An executor of an estate can easily get into trouble for not doing certain things, but an executor can also find themselves in trouble if they do certain things. An experienced estate planning attorney can help with navigating the do’s and don’ts of the executor’s tasks.
There are no lack of guidelines to help an executor or personal representative of an estate to understand the specific tasks and responsibilities that he or she has when managing an estate. Most guides, available online, at personal finance websites, in magazines and books, are written with an eye to the positive and provide a good outline of the tasks that need to be taken.
That can leave a lot of important information out, however, if the executor is not also given advice about what not to do doing during the process.
Facebook offers a feature that will allow a designated person to have increased access to a Facebook account when its owner passes away. Facebook realizes there is a growing need to support those who are grieving the loss of a loved one and those who want a say in what happens to their account after death.
Facebook responded by launching a feature called: "Legacy Contact." This feature may help your loved ones through the grieving process in the event of your death and allows you to designate what will happen with your account upon passing.
If you are a Facebook user, you may want to go into your account now and designate your Legacy Contact to manage your account when you pass away. Here is how it works when someone passes away:
Of course, many state legislatures are currently wrestling with how to handle digital accounts after the user passes away.
Consequently, this issue might eventually be taken out of Facebook's hands entirely. Until then, contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney to help you make arrangements for your “digital assets” pending future legislation.
It is not unusual for wealthy parents to guide their children in their life choices while they are alive, and it’s also not unusual to control how heirs spend their inheritances. But using an inheritance as an incentive to reach specific benchmarks is a new one on us – and perhaps typical of the type of personality it takes to amass great wealth.
When New York real estate tycoon Maurice Laboz passed away, he left behind an estate worth approximately $35 million dollars, two daughters, 21 and 17, and an unusual estate plan.
As is often the case, Laboz did not leave all of that money to his daughters right away. Instead, they must wait until they are 35 years old to receive their inheritances.
However, what is somewhat unusual is that Laboz left ways for his daughters to get some of the money early if they will do things he approves of. For example, they can receive early payments if they get married, only having children in wedlock, and graduate from an accredited university.
These types of pre-conditions to receiving an early inheritance are not normally encouraged by estate planners. One potential issue is that they might have a tendency to make heirs resentful.
By and large, people do not like being told how they should live their lives and do not like feeling manipulated when it comes to things like getting married and having children.
Thus, while the conditions Laboz set might not seem like anything particularly harmful, their mere existence could have unintended consequences. In this particular case, these conditions might become moot.
Laboz was in the process of divorcing his wife when he passed away. The divorce was not finalized and he cut her completely out of the will. She is likely to challenge it.
Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney can advise you on the benefits and detriments to “incentivizing” an estate plan.
A trust that rewards heirs for desired behavior is known as an “incentive trust.” These kinds of trusts are popular among those who fear that their beneficiaries will not treat their inheritances with respect and are likely to waste vast amounts of resources. If you are considering setting up an incentive trust that will succeed, it needs to be done correctly.
Some wealthy families worry that their heirs may not be capable of handling large inheritances, and are concerned that the money may be squandered. In an effort to guide their heirs, they turn to incentive trusts to reward heirs who follow in what they consider to be the correct path.
For example, if you are creating a trust for a minor child, you might want to create a trust that rewards the child for graduating from college or getting a job.
Not all incentive trusts are created equally, however, and it is important to set one up properly or it is likely to fail.
Decide whether you want to create specific things for beneficiaries to perform to receive distributions or if you want to leave everything up to the discretion of the trustee.
Determine whether payments should be made directly to the beneficiary or to a third party. For example, if the trust is to provide money for school, should the trustee distribute that money to the school in the form of tuition or give it to the beneficiary to pay the school?
Decide how long the trust should exist. You can keep the trust in place for the beneficiary's entire life or you can set the trust to terminate at a certain point.
Decide what will happen to the trust assets if the beneficiary does not live up to expectations.
Make sure that all key conditions are spelled out in the trust.
It is important to note that some courts will not enforce incentive trusts that point to actions that are against public policy, such as requiring a person to marry a person of a certain race or religion.
Make sure to consult with Robert A. Gordon of Redkey Gordon Law Corp, an experienced attorney about what types of conditions you can make.
Wealthy mining magnate Harry Magnuson thought that his estate plan was all settled, and it was, while he was alive. But his wife did not follow the plan he had created, and as a result, one of the Magnuson children is now suing his siblings over an inheritance.
When Harry Magnuson and his wife Colleen had their estate plan created in 2002, the structure was relatively straight-forward: if Harry died first, everything would be left to the surviving spouse. When Colleen died, the entire estate was to be divided equally among the couple’s five children.
Harry passed away in 2009 and Colleen received everything as planned. However, when she passed away, everything was not divided equally between all of the children.
Colleen had signed a new will in 2011 that revoked the 2002 will and disinherited her son Thomas, while the remaining four children inherited everything. Thomas was not amused.
Apparently the new will was prepared by a notary working in the law office of one of the other Magnuson siblings. This has predictably led to problems.
Thomas Magnuson is suing his siblings claiming that they conspired to unduly influence their mother to have him cut out of the will. The Spokesman-Review reported this story in a recent article titled "Magnuson son sues siblings."
It is too soon to know what will happen in this case. This is yet another example of what happens when there is a lot of money at stake and a family member does not think that he or she was treated fairly in an estate plan.
Even if the other four siblings are found to have not unduly influenced their mother to rewrite her will, this case will likely cost the family a lot of money and hurt feelings.
