Michigan Estate Planning Blog

Graduation Gifts: Gifting For A Good Future And Not Just A New Car

As we move from spring into summer, many of our young loved ones are entering their own transition periods and marking some of their first real life milestones. It is graduation season, which means it is graduation gift-giving season. If you hope to mark your loved one’s accomplishment with a sizeable gift, then how do you ensure that such gift is not squandered? To mark a milestone with a financial gift can be something of a carrot-and-stick opportunity. If that is the case, then the trick is to ensure that the gift encourages positive possibilities instead of some shiny mess with a new car smell. Reuters recently provided some advice on this timely topic in an article titled “Four ways to influence how new grads handle money.” In some ways, the advice for giving money to young adults does not hinge on the number of dollars involved. In fact, from $100 to $100 million, and however you slice it, the goal is to ensure a responsible use of the funds. Then again, with high-value gifts or full inheritances in the mix, there is that much more that can go wrong. Fortunately, there are more tools at your disposal to structure a successful gift. The advice in the original article is well worth thinking about, whether your potential gift is imminent or not for another four years of high school, college, or an advanced degree. Knowing full well the value of an approaching milestone, it is the sort of thing you can begin to plan for well in advance and doing so in the midst of this advice can really make the best of your gift.

Reference: Reuters (May 14, 2014) “Four ways to influence how new grads handle money”

Now Or Later? When Do You Give It Away To The Heirs? Mid-Michigan

When is the right time to give to your children? Should you gift them assets now or wait to give it all away only after you’ve passed? It’s a good question and can be a difficult calculus. Forbes recently tackled this difficult issue a short while ago in an article titled “Should I Gift Money To My Children Now Or Later?” The original article is a sort of evolving discussion between two advisers who end up giving solid points to support either option. And, that’s fair. There really are two ways to approach this dilemma because there are different motivations in either direction. Giving now is simple and can be an entirely different act – emotionally, financially, and legally – from giving at death. It raises issue of control (how much and when), issues of need (who needs it most now and later?), trust (can they be trusted to act wisely?) and, yes, mortality (do you wish to be there to see them enjoy and make good use of your generosity?). One thing is for certain. The longer you delay making this decision, the longer time you have to mull it over. For many it will be an important transition if they choose to gift in life, emotionally or financially, and it will likely be a gift worth making wisely and to the greatest advantage of all. Competent counsel can help think with you, identify the legal or financial consequences of either option, and help you structure the best transition for you and your family.

Reference: Forbes (April 23, 2014) “Should I Gift Money To My Children Now Or Later?”

For more information, see www.jerryreiflawyer.com

 

Going Back To Basis

The beast – the estate tax – is not dead. Nevertheless, that multi-headed monster is far tamer these days. On the other hand, there is another less obvious tax monster that you cannot afford to ignore. The capital gains tax. The reason for the pivot from estate tax to capital gains tax has everything to do with the same legislation. Actually, it is a fairly recent change, as far as these things go. The budget deal of January 1, 2013, locked in a high estate tax exclusion amount and enshrined the ability for spouses to pass unused estate tax exemption amounts between themselves (so called, “portability”). In the same swoop, though, the capital gains tax jumped up another 8.3% to 23.8% from the previous 15%. So, with this capital gains tax in mind, what does that mean for planning? This is a question Forbes explored in a recent article (intriguingly) titled “Freebasing Your Estate.” The nut of the issue with capital gains is “cost basis,” a term for the original value against which the present value is used to determine the taxable portion of capital gain. Essentially, a “postmortem (at death) bequest” and an “intervivos (during life) gift” may transfer an asset with the same current value. However, they transfer a different cost basis to the inheritor and donee respectively. The inheritor inherits the “date of death” value as the basis of the inheritance. This is known as the “stepped up” basis. The donee receives and continues to hold the same basis held by the donor. This is known as the “carryover” basis. With the estate tax now less of a concern, it makes more sense to transfer an asset at death rather than during your lifetime, all other considerations being equal. What assets will you be transferring? Is the estate tax or is the capital gains tax a greater threat to your family wealth? Regardless, it is wise to keep in mind that what Congress puts into place it can just as easily undo.

