Estate Planning

Estate planning is a serious business. Meeting with clients often dredges up emotions and issues in the family that are necessary to discuss in order to fully discover a client’s goals and values and to design a plan that successfully transitions the family legacy from one generation to the next.  Estate planning concepts can be more enjoyable to learn in a hypothetical situation, however.  I was reminded of the Harry Potter series recently when I read of Richard Griffiths’ death at age 65. Mr. Griffiths’ character was Uncle Vernon Dursley, one of the series’ minor villains.  Uncle Vernon prevents Harry from developing into the person Harry was meant to be. I challenge you to think about this scenario and ask yourself if the fantastical world of Ha...

My Uncle Bud was one of the sweetest men you could ever hope to meet.  He had a huge heart and a generous spirit.  He died of a stroke at the much-too-young age of 71.    In keeping with Jewish tradition, my family gathered for the unveiling of his headstone a year after he died.  I learned many wonderful new things about my uncle at this event, including that his desk had been littered with half written love notes to his wife of some 50 years at the time of his death.    At the luncheon after the ceremony, my Aunt Lee announced that when they had done their estate plan many years before, Uncle Bud felt it was important to leave a little something to each of his nieces and nephews to symbolize how much they meant to him.  The amount he settled on...

I saw Cinderella for the first time with my daughter recently, and though I (and likely you) were familiar with the outline of the story, we often forget the backstory. It starts with the disaster, specifically, an estate planning disaster in a world that does not need to worry about the estate tax or probate, or even lawyers. You see, Cinderella’s mother died when she was a child. Her father decided to remarry a woman with two girls that are about the age of his own daughter. Cinderella’s father dies next, when she is still a child. He leaves the estate to his widow (the normal thing to do in the real world), who serves as Cinderella’s stepmother. This woman takes control of the estate for the benefit of herself and her own two daughters. Cinderella then, as presumabl...

For many Americans, passing along religious beliefs and values to the next generation is just as important, if not more so, as passing along financial wealth and tangible assets. Estate planning creates many opportunities to do this. Here is a brief discussion of some of these opportunities.   End-of-Life Care. In a health care power of attorney (Advance Directive in some states), you name someone to make medical decisions for you in the event you cannot make them yourself. You can select someone who shares your faith and values about end-of-life issues or someone who will honor your wishes. In either case, it is important to provide written instructions about things like organ donation, pain medication (if you want to remain conscious or be fully sedated at the end of life),...

The tax act signed into law by President Obama last week provided some very good estate planning provisions. Surprisingly, I have already read and heard complaints from other estate planning attorneys that this new tax act renders the 2012 year end gifting a “waste of time.” This is absurd; quit your whining! These are the same folks who complain that their clients would not make any significant gifts in spite the significant benefits that go with it, tax and otherwise. The one good thing about the “fiscal cliff threat” is that it convinced some to implement plans that should have been implemented already.   The American Taxpayer Relief Act of 2012 extended and made “permanent” the estate, gift and generation-skipping transfer tax structu...

The recent tax legislation dealing with the “fiscal cliff” included significant revisions to the estate tax law that will affect estate planning for the foreseeable future. These revisions include: The federal gift, estate and generation-skipping transfer tax provisions were made permanent as of December 31, 2012. This is great news because, for more than ten years, we have been planning with uncertainty under legislation that contained expiration dates. And while “permanent” in Washington only means that this is the law until Congress decides to change it, at least we now have some certainty with which to plan.   The federal gift and estate tax exemption will remain at $5 million per person, adjusted annually for inflation. In 2012, the exem...

We learned on January 2nd, after the gift, estate and generation-skipping transfer tax exemptions had returned to $1 MM, that all three exemptions are going to stay at $5 MM (plus an extra amount for inflation).  This was a surprise in light of the strong desire of policymakers to keep the gift tax exemption low and discourage wealthy people from moving money to taxpayers with lower tax brackets.   For many reasons, it made sense to move assets to irrevocable trusts last year even while the law was uncertain.  Proactive planning is wise! Nonetheless, if you did not take full advantage of opportunities to move assets out of your taxable estate last year, here are 10 reasons why you should consider doing so now: You can grow assets tax-efficiently outside of your tax...

Does your estate plan (or lack thereof) come to mind every time you board a plane or embark on a long drive? That’s because when we travel, many of us are reminded of our own mortality and the remote but real possibility that we might not return due to death or illness.   Before any trip, most of us create a “to-do list” of things we have put off and want to take care of before we leave. Here, then, is a checklist of estate planning things to do before your next trip. Taking care of these will help you travel with peace of mind, knowing that if you don’t return, you have made things much easier for those you love.   1. Have your estate planning done. If you have been procrastinating about your estate planning, use your next trip as your deadline to fin...

Most young adults think they are invincible. But the reality is that anyone, at any time, can become seriously ill or be injured in an accident or a random act of violence. And far too many of us know the tragedy of a promising young life that was abruptly cut short.   Once a child turns 18, parents lose the legal ability to make decisions for their child or even to find out basic information. Learning you will not be able to see your college student’s grades without his/her permission can be mildly frustrating. But a medical emergency can take this frustration to a completely different level. The parents (or a sibling or another person) will probably have to go to court and ask for permission to obtain information about the student’s medical condition, be able to make d...

Many young families put off estate planning. If asked, they may say they are too young, healthy or can’t afford it. Some have trouble just thinking about what could happen if they should die while their minor children and spouse are depending on them. But even a healthy, young adult can be taken suddenly by an accident or illness, and those with young families need estate planning precisely because others are depending on them.   Of course, you are not expecting to die while your family is young, but planning for the possibility is being prudent and responsible, and it shows your family how much you care.   A good estate plan for a young family will include naming someone to administer the estate (a trustee or executor), naming a guardian to care for minor children, pro...