Articles Posted in Estate Planning

When a couple is getting married the last thing that they are typically worried about is estate planning. However, once the honeymoon is over you should sit down with your new spouse and update your individual estate plans to reflect the new status of your marriage. The following tips are a good place to start when combining two individual estate plans into one.

Visit the HR Department

Nowadays, your employer typically handles your retirement accounts and life insurance forms. Once you have been married, you should visit your HR department to update the beneficiary forms for these documents to include your new spouse. Beneficiary accounts are different from other assets in an estate, so if the beneficiary is left as someone different the value of the account will go to them and not the spouse.

Living and working abroad while maintaining your United States citizenship can add a layer of complexity to the estate planning process. International property, assets, accounts, taxation, and other issues that can affect estate plans must be considered that normally do not complicate the estate planning process. If you expect to be working as an expat, consider looking into the following issues for your estate plan before you go.

Review Your Estate Plan

It may seem basic, but review your estate plan before you go abroad. Update any necessary documents or beneficiary forms before leaving and make sure that everything is set with your attorney in the United States before going abroad. It would also be helpful to review the interactions between the U.S. legal system and the laws where you will be going to so that you can understand how your estate plan may be affected by the move.

In a bizarre care, a woman in New Hampshire admitted in court that she told police that she dug up her father’s grave in search of his “real will” but was rewarded with only vodka and cigarettes. Melanie Nash, 53, pleaded guilty last week as one of four people who opened her father’s vault and rifled through his casket last May.

According to the prosecutor, the scene was reminiscent of an Edgar Allen Poe tale. Ms. Nash believed that she was unjustly shorted out of her part of her father’s estate when he died in 2004. She did not receive anything when he died and had been thinking of digging up her father’s grave for years to try and prove that her sister hid the will in his casket. Her sister, Susie Nash, has always maintained that there was only one will created in 1995 along with the rest of the estate planning documents and that everyone involved in the process knew about it.

In Search of the Real Will

A Florida Court of Appeals sorted through a complicated question of bank accounts and estates in a case at the end of last year. This case illustrates the complexities of banking law and administering estates in addition to the importance of reviewing the state law regarding estate administration before creating an estate plan.

Facts of the Case

In the case of Brown v. Brown, Elizabeth Brown died in 2007, leaving behind six adult children. She had an estate plan in place that distributed several specific bequests and left the remainder to be distributed equally amongst her children. She named one of her children as the executor of the estate, and he filed this lawsuit against one of his siblings, Joseph.

The first part of this article dealt with tips to keep in mind when helping an aging loved one with estate planning matters. This included watching for waning mental capacity, exercising any necessary swap powers, reviewing trust principal distribution standards, adjusting the timing of any charitable gifts, amending family limited partnerships, and providing for any shifts in the trust situs. This section of the article discusses tips to keep in mind after your loved one has passed in order to derive the most value possible for the heirs.

Tips for After the Passing

In addition to looking out for an estate before a loved one passes, you should also keep in mind what is important after they pass away. There are many different opportunities available to ensure that the heirs of the estate also get as much value as possible that their loved one wished to pass on. Issues that can arise after the passing of a loved one can include:

Estate planning lawyers agree that there has been a fundamental shift in their clients’ estate planning concerns over the last couple of decades. There has been less worry about estate tax minimization and more concern for income tax minimizations and other valuable planning ideas. Thankfully, there are things that can be done with an estate before and after your loved one passes away that can add value to an estate for them as they age as well as for their heirs.

Tips for Aging Loved Ones

If you are going over your elderly’ loved one’s estate plan, there are some important items that you should review or look out for in their estate. These issues can include:

An IRA, either in its traditional form or as a Roth, gives you the opportunity to reduce your taxes and grow your wealth for the future. The deadline for 2014 IRA contributions this year is April 15, and the maximum contribution amount is $5,500. If you are fifty years old or older, you can contribute another $1,000 annually as a catch-up contribution. However, many people do not understand the differences between IRAs or what other opportunities exist that can help you with your retirement wealth.

Traditional v. Roth IRAs

There are two main types of IRA accounts. The first is a traditional IRA, where earnings can grow tax deferred until you reach age 70½ years old. However, if you make withdrawals before age 59½, you may incur both ordinary income taxes and a ten percent penalty. As soon as you reach 70½ years old, you are required to start taking the minimum required distributions (MRDs) and start paying taxes on that amount.

Many people who are planning their estate are told by advisors to give annual gifts to children and grandchildren up to the $14,000 yearly limit. It can help you avoid the estate tax of up to forty percent if your estate exceeds the federal exemption level. This year, the exemption is $5.43 million for a single person, $10.86 million for a couple. However, there is a lot more that you can do with this money than simply give it away. You can pass along wealth and wisdom through these annual gifts in a variety of ways.

Why Give Differently

The problem with giving an outright gift to a child or grandchild of up to $14,000 per year is that it may not have the intended effect that you had hoped. If the gifts are significant over time, your loved ones may take advantage or feel like they do not need to accomplish as much. However, you can use these gifts to create a different set of incentives for your loved ones that will help them for years down the road if you invest your annual gift in an alternative way.

The Eighth Circuit U.S. Court of Appeals recently ruled on a case where an estate claimed that the decedent made a gift during his lifetime that actually belonged to the estate after his death. The court ruled that the gift was actually a conditional gift that had its reversionary interest end when the decedent died without asking for the gift back from the recipient.

Facts of the Case

In the case of Estate of Pepper v. Whitehead, Sterling Pepper Jr. owned a large collection of Elvis Presley memorabilia. When he moved into a nursing home in 1978, he told Nancy Whitehead to “keep it.” Mr. Pepper died two years later in the home, and Ms. Whitehead kept the Elvis collection. In 2009, after maintaining the collection for over thirty years, the Pease Family Partnership put it up for auction, and it sold for more than $250,000.