Reference: Forbes (February 12, 2014) “Freebasing Your Estate”

For more information, see www.jarryreiflawyer.com

The Boomer Inheritance Boomerang

Much of estate planning focuses on the technical aspects of leaving behind or receiving an inheritance. Commonly, these include the tax questions, the legal questions, and the nitty-gritty details. In the midst of all of the numbers and code sections, it is easy to overlook the very emotional nature of inheritance itself. Indeed, the Boomers of today are experiencing an unprecedented period of wealth transfer. What does it mean for a Boomer to inherit these days? The New York Times approached the subject a short time ago in an article titled “When Boomers Inherit, Complications May Follow.” We all know that the Baby Boomers are a unique generation in terms of demographics and healthcare, not to mention their relationship to the very history and spirit of the country since their arrival. But did you know that Boomers are in the process of receiving the greatest inheritance windfall in the history of the country? Indeed, and that inheritance is estimated at some $8.4 trillion spread across some 79 million Baby-Boomers. Against this backdrop, what does inheriting mean? What do you do with an inheritance and how do you deal with having it? While it is easy to think of an inheritance as nothing more than money, it seems to mean something far more depending on the individual inheritor. Some may receive it as a gift to be honored, some sense spite in it, and others are quick to spend it away. The original article collects a number of voices from diverse viewpoints along the inheritance spectrum. If you are inheriting, consider pausing for a moment now to think about what that may mean to you. For that matter, this personal reflection can guide you through your own estate planning. How are you leaving an inheritance for your heirs? Why are you leaving it as you are?

Reference: The New York Times (February 10, 2014) “When Boomers Inherit, Complications May Follow”

For more information, see www.jerryreiflawyer.com

A Medicaid Primer 101

What is your Medicaid IQ? Most Americans have heard of Medicaid, since it has been part of the national political debate for some time. A political discussion is one thing, but what does Medicaid mean to your elderly loved ones? If you have elderly parents, it is high time to learn about Medicaid and how it works. Fortunately, a recent Forbes article is a good place to start. The article is aptly titled “Medicaid And Your Parents: The Basics.” Essentially, Medicaid is a program run jointly by the federal government and each respective state government. Think of it as government insurance for, among other things, late-in-life medical care like home care or nursing home care when the one needing care has too limited financial resources. Medicaid is “means-tested.” Consequently, having too great an income or too much in assets will disqualify a Medicaid applicant and create a legal hurdle to receiving benefits. In addition, having “assets” is not the same as having the money to pay for care. For those with assets exceeding the Medicaid limits, “giving” assets away will only disqualify them from Medicaid assistance if the transfers violate the “look back” period designed to keep them from gaming the system. Of course, an elderly individual might have had innocent intentions when they made a disqualifying gift a few years ago and the need for Medicaid was unforeseen. Regardless, such transfers are a red flag when it comes to Medicaid qualification. Each state is subtly different in its approach, but these are very real rules and they require careful thought and timing. Otherwise, it is easy to run afoul of the rules now and be disqualified from care later. You owe it to your elderly loved ones to start planning for a worst case scenario without delay.

Reference: Forbes (February 11, 2014) “Medicaid And Your Parents: The Basics”

