Think Strategically when Creating Estate Plan

Think Strategically when Creating Estate Plan

Mindful estate planning can create tax and investment efficiencies and help ensure that your wishes are fulfilled, says a recent article titled “Estate planning basics: Tips for strategic preparation” from Atlanta Business Chronicle. Before creating a plan, it may be helpful to understand the components of a comprehensive plan, how assets can be transferred and how to get started.

Thoughtful estate planning starts with key documents. Your last will and testament provides details on wishes about property distribution and assets after death. The will creator names an executor, who oversees and manages the estate until its final distribution, including payment of any outstanding debts or taxes.

The will has no impact on insurance proceeds, retirement assets, or transfer-on-death investment accounts. A will can be amended during the creator’s lifetime and should be reviewed every three years or so to ensure that it still aligns with the testator’s wishes.

Trusts are legal entities allowing a third party—the trustee—to manage assets on behalf of beneficiaries. There are many different kinds of trusts, depending on the family’s needs. The grantor, who is the person creating the trust, can define how and when assets pass to beneficiaries. They can be revocable, meaning the grantor can amend the trust as long as they are living, or irrevocable, meaning the grantor cannot amend the trust after its creation.

A letter of intent can accompany a will and is published to the executor, trustees and beneficiaries. This provides detail from the decedent on their wishes but is not legally enforceable.

Power of Attorney is used when the person creating it is physically or mentally disabled due to illness or injury. It allows an agent to manage financial and legal affairs, can be temporary or permanent and is revoked upon the death of the principal.

Advance directives for health care provide detailed guidance to caretakers and medical professionals regarding wishes for healthcare when the person is unable to communicate their own wishes.

Transferring assets to beneficiaries occurs in several different ways, including designations, jointly held accounts and property, probate, or trusts. Beneficiary designations are typically used with life insurance policies, annuity contracts, retirement accounts and investment accounts.

Some assets are owned through Joint Tenancy With Rights Of Survivorship (JTWROS). They pass by title or registration to a surviving co-owner. This type of ownership is usually used with bank and investment accounts, real estate property, vehicles, or boats. The asset automatically transfers to the surviving owner. Be sure to avoid conflicting instructions in wills or trusts when assets are owned with JTWROS.

Probate is the method through which the estate is approved by the court and assets are distributed using the will as guidance. The court also authorizes the executor to manage the estate.

Assets held in trust are maintained by trustees who hold the assets on behalf of beneficiaries. They are passed on based on the trust agreement and don’t go through probate.

Once you have created an inventory of all assets and properties, meet with an experienced estate planning attorney to draft the documents needed to carry out the plan. The attorney will help refine goals and clarify key issues. Assets may need to be retitled and trusts may need to be funded. Executors, trustees and beneficiaries should be notified, so they understand their role in your estate plan.

Reference: Atlanta Business Chronicle (March 1, 2023) “Estate planning basics: Tips for strategic preparation”

How Should I Handle Memorabilia in My Estate Planning?

How Should I Handle Memorabilia in My Estate Planning?

Kiplinger’s recent article entitled “Estate Planning for Memorabilia Collectors: Don’t Leave Your Family in the Lurch” says the first step is to know what you have. Make a thorough and updated inventory to help your family understand the scale of the collection and where the items are located. Make sure the inventory is current and has detailed information about the items, like if a piece of memorabilia is signed or if it was game-used.

It’s also wise to log valuations along with the items’ description. You can try to stay on top of when comparable items sell at auction and follow industry publications to keep your valuations as current as possible. Every sector of collectible is different. Some items see their valuations fluctuate more than others. Even so, it’s helpful to have a ballpark idea of the total value of the collection. At some point, it might be worth hiring an appraiser to give you a formal valuation of the collection.

As far as authentication, many items need supporting paperwork to verify they’re legitimate. As you plan for your family to handle the sale of your items, they’ll need to know that those documents are an essential part of the collection and where they are.

When you’re walking them through your inventory, note where the items are identified as having separate certificates of authenticity and make sure they know where to find them. This can be as simple as using file folders.

When it comes time to sell, where does your family go Whether it’s sports memorabilia, coins, stamps, or just about anything else, there are dealers who are willing to purchase the collection. If you go into a collectibles shop that’s only buying items they plan to resell, you can expect to get about half of a collection’s actual value.

You can help your loved ones by making connections with auction houses that would be interested in bringing your collection up for sale. This can be a highly specialized area, so you’ll be saving your beneficiaries a big pain if you give them information about where they will get a fair price.

Reference: Kiplinger (Feb. 26, 2023) “Estate Planning for Memorabilia Collectors: Don’t Leave Your Family in the Lurch”

Who Inherits TV Broadcaster Barbara Walters’ Estate?

