Planning for Children

Tuesday, March 01, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

Is it OK to treat my children differently in my estate plan?

It’s both OK and sometimes advisable, but dependent entirely on one’s personal and family circumstances. The default for most parents is to treat their children equally, but situations arise where leaving money to one child already very well off doesn’t seem to make sense when other children are equally productive but in careers that simply don’t compensate as much. Factors that go into this decision include the amount of money at issue, whether a child will feel slighted if their share is unequal, and possibly whether a child simply doesn’t deserve as much as their sibling, among other issues. Talking through how you want to proceed, and the best way to accomplish your plan, is best done with an experienced estate planning attorney, who has dealt with similar situations before.

Monday, December 20, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website.

Can you protect your children’s inheritance if you die first and your spouse remarries?

Yes, but you have to avoid simplistic estate planning that leaves everything to your spouse if you die first. Most basic wills leave everything to one’s surviving spouse, who may decide how all the family assets will be distributed upon their death, because they own everything. Instead of leaving everything to your spouse, you can leave your share of the family assets to your children in trust, but give your spouse limited access to the assets in trust for the remainder of his or her life. That way your spouse has access to the assets so that their standard of living can be maintained, but upon your spouse’s death, the assets pass to your children. This is a common planning scenario where blended families are involved. Blended families exist where one or both spouses has children from a prior marriage.

For more information on this topic, see the articles:

How to Avoid Disinheriting Your Children

The Casserole Brigade
 

Friday, June 25, 2010

Press Coverage of Estate Planning this Week (June 25, 2010)

Deborah L. Jacobs of Forbes points out that estate planning is usually more important for women than for men, in part because women live longer and tend to marry older mates. In addition, because women typically have lower lifetime earnings, they will be more likely suffer the consequences of poor money management in later years if proper estate planning isn’t accomplished before their husband dies. She offers six issues for women to consider regarding estate planning. See Six Estate Planning Questions for Women (June 22, 2010).

Liz Davidson contributed two articles to Forbes, the first providing some tips on how to leave a legacy during your lifetime and at death. It begins with defining your values, encourages teaching life’s lessons, and identifying a charitable organization you wish to support after your death. See Estate Planning, As Told By Clint Eastwood in ‘Gran Torino’ (June 21, 2010).

In the second of Davidson’s contributions, she discusses issues to consider when leaving an inheritance to beneficiaries who may not be old enough or financially savvy enough to use it wisely. Actions to consider include educating your heirs and giving them some assets now to build their experience in managing money, limiting access to principal through use of trusts, and maintaining flexibility through the use of trustees who can oversee asset distributions after you die. See Giving and Inheritance the Right Way (June 24, 2010).

Laura Saunders of the Wall Street Journal raises the question of whether the federal government could reverse course and later tax Roth IRAs. If that were a valid fear, then converting a traditional IRA to a Roth IRA could end up being a big mistake. Her conclusion is that while possible, a later tax on Roth IRAs is highly unlikely, and today's risk may be outweighed by the benefits of Roth IRAs, which can be substantial. See Is a Roth IRA Safe From Taxes? (June 18, 2010).

Friday, April 23, 2010

Press Coverage of Estate Planning this Week (Apr. 23, 2010)

Financial Advisor Magazine reports that as more high-profile deaths occur in 2010, questions about making a new estate tax retroactive are mounting. In April, Texas billionaire Dan Duncan died, leaving an estate of $9 billion, according to the article. If Congress tries to re-instate the estate tax this year and make it retroactive to January 1, beneficiaries can be expected to fight long and hard because so much money is at stake. See Deaths Highlight Estate Tax Question (Apr. 22, 2010).

Yuki Noguchi of National Public Radio discusses the effects of the lapse of the federal estate and generation skipping transfer tax in 2010, which is offset by additional capital gains taxes on beneficiaries when they sell inherited assets. See There May Be a Tax Upside to Dying in 2010 (Apr. 20, 2010).

Deborah L. Jacobs of Forbes writes that the past decade could in hindsight be viewed as the golden era of wealth transfer if the current estate tax laws remain unchanged. In 2011, citizens may be able to pass far less tax free and have fewer methods to minimize the tax bite. See Estate Tax Could Come Back With Sharp Bite (Apr. 18, 2010).

Maria Baler writes in the Dedham Transcript about how to plan for your kids, offering tips including appointing someone to make decisions for your children in your absence, naming a personal guardian and a property guardian, and having young adults fill out advance directives for health care. See 5 Facts You Should Know About Planning to Protect Your Kids (Apr. 16, 2010).

Friday, March 26, 2010

Press Coverage of Estate Planning this Week (Mar. 26, 2010)

Paul Sullivan of the New York Times discusses high priority estate plan documents everyone should have up to date, including a will or trust, updated beneficiary designations on insurance and retirement accounts, and advance directives, among others. See Assemble a Paper Trail, and Make Sure Your Heirs Can Follow It (Mar. 24, 2010).

Anthony J. Medico, Esq., writes in the Greenwich Citizen how to avoid common estate planning mistakes, such as a disorganized and complex probate process, failing to plan with asset protection in mind, and leaving too much to young beneficiaries who are likely to spend their entire inheritance within two years. See 10 Problems That Can Be Avoided Through Proper Estate Planning (Mar. 26, 2010).