For more information, see www.jerryreiflawyer.com

Unequal Inheritances – Handle With Care

Sometimes it is easy to split up your assets like pieces of the pie, with equal pieces for everyone. Sometimes, the assets just do not split that way or maybe you do not want to split them equally. For those who receive something less than equal, they may feel spurned or sense favoritism. How do you split your estate unevenly and still keep the peace in the family or, at the very least, keep it out of the courts? The uneven distribution of an estate is always a challenge. Nevertheless, when it must happen, it must happen carefully. Why might you split assets differently among your children and what are the challenges? Private Wealth investigated this matter recently in an article titled “Playing Favorites.” While “favoritism” may be the sole motivation, such is generally the exception to the rule. Commonly, after a “lifetime” of rearing their children, parents may want to level the playing field out of a sense of fairness. Whether making adjustments for unrepaid lifetime “loans,” helping children who were less “successful” financially than their siblings, or protecting an inheritance from a squandering prodigal, the reasons for unequal inheritances as unique as families themselves. Since there are so many variations on the unequal inheritance theme, the key is to ensure that your reasons are thought-through, valid, and, better yet, conveyed. Remember: inheritance and disinheritance are complicated subjects, both legally and emotionally. Depending upon your reasons, you may even find another path forward to be more useful.

Reference: Private Wealth (January 7, 2014) “Playing Favorites”

For more information, see www.jerryreiflawyer.com

Planning Your Family Business Legacy

Sometimes, passing along your assets to the next generation is simply a matter of passing them along. You just let the gift and the potential represented by that gift be your legacy (emphasis on the “sometimes”). However, when the asset is a business, it is rarely that simple. A business is not merely a thing. No, a business is a mindset, an activity and, oftentimes, even a lifestyle. It can get complicated. If your legacy is the family business, then with great responsibility comes the need for equally careful planning, preparation and dialogue. Because every business is different, as every family is different and every individual is unique, what is right for a family business is something to be figured out and understood. That said, businesses have been coming and going for generations. Some have transferred successfully and others less so. Consequently, there are some tried and true strategies to consider when planning for your own family business succession. Whether your objective is a sale, windup or succession, Forbes has provided a practical roadmap in a recent article titled “Six Steps For Making Your Business A Family Legacy.” Here are the six steps by heading alone: 1. Give the family a reason to continue the family business 2. Develop a management team 3. Structure a business succession plan 4. Fund the business succession plan 5. Wealth replacement for other family members 6. Have a successful business So what is right for you, your family and your business? I recommend reading the original article and then consulting with your team of professional advisors. Your attorney, accountant, financial planner and insurance agent will each bring a valuable and unique skill set to the table.

Reference: Forbes (February 3, 2014) “Six Steps For Making Your Business A Family Legacy”

For more information, see www.jerryreiflawyer.com

Estate Planning With A Life Estate

Do you want to avoid probate when it comes to the transfer of your assets at death, especially when it comes to your home? Perhaps you would prefer that home to pass directly into the hands of your adult heirs. If yes, then consider using a “life estate” approach. If the concept of a life estate is new to you, then a recent article in The Wall Street Journal ought to be on your reading list. As the article titled “An Easy Way for Heirs to Inherit Your Home” explains, a life estate for real estate operates like a “payable-on-death account” for a bank account. Here is how a life estate works. First, you draw up a deed to your house naming your heirs as beneficiaries. Second, you live in the house for the rest of your life. Third and lastly, after you pass, your named heirs need only to present your death certificate to assume title to the family home. This can save time and money often associated with probate. Simple? A life estate may be too simple, depending on the circumstances. As with most things legal, things can get complicated quickly. For example, you will not be free to sell your home during your lifetime without beneficiary consent and there are tax issues to consider. Depending upon the home and your objectives, there may be better ways to transfer the family home. Regardless, a life estate is a proven transfer tool just right for the right circumstances.

Reference: The Wall Street Journal (February 9, 2014) “An Easy Way for Heirs to Inherit Your Home”

