Part of the Family: Planning for Pets
January 24, 2010
Creating an estate plan often involves serious discussion with your advisors about tax planning, asset protection, and charitable giving; but it is important to remember that at its core, estate planning is about protecting your family—and as this article in the Wall Street Journal reminds us, for many people the word “family” also includes our four-legged friends.
Some people will be tempted to roll their eyes and joke about Leona Helmsley at the mention of including your pet in your estate plan, but most will agree with article author Max Alexander that ensuring your pet will be taken care of after your death is not a frivolous indulgence but a simple matter of responsibility.
Providing for the care of your cat or dog does not necessarily mean leaving millions of dollars in a pet trust, what it really means is taking steps to ensure your pet doesn’t end up out on the street or in a cage in the local animal shelter. The Wall Street Journal suggests four simple steps pet lovers can take when planning their estate, including:
- Choosing a “pet guardian”
- Deciding whether or not to provide financial assistance for the care of your pet
- Adding language to your will or trust regarding the care of your pet
- Writing down a list of instructions for your caregiver
Over 50% of U.S. households own a dog or a cat. Those pet owners know that in return for companionship, love, and devotion pets rely on their owners for the basic necessities: food, shelter and protection. Why gamble with the future when ensuring their care can be so easy?
Is All This Really Necessary? . . . Yes, It Turns Out It Really Is
November 17, 2009
Jane Hodges of the Wall Street Journal recently jumped in where few would fear to tread—and lived to write about it. Where most people would prefer not to think about taxes and estate planning at all if they could help it, Hodges went through the process of creating an estate plan not only once, but with four different Do-It-Yourself Will or Trust kits, and shared her findings with her readers.
Although Hodges gives a decent description of her experience with the various kits, her final verdict is inconclusive. But what does come through loud and clear in the article is that a “Do-It-Yourself” (“DIY”) Trust or Will isn’t as easy as it seems, and that anyone with a significant amount of assets (and by significant we mean a house or life-insurance policies) should not be doing it themselves; “the program presented a pop-up note indicating that people with more than $1 million in assets might need an attorney…” One million may sound like a lot, but as mentioned above, just about anybody with a house or life insurance policy is going to fall into this category.
What Hodges and her husband discovered (and we think this would be the experience of most people looking for a DIY solution to estate planning) is that there is a lot more to creating a will or trust than a simple distribution of assets. Most people have specific wishes for leaving their home to their spouse; for ensuring that the surviving spouse has access to joint assets but does not have the ability to bypass your children and leave everything to a new husband or wife if they remarry; for earmarking a certain percentage of the estate for brothers or sisters, nieces or nephews; and so much more. Add to this the complicated and changing state and federal estate tax laws and DIY estate planning kits can be a frustrating recipe for disaster.
The goal of estate planning is not only to distribute your assets, but also to protect them—and to protect and provide for the family and loved ones who are left behind. Ultimately, no program can understand this and help you with it the way a living, feeling, and experienced estate planning attorney can.
What To Do If You Suspect Foul Play
October 27, 2009
The movies have given people certain expectations when it comes to a death in the family and probating a will; this Hollywood portrayal includes an attorney, a book-lined office, and the entire family assembled for a formal reading of the will which ends in shocked gasps as the entire fortune goes to an unknown and unlikely character. Inevitably, there is some intrigue surrounding a possible forgery of the will.
This Hollywood portrayal may be completely off base, but the basic premise is based on the very real feelings that come with the death of a loved one: helplessness, confusion, familial bonds, and sometimes even betrayal. Forged or secret wills may not be as common as the movies may have us believe, but as recent events and this article in the Wall Street Journal reveal, they aren’t completely unheard of either.
So what should you do if you suspect that the will of a loved one has been forged or tampered with? First of all, don’t try to deal with the situation alone. Dealing with the death of a loved one is stressful and emotional, and everyone—including you—is likely to be quicker than usual to react without thinking. Instead, seek the advice of a trusted third party, someone who can help you distance yourself and look at the situation objectively.
As mentioned in the article above, will forgeries are very rare, but incidents of testators (especially elderly testators) being unduly influenced are sadly not rare enough. If you suspect foul play was involved in the creation of a loved one’s will, make an appointment with an estate or probate specialist. With professional guidance, you can better work through your suspicions in a safe environment and explore your options should you feel the need to take action.
Sharing the Nest When Adult Children Fly Home
July 21, 2009
If you have adult children then you know that it’s more than just credit limits and investment accounts that have been affected by the slow economy; companies also are tightening their belts, and people of all ages are finding it harder to get (or keep) jobs. As a result, more and more adult children have been moving back in with their parents.
Of course every parent wants to do what’s best for their child, but Ruth Mantell of the Wall Street Journal writes in her article that in this case, being tough may be what’s best. This isn’t to say that you should refuse if your out-of-work child comes to your door asking for help, but that parents or grandparents need to do what’s necessary to protect themselves before they welcome their adult children back home. “With job losses continuing to mount, older Americans’ wallets are being stretched by their own children,” Mantell writes, but having your adult children back in your home can actually be a good experience for all—if you know what to expect and take the right steps first.
In her article Mantell offers five useful tips to help keep the peace and keep your finances secure, including suggestions such as making sure everyone knows who is boss (you as the homeowner), asking for household contributions (even if all your children can afford is a token financial contribution or a contribution of manual labor), and especially preserving your retirement plans at all costs.