Who Inherits TV Broadcaster Barbara Walters’ Estate?

Vim Buzz’s recent article entitled titled “Who Will Inherit Barbara Walters’ Estate?” says American broadcast journalist and television personality Barbara Walters also rose to fame and received praise for speaking with people like Hugo Chavez, Fidel Castro, Anwar Sadat, Menachem Begin, Katharine Hepburn, Sean Connery, Monica Lewinsky and Vladimir Putin.

She hosted a number of television shows, including Today, the ABC Evening News, 20/20 and The View.

Walters was well known for her interviewing skills and popularity with viewers.

Her “coming out of retirement” for a special 20/20 interview with Peter Rodger, the father of the murderer of the 2014 Isla Vista shootings, Elliot Rodger, was announced on June 10, 2014.

She spoke in-depth with presidents and their wives, like Richard and Pat Nixon and Barack and Michelle Obama. In fact, she spoke with every sitting president and first lady of the United States during her tenure.

She also spoke with Joe Biden and Donald Trump, but not when they were president.

The newscaster’s estate will be inherited by her family. Chief among her assets was a Florida retreat she purchased in 2014. That was the same year she announced her retirement.

However, the property was placed on the market shortly after her dementia diagnosis took a turn for the worse.

She purchased the three-bedroom, four-bath waterfront condo in Naples for $3.4 million.

Just two years later, in April 2016, she transferred the unit to her daughter, Jaqueline Dena Guber.

The 54-year-old Guber subsequently listed the home three months later for $6.78 million. The home spent time on and off the market until September 2018, when it sold for $5.35 million.

The complex is called Moraya Bay. This luxury building has a concierge service, a private beach club, a large state-of-the-art fitness center and full security.

However, in New York City, Walters had lived in the same Upper East Side apartment overlooking Central Park since 1989.

An ABC program titled “Our Barbara” aired on January 1, 2023, and a 20/20 senior producer remarked, “For a lot of years, we maintained a close eye on Barbara.

Her final public appearance was in 2016, and her final on-air interview was with Donald Trump for ABC News in December 2015.

Reference:  Vim Buzz (Jan. 3, 2022) “Who Will Inherit Barbara Walters’ Estate?”

What Is Inheritance Theft?

What Is Inheritance Theft?

Inheritance theft is sometimes a very real issue for those who inherit money, property, or other assets. Inheritance theft laws exist to protect heirs and beneficiaries. If you’re going to receive an inheritance or have received one that was stolen from you, it’s important to know your legal rights and how to get those assets back.

Yahoo’s recent article entitled “Someone Stole My Inheritance. What Are My Options?” says inheritance theft can take different forms, and some are more obvious than others. Some common examples of inheritance theft or inheritance hijacking include:

  • An executor of a will who steals or attempts to conceal assets from the estate inventory
  • A trustee who diverts assets from a trust for their own use or benefit
  • Executors who charge excessive fees for their services
  • Abuse of power of attorney status
  • Use of coercion or undue influence to force a will-maker or trust grantor to change the terms of their will or trust; and
  • Fraud or forgery related to the will or trust document or the destruction of the documents.

Inheritance theft can also occur on a more personal level. Perhaps your sister and you share caregiving duties for your aging mother. Your sister has access to your mother’s bank accounts and—without your knowledge—takes out a large sum while your mother is still living. Your mother then names you as the executor of her will. When she dies, you create an inventory of her assets, as required. While doing so, you discover the missing funds from her bank accounts. If you and your sister were supposed to have inherited those assets jointly, this could be a violation of state inheritance theft laws.

People who commit inheritance theft may be subject to both criminal and civil penalties. A caregiver who steals money from someone’s bank accounts or coerces them into signing over other assets could also be charged with a felony or misdemeanor crime.

The injured heirs or beneficiaries may also opt to pursue a civil claim against someone they believe has stolen their inheritance.

Reference: Yahoo (Jan. 18, 2023) “Someone Stole My Inheritance. What Are My Options?”

Who Gets Graceland after Lisa Marie Presley‘s Death?

Who Gets Graceland after Lisa Marie Presley‘s Death?

The daughter of Elvis and Priscilla Presley, died on January 12 at 54 after suffering a cardiac arrest at her home in Calabasas, California. She will be buried near her late father and son (Ben Keogh) at Graceland, reports NME’s recent article entitled “Lisa Marie Presley’s children to inherit Graceland estate.”

According to People, Lisa Marie’s three daughters – actor Riley Keough, 33, and twins Harper and Finley Lockwood, 14 – will inherit Graceland in Memphis, Tennessee.

She was the sole heir to her father’s estate, which she assumed in 1980 after the Presley’s death in 1977. She owned Elvis’ former home, including his Graceland mansion and its surrounding 13 acres.