For more information, see www.jerryreiflawyer.com

When Children Are Responsible For The Nursing Home Bill

Filial support is not just a moral virtue. In many parts of the country and branches of the legal system filial support is a legal imperative. Filial support laws exist in 29 states as well as Puerto Rico, and have quietly existed on the books for some time. Now, however, these laws are a very real and present concern for the adult children of elderly loved ones. Fortunately, Forbes has provided a crash course regarding filial laws and their potential challenges in an article titled “Who Will Pay For Mom's Or Dad's Nursing Home Bill? Filial Support Laws And Long-Term Care.” Essentially, filial support is the legally-imposed financial responsibility whereby children are responsible for their aging parents. The origins of filial support are found in some pretty old laws and lines of legal reasoning. History aside, consider filial support the flip-side of the legally-imposed financial responsibility parents owe to young children. Nevertheless, in a modern context with the massive escalation of healthcare costs, some see a dangerous pattern emerging. This is most dramatically evident when it comes to the costs of long-term care. So are you at risk? These are state laws. However, you might be liable if an elderly loved one resides in one of these states and you do not. Does this have your attention? Be sure to read the original article and, perhaps, do a little online research yourself. If nothing else, find out which states have filial support laws. Better yet, consult with an experienced elder law attorney.

Reference: Forbes (February 3, 2014) “Who Will Pay For Mom's Or Dad's Nursing Home Bill? Filial Support Laws And Long-Term Care”

For more information, see www.jerryreiflawyer.com

Family Wealth And Financial Entropy

Family wealth created through a family business can be a wonderful blessing for a family. The trick is keeping it through the generations. Far too few families make proper plans to keep the family business going between generations. That is where the real work needs to be done. Only the big family names (think “Rockefeller”) lead us to believe that family wealth is perpetual. In reality, family wealth left unchecked has a tendency to follow the laws of entropy as it devolves into chaos and greater and greater breakdown or division. This phenomenon, along with some constructive advice, is featured in a two-part Forbes article titled “How The Wealthiest Families Make And Lose Their Money.” The article offers a solid point about the power of solidarity. The family that sticks together stays together, and so it is with the family business and the family wealth. As a whole, the family assets get a single voice, a larger capacity, and even attracts the attention of professional management. Absent that solidarity, the basic estate laws can effectively and efficiently work to pull apart the assets, the business, and potentially the family’s financial health. As you read the original article, think about your own family assets. How do you want to pass along your family wealth, whether you have a little or a lot?

Reference: Forbes (February 5, 2014) “How The Wealthiest Families Make And Lose Their Money”

For more information, see www.jerryreiflawyer.com

Life Insurance Donations: Two Birds With One Stone

Life insurance can be an incredible boon to your family, and a buffer against a dozen high-cost issues or a source of much-needed liquidity in the face of an estate tax. Then again, you might just end up not needing it all. What do you do with the policy? The good news is that you can kill two birds with one stone. Have you thought about donating your life insurance to a worthy cause? WealthManagement.com explained the motive and the usefulness of the approach a short time ago in a recent article titled “Donating Life Insurance.” What if it turns out that you won’t need that life insurance policy for which you scrimped to pay premiums over the years? Your children are grown and on their own, plus you have built up enough wealth to carry you and your spouse through retirement. Perhaps you have forgotten about that old policy sold to you by a college buddy when he was just getting into the business. In short, the policy is “found money” you really do not need now. Consider this: your favorite charity could make good use of your policy and its eventual proceeds. Charities in the know are far more amenable to such unique gifts than you might realize. Now, instead of the eventual proceed being a potential tax burden to your estate, you can claim a current charitable deduction. Two birds with one stone. Be sure to read the original article for more of the particulars. Then, before taking action, schedule a consultation with your estate planning attorney to make sure you connect all of the dots and get the best benefit while doing the most good.

Reference: WealthManagement.com (March 18, 2014) “Donating Life Insurance”