Although the practice has fallen out of style, multi-generational households used to be the norm. It may not be the ideal situation today, but with the right communication, and with everybody on the same page, temporarily sharing the house with your adult children can be an acceptable—and maybe even rewarding—experience.
If It Sounds Too Good to Be True, It Probably Is
June 21, 2009
“We are pleased to inform you of the result of the Lottery Winners International programs… Your address attached to ticket number 2051146 won in the second category, you have therefore been approved to receive a sum of 1,000,000.00 Euro. Congratulations!!!”
You probably recognize the paragraph above from a common mail/e-mail scam letter. This letter (or something like it) makes the rounds quite frequently in an attempt to part unsuspecting people from their money. Most of us simply trash the letter and move on, but the elderly are more likely to fall victim to the scam and end up losing hundreds—sometimes thousands—of dollars before they realize they’ve been duped. A recent article in the Wall Street Journal tells the story of one of these elderly victims and his family’s attempts to save him from the con artists:
“In less than a year, this Ivy League-educated professional sent at least $23,000 to slick con artists who came to know his personal interests, as well as his bank-account, credit-card and other personal information.”
The article states that the elderly are more likely to fall victim to these scams if they live alone, are grieving for a lost spouse, or have started to lose cognitive capacity. Luckily, there are ways to protect a loved one from scammers; protections from con artists and creditors can be built into trusts and estate plans, or in extreme situations a trusted family member can be given power of attorney over bank accounts and financial matters.
If you are worried about a loved one and would like to take more immediate action, here are a few steps you can take:
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Sign up phone numbers on the FTC’s Do Not Call Registry.
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Gather scam mail in one envelope and place it in your mailbox with the note “Forward to Postal Inspector—suspected mail fraud.”
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Place a short “I’m sorry, I’m too busy to talk right now. Thank you for your call” script by the phone to help respond to telemarketing calls.
If the fraudulent activity continues you can call the AARP Foundation Fraud Fighter Call Center at 1-800-646-2283. But the best thing you can do for your loved one is to be patient, supportive, and aware.
Internet Tools to Improve Your Personal Finances
June 9, 2009
The realm of personal finance is in the midst of being revolutionized. The crash on Wall Street has made many armchair investors mistrustful of professional financial advice, and many people are now taking the time to manage their own personal finances with the focus shifted from investing and earning to budgeting and saving. The problem is that after all the effort people put into learning how to spend and play the market from their laptops, many now don’t know how to budget and save responsibly.
This is where the revolution begins.
A recent article in The Wall Street Journal has collected some of the best websites on the internet to help you keep track of and plan your finances. These online tools run the gamut of personal finance categories; from budgeting your household expenses to creating a financial plan to managing personal loans between friends and family. And these aren’t just educational resources, these are interactive tools to help you implement the processes you prefer—and many of these tools are free.
We hope our readers will find these resources helpful, but if you are one of those who would still like the advice and services of a professional financial planner but aren’t sure who to call, please contact our office. We would be happy to recommend one who would fit your family’s needs.
The Wall Street Journal: Every Child Deserves a Little Trust
June 4, 2009
If you’ve been weighing the pros and cons of setting up a trust for your young child, wondering if you really have enough assets to warrant such an expense, you must read Stacey L. Bradford’s recent article in the Wall Street Journal entitled “Deciding if Your Kid Is Trust-Worthy”. In her article Bradford explains why every parent should consider a trust for their minor child, even parents with small estates and few significant assets.
You see, legally, non-adult children cannot inherit large sums of money (and if you have a home or a life-insurance policy then you have “large sums of money” to pass on to your child); if a parent dies and leaves this money directly to a minor child the court will step in and appoint a guardian to manage your child’s money for him—and this guardian may not be the trusted friend or relative whom you might have preferred. A trust will prevent your child from having to grow up with the added level of bureaucracy required by such court-appointed guardianship, and allow you more control over how the money is managed and spent.
Bradford goes on to explain the other benefits of creating a trust for your minor child (paying for education, delaying the age at which your child has outright access to the money, reducing taxes, etc.), She also gives helpful tips about how to choose a trustee, “The trustee holds the purse strings, so don’t delegate this job lightly. You need someone who is trustworthy, is good with money and has great attention to detail.”
Bradford’s article is a great introduction to trusts for parents of young children. And if you find this article helpful, you may want to check out the book from whence it came, The Wall Street Journal’s Financial Guidebook for New Parents.
Family Business? You Might Flip For A FLP
April 18, 2009
The Wall Street Journal says that family limited partnerships are finding renewed favor as an estate planning tool, thanks to recent tax-court decisions.
In an article entitled “Covering Your Assets” Journal writer Mark Klimek asserts that despite some IRS opposition, tax court rulings in recent years have endorsed the use of FLPs when they are used to preserve a family business for future generations.
“Setting up such a partnership could be especially useful right now for families with businesses,” according to the article. In its present form, “[t]he Obama budget calls for the estate tax to be restored next year at a rate of 45 percent for estates worth more than $3.5 million, or $7 million for couples. Income-tax increases for high earners are on the agenda as well.” Approval awaits Congressional action.
The article goes on to describe many of the dos and don’ts of FLPs, but of course each family’s situation is special, and you should consult an estate planning attorney before making decisions about any specific strategy.
In any case, the time to act is now. According to one expert quoted in the Journal article, “There’s a realization that any kind of estate planning you can do this year is good, because 2009 will probably end up being the most favorable year for taxes ever.”
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