file a legal “disclaimer” (a legal form of saying “no” to avoid or reduce state estate taxes.

Failing to follow the rules properly can lead to many complications. If you are concerned that someone may want to disclaim their inheritance from you, or if you need to disclaim an inheritance, I’m available to answer questions and to meet with you.

Who are the biggest estate planning procrastinators?

One-in-five investors have yet to create an estate plan. Adrian Reyneri writes in her March 19^th  article in Spectrum’s Millionaire Corner  who’s most likely to put off this important aspect of personal financial planning:

1. Young investors
2. Main Street investors
3. Investors with little or no knowledge
4. Women

Do you fall into any of these estate plan procrastinator groups? If so, give me a call to set up a meeting to discuss your plan.

Plan a family meeting

Estate planning is vital to ensuring your family is properly taken care of after your passing, but almost equally important is communicating that plan to your family in advance. The below commentary was written by Estate planning columnist Curtis Kaiser.

Last year, I met with a prospective client whose wife had passed away a decade or so ago. He wanted to check in to make sure his estate plan was on track – as it hadn’t been reviewed or updated since his wife’s passing.

He was a delightful and extremely organized person. His plan – which had been drafted by an attorney who had since retired - was in reasonably good shape – the assets were properly funded and the trust accurately reflected his wishes: a simple division of assets upon his death to his three adult children. I suggested that he make some minor changes to his plan, but reported that otherwise he appeared to be on track.

Earlier this year, I received a frantic call from one of that client’s beloved daughters – her father had unexpectedly developed a serious illness and was unable to manage his financial and health affairs. She had no idea where her father’s estate planning documents were, what they said, or what they meant. Instead of being able to focus on supporting her father during his illness, she was consumed by an additional layer of worry.

It appears that my client didn’t want to “burden” his children with having to think about the possibility of him falling ill or passing away – he just told them that things were “taken care of” if anything should happen to him.

I arranged a time with his daughter to visit my client and his family to discuss how his estate planning documents were designed to make sure that his family could properly assist with his financial and medical affairs – like paying his bills and talking with his doctors. Unfortunately, shortly before the meeting, my client’s illness took a turn for the worse and he required hospitalization. The family needed to focus on him — they didn’t have time to meet with me to go over the documents.

My client was a conscientious, loving and thoughtful father – he already had done so much for his children in terms of preparing an estate plan and having his affairs in order – what else could he have done? The ideal solution here would have been a “family meeting.”

Coordinated with either his financial advisor or his estate planning attorney (or ideally, both), this family could have sat down for an hour to allow my client to explain his wishes and allow the estate planning attorney to discuss with the children how the plan would work in the event of his illness or passing. Through the family meeting, family members could ask appropriate questions and reach an appropriate level of understanding so that when the time came, they would be ready to help – and not burdened with an extra layer of complexity.

I’ve done a number of family meetings for clients. Both the clients and their loved ones often approach the meeting with a bit of anxiety, but in every single case that I’ve been involved with, the experience has had a positive end result. Even when there are controversial issues discussed – for example, if the parents don’t feel that a certain child is financially ready to manage an inheritance – putting that issue out in the open eventually leads to an increased level of understanding.

Another benefit of the family meeting is that it builds a relationship between the client’s advisors and family members so that when the time comes, the surviving family members feel comfortable.

Call if you need help setting up such a meeting with your family.

Downton Abbey: Real Life Lessons for Trust and Estate Advisors

The following commentary is extracted from an article written by Joshua Baron and Devin Bird  published in Trusts and Estates

In real life, far from the TV world of post-Edwardian England, business families can find themselves in the same circumstances as those of the beleaguered Crawley family.  Consider estate planning.  In the TV series, the Earl doesn’t leave the estate to his eldest daughter but, having no son, passes it on to Matthew, an unknown relative.  He’s forced to do so because English laws at the time required a male heir.