The estate was passed to Lisa Marie in trust when she was just nine. That trust officially dissolved on her 25th birthday in 1993, giving her full ownership of Graceland.

Graceland was turned into a public museum in tribute to Elvis in 1982. About 650,000 people visit the estate every year. The property is estimated to be worth $500 million.

Lisa Marie vowed to keep Graceland in the family.

“Graceland was given to me and will always be mine,” she said in a 2013 interview. “And then passed to my children. It will never be sold.”

The family has requested that fans donate to The Elvis Presley Charitable Foundation, instead of giving flowers.

With the news of Lisa Marie’s passing, tributes poured in from the likes of her ex-husband Nicolas Cage, John Travolta, Elvis star Austin Butler and the Michael Jackson estate.

Lisa Marie Presley opened up about bereavement in a 2022 essay for People, writing that “grief does not stop or go away in any sense, a year, or years after the loss.” She lost her son Ben to suicide in 2020.

She added: “Grief is something you will have to carry with you for the rest of your life, in spite of what certain people or our culture wants us to believe.”

Reference: NME (Jan. 17, 2023) “Lisa Marie Presley’s children to inherit Graceland estate”

How Does My Co-op Fit into My Estate Planning?

How Does My Co-op Fit into My Estate Planning?

Parents bought a studio apartment in a New York City co-op for their adult son with special needs. He’s able to live independently with the support of an agency.

The couple asked the co-op board to let them transfer the property to an irrevocable trust, so when they die, the son will still have a place to live. However, the board denied their request.

An individual with special needs can’t inherit property directly, or he’ll no longer be able to receive the government benefits that support him. What should the parents do?

The New York Times’ recent article entitled “Can I Leave My Co-op to My Heirs?” explains that parents can leave a co-op apartment to their children in their will or in a trust. However, that doesn’t mean their heirs will necessarily wind up with the right to own or live in that apartment.

In most cases, a co-op board has wide discretion to approve or deny the transfer of the shares and the proprietary lease.

If the board denied the request, the apartment will be sold and the children receive the equity. Just because the will says, ‘I’m leaving it to my children,’ that doesn’t give the children the absolute right to acquire the shares or live there.

In some instances, the lease says a board won’t unreasonably withhold consent to transfer the apartment to a financially responsible family member. However, few, if any, leases extend that concept to include trusts.

The parents here could wait to have the situation resolved after their deaths, leaving clear directives to the executor of their estate about what to do should the board reject a request to transfer the property into a trust for their son. However, that leaves everyone in a precarious position, with years of uncertainty.

Another option is to sell the co-op now, put the proceeds in a special-needs trust and buy a condo through that trust. The son would then live there.

Unlike co-ops, condos generally allow transfers within estate planning, without requiring approval.

While this route would involve significant upheaval, the parents would have more peace of mind.

However, before buying the condo, an experienced estate planning attorney should review the building’s rules on transferring the unit.

Reference: New York Times (Oct. 1, 2022) “Can I Leave My Co-op to My Heirs?”

Do I Need to Name a Life Insurance Beneficiary?

Do I Need to Name a Life Insurance Beneficiary?

When a loved one dies, there are questions to address, such as how to pay for a funeral and other death expenses. A life insurance policy may help. However, the deceased must have made sure the proper beneficiary is named.

If a beneficiary isn’t designated, some issues with the estate could arise, or the policy could go to the decedent’s estate. Likewise, the same is true if the one beneficiary preceded the decedent in death.

Yahoo Finance’s recent article entitled “What Happens If I Don’t Name a Life Insurance Beneficiary?” explains that a life insurance policy is a contract you enter into with a life insurance company.

When you set up your life insurance policy, you have the right to name one or more beneficiaries who’ll get the proceeds of the policy when you die. You pay premiums on the policy until your death, to guarantee your beneficiaries that right.

You might designate just one beneficiary to receive all the proceeds. In addition to the primary beneficiary, you can name contingent beneficiaries who will receive the proceeds of the policy if the primary beneficiary predeceases the policyholder.

It is important to add as much identifying information about your beneficiaries as possible, so they can be easily identified. It’s also important to keep your policy up to date on the information of your beneficiaries.

If there are no beneficiaries living, either the proceeds of the policy will enter the probate process, or the life insurance proceeds will pass to the decedent’s heirs-at-law who are those people who are close to the decedent and would probably inherit, if there was a beneficiary designation or will.

Heirs-at-law are also defined as those people who will inherit your assets, if you die intestate.

Dying without a beneficiary in place or leaving your estate as beneficiary of your policy have different rules in each state.

Ask an experienced estate planning attorney about your state’s rules and the rules of the life insurance company when you’re setting up your life insurance policy and will.