Ashlea Eberling of Forbes updates readers on the status of Grantor Retained Annuity Trusts (GRAT), and how the law may be changing soon. Proposed legislation would require 10-year minimum terms and disallow zeroed-out GRATs. See Goodbye GRATs? (Mar. 24, 2010).

Ruth Mantell of MarketWatch writes about the importance of having a will if you have young children. The most important, and difficult, decision is who would be the children’s guardian, the person who would raise your children if something happens to both parents. Parents can make that decision, or leave it to someone else. See If You’ve Got Kids, It’s Time to Make a Will (Mar. 23, 2010).

Friday, August 21, 2009

Pres Coverage of Estate Planning This Week (August 21, 2009)

Melinda Beck of the Wall Street Journal discusses health care advance directives, including how to get them, what you can specify in them, what to do with the forms when completed, and how to have a discussion about health care issues with your family and chosen agent.  See Preparing for the Final Hours (Aug. 18, 2009).

The Wall Street Journal blog, The Juggle, notes that fewer than one-third of Americans have an advance directive and urges readers to take time to get this important document prepared.  See Make Time to Create an Advance Medical Directive (Aug. 20, 2009).

Bob Carlson, editor of Retirement Watch, cautions estate planning clients to expand their focus beyond merely tax planning to include legacy planning, addressing topics such as ensuring financial security, management of one's estate, protecting the estate and managing tax issues. Too often, Carlson says, estate planning is viewed as merely tax planning.  See The Four Goals of Legacy Planning (Aug. 20, 2009).

Timothy O'Sullivan, Esq., writes in the Wichita Eagle that family harmony should be as large a goal as tax reduction when engaging in estate planning.  He includes a few areas where planning more often leads to disharmony.  See Think of Family Harmony as Well as Assets During Estate Planning (Aug. 20, 2009).

Tim Grant of the Pittsburgh Post-Gazette provides an overview of special needs trusts and how creation of a special needs trust for a child with a disability can take a major emotional weight off your shoulders.  See Special-Needs Trusts Can  Provide for Disabled Children (Aug. 18, 2009).

Friday, July 24, 2009

Press Coverage of Estate Planning This Week (July 24, 2009)

John Eligon of the New York Times recounts that estate plan amendments late in life often lead to bitter fueds due to questions of capacity and overbearing caregivers, among others.  See Battle Over Estates, Small or Astor-Size, Can Be Bitter (July 20, 2009).

Andrea Coombes of the Wall Street Journal discusses the troubles that arise in trying to access a decedent's online accounts, and suggests ways to safely share online access information so that it's available to your survivors after you die.  See You Need an Online Estate Plan (July 19, 2009).

Eileen Ambrose of Tribune Media Services reviews the benefits of having a will, naming a guardian, and picking a sensible executor.  See When There Is a Will, Things Are More Likely To Go Your Way (July 19, 2009).

Candice Choi of the Associated Press offers tips on three issues related to children and estate planning: guardianship, inheritance and trusts.  See Safeguards Vital for Kids After Parents Are Gone (July 21, 2009).

Rick Bloom writes in Hometownlife.com about the benefits of living trusts, even for small estates.  See Living Trust Great Vehicle, No Matter Estate Size (July 23, 2009).

Friday, July 10, 2009

Press Coverage of Estate Planning This Week (July 10, 2009)

Kevin Bourke writes in the Santa Barbara (Calif.) Independent that failure to update your beneficiary designations on financial accounts such as IRAs can lead to surprise endings, like long-divorced ex-wives receiving sizable retirement plans while the children get nothing.  See Accidentally Disinherited (July 7, 2009).

Harriet Johnson Brackey of the South Florida Sun-Sentinal discusses arranging for guardianship of minor children in complex family arrangements, as well as providing some tips to strengthen the chances a court will abide by your wishes.  See Got a Will?  Better Make Sure Who Gets the Kids (July 10, 2009).

Jane Bennet Clark of Kiplinger's Magazine contends Michael Jackson had his estate plan in order, at least more so than most Americans.  She offers some general advice on what should be included in an estate plan.  See 4 Estate-Planning Lessons From Michael Jackson (July 2009).

Karin Grablin writes in the Bradenton (Fla.) Herald that soon after divorce it is important to review your estate and financial planning.  Issues include planning for blended families if you remarry, and guardianship of minor children, among others.  See Make Estate and Financial Planning First Step After Divorce (July 7, 2009).

Candice Choi of BusinessWeek provides a brief overview of the differences between wills and trusts, and some of the advantages of choosing one over the other.  See Will or Trust? Understanding the Differences (July 3, 2009).

Sarah Arnquist of the New York Times discusses planning for funeral arrangements and the options available to avoid the expense of a full-fledged funeral, including cremation and home funerals.  See The Caregiver's Last Expense (July 8, 2009).

Thursday, April 02, 2009

Two Basic Documents to Protect Your Children

Naming a guardian for your children, and having them fill out a HIPPA Release when they turn 18 are the two most important acts you can take to protect your children. Learn more about these documents in Two Basic Documents to Protect Your Children, located on the Articles page.