Estate Planning

March 6, 2013

WSJ on “Downton Abbey” Planning Lessons

It is not everyday that important retirement and estate planning issues make their way into popular entertainment drama. One of the few exceptions was the movie “The Descendants” a few years ago which garnered widespread acclaim–and some Oscar awards–in a tale focused on a man who unexpectedly comes into control of vast land holdings in trust following his wife’s surprising death. The main character, played by George Clooney, is forced to grapple with a range of issue while dealing with feuding in-laws and uncertainty about his wife’s wishes.

One of the other exceptions is the massively-popular British drama Downton Abbey. The BBC program has been running for several seasons, with the most recent batch of episodes just finishing to high rating here in the United States. The story is set over the course of several years in the first part of the 20th Century, including the first World War and the decade or so afterward.

Much of the drama revolves around one family living off “old wealth” and the challenges presented in maintaining a large estate and transitioning for its transfer to another generation. Recently, a Wall Street Journal article offered an interesting take on some estate planning lessons that viewers can glean from the ups and downs depicted in the show surrounding the inheritance drama.

February 27, 2013

Understanding How a Wealth Transfer Might Affect Insurance

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.

February 22, 2013

Can You Reject an Inheritance You Don’t Want?

by Ettinger Law Firm

Communication is absolutely essential to quality estate planning. That includes both sharing of information between client and planner, as well as the client being open and honest with their family about their wishes. Some might want to avoid difficult conversations about inheritances by keeping silent and allowing family members to find out only after they are gone. But this opens up the door to potential feuding and costly legal challenge. The goal of proper planning is to make transfers as seamless and efficient as possible, and meeting that goal requires others to know what to expect when the time comes.

Most of the time, unwelcome inheritance surprises come in the form of not getting what you expected to receive. Many adult children are surprised when a parent leaves assets to someone else or does not distribute equally between siblings. But the opposite may also be true. You may receive an item that you do not want. For a variety of reasons, not all gifts may be welcome. There are steps that can be taken to disclaim a gift that is part of an inheritance but they are often confusing.

Thanks, But No Thanks

February 19, 2013

Retirement Planning — The Stages

by Ettinger Law Firm

There are no shortage of articles discussing the need to get serious about planning for your retirement. Money is seemingly always tight, and taking a significant portion of assets and putting it away for another day is rarely an easy step. That is particularly true for middle class families who generally have much more pressure to ensure that income is sufficient to meet monthly bills. Of course, regardless of the difficulty, retirement planning is essentially for all of us–health and happiness in one’s golden years depend on it.

A recent New York Times article provides some helpful analysis of the “stages” that many go through in putting off retirement planning before eventually buckling down and getting it done. The author argues that the well-known five stages of grief are perfectly adept at describing the stages of long-term financial planning as well. Those five include: denial, anger, bargaining, depression, and acceptance.

At first, many deny that the task is all that important. The article suggests, for example, that the amount of money needed to be saved is usually far higher than most suspect–so much so that many simply deny that the saving requirements are accurate. When that figure is shown accurate, many get angry about the difficulty of planning for retirement. With so many daily financial pressures it sometimes seems unfair that planning for one’s retirement is such a burden.

February 15, 2013

Dying Intestate–The Documents that Later Emerge

by Ettinger Law Firm

If you pass away without a will designating how you’d like your affairs to be handled, you are deemed to have died “intestate.” Some of the most significant legal battles and family feuding occurs in those situation because it is essentially a free-for-all. Generic legal rules apply, but without any indication of how to handle property distribution and other matters, all interested parties may decide to pursue different legal avenues to maximize their own interests. Legal fights can still occur when a will exists (often referred to a “will contests”), but the possibility of one’s wishes being completely upended are far lower when at least some documentation exists.

Interestingly, it is not uncommon for various documents purporting to explain one’s wishes to pop up later on–in the midst of a legal dispute. For obvious reasons, these documents should be examined with much scrutiny, but they still may influence a legal case.

New Document in Lottery Winner’s Estate Feud

February 13, 2013

Estate Battles More Common Than Ever

by Ettinger Law Firm

Feuding after a death has been common for centuries. However, observers point out that in recent years estate battles have actually grown and more frequent. The trend is noted for all families, both those with sizeable wealth and those of much smaller estates. It is a crucial reminder for residents to take action now to eliminate uncertainty and confusion and ensure in-fighting doesn’t tear a family apart following a passing.

Last week the Telegraph published a story on the topic, pointing to data showing an uptick in legal battles over inheritance disputes. The most common explanation for the change is the recession which devastated many families over the past seven to eight years. One observer explained that in tough economic times, “more people are hoping to receive an inheritance and there can be a great deal of trouble if their hopes are disappointed. People are more litigious in general and more willing to assert their rights.”

Undoubtedly, the recession acted as a spur, influencing some to start a legal fight in order to secure funds that they desperately needed and might assume are owed to them. However, money troubles aren’t the only cause in the change. After all, financial incentives exist even in relatively prosperous times.

February 11, 2013

Richard III Reminder: Set Your Funeral and Burial Plans in Stone

by Ettinger Law Firm

One common excuse for putting off basic estate planning is the assumption that others–spouse, children, siblings, close friends–already know exactly what you want, and so there is little need to go through the legal hoops to solidify it. Sadly, in the aftermath of a passing, there is no way to know exactly what those in control of a situation might do unless there is legal backing to it. That obviously applies with distribution of property, but it also applies to more ceremonial aspects to a passing, like funeral and burial wishes.

Don’t Leave it to Chance

For many, their faith dictates how they chose to have their passing honored (or not honored). From deciding what to do with remains or where to be buried, it is critical that desires be set forth clearly. It is a mistake to underestimate the significance of these details or the in-fighting that may bubble up where there is disagreement about how to handle these matters.

February 8, 2013

Taking a “Do Over” for 2012 Asset Transfers

by Ettinger Law Firm

The last few months of 2012 were filled with mass speculation about how many federal tax issues would ultimately be decided. One part of the high-profile “fiscal cliff” proposal and competing options was the estate tax. As oft-discussed, the final tax details could have fallen anywhere between a $1 million or $5 million exemption level, with rates anywhere from 35% to 55%. Fearing that no agreement would be made and the country would “go over the cliff,” many local residents conducted last minute wealth transfers to take advantage of what was assumed to be relatively favorable rates in 2012 that might disappear in 2013.

As we now know, the country did not go over the cliff. As for the estate tax, the compromise did not see nearly as sharp a rise as expected, with a $5.25 million exemption level and 40% rate (up somewhat from the 35% in 2012).

Considering that the concerns which led to many transfers in late 2012 were false alarms, is there anything that can be done to reverse the transfers? That was the subject of a recent Forbes article discussing the “Buyer’s Remorse” of many who pulled the trigger on different financial plans as a result of tax uncertainties.

February 6, 2013

E-Planning: Estate Planning in our Digital World

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.

February 4, 2013

Estate Planning with the Blended Family in Mind

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.