CA Estate Planning

Dying without a will is the unkindest cut of all. Yet 70% of Americans do!

The bottom line is: If you love and cherish your family, you MUST take the time to at very least write your will. Writing your Last Will is the most basic act of estate planning.

 A will  ensures your assets go to the people you want to receive them when you die. Pretty basic, huh?  But some 70 percent of Americans have no Last Will!  Without a will, the state decides who receives your estate. You may not agree with the state's decision, but it will be a little too late for you to do anything about it!

Many people who have a will believe that their estate won't have to go through probate.  That is incorrect.  If you live in California, your will can avoid probate only if your estate is valued at less than $150,000.  Otherwise your will has to go through probate; but at least your estate goes to the people you want to receive it.  As mentioned above, if you have no will, the State has an estate plan for you.  Probate can be avoided by setting up a revocable ("living") trust. 

 But first of all, you must stop procrastinating.  Everyone has excuses for not having a Will, especially if you are young; after all you are immortal. But if you have a family and no will, you are condemming them to dealing with your probate, and they will not thank you for it.  The most loving action you can take is at least preparing a will.  

As reported in a recent article in Forbes, Tell Your Family You Love Them -- Write Your Will, there are certain fundamentals only you can control when it comes to your estate.

In reality, there isn’t a single moment in your life when you’re ready to plan your estate. You don’t just reach some magical “pause button” where everything stops and there’s nothing new happening in your life, your business, your investments, or with your loved ones. Likewise, there is no time to stop planning, and for the same reasons.

Estate planning is not an event, but rather a lifetime process. Beginning today, you can put a plan in place with enough flexibility to cover many of life’s twists and turns. And, of course, you should always update your plan to reflect major changes – whether in the law, your life, your assets or the lives of your loved ones. 

Reference: Forbes (March 30, 2011) “Tell Your Family You Love Them -- Write Your Will”

 

 

Brooke Astor's Estate is Settled –Changing a Will Late in Life is Suspect, as Astor’s Son Discovers to his Cost.

Brooke Astor’s only son saw his inheritance slashed in half and had his control of the estate’s powerful charitable contributions stripped away as part of a settlement that ended a bitter, five-year dispute over the family’s millions.

Changing your mother’s will in your favor when she is already suffering from dementia may not only lead to a will contest but criminal charges as well. When your mother was the doyenne of New York High Society, Brooke Astor, and the will changes, involving many millions, are all in your favor, you are likely to be in the spotlight not only in New York society circles but also in that of Manhattan’s District Attorney.

That is what happened to Anthony Marshall, Mrs. Astor’s 87-year-old son.  After a 19-day criminal trial resulting in the conviction of Marshall and Mrs. Astor’s attorney for fraud and theft, the contest of Mrs. Astor’s will has been settled without going to a hearing.

Mrs. Astor’s original 2002 will was found in the criminal trial to be her valid will. As part of the settlement forged by Manhattan’s Attorney general, Marshall’s original inheritance was cut in half and his control over influential charitable interests stripped away.  Mr. Marshall now receives a paltry $14.5 million.

Involving at did one of New York’s historically glamorous families, it is not surprising that The New York Times followed the Astor case day by day as many of New York’s society gave evidence against Mr. Marshall.  And the Gray Lady covered the settlement in a recent article titled Settlement in Battle Over Astor Estate Is Reached.

There are many lessons to be learned by estate planners from this case:  Be very suspicious of substantial changes to clients’ estate plans late in life, especially so when the change involves depriving a long-time beneficiary in favor of another.  It is up to the family attorney to scrutinize carefully the requested changes, and especially investigate the client’s state of mind.  Keep scrupulous notes.  If the attorney doesn’t probe deeply, the deprived beneficiary will do so and more than likely contest the will when the estate must be administered.

Reference: The New York Times (March 28, 2012) “Settlement in Battle Over Astor Estate Is Reached”

 

Discuss your estate plan with your heirs; you may be surprised by their opinions. Small changes now may avoid large fights after you've gone

The death of a parent often shifts the family dynamic, making issues arise that appear to be based on current events but in fact are perceived as slights that occurred years ago and are now playing out as the parents’ estate is doled out.

Families are complex. While people are complex in general, families are all the more. Why? Families are built on shared histories, both good and bad.