Although primogeniture is no longer in effect in most countries today, it’s not uncommon for families to choose to operate under similar restrictions.  For example, some business families only allow male family members to be owners.  This arrangement is usually established with the intention of reducing future conflict in the family.  Unfortunately, it can have the unintended consequence of excluding some of the talented leaders in the next generation who are female.

Understandably, family business owners often wish to keep the business, and sometimes management, in the family, and so they try to restrict future ownership to bloodline relatives.  To endure and remain competitive, however, each generation requires at least one talented and driven leader.  There’s no guarantee that blood relatives will have the necessary vitality and energy.  Sometimes, the passion and ideas can come from the outside, for example, from in-laws. That’s what happened in the Canadian company Bombardier Inc. and its recreational BRP division, which has subsequently been spun off.  When the founder died in his 50s, it was the founder’s son-in-law who transformed the business from a pioneering, small snowmobile company into a global airplane, locomotive and recreational company, with combined revenues of some $20 billion. 

Even in a make believe world, succession isn’t easy. Downton Abbey reminds owners of assets, and the advisors who counsel them, that caution should be exercised in placing too many restrictions on who can be owners in the future.  There may be good reasons for the restrictions, but full understanding of what could happen is crucial.

Trust and estate advisors like themselves can serve our clients well by doing scenario planning with you about how such rules/restrictions could ultimately play out in ways that hadn’t originally been intended.

Special Needs Children Benefit from Special Needs Estate Planning

The following commentary is extracted from an article written by Laura Shumaker - writer and Autism Advocate - and mother of a special needs child.  It appeared in SFGate.com of the San Francisco Chronicle.  Feb. 14, 2013.

1) Most parents of children with special needs worry about what will happen to their child when they are gone, and they worry so much that they put off planning. How do you talk to parents about their fears?

It is difficult sometimes for parents to discuss who is responsible to take care of their children if they are no longer there to do it. This is even more true for parents of children with disabilities who oftentimes must provide a much higher level of care. The benefits of planning are so enormous in these situations that our clients tend to come to us at a much earlier age. A proper estate plan will include planning for the money that is left for the child with a disability, along with a detailed plan that addresses residential, caregiving, advocacy, and other issues that arise for a child with a disability. Once the benefits of planning are provided, parents are relieved to know that something productive can be accomplished to preserve and enhance their child’s life, even when they are not able to do it themselves.

2) What is the first thing parents should do to prepare for the future?

Prepare their own estate plan and write out their instructions for how to best manage their child and their finances. If that is too much, they should at least prepare a Power of Attorney and Advance Health Care Directive to appoint someone to make these important decisions if they are unable to do so.

3) Parents tell me that they are spending so much on treatment now that it is hard to save for later. Your thoughts?

This is a common problem. One solution is to purchase a life insurance policy. It is one additional bill throughout the parents lifetime, but it will provide cash for the care of their loved one with special needs after they are gone. It is important that they select the right kind of policy, because term life insurance usually is not beneficial because they so rarely pay out a death benefit.

4) What is a Special Needs Trust?

A Special Needs Trust (SNT) is a type of trust where people can leave assets to a loved one with special needs that will not interfere with their eligibility for public benefits like SSI or Medi-Cal. In addition, the SNT is a legal way for a person to leave instructions on how best to enhance the quality of life of a loved one with special needs. This often includes plans on where the person shall live, what caregiving will be required, what type of distributions should be made that enhance that person’s quality of life, and any other benefit the person would like to see accomplished.

5) Will trust income affect SSI Eligibility?

No, any assets held inside a special needs trust and any income generated from a special needs trust will not jeopardize eligibility for SSI or Medi-Cal. These trusts are expressly authorized by the federal and state government to hold assets for persons with disabilities and not interfere with public benefits. However, improper administration of an SNT can still cause a loss (or reduction) in benefits, so it is also important to name a trustee (the person responsible for managing the trust assets) who understands SSI rules, Medi-Cal rules, and the typical rules of managing a trust.

6)Why is it important to hire an attorney who specializes in special needs trusts?