For more information, see www.jerryreiflawyer.com

Estate Planning And The Specter Of Alzheimer’s Saginaw, MI

Alzheimer’s is no ordinary condition. What it means to the patient and to their mind is simply unique, just as it is uniquely meaningful to the family. Unfortunately, it is also a uniquely meaningful condition when it comes to estate planning and there are very important steps to take sooner rather than later. Planning for one’s estate and for one’s late-in-life plans requires more than a bit of wherewithal. This is not only an empirical fact but also a legal one. Because Alzheimer’s and dementia affect the mind means certain legal choices, whether regarding healthcare or disposition of property to one’s heirs, simply have to be down and in writing well before they are questionable. It’s a complex problem. Fortunately, there are some important tools to keep in mind early and get a plan in place. Some of the basics were helpfully pointed out in a LifeHealthPro article last month titled “4 things to know about Alzheimer’s and estate planning.” The four things? • Collect Your Documents: that is, all of the important documents should be easily at hand or easily discoverable for when they are needed, and not by the patient but by whoever cares for them. • Property Management: perhaps more appropriately, you should have a plan for assets in this life and an estate plan to direct assets thereafter. • Advanced Directives: these documents spell out important decisions and/or give that decision-making power to others through a Durable Power of Attorney, a Living Will, and Medical Directives (like a Do Not Resuscitate order). • A Living Trust: a trust can be all the more useful in organizing and disposing of property as well as allowing another to manage it, which is that much more powerful for an Alzheimer’s patient. These are just the basics. Regardless, and not without coincidence, these are important basics steps and tools when it comes to any estate plan. Planning in anticipation of Alzheimer’s is no different than the planning one ought to do anyway. But then, to the extent many of us will be affected by Alzheimer’s or dementia, it only stands to reason that we should all be diligent in our planning. Once we have one of these conditions, it could be too late to plan for anything. Be sure to get your own estate in place and work with your elderly loved ones to ensure they have the plans in place allowing for you to care for them.

Reference: LifeHealthPro (March 11, 2014) “4 things to know about Alzheimer’s and estate planning”

For more information, see www.jerryreiflawyer.com

 

Art – In the Eye of the Beholder?

Art is gauged by two entirely different and often mutually-exclusive vantage points. There is the subjective eye of the beholder that gauges beauty, and then there is the no less subjective eye of the market, the appraiser and/or the taxman. In planning for your estate, your heirs can adopt the eye of the beholder but it is necessary for you to see through the eyes of the taxman. Be sure to properly plan for your artworks and ensure that they are appropriately (if usefully) valued, as seen through the eyes of the taxman. The issue of valuation is always the issue at stake when it comes to taxes – be it with regard to real property, stocks, or something as mercurial as an easement – but with art there is both a special importance and a special irony. After all, art is only truly valuable when it is priceless, in one sense, but there is nothing that is priceless on the market. For perspective on the issues and even some practical advice there is much to be gleaned from a recent article in Mondaq titled “Valuing Artwork For Federal Taxation Purposes: Income, Estate & Gift Tax Issues.” As anyone with a sizeable art collection will quickly understand, the value placed on a piece of art is, in the first instance, entirely based on the market’s whim and, in the second instance, every valuation is both a blessing and a curse. A high valuation leads to high prices for sale and, just as important, a high deduction when donated to charity. A low valuation, on the other hand, can make a piece of art cut that much less against estate and/or gift taxes. It is really hard to say which value you will want and when. That is a dynamic the IRS is well attuned to, so when it comes to finally pegging a value it is vital to have a reasonable valuation of the “fair market value.” Admittedly, it is a tricky topic and after reading the original article you will agree that it is a good idea to review your own collection and plans. So, what about your art collection? Will it pass the taxman’s tests or will it be a flaw in the estate plan?

Reference: Mondaq (June 3, 2014) “Valuing Artwork For Federal Taxation Purposes: Income, Estate & Gift Tax Issues”

Building The Plan For The Things You Care About, Even Houseplants

Sometimes the stories and the examples that seem silly on the face of things can be both the most entertaining and illustrative. Case in point, you might have noticed a recent article in The Wall Street Journal illustrating one way of making sure everything is taken care of after you are gone. The article is titled “A Woman's Will Provides Funds for Trusty Houseplant Upon Her Death.” The article chronicles the curious case of Ronna Scoratow, her will, and her trusty 42-year-old philodendron. Ms. Scoratow, having no children or horticulturally-minded next-of-kin, simply had no automatic option for the future care of her prized plant. Beside, this is not your average houseplant that is easy to move around. Wanting to ensure that her plant would not be left to waste away should it outlive her, Ms. Scoratow provided a tidy sum of $5,000 to a trusted friend with the express purpose of caring for the plant. In this way Ms. Scoratow ensured the ongoing care for one of the things she cares about without unduly burdening others (including the friend that would otherwise have to move the ungainly plant). Now, you likely would be forgiven for leaving the ficus out of the family inheritance, or coolly disinheriting the cactus, but that is not really the important part of this story. The essential takeaway is that we all have just as many little details in our lives for which we have specific plans after we are gone – from collections, to pets, to the homestead. The only way to ensure that our specific plans are carried out is to make proper estate plans including them. Depending on your hopes and the items or persons planned for, there are many ways of ensuring for the best.

