Articles Posted in Estate Planning

News spread quickly last week of the death of Steve Jobs, the popular technology guru who pioneered so many technological marvels with Apple and the animation company Pixar. While Mr. Jobs was a billionaire, those familiar with his estate planning affairs explain that even middle class families have much to gain by following his lead in planning for their long-term financial affairs. For one thing, no one knows exactly what Jobs decided to do with his affairs, because by using trusts he was able to keep his business out of the public eye. As reported in The Trust Advisor, one man familiar with the situation explains, “Privacy was such a big part of his life and his career. And if everything passed through one or more trusts, there would have been no probate fee…and no will to be read (publically).” You do not have to be a billionaire to achieve this privacy by utilizing alternatives to a will. Our New York estate planning lawyers have helped many local families in our area do just that over the years.

On top of the ability to make decisions privately, Mr. Jobs plan also highlights the way that preparation can help avoid taxes. Most believe that his roughly $6 billion estate will likely pay no estate taxes. Estate taxes continue to make news nationwide as lawmakers debate over changes in the rate and the levels at which the tax kicks in. However, steps can be taken to essentially eliminate the assets that are counted toward those taxes, making it possible to avoid these taxes altogether. The New York estate planning attorneys at our firm can explain what specific steps should be done in your individual case to ensure as much wealth as possible passes on to those who you’d like to receive it.

Mr. Jobs estate planning is also a good example of how each plan is entirely individualized to account for the unique goals, desires, and perspectives of the one from whom it is crafted. No one yet knows how his fortune will be divided down the road. All that is known is that before his death Mr. Jobs’ attorneys moved 5.5 million shares of Apple, 138 million shares of Disney, and various real estate holdings into trusts. It is unknown who the trustee is now that Mr. Jobs has passed. Those familiar with the situation explain that Mr. Jobs had indicated distaste for dynastic plans that would have kept the fortune entirely locked up down the ages. Instead, most suspect that a philanthropic enterprise may be created with much of the assets, perhaps to assist other technology start-ups. No matter what, it is assured that Mr. Jobs plan was a reflection of his own values, something that he shares with every other community members who takes the time to craft their estate plan and consider their long-term legacy.

Any time is a good time to consider your family’s financial future and to plan for inheritances. Our New York estate planning attorneys continue to help clients save money and gain the peace of mind that comes with knowing that a plan is in place to guarantee that one’s wishes will be carried out down the road. However, there remain many local residents who are still unsure if they need to craft a New York estate plan. Discussions about death and asset transfers are naturally an uncomfortable topic, but it is hard to overestimate the benefit that a family can gain by handling these issues ahead of time.

Sharing information about the importance of the task is one of the main goals behind the National Estate Planning Awareness Week. As discussed this week in the Review Journal, the yearly program is sponsored by the National Association of Estate Planners & Councils (NAEPC) and is slated this year for October 17th to the 23rd. Besides sharing basic information about the value of estate planning, the NAEPC also hopes to use the week to educate the public on the best ways to develop productive relationships with their planning professionals. For one thing, it is always very helpful to gather personal and financial information together in one place before meeting with the professional. That information includes a list of assets and liabilities, retirement plan information, life insurance policies, property deeds, income tax returns, business agreements, and similar materials.

On top of these records, all community members should also do some thinking about their goals and concerns before beginning the process. On the most basic level, one should consider who they would like to receive an inheritance and what specific items they would like to pass along. A large part of that process includes consideration of the unique situations of certain family members that make it reasonable for them to receive more or less of an inheritance. In addition, thought should be given to who should be named guardians for minors and who would make a good executor for a will or trustee for a trust. However, a community member need not have every single detail figured out ahead of time. Experienced planners are often able to provide advice on these issues and share thoughts about how certain family dynamics may influenced by the process.

Many local residents have found themselves facing unexpected problems after trying to create a New York estate plan on their own. Community members often mistakenly believe that joint ownership of property and accounts can be used to avoid probate and transfer assets. While joint ownership may be helpful in certain circumstances, in most cases it leads to a variety of problems. Many families have descended into ugly and expensive court fights after a “do it yourself” estate plan was created using these joint accounts.

Last month Forbes published a story listing several reasons that families should beware of joint ownership. The author was particularly concerned about the problems faced by families with joint ownership between generations–such as when an adult child shares control with an aging parent. Adult children are frequently names included on bank accounts, homes, cars, and other investments. Good intentions often lie at the heart of these decisions, but complications usually arise. For one thing, parents often face unwanted exposure to creditors when there is more than one name on an account. When an elderly parent has their child added to the account, the child’s creditor may be able to access the funds. This is the case even though the child may have added none of his or her own money into the account and even though the parent had no involvement in the debt. Other circumstances could also present problems. For example, if the adult child gets divorced the ex-spouse may claim the joint assets as part of the marital estate to which they have rights.

Beyond that, many families have set themselves up for inheritance fights because of joint asset control. Upon the death of the parent, the child whose name was on the account or property usually retains sole ownership. Sometimes this may be exactly as intended. However, in other cases, there may have been an understanding that the assets should have been shared among siblings. Regardless of the intention, the child who control the assets is likely under no legal obligation to follow those wishes upon their parent’s passing. Even in those cases where it was intended for the named child to take the property, the other siblings may still seek to challenge it. No matter what the court ultimately decides, costly, timely, and stressful legal wrangling would result.