Should You Talk to Your Kids (Or Your Parents) About Inheritance?
September 27, 2009
The subject of inheritance is one that most people studiously avoid for a number of different reasons: superstition, fear, lack of knowledge, or—as this article by Gordon Powers points out—they don’t want to appear greedy. Furthermore, many older adults were raised to believe that money was a private affair, and that talking about it was inappropriate, almost dirty. The difference in how the older and younger generations view money and its place in “polite conversation” has become so great in some cases that it’s no wonder they avoid any mention of it.
An unfortunate side effect of this disconnect is that a refusal to talk about money or your estate plans with you children means that they may have a difficult time following your wishes in regards to inheritance. According to Mr. Powers (and most of the adult children who come into our offices to create their own estate plans) “most middle-aged adult [children] really want to fulfill their parents’ last wishes, regardless of how much money they might or might not see in the end.”
So the answer to the title question is, yes, you should talk to your children about inheritance if you can. Talking about it will not only make it easier for them to follow your wishes, it may even help you determine how you would like to make a difference in the lives of your heirs.
A Guide to Taking Care of the Details After the Death of a Loved One
September 21, 2009
“The death of a loved one imposes cruel demands on the closest survivors.” The truth of that statement from this article in moneywatch.com is known to anybody who has lost a close friend or family member. We’ve written a lot on our blog about going through the probate process when a loved one dies, but probate isn’t the only thing you have to think about; in fact, it may not even be the first thing you should think about. At a time when you are bombarded by as many emotional demands as you are mundane demands, how can you know what to do first?
The article mentioned above contains a helpful guide for those who are dealing with loss. It includes well-known items such as “contact close friends and family” and “make funeral arrangements” as well as items that may not come to mind as naturally, such as “write an obituary” and “contact the deceased’s employer.” Few people think about these things when under emotional strain, which is why this list is an excellent resource to file away for a time when it may be needed.
If you are having a particularly hard time with the grieving process don’t be afraid to ask others to help with the more difficult items, or to hand the list over entirely to someone else. This is when your own probate or estate planning attorney (or the deceased’s attorney, if they had one) can be especially helpful.
Although it sometimes feels as if time should stand still when someone we love passes away, life does go on, for better or worse. But the world is full of caring and knowledgeable people to help you through the process… if you only know where to look.
5 Goals Your Estate Plan Can Help You Achieve
September 16, 2009
What is your estate plan all about? Is it about saving your assets from estate tax, or is it about leaving an inheritance for your children? Or is it something even beyond that—providing for your own financial security during your life, thus enabling you to leave a lasting legacy for your family?
Estate planning—or what this article from Investors Insight likes to call “legacy planning” —can help you achieve all of these goals. The article outlines four goals an estate plan can help you achieve. In our firm, we add a fifth: Long Term Care Planning. You and our firm can work together to make your plan more than merely a tax savings tool, by addressing the following:
- Financial Security
- Estate Care and Management
- Protecting your Estate
- Minimizing the Tax Burden and Probate Expense, and
- Long Term Care Planning
Tax planning is sometimes an important part of your estate planning process, but tax laws have a tendency to change, and with a new estate tax law expected in 2009 or 2010 it is essential to remember your other goals as well when you plan your estate.
For many of our clients, planning to help fund the cost of Long Term Care without depleting the estate is a primary goal; if these costs are not considered, they can drain the estate you leave to your spouse or children. Our firm may be able to help minimize the impact of these costs by creating an estate plan that coordinates your wishes with available government long term care benefits. Pre-planning is the best approach.
How to Leave Meaningful Mementos to the Next Generation
September 15, 2009
When clients come into our office to design their estate plans one of their biggest concerns is how to dispose of their tangible personal property. Sometimes clients spend more time determining how to dispose of these personal mementos than they do the big ticket items such as bank accounts, real property, and investments. This is completely understandable when you consider that it is these personal items that carry our history and our memories, and in many ways make up the fabric of our lives.
One of the questions we are often asked is if these personal items should be included in the will or trust or if there is an easier way to dispose of them. The answer is that although major items such as the crown jewels should be listed in your will or trust, smaller mementos such as a baseball card collection or grandma’s china (things that are not required to go through probate) can be listed on a much less intimidating document called a personal property memorandum.
A personal property memorandum is a written statement which lists your various tangible personal items along with the people who should receive these items upon your death. (Tangible personal items do NOT include bank accounts, stocks, money, securities, or trade or business properties.) The nice thing about the personal property memorandum is that you can edit and update it yourself, whereas any changes to a will or a trust should be made by a qualified attorney. You must, however, be sure that your will or trust refers to your personal property memorandum if you have one, to ensure that there is no confusion about distribution of property.
A personal property memorandum can be typed up, handwritten, or can be a standard template that you get from your attorney to fill out at home—so long as it clearly expresses your wishes and is signed and dated. It is best to store your personal property memorandum in a safe place with the rest of your estate planning documents; but if you find yourself making frequent changes to the document it can be kept at home, so long as your trustees or executor know where to find it if something happens to you.
For more information about how to leave personal property to your heirs please contact our office.
If You’re Waiting on Congress to Settle the Estate Tax—Better to Take Action Now
September 11, 2009
Schoolchildren aren’t the only ones putting their noses back to the grindstone after this warm summer and long Labor Day weekend; Congress is also returning to work, and among the many issues they will be discussing is that of the Estate Tax, which is set to expire for one year in 2010.
According to The Wall Street Journal President Obama was expected to take swift action when he took office to prevent the scheduled Estate Tax repeal, locking it in at a permanent rate instead. One of the reasons for this anticipated “swift action” by democrats was that it would be “politically harder to go ahead with their plan to resurrect the estate tax once it [had] disappeared.”
Although action has not been as swift as originally anticipated, it is not likely to disappear. Some ruling on the estate tax is still expected before the end of the year, although it may not be as permanent as people may hope for planning purposes. Here is what Forbes.com has to say about the immediate future of the estate tax:
“President Obama wants to see a permanent extension of the estate tax, but that’s unlikely to happen this year. Instead, look for Congress to give it a one-year extension, as it’s slated to expire for a year in 2010. For 2009, estates valued at less than $3.5 million are exempted from the tax, which has a maximum rate of 45%.”
If you’ve been putting off planning until a permanent decision on the estate tax is reached, it may be time to bite the bullet and take action now.
What We Can Learn From the Kennedy Trusts
September 4, 2009
The recent death of Senator Ted Kennedy has given us an opportunity to reflect on the unique nature of trusts not only as a tool to protect assets for future generations, but also as a way to leave a lasting legacy for your children and grandchildren.
The Kennedy trust—or Kennedy trusts, we should say—are some of the best examples of how comprehensive and versatile trusts can be, as this article by Gerald Posner illustrates. The trusts were first established by Joe Kennedy; one in 1926, another in 1936, and another in 1949. Each trust had its own unique purpose: the trust established in 1926 was for Rose and the children, whereas the trust established in 1949 was intended for his grandchildren. Furthermore, each trust was set up as a blind trust, designed to act independently from any other trust.
The Kennedy trusts were built to last, with each successive trustee working to provide for the beneficiaries while protecting the principal for future generations as well. And last they have, to the extent that today—even taking the recent economic downturn into account—the trusts have survived… and even flourished in some cases.
You don’t have to be a Kennedy to leave a legacy for your children or grandchildren. The Kennedys certainly had a financial head start, but trusts can be designed to protect and build on even a modest estate. Whether your desire is to provide for your immediate heirs, or leave a legacy that lasts far into the future, a trust can help you accomplish your goal.
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