Reference: The Wall Street Journal (May 4, 2014) “A Woman's Will Provides Funds for Trusty Houseplant Upon Her Death”

The Conundrum Of Effective Charitable Giving

Is your charitable giving having the impact you expect? Are your dollars doing the work you intended? Is it time to reassess your personal philanthropy? If you are wrestling with these and similar questions, you may be interested in a recent article in The New York Times titled “Donating, and Making Sure the Money Is Put to Work.” It is natural to want your charitable dollar to effect the greatest good and have the greatest impact. When that happens, it can be genuinely satisfying to both giver and receiver. In fact, when really done right, it may be harder to tell who truly is on the receiving end. On the other hand, it can be rather disheartening when there is needless waste. Case in point: the original article tells the story of a useful organization known as GiveWell and the troubled relationship with Against Malaria Foundation. Perhaps you have your own concerns and your own story. If you are only just starting to reevaluate your charitable giving, then consider reading this article for any relevant advice.

Reference: The New York Times (April 25, 2014) “Donating, and Making Sure the Money Is Put to Work”

Knowing Better Than The Professionals: New Medicare Rules And Knowing Your Rights

Sometimes big legal changes happen. Nevertheless, sometime you still have to point out these changes to the powers that be. Sometimes you must do so over and over for the real changes to manifest. As you may know, Medicare has recently undergone a big change affecting long-term care and the availability of skilled nursing or therapy. Namely, thousands are now eligible for Medicare benefits, but you might just have to point that out to care providers. The slow transition to full adoption of the rules and new standards of care, as well as the continuing plight of those left in a lurch, is discussed in a recent Reuters article titled “New Medicare coverage of long-term care off to a rocky start.” As pointed out there, you or a loved one may be eligible for benefits, but may need to fight to receive the benefits. Formerly, Medicare would only pay for skilled nursing or physical therapy sessions if there were signs of improvement. The trouble is that skilled nursing and therapy are not always about improvement but about maintenance, or even slowing a natural decline to keep a patient in a positive state. The rules were challenged and the case of Jimmo v. Sebelius brought about relaxed rules, allowing such services for far broader classes of patients. Medicare communicates these kinds of changes directly to healthcare providers and not to beneficiaries. However, it seems many beneficiaries are having to figure it out for themselves and push institutions to adopt the changes. As a Medicare beneficiary, it may be important to know what the new rules mean and how to advocate for your care or the care of a loved one. The original article offers some important resources like the Center for Medicare Advocacy, as well as the Medicare Rights Center. Each of these resources has some helpful guides and much more information on this and other relevant issues.

Reference: Reuters (April 29, 2014) “New Medicare coverage of long-term care off to a rocky start”

Ask The Right Questions And Don’t Overlook The Details

To begin planning your estate is really about beginning to think through the very intricacies of your life. You think about your values and your family, for sure, and this may be the most important thing. Then there is the nitty-gritty you might be overlooking: the financial, the legal, and the shared understandings. Make time for some real thinking, but also take some time to begin thinking about what you might be overlooking before planning in earnest. The bits and pieces that are easiest to overlook are the kinds of things best uncovered by some friendly self-interrogation. To help get that conversation started, consider reading a recent article in US News & World Report titled “3 Important Estate Planning Questions.” These three questions are really only a start, but they are good ones, especially for married couples. The three? 1. How well does my spouse know our financial advisor? 2. Does my spouse know where all our accounts are located and how to access them? 3. Are our wills and beneficiary designations up-to-date? If you answer any or all in the negative, then the original article has some easy suggestions. Following through is a natural lead-in to having the right conversations and doing the right things. At least for this list of questions, the truly important lesson comes down to starting the right conversations with your spouse. Read a bit more in the original piece and further the conversation with competent counsel who can guide you, your spouse and all of your loved ones in building the right plan to both catch all the details and achieve your unique important goals.

