Articles Posted in Estate Planning

A lot of people assume that estate planning is just for the old and the wealthy; however, that is not the case. As a Daily Finance article discusses, when you are in your thirties, planning for your eventual passing is not usually a top priority, but most estate planning experts agree that this is the best time to begin to create an estate plan that will protect you and your family in case the unexpected occurs.

Sometimes it can be even more important for people in their thirties to create an estate plan because they have just as much to lose, sometimes more, than their parents and elders. A lot of people entering this decade are settling down, getting married, buying their first home, and having children – all of which needs to be protected.

An estate planning attorney can help you start to draft your estate plan, and here are the basic documents that you should consider putting into place:

Prenuptial agreements, or prenups, are almost always associated with marriage and divorce; however, they can also be a powerful tool for estate planning. This type of agreement can be used to clarify the rights and responsibilities of both spouses if one suddenly passes away. A prenuptial agreement can be used in estate planning to reduce family in-fighting and other legal issues by predetermining what the spouse is entitled to in the estate.

Using a Prenup to Prevent Estate Nullification

Most prenuptial agreements are made when one or both spouses come into the marriage with significant assets, land, or wealth, if one or both spouses have been previously married, or if children from a previous relationship are involved. One of the biggest advantages to a prenup for the purposes of estate planning in these situations is that the agreement prevents the spouse from nullifying the existing estate plan.

All across the country there are cemeteries for people and cemeteries for pets. Virginia has become the third state in the nation to pass a law allowing pet owners to be buried with man’s best friend. Joining New York and Pennsylvania, Virginia’s new law went into effect in July and could affect many pet owners’ estate planning options.

New Burial Law

In Virginia, a new state law allows cemeteries to set aside parts of their property to create sections where pets and humans can be buried next to one another. Most states do not allow for pets and humans to be buried together or their laws do not address it. This law was introduced by Republican member of the House of Delegates, Israel O’Quinn, and was passed in April.

There are a lot of benefits to establishing a trust in your estate plan. It can eliminate the need for probate, keep your affairs private, and reduce the chances of issues arising among your heirs regarding their inherited share. However, creating a trust is a big investment that involves a considerable amount of time and legal fees that should not be taken lightly. Here are some factors to consider when deciding whether or not to establish a trust in your estate plan.

Factors in Establishing a Trust

· How much of your estate can you shield from probate?

One of the most common estate planning mistakes comes in the handling of beneficiary designations. Many people do not understand that inheriting retirement accounts, life insurance, and other assets that involve a beneficiary designation are different than inheriting from a will. Here are some of the most common mistakes that occur with beneficiary designations as well as steps that you can take to ensure that the retirement money that has been diligently saved will be passed on to the person you intend.

Common Mistakes in Beneficiary Designations

While many people go to an estate planning attorney for help drafting wills and trusts, most do not rely on their expertise for beneficiary designations. As a result, those that you wished would inherit your retirement accounts and life insurance receive less while creditors, former spouses, and miscellaneous relatives could get it all. Here are some of the most common mistakes and misconceptions that lead to problems with beneficiary designations:

A lot of people who have not started estate planning often ask if they really need a will, or if any estate planning is really necessary? Usually, it is followed with a statement about how the children will take care of it, or that the situation is pretty straight forward, so why deal with it. The truth is if you have no children, no spouse, no heirs, and few worldly possessions then you can probably get away with not needing a will. Otherwise, a will and other estate planning documents are very important for your wellbeing and for your loved ones.

Why You Need a Will

One of the most basic tasks a will accomplishes is naming an executor or executrix of your estate. This is the person who will handle all of your affairs after you pass on. This includes gathering all assets of your estate, paying debts or taxes owed, and distributing the remaining property to your heirs. If you do not have a will the court will appoint an executor to your estate. That person may not be aware of what your final wishes were for your property or know what you wanted your heirs to receive.

Comedian and trailblazer Joan Rivers passed away this week, with friends and family saying goodbye at a memorial service in Manhattan. Details about her estate and funeral have not been made public, but it was no secret that Joan Rivers wanted her funeral to be as extravagant as the rest of her life.

In her 2012 book, I Hate Evenyone…Starting with Me, she detailed her wishes for her funeral by writing, “When I die, I want my funeral to be a huge showbiz affair with lights, cameras, action…I want Craft services, I want paparazzi and I want publicists making a scene! I want it to be Hollywood all the way. I don’t want some rabbi rambling on; I want Meryl Streep crying, in five different accents. I don’t want a eulogy; I want Bobby Vinton to pick up my head and sing ‘Mr. Lonely.’ I want to look gorgeous, better dead than I do alive. I want to be buried in a Valentino gown and I want Harry Winston to make me a toe tag. And I want a wind machine so that even in the casket my hair is blowing just like Beyoncé’s.”

However, what may come as a surprise is the federal tax deduction that can come with such a funeral, and how it can apply in other people’s estates.

When many people begin the estate planning process, they sometimes believe that they are doing the right thing by giving more to one child than the other. One child may be making more money, is more successful, or has married into wealth of his or her own. Parents think that giving an unequal share of the estate to one child over the other is the best way to rectify the situation; however, unequal inheritance comes with hazards that parents may not consider when creating an estate plan.

Punishing Success

By giving one child an unequal share of the estate, it punishes the success of others. In addition, with today’s economic and financial climate the success of one child today does not guarantee it for life. A lot can change over the course of five, ten, or twenty years to your children financially. The more successful child could fall on hard times, and the less successful child could start doing much better financially.

A little more than a year ago, the United States Supreme Court struck down Section Three of the Defense of Marriage Act. In doing so, the federal government gave same sex couples access to the same federal rights as heterosexual couples. Many of these rights involve taxes, housing, Social Security, and estate planning issues. However, more than one year after the decision, many same sex couples are still struggling with understanding the new benefits available to them.

LGBT Benefits Study

In a study released by Wells Fargo, after one year of access to new federal benefits LGBT investors are struggling to make sense of the new legal landscape. In total, 83% of participants surveyed who were LGBT stated that they do not fully understand how new state and federal laws apply to them in the estate planning sector. Of those people, 67% were in legal same sex marriages. However, most troubling is that around forty percent of LGBT investors surveyed believed that the federal government would treat a state sanctioned civil union or domestic partnership just like a marriage, which is not the case.

After nineteen years of battling from probate court all of the way to the United States Supreme Court twice a recent court ruling seems to have ended the battle between the estates of Anna Nicole Smith and Pierce Marshall, for now. Called “The Grand-Daddy of all Estate Battles” these two estates have been battling over the $1.6 billion fortune left by Ms. Smith’s husband and Mr. Marshall’s father, J. Howard Marshall, for almost two decades.

History of the Feud

Federal court proceedings began regarding this estate in 1996 when Anna Nicole Smith filed for bankruptcy in California. The bankruptcy led to a $475 million judgment against Pierce Marshall, but only temporarily. The judgment was reduced to $88 million on appeal, and then appealed again, making to the United States Supreme Court on two separate occasions. After the second trip to the Supreme Court, where the judges rejected Anna Nicole Smith’s claims, it had appeared then, too, that the battle was over.