Estate Planning

Family Feuding Over High-Profile East Coast Cavern Dynasty

Published on: March 25, 2013 | by Ettinger Law Firm

Infighting over control of family assets is far from uncommon no matter the value of the holdings. History is replete with examples of siblings, step-relatives, and other engaged in estate battles over property that has little to no value. Of course, that is not to say that the possibility a disagreement increases with the value of the property. Things can get especially sticky when things like family businesses, land holdings, and other tangible and valuable items are at issue. Many of these assets may have been within a family for decades (or generations) and fighting over control is quite predictable, especially when estate planning is inadequate.

For example, the Wealth Strategist Journal reported recently on the battled over control of supposedly the largest underground series of caves in the eastern United States–Luray Caverns. The caverns are incredibly popular, and it is reportedly the third most visited cave in the country. Considering its popularity, the location has grown into a significant business for the family which owns it. A Washington Post story notes how the cave has been open to the public for nearly 130 years. At $24 for a one-hour tour, the business of showing the cave is estimated to bring in about $30 million annually.

Unfortunately, control over the caverns is apparently is disarray as the family in charge seems perpetually mired in controversy. The Post story explains how two of the family siblings recently sued two others in an attempt to disqualify them for participating in a family trust. In total, control of the caverns rests with six children bore of a family patriarch who died in 2010 at the age of 87.

Becoming a “Paradigm” of Financial Health

Published on: March 21, 2013 | by Ettinger Law Firm

Money is always at the top (or near it) of lists describing issues that most commonly bring stress into our lives. It’s cliche to say that “money is the root of all evil,” but its obvious that dealing with financial issues is a common concern for families of all shapes, sizes, and even income levels. There is so much different advice out there about what you should be doing or could be doing as it relates to money matters that it is hard to distinguish between the useful and the fluff.

One such story posted in Yahoo Finance this week offers a somewhat helpful distillation of seven basic concepts that can be used for those of all income levels and at different life stages. They are referred to as “paradigms” of financial health. The entire list is worth browsing, but a few of the items on the list include:

***If you are a couple with two incomes, you can pay for “essentials” with only one spouse’s income. Those essentials are things like the mortgage, insurance, child care , and similar items that cannot be cut easily. Essentially this is one way to check whether you may be living above your means. It is an easy shortcut to figure out if you can survive in the event of a lost job or other emergency.

Family Offers Example of Need for Clear End of Life Planning

Published on: March 15, 2013 | by Ettinger Law Firm

As with all aspects of estate planning, one of the biggest mistakes that families continue to make is assuming that they will “just know” how to handle certain issues when the time comes. That includes figuring out how to divide assets, handle long-term care, and otherwise make complex end-of-life decisions. There is no need to go through any complex legal planning, the thinking goes, because our family is different or our issues are not complex.

Countless feuds, legal battles, and prolonged disputes began with that mindset. The bottom line is that it is never smart to leave any of these issues to chance. The stress and emotion tied into the decisions can make mountains out of molehills and split up even the most tight-knit family. Planning ahead and leaving no room for doubt is not only to ensure that your own wishes are fulfilled but to spare family members the struggle of deciding on their own.

Personal Example

Fighting to Care for the Ailing Zsa Zsa Gabor

Published on: March 11, 2013 | by Ettinger Law Firm

It is often argued that estate planning is necessary to prevent family feuding in the aftermath of a passing. Disagreements about “who gets what,” how to handle funeral issues, and other concerns are known to tear friends and family apart. Being explicit about one’s wishes ahead of time–and letting relatives know early on–is the ideal way to avoid surprises and present the best opportunity for disputes to be squelched.

But proper planning does more than prevent feuding after a passing; it can also prevent it before one’s death. That is because disagreements about caring for aging relatives is often a bone of contention. Arguments about who is going to make decisions on their behalf, what type of long-term care will be pursued, and similar concerns can cause ruined relationships just as much as any inheritance dispute. All of this makes it imperative for local community members to visit with an NY estate planning lawyer early on to ensure legal documentation is in place so that there is no uncertainty about how any of these issues are to be decided. Considering the prevalence of cognitive brain issues (i.e. Alzheimer’s and dementia), prudent planning requires these matters be handled as soon as possible.

Celebrity Example

DOMA Case Update: Amicus Briefs Mount in New York Couple’s Case

Published on: March 7, 2013 | by Ettinger Law Firm

We have frequently discussed the federal law known as the Defense of Marriage Act. Passed in 1996, the law essentially prevents the federal government from recognizing as married same-sex couples who are legally wed in individual states. Of course, New York allows gay couples the right to marry. Under state law, all couples, gay and straight alike, are treated the same. However, while in most cases the federal government defers to state law on legal marriages, that is not so for same-sex couples. To this day they are treated as legal strangers for federal purposes, creating a whole host of complex long-term planning, tax, and government support complications.