Reference: US News & World Report (May 1, 2014) “3 Important Estate Planning Questions”

An Estate With No Family To Pass It To: Motivations To Charity

Estate planning oftentimes means ensuring the future care and prosperity of one’s children, and through them, for future generations still. So what do you do when there are no kids, no grandkids, or not even so much as a stepchild to care for? What is estate planning without a family? The New York Times recently touched on the subject of estate planning without a family. It is an important topic for those without future generations to inherit their assets. If this issue affects you or someone you know, then be sure to read the article titled “In Estate Planning, Family Isn’t Always First.” In the beginning and in the end, estate planning is always about disposing of your assets. Both in popular imagination and in the laws on the books, this commonly means the how and why of giving it to family members. Nevertheless, even with no lineal heirs to inherit your assets, there remains important decisions to be made. Optimistically, this means the sky is the limit. Many elect to give to charity, and as the original article describes, this can be an ever more important life-choice and period of growth for you, and especially for a childless couple. You see, many see “family” as their only legacy. However, through philanthropy you can choose your legacy. To do so well and to really appreciate your choices can take some planning. In the end, however, the time and treasure required to get your estate planning done right is worth the satisfaction and peace of mind it affords. To build the right plan will take both competent counsel and a bit of soul searching, to be sure.

Reference: The New York Times (May 2, 2014) “In Estate Planning, Family Isn’t Always First”

Caring For All Of The Family Members: Pet Trusts

Pets tend to have a firm and well-established role within the family. Sometimes, they have full membership. In the eyes of the law, however, pets enjoy a far lesser standing. This can make planning for the care of your pet difficult after you’re gone. While you can’t leave an “inheritance” to a pet, when including a “pet trust” as part of your estate plan you can provide for their care when you’re not there to provide it yourself. “Pet trusts” have a decidedly less serious ring about them than a “Grantor Retained Annuity Trust.” Legal jargon aside, pet trusts can be plenty useful little devices for a common problem, especially amongst elderly pet lovers. In fact, a recent article in the Millionaire Corner considers a pet trust an estate planning basic. The article, titled “Estate Planning Basics: Creating a Pet Trust,” offers some practical pointers to consider. Pets are family members to some, but to the law they are just another form of property. Nonetheless, this living, breathing “property” sometimes outlives its master and this fact of life is worthy of proper legal attention. What happens when there isn’t a family member or friend to step up and take the animal? What if there is a potential caretaker, but that person simply cannot afford to care for your pet? By establishing a pet trust as part of your estate plan, you can set aside funds exclusively for the care of your pet, the caretaker and your own peace of mind. Setting up a trust doesn’t need to be too difficult, but it does take some preparation and foresight to keep it running efficiently when needed. You’ll want an experience estate planning attorney to create a pet trust as part of your estate plan.

Reference: Millionaire Corner (April 28, 2014) “Estate Planning Basics: Creating a Pet Trust”