For better or worse, a family’s history sticks with the members of the family, informing their every decision or reaction. This is oftentimes strikingly apparent when it comes to creating one’s estate plans. Remember: The estate planning decisions you make today may affect your loved ones, perhaps for generations.

This issue was the focus of a recent article from Private Wealth titled Siblings Scorned.

As the article notes, it takes a careful hand to divide your estate amongst your family members. Sometimes, even mathematically, equal shares aren’t even in the eyes of certain family members. What are the possible tensions in the family? The reasons are as varied as the makeup of each family itself. For example, did one child get a college degree, while another was denied the opportunity because the family fell on hard times? Did one child seem more favored by the parents, either earlier or later in life?

Interestingly, the most important considerations when planning your estate are rarely money-focused. Over the years, studies have shown that communication between generations and among family members can reduce the risk of family fallouts over estate planning decisions. The “details” communicated, however, will vary from family to family.

I would recommend reading the article from Private Wealth for ideas to mull over and for some real-life stories. 

Reference: Private Wealth (March 2012) “Siblings Scorned”

 

Will your beneficiaries appreciate your art collection as much as the IRS appraises it for estate tax?

How do you dispose of your valuable art collection?  Does it go to a museum where many may appreciate it?  Will your heirs appreciate it or just send it to auction?  Here are some options.

Collecting artworks has been your passion for many years; you've built a fine collection.  However much you may appreciate early Renaissance Madonnas, your children may be more into Jackson Pollock or Joan Mitchell. Or you may have discovered Lucien Freud before he came popular and your collection has greatly appreciated in value.  Capital gains, estate and gift taxes are on your mind.  

So, how do collectors and their estate planning attorneys make proper plans for the transfer of your treasures?  There are many different options, but first of all it may be a good idea to determine the market value of the collection for taxation purposes:  This is valuation used by the IRS.

The next challenge is determining who will receive your collection.  Recently, estate planning issues regarding art have received media attention (to include the strange case of Ileana Sonnabend) as highlighted in a recent article in the Wall Street Journal appropriately titled The Art of Passing Along Art.

As the article notes, the major problem with making an estate plan to transfer art is the nature of “art” itself.  Ultimately, you need to ask yourself why you are giving the art collection in the first place. Are you giving to an art-lover or in lieu of liquid assets? Are you actually giving to the beneficiaries or are you simply trying to find safe homes for the pieces?  Or, do you bequeath it to a museum and offset the charitable deduction against your estate taxes, and probably avoid capital gains tax if you sold the pieces during your life.

Whatever your wishes, there are estate planning solutions. However, you need to prioritize your own goals and wishes for your loved ones, as well as for your art treasures.

Reference: The Wall Street Journal (March 2, 2012) “The Art of Passing Along Art”

 

The funeral is not the end; it is only the beginning of what has to be done after the loved one dies. There is always a long list of tasks to be carried out, but what could be simple chores make for a major headache if the loved one was not well organize

Death and taxes, Benjamin Franklin aptly noted, are the only two certainties in life. Mr. Franklin perhaps should have added a footnote regarding the paperwork both certainties generate.

A New York Times blog (The New Old Age) recently published a “public service” announcement of sorts titled Death's Companion: Paperwork. The article showcases the experiences of the Foreman family as an object lesson for what one of the family members’ termed “administrivia.” This is in an appropriate one-word description for one family’s experience with the trials and tribulations of postmortem paperwork and minutiae.

Think about it. While we are living, we establish myriad relationships with bureaucracies. Whether the IRS, Social Security, Medicare, banks, hospitals, creditors, social media platforms, car companies or gym memberships. We all have long lists of identification numbers, account numbers, customers’ numbers, and user passwords. And the list goes on and on. So, what happens when you die? How do all of these relationships end? How many trees must die (in the form of paperwork) to achieve legal and financial closure?

It has been said that a shortcut to wisdom is to learn from the experiences of others. Accordingly, the experiences of the Foreman family provide excellent lessons and the original article provides important pointers for you to consider in your own estate planning.

In short, proper planning is about seeing both the forest and the trees. Be sure to seek competent probate counsel to help you with the big picture when it comes to your own estate planning. However, the difference between the success and failure of any estate plan hinges on careful attention to the details.

Reference: The New York Times – The New Old Age Blog (March 15, 2012) “Death’s Companion: Paperwork”