If you really want to disinherit one of your descendants, be sure to contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.
Estate taxes are seen by some as instruments of public policy, an attempt to fight economic inequality by diminishing the ability of wealthy families to aggregate vast amounts of wealth. Others see estate taxes as a “death tax” that penalizes those who are financially successful. Whatever your opinion, estate tax rates are still quite high compared to other taxes. This creates an incentive to plan in advance and use sophisticated methods to reduce estates taxes.
Thirteen different brackets might make you think that estate tax planning is all about college basketball! According to a Fox Business article, “2015 Estate Tax Rates: How Much Will You Pay?” the rate structure for the estate tax has remained virtually unchanged since 2013, even with these numerous brackets. See the chart below for a birds-eye-view of the 13 different brackets:
Amount of Taxable Estate
Over $1 million
Before you do any number crunching, remember that the federal government has an estate tax exemption for all estates more than $5.43 million (in 2015). The “lifetime exemption amount” is the cut-off mark for how much wealth each person can pass to their heirs without owing any estate tax.
The article explains that the exemption is different than a standard deduction. What you do is look at all your taxable estate assets and knock out the first $5.43 million. If you have more than that, the estate tax will be at the maximum rate of 40% on the portion of the estate that’s above the $5.43 million threshold.
Robert A. Gordon of Redkey Gordon Law Corp, an estate planning attorney can help you with some ways to reduce or even eliminate your estate tax liability. This can include gifts during your lifetime to reduce your estate assets at your death. The law says that you can give an individual up to $14,000 annually without having to pay any gift tax. If you give more than that amount, you'll start using up your lifetime exemption. You don’t want that!
There are also many more-complicated methods of giving money to potential heirs during your lifetime that can reduce your eventual estate tax bill. Talk with your estate planning attorney about these more complex strategies and leave more money for your heirs and less for taxes.
Owners who are personally and emotionally involved in their businesses, including farming operations, often consider what will happen to their businesses, farms and business assets when they are no longer involved. Planning for the disposition of a business is different than estate planning. While many think they are the same process, they are really very different.
Estate planning concerns the transfer of assets, including wealth, of an individual from one individual to another or to an entity, such as a trust, and this occurs only when the person passes away. Ownership of a business and business assets, whether they are tangible or intangible, can be transferred to a legal entity, whenever the owner chooses. The Columbus (NE) Telegram’s article, “Estate planning and business transition quite different,” discusses these two different kinds of transactions.
Business transition is simply the transfer of a business asset or the entire entity from an existing owner who has decided to retire or move on. This usually occurs during the life of the existing owner. However, when a business transfer takes place after the death of the owner, it’s usually part of an existing or implied estate plan or asset transfer process.
The process of business transfer can be a very simple process, or it can be complex and dynamic with many steps, based upon the wishes of the existing owner. There is a valuation of the business and the resources that must take place. The transfer of the tangible and intangible assets can occur through the cash purchase of individual items, a purchase of share interest, and/or purchase of stock or certificates. A cash sale, just like when buying a house, is the quickest and cleanest. A larger company with stockholders and a corporate structure takes some time.
The article reminds us that there are a number of similarities between estate plans and transition plans, but the big difference is timing of the transfer. Estate plans deal with the transfer of tangible and intangible assets and interests after the owner has died. A business transfer plan typically happens when the owner is still alive.
Neither of these is designed to be a replacement for the other. They work together, to fulfill the wishes of the business owner.
Robert A. Gordon of Redkey Gordon Law Corp, a qualified estate planning attorney can help a business owner sort out the issues and create both plans according to the owner’s wishes.
When a loved one has Alzheimer’s, advanced planning for legal and financial matters becomes even more important than in day-to-day estate planning. Ideally, planning well in advance, before the disease has taken a toll on the person’s cognitive abilities, may give them an opportunity to express their wishes for their care. The debilitating nature of Alzheimer’s and other forms of dementia is extremely stressful for family members who are charged with being caregivers and decision makers. Planning early with the help of an experienced professional can alleviate some of the stress that results.
Caring for a loved one with Alzheimer’s or a different type of dementia is a challenge that requires a great deal of planning in advance. An article in The Lincoln (NE) Journal Staraddressed a number of financial, legal and medical care issues – “Planning the future of a loved one with dementia.”
You will encounter a number of costs in caring for a person with dementia. Planning for these expenses and costs throughout the course of the disease will involve examining all the costs you could possibly face now and in the future. These can include prescription drugs, personal care supplies, adult day care services, in-home care services, and residential care services.
Discuss financial needs and goals as early as possible. This way the person with the disease will be able to comprehend the issues, take a role in mapping out his or her objectives, and clarify their wishes. An experienced elder law attorney will have worked with financial advisors and will be able to point out potential financial resources, uncover tax deductions, and counsel against imprudent investment decisions. You may have these financial resources available to help you with the costs during the course of the disease:
Health care coverage
Long-term care insurance
Other public programs:
In addition, many states have state-funded, long-term care available, such as adult day care and respite care.
Legal capacity is the ability to understand the meaning and importance of a legal document, such as a power of attorney. A person suffering from dementia who has the ability to understand and appreciate the consequences of his or her actions to execute a document needs to be the decision-maker. As long as he or she possesses legal capacity, they should take part in legal planning. The article recommends these documents:
Power of Attorney
Health Care Directive or Power of Attorney
Talk to Robert A. Gordon of Redkey Gordon Law Corp, an experienced and qualified estate planning attorney if you have questions about elder care for your loved one.