When Money Isn’t Everything But There Is Still Something Worth Fighting Over

“Money isn’t everything.” That is what most of us think when we hear about heirs fighting over an inheritance. Nevertheless, it’s a truth many heirs know all too well. Yes, sometimes heirs fight – even reasonable and emotionally upright ones – especially because money isn’t everything. How you split up priceless family artifacts and other physical goods can start or end fights before they happen. So how do you plan to fairly spread the relics and keep the peace? Sure, there are many inheritance fights over dollars and cents. On the other hand, there are even more fights leading to protracted probate battles and just plain old hurt feelings over the disposition of physical goods, relics and family keepsakes. Unfortunately, it can be more difficult to plan for the disposition of these “things” in contrast to cash. As you begin to think about your estate in this light and figuring out who wants what, consider the insights provided in a recent article in Consumer Reports, aptly titled “How to spare your heirs a battle over your estate.” Oftentimes, physical items are difficult to split up. For example, you can’t simply tear the painting in half, divide a book, or even realistically split a set of china. In the end, in order to end a debate about which direction an item will go, to one heir or the other, you have to write it out. A will is simply not enough, generally speaking. It is hard to capture the kind of detail needed. Consequently, the matter will go straight into probate. Thankfully, many states allow you to attach a more informal writing to your will – a document that offers a list of “what” and “to whom”, and is far more easily updated. No one, however, can make the often tough distribution decisions and create the list for you. This list is one of those many little tasks to take on as part of the overall plan, and one you must keep updating as you acquire or lose this or that asset or family heirloom. This is also a topic worth discussing with your heirs. That way you, and they, will know what things they may want. After all, with heirloom fights it is an emotional connection to an object at the heart of the matter rather than its intrinsic value. Remember, it’s not always about money, because money isn’t everything.

Reference:  ConsumerReport.org (April 2014) “How to spare your heirs a battle over your estate”

When Money Isn’t Everything But There Is Still Something Worth Fighting Over

“Money isn’t everything.” That is what most of us think when we hear about heirs fighting over an inheritance. Nevertheless, it’s a truth many heirs know all too well. Yes, sometimes heirs fight – even reasonable and emotionally upright ones – especially because money isn’t everything. How you split up priceless family artifacts and other physical goods can start or end fights before they happen. So how do you plan to fairly spread the relics and keep the peace? Sure, there are many inheritance fights over dollars and cents. On the other hand, there are even more fights leading to protracted probate battles and just plain old hurt feelings over the disposition of physical goods, relics and family keepsakes. Unfortunately, it can be more difficult to plan for the disposition of these “things” in contrast to cash. As you begin to think about your estate in this light and figuring out who wants what, consider the insights provided in a recent article in Consumer Reports, aptly titled “How to spare your heirs a battle over your estate.” Oftentimes, physical items are difficult to split up. For example, you can’t simply tear the painting in half, divide a book, or even realistically split a set of china. In the end, in order to end a debate about which direction an item will go, to one heir or the other, you have to write it out. A will is simply not enough, generally speaking. It is hard to capture the kind of detail needed. Consequently, the matter will go straight into probate. Thankfully, many states allow you to attach a more informal writing to your will – a document that offers a list of “what” and “to whom”, and is far more easily updated. No one, however, can make the often tough distribution decisions and create the list for you. This list is one of those many little tasks to take on as part of the overall plan, and one you must keep updating as you acquire or lose this or that asset or family heirloom. This is also a topic worth discussing with your heirs. That way you, and they, will know what things they may want. After all, with heirloom fights it is an emotional connection to an object at the heart of the matter rather than its intrinsic value. Remember, it’s not always about money, because money isn’t everything.

Reference:  ConsumerReport.org (April 2014) “How to spare your heirs a battle over your estate”

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The Conundrum Of Effective Charitable Giving

Is your charitable giving having the impact you expect? Are your dollars doing the work you intended? Is it time to reassess your personal philanthropy? If you are wrestling with these and similar questions, you may be interested in a recent article in The New York Times titled “Donating, and Making Sure the Money Is Put to Work.” It is natural to want your charitable dollar to effect the greatest good and have the greatest impact. When that happens, it can be genuinely satisfying to both giver and receiver. In fact, when really done right, it may be harder to tell who truly is on the receiving end. On the other hand, it can be rather disheartening when there is needless waste. Case in point: the original article tells the story of a useful organization known as GiveWell and the troubled relationship with Against Malaria Foundation. Perhaps you have your own concerns and your own story. If you are only just starting to reevaluate your charitable giving, then consider reading this article for any relevant advice.

Reference: The New York Times (April 25, 2014) “Donating, and Making Sure the Money Is Put to Work”