Reference: Yahoo Finance (Dec. 10, 2022) “What Happens If I Don’t Name a Life Insurance Beneficiary?”

The Basics of Estate Planning

The Basics of Estate Planning

No matter how BIG or small your net worth is, estate planning is a process that ensures your assets are handed down the way you want after you die.

Forbes’ recent article entitled “Estate Planning Basics” explains that everybody has an estate.

An estate is nothing more or less than the sum total of your assets and possessions of value. This includes:

  • Your car
  • Your home
  • Financial accounts
  • Investments; and
  • Personal property.

Estate planning is the process of deciding which people or organizations are to get your possessions or assets after you’ve died.

It’s also how you leave directions for managing your care and assets if you are incapacitated and unable to make financial or medical decisions. That is done with powers of attorney, a healthcare directive and a living will.

Your estate plan details who gets your assets. It also designates who can make critical healthcare and financial decisions on your behalf should you become incapacitated. If you have minor children, it also lets you designate their legal guardians, in case you die before they reach 18. It also allows you to name adults to safeguard their financial interests.

Your estate plan directs assets to specific entities or people in a legally binding manner. If you want your daughter to have your coin collection or your favorite animal rescue organization to get $500, it’s all mapped out in your plan.

You can also create a trust to safeguard a minor child’s assets until they reach a certain age. You can also keep assets out of probate. That way, your beneficiaries can easily access things like your home or bank accounts.

All estate plans should include documents that cover three main areas: asset transfer, medical needs and financial decisions. Ask an experienced estate planning attorney to help you create your  plan.

Reference: Forbes (Nov. 16, 2022) “Estate Planning Basics”

Should I Need a Trust in My Estate Plan?

Should I Need a Trust in My Estate Plan?

Fed Week’s recent article entitled “Considerations for Including a Trust in Your Estate Plan” describes what a trust can offer. This includes the following:

  • Protection against possible incompetency. To protect yourself, you can create a trust and move your assets into it. You can be the trustee, so you’ll control the assets and enjoy the income.
  • Probate avoidance. Assets held in trust also avoid probate. In the documents, you can state how the trust assets will be distributed at your death.
  • Protection for your heirs. After your death, a trustee can keep trust assets from being squandered or lost in a divorce.

If your heirs are young, you can set up a trust to stay in effect until they are older and can handle their own finances. Another option is to keep the trust in effect for the lives of the beneficiaries.

A trust can be revocable or irrevocable. A revocable trust must be created during your lifetime. If you change your mind, you can revoke the trust and reclaim the assets as your own.

A revocable trust can offer incapacity protection and probate avoidance but not tax reduction.

An irrevocable trust can be created while you’re alive or at your death. A revocable trust may become irrevocable at your death.

Assets transferred into an irrevocable trust during your lifetime will be beyond the reach of creditors and divorce settlements. The same is true of assets going into an irrevocable trust at your death.

Your family members can be the beneficiaries of an irrevocable trust, while a trustee or co-trustees you’ve named will be responsible for distributing funds to those trust beneficiaries.

The trustee will be responsible for protecting assets.

Reference:  Fed Week (Oct. 5, 2022) “Considerations for Including a Trust in Your Estate Plan”

What Is Asset Protection Planning?

What Is Asset Protection Planning?

Yahoo’s recent article entitled “How to Protect Your Money, Even If You’re Not Rich” says that contrary to what many people believe, asset protection planning isn’t just for the wealthy. The estates of anyone, in any income group, can be sued or suffer from hefty taxation.

The following strategies can mitigate the effect of creditor claims and other issues on your wealth.

If you want and need to protect your assets, you should be proactive. However, if you have significant debt and few assets and you are subject to a lawsuit, it may be better to file for bankruptcy than to create an asset protection plan.

That’s because it’s only worth it if you have significant assets, although some events cannot be protected against. These include tax liens, mechanics liens, alimony judgments and child support claims.

A plan benefits these people the most:

  • Anyone with a significant amount of assets.
  • Anyone with a significant, recurring amount of credit card debt.
  • Homeowners underwater on their mortgage (your mortgage balance is greater than the value of your home).
  • Anyone whose profession carries with it a high probability of liability, such as doctors and attorneys.

Some assets aren’t subject to creditors, such as retirement accounts under the protection of the Employee Retirement Income Security Act of 1974 (ERISA).

You may also legally preserve at least a portion of your home equity. Homes may be put in another individual’s name.

The goal of an asset protection plan is to set a level of legal separation between you and your assets. This allows you to legally shelter your assets from creditors without doing anything illegal.

Reference: Yahoo! (Nov. 6, 2022) “How to Protect Your Money, Even If You’re Not Rich”