Special needs trusts work to preserve eligibility for public benefits, but only if all of the rules are followed. Many estate planners who do not do a lot of planning for persons with disabilities do not understand all the wonderful things a special needs trust can do to enhance the quality of life of a person with a disability. Thus, it is important that the proper special needs planning attorney is used to make sure all of the legal technical rules are followed along with providing advice on all the options that can be used as part of the special needs planning.

Solid legal planning is highly recommended for individuals with developmental disabilities.  I am available to meet to talk about all types of estate planning needs.  The key words are "estate planning".  Let's get you started now.

Estate planning can be a jungle, and a guide can be invaluable.

There comes a time for a business owner to plan transition of ownership.  Before selling or giving a business to family members, the owner must devote thought to the outcome that he or she wants to accomplish. Regardless of the intended family recipient(s), all parents have to ponder and answer the following questions to determine their exit objectives:

• How much wealth do we want to keep?
• How much wealth do we want the kids to have?
• How much is too much?
• And finally what tools should we use to minimize the estate and gift tax consequences?

It's key that business owners define their financial exit objective, then they can become effective in the designs for the optimum transfer mechanisms for passing the wealth to their children with minimal tax impact. It's the first part that is daunting -- Figuring out one’s wealth transfer objectives.  The transfer of wealth tends to be difficult, as family relationships and business objectives become part of the same equation. For example, if an owner wants to transfer the business to a child but still retain control and authority over all business decisions, it is doubtful the child will be ready to run the business once the transition is complete.


These are a few of the subjects that we can discuss when we meet.  I will take the role of "estate planning guide" most seriously.  So please call me, and let's take on the "jungle" one step at a time to insure your success.

Celebrity Estate Planning goes awry Pt. 8

Whether famous or just regular folks, we are reminded by the following anecdote that a few extra steps in your estate planning will deliver on your intentions.

Leona Helmsley

Leona Helmsley was famous for being direct in her requests of staff and others around her.  After her death, it was discovered that the hotel tycoon had left instructions cutting two of her grandkids out of her $5 billion estate and leaving $12 million for her dog, Trouble. The stiffed grandkids made their own trouble and sued, claiming that she wasn’t mentally fit to create her will and trust. The case settled, leaving poor Trouble with “only” $2 million.

There is a basic lesson to be learned here: If you’re planning to do anything unusual, especially if it involves anything that would leave unhappy family members, have a lawyer conduct a mini evaluation attesting to your mental competence.

Whether  I'm working on the ordinary or the exotic estate planning issues, I enjoy helping people plan their estates.  Please give me a call, if I can assist you..... or if you just wish to meet and get acquainted. 

Celebrity Estate Planning goes awry Pt. 7

Whether famous or just regular folks,  we are reminded by the following anecdote that a few extra steps in your estate planning will deliver on your intentions.

Heath Ledger

The actor started out being an excellent estate planner for himself.  He drafted a will leaving everything to his parents and sister, but after the birth of his daughter he failed to update his will.  The results were messy family fights in the media.

The lesson is to start well and then maintain the good beginning: Be sure to regularly update your will following life events like a birth, adoption, marriage, divorce, or death in the family.

I work daily with estate plans, and I would welcome the opportunity to discuss how we could develop a plan that would work for you.  Call me, and let's get acquainted.

Celebrity Estate Planning goes awry Pt. 6

Whether famous or just regular folks, we are reminded by the following anecdote that a few extra steps in your estate planning will deliver on your intentions.  

Florence “FloJo” Griffith Joyner

This Olympic sprinter wrote a will (which was a good estate planning act), but she never told anyone where it was.  The result left her husband was unable to file the will within 30 days after her death --- as required by her state's law. As a result, both FloJo's husband and her mother went to court over disputes, and administration of the estate was eventually turned over to a third party.

Basic Lesson to be learned here: Keep copies of your will someplace secure like a safe deposit box, your attorney’s office, or with a reliable third part.  And then be sure to let your family members know where it is and how to access it.

Call me, and we can draft a will and make arrangements for its safe storage.