New York DOMA Challenge

Over the past few years a few legal challenges have been heard in federal courts arguing that DOMA violates federal constitutional principles. In virtually all of those cases the courts have ruled in favor of the plaintiffs, agreeing that parts of the law are unconstitutional. However, considering the magnitude of the issue, it was almost guaranteed that the decision would ultimately lie with the U.S. Supreme Court.

Understanding How a Wealth Transfer Might Affect Insurance

Published on: February 27, 2013 | by Ettinger Law Firm

Advisor One shared a useful story this week that touches on an item commonly forgotten in wealth transfers, including those using trusts or other legal tools. It is critical to remember how insurance coverage might be affected by the transfer. That way, changes can be made immediately to guarantee that coverage is in good standing at all times. Sadly, as you might expect, this error is often only uncovered after some catastrophic accident, when insurance coverage is needed. The last thing anyone wants is that “oops” moment, when it is discovered that the coverage does not exist because of the previous transfer via trust or other tool (like an LLC).

The Basic Problem

Insurance policies are written to provide coverage to an owner or titleholder. This is the case for virtually all types of coverage, from home, automobile, and boats to collectibles. Problems arise, however, when a transfer is made and the insurance policy is not updated to reflect the change. For example, if a home is transferred into a trust, it is important to confirm that the proper changes are made so that the homeowners policy covers the new arrangement.

E-Planning: Estate Planning in our Digital World

Published on: February 6, 2013 | by Ettinger Law Firm

Like it or not, our world is infatuated with technology. Smartphones conduct intercontinental transactions. Friends across the country communicate through instantaneous text messaging, and telephones and tablets close distances and miles through face to face conversations. Because technology plays such an important role in our daily lives, today’s estate planning should include an arrangement for organizing and protecting technological and digital assets.

Dividing Up Digital Assets

We have frequently discussed how there are different kinds of digital assets to think about when drafting your estate plan. First, there are your personal digital assets, which would include any email accounts, personal social media accounts and maybe even a personal web site or personal blog. Personal digital assets might also include any photos or documents stored on different websites, like Snapfish, Shutterfly or Dropbox. Information stored in any cloud storage should also be considered personal digital assets.

Estate Planning with the Blended Family in Mind

Published on: February 4, 2013 | by Ettinger Law Firm

The birth of a child, a soldier’s welcome home, a wedding, a graduation, holiday festivities, or even a birthday party are all examples of gatherings where, more often than not, a blended family is present, taking part and celebrating. In the U.S., first marriages, second marriages and remarriages regularly welcome new family members. Plus, people are generally living longer, often outliving spouses and marrying again. Step children, step parents, children from previous marriages are all members of the different types of blended families that now outnumber “traditional” families in the United States. And if you are a member of a blended family, as it grows and changes, new estate planning considerations arise regarding your own children and family members, as well as members of your blended family.

Avoiding Possible Problems

Often, in many family situations, one of the best ways to avoid potential problems is to talk with family members about your concerns. As a recent USA Today article discusses, communication is critical in estate planning, particularly when a blended family is involved. Frequently when a family member passes, the remaining family members aren’t just concerned with the transfer of money, they are also concerned with the transfer of special heirlooms and other unique items. Talking about, and planning for the future transfer of not just monetary assets but personal assets as well will hopefully avoid potential problems and disagreements.

Passing on Digital Passwords After Death

Published on: February 1, 2013 | by Ettinger Law Firm

Over the past few years more and more attention has been paid to the value of “digital” assets and the need to account for them in estate planning. Yet, for all the increased awareness, there is still a long way to go before all families properly plan for handing online access and property issues. A Private Wealth story recently highlighted one of the main problems: failing to provide others with access to crucial username and password details.

Extra Burden on the Family

Many of us have a myriad of usernames and passwords that we use to control our online lives. These include social media accounts (Facebook, Twitter, blogs), email addresses, online banking data, and more. Many families are plagued with administrative nightmares when a loved one dies without providing a way to access these accounts.

Trusting Kids with Large Inheritances Remains a Challenge

Published on: January 30, 2013 | by Ettinger Law Firm

One of the most common concerns that parents have when creating an estate plan in New York is worrying about passing on too much wealth to children who cannot properly handle it. After a lifetime of hard work, ingenuity, and prudent planning, the last thing many families want is to see a child obtain an inheritance and then lose it. One need only check newspapers headlines to see celebrity examples of younger individuals with too much money whose lives take a turn for their worst as they fail to handle their wealth carefully.

A Wall Street Journal article last week discussed this issue in the context of the now seemingly permanent federal estate tax rates. Per the “fiscal cliff” agreement, the estate tax law will allow each individual to shield up to $5.25 million. For a couple, that allows $10.5 million to be given to others tax-free.

While this is good news for those who have this much wealth to pass along, it does raise some questions for families. Is your child–no matter what age–prepared to handle an inheritance of this size? Will it be lost to creditors? Taken by a spouse? WIll the money change the child’s motivation or long-term goals?