Wills

Wednesday, April 20, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

Is the guardian of a ward the ward’s executor after the ward dies?

Guardians and executors are two distinct roles, and while the guardian may become the executor, the Probate Court will address the issue of who should be the ward’s executor independently of who was previously named as guardian.

Tuesday, April 19, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

Is it necessary to have the probate court appoint an executor if the executor has already been named in the deceased person’s will or trust?

Yes, because an executor is not authorized to act in the capacity of executor until being appointed as the executor by the Probate Court. The will states the decedent’s preference that the named person serve as executor, but it will be the Probate Court that makes the final decision. If the person named to fulfill the role of executor files the will with the Probate Court and no interested persons object to that person being executor, the Probate Court usually acts very quickly to issue Letters Testamentary appointing the person as executor of the estate. If any of the interested persons object, then the Probate Court usually holds a hearing to discuss the objections and whether the named person should nonetheless be appointed executor.

Wednesday, April 13, 2011

NEET Tips

NEET Tips answers questions posed by visitors to the NEET website

How do you file a will for safekeeping in probate court in Vermont?

To file a will for safekeeping, you should have the will placed in a sealed envelope with the following information on the envelope: (1) Testator’s full name; (2) Testator’s address; and (3) Testator’s executor(s). Many attorneys will also put their name and contact information on the envelope. The envelope should be presented to the clerk of the Probate Court with a check for $21. Remember that if you amend your will, you should be sure the Probate Court receives a copy of the updated will, in an envelope just as above.

Friday, April 08, 2011

Recent Press Coverage of Estate Planning (April 8, 2011)

Bill Bischoff of SmartMoney contends that even though the federal estate tax exemption has risen, people still need an estate plan to avoid having their assets pass according to their state’s default intestate rules. The article provides a quick overview of wills, living trusts and other estate planning options. See Why Most People Need An Estate Plan (Mar. 22, 2011)

Ashlea Ebeling of Forbes writes about how to handle an inheritance. There’s an estimated $8.4 trillion that will pass to baby boomers, an average of nearly $300,000 per inheriting household, and boomers are finding many different ways to use the money. See The Inheritors (Apr. 11, 2011).

Susan Hirshman writes in Forbes about wives that should be acting now to protect their interests. She notes that some estate plans allocate up to the federal estate tax threshold to one’s children, with the surviving spouse receiving the rest. With a high exemption level of $5 million, that could leave the wife with nothing. See Why Women Need An Estate Plan (Mar. 23, 2011).

Deborah L. Jacobs of Forbes discusses the new portability law that allows a surviving spouse to use the decedent spouse’s unused estate tax exemption amount, and argues that even though this provision is set to expire at the end of 2012, it could stick around beyond that, so it behooves you to understand how it works and prepare for it. See Estate Planning for Two (Apr. 1, 2011).

Linda Covella of the Santa Cruz Patch discusses the differences between wills and trusts, offers pros and cons for each approach, and reviews the role of an attorney in the process. See Wills and Trusts: Which Will You Trust for Your Estate Planning? (Apr. 3, 2011).

Deborah L. Jacobs of Forbes provides a short overview of the gift tax law, gift tax returns, and offers some Q&A regarding whether a gift tax return should accompany your income tax return this April. See Time to File That Gift Tax Return (Apr. 1, 2011).

Monday, April 04, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What happens if the executor dies after the will maker?

The executor is named by the probate court to manage the probate process. If an executor dies in the midst of carrying out their responsibilities, the probate court will name a new executor to take over. The probate court would review the will to see if a backup executor had been named by the decedent. If so, the probate court would likely name that person absent a compelling reason not to. If no backup was named, the probate court would seek to name a willing survivor of the decedent who was in the best position to take over the responsibility.

Friday, March 25, 2011

Press Coverage of Estate Planning this Week (March 25, 2011)

Anne Tergesen of the Wall Street Journal reviews which states allow a person, while still living, to defend their will against challenges. One handicap of wills is that they traditionally do not become effective until the person’s death, and then wills are sometimes challenged when the will writer is not there to say what they really intended. Some states now allow will writers to notify beneficiaries and the disinherited of the contents of their will, and if those notified do not contest it within a certain time period, they are barred from contesting it in the future. See A Will and a Way (Mar. 21, 2011).

Ms. Tergesen also writes about qualified personal residence trusts (QPRT) and suggests that depressed real estate values, combined with recently passed estate and gift tax law changes, make this an opportune time for homeowners to consider transferring their homes to their children to save on future estate taxes. See A Matter of Trust: Giving Away the Home (Mar. 19, 2011).

Robert Frank of the Wall Street Journal writes about the increasing use of pet trusts. A pet trust is a legal arrangement that sets aside money for a pet’s care if their owner predeceases them. Leaving too much money to your pet can invite problems, such as that experienced by Leona Helmsley’s dog Trouble, who lost $10 million of a $12 million inheritance after lengthy legal battles. See Trust Funds for Pets Are on the Rise (Mar. 17, 2011).

Thursday, March 10, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

How can I ensure my children receive an inheritance if I die and my spouse remarries?

You can accomplish this through a will or a trust. If through a will, you simply name your children as beneficiaries. Keep in mind that in Vermont, as in many states, your spouse has a right to what’s known as an “elective share” whereby they can inherit a portion of your estate regardless of what your will states. One problem with the will approach is that if you leave a sizable portion of your estate to your children, your spouse might need to scale back their standard of living. For this reason, many people opt for a trust that is structured so that the surviving spouse has limited access to the deceased spouse’s assets for the remainder of the surviving spouse’s life, but upon the death of the surviving spouse, the assets pass to the first decedent’s children. By creating the trust structure, you are allowing your spouse to maintain their standard of living, while ensuring that the remaining funds eventually pass to your children. This structure is recommended for many clients, but especially those in blended families, where one or both spouses have children from a prior marriage.

Thursday, February 17, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

How long does a person have to contest a will in Vermont probate?

When an executor or other person submits a will and a petition to commence a probate proceeding to the relevant Probate Court in Vermont, they must also send notice of the proceeding to all interested persons. Often the executor will have obtained all of the interested person’s consents to the validity of the will. Interested persons in Vermont include heirs, devisees, legatees, children, spouses, and such other persons as the Probate Court directs. Notice should also be sent to the trustee of any trusts to which assets of the decedent’s estate may be distributed, as well as other fiduciaries representing interested persons, such as a guardian.

If not everyone consented to the validity of the will, the Probate Court will schedule a hearing date no less than 14 days after all interested persons were served proper notice. Anyone contesting the will should file a written answer to the petition prior to the hearing, and may provide an oral answer at the hearing, unless the court directs otherwise. Thus, there is no set number of days allowed to contest a will in Vermont, instead a written answer should be filed with the Probate Court before the first hearing is scheduled.

Tuesday, February 08, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What are some good ways to begin discussing my parent’s estate planning?

There are three common approaches to raising the issue of estate planning with elderly parents. One method is to discuss what happened to a family friend or neighbor who recently died, particularly if the lack of estate planning caused family problems. You and your parents can learn from their mistakes. Another method is to begin your own estate planning and mention to your parents what you have learned. You can also state that your attorney wants to know how your parents estate planning is set up so that your attorney can plan accordingly. The final method is to suggest your parents get organized, first with getting important paperwork in order, then addressing incapacity issues with an Advance Directive, a power of attorney for finances and a HIPAA release. Once your parents complete those documents, the next natural step is drafting a will or trust. Be aware that patience is important, and recognize that as the elderly get older, one of their biggest fears is losing control, so attempting to micro-manage the process could backfire. It’s never an easy conversation, but it will undoubtedly benefit everyone.

For more information on talking to your parents about estate planning, see the NEET article:

Talking to Your Parents About Estate Planning

Thursday, February 03, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What’s the best way to disinherit someone?

To disinherit someone who would otherwise likely receive a portion of your estate through the Vermont intestacy laws, you need to have a written will or trust. Absent a written document, the intestacy laws will control.

When drafting a will or trust, most attorneys suggest naming the person who you wish to disinherit, but stating that although they are a child (or other relationship) of yours, you wish to leave them nothing. Many attorneys advise against providing reasons for your actions, as the disinherited person could contest the will later on the grounds that those reasons no longer applied. Some attorneys recommend leaving the person a relatively small amount and including a “no contest” provision. By doing this, the disinherited person has to weigh receiving the small amount against contesting the will and potentially receiving nothing if they lose in court. The amount is intended to be an incentive against contesting the will.

Keep in mind, surviving spouses cannot be disinherited. A surviving spouse may waive the will and exercise their “elective share” to take one-half of their deceased spouse’s estate. Your children and others do not have similar rights.

Friday, January 28, 2011

Press Coverage of Estate Planning this Week (January 28, 2011)

Deborah L. Jacobs of Forbes reviews new tax breaks, portability provisions and when trusts make sense under the new estate planning laws passed in December. See Married, With Assets (Jan. 27, 2011).

Joseph A. Giannone of Reuters points out that the rich have a rare opportunity to pass along millions of dollars to their children because of the re-uniting of the gift tax with the estate tax exemption level. But the current law expires at the end of 2012, so the opportunity may not last long. See U.S. Rich Get 2-Year Window on Gifts to Heirs (Jan. 27, 2011).

Ashlea Eberling of Forbes discusses how to go about writing your first estate plan, covering basic wills, advance directives, naming a guardian, beneficiary designations, and considerations for business owners. See How to Write Your First Estate Plan (Jan. 26, 2011).

Friday, January 07, 2011

Press Coverage of Estate Planning this Week (January 7, 2011)

Deborah L. Jacobs of Forbes discusses the new portability provisions included in the tax law passed by Congress in December, and asks if portability eliminates the need for trusts. She then provides several situations where trusts still make sense, and others where relying on portability alone may suffice. See Planning for a Disappearing Estate Tax Break (Jan. 3, 2011).

Ashlea Ebeling of Forbes argues there is no longer any excuse to put off estate planning, and suggests four steps to take soon: write a will, complete a financial power of attorney, complete a health care advance directive, and review the beneficiary designations on your life insurance policies and retirement accounts. See No Excuse For No Estate Plan (Jan. 3, 2011).

Thursday, January 06, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What is undue influence, and what factors determine if undue influence was exerted?

Undue influence occurs when a donor no longer exercises free will, and the resulting transactions are thus considered tainted, according to Vermont case law. In essence, when undue influence is being exerted, the donor is being coerced, and the donor’s judgment and desires are not being reflected in the resulting transaction.

Charges of undue influence may arise in probate or related court proceedings, particularly when there are suspicious circumstances surrounding the execution of the relevant documents. Suspicious circumstances include relations of trust and confidence whereby the opportunity for one party to abuse the other exists, such as between a person writing a will and their beneficiaries, guardian and ward, and spiritual advisor and persons turning to them for advice.

In determining if undue influence was present, the courts look to see if the transaction was made at arms length, i.e. the donor and the donee are not related or on close terms, and are presumed to have equal bargaining powers. Additionally, the courts will want to know if the donee profits financially from the transaction, whether the donee was acting in a fiduciary capacity to the donor, and if the transaction is consistent with the donor’s wishes expressed prior to the time when undue influence became a concern. Courts may also consider other factors as determined relevant to the specific circumstances of the case.

Wednesday, January 05, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

Does real estate that is devised or bequeathed go through probate in Vermont?

Yes, in fact devise and bequest (or bequeath) are terms of art that specifically related to probate assets. Devise means the act of giving property, usually real property (land), by will. Bequest means the act of giving property, usually personal property, by will.

If an asset was transferred to an heir outside of probate, for example a financial account that passed via beneficiary designation, it would not be a bequest in the traditional sense of the word because it is not passing by one’s will. So, all devises and bequests, by definition probate assets, would have to pass through probate in Vermont.

Tuesday, January 04, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

In Vermont, how long does it take to be appointed executor of an estate?

If the person seeking to be named executor was named in the will as the decedent’s choice to be executor, and none of the interested persons or others protest the choice of the executor, the probate court often acts within a matter of days or weeks in formally appointing the executor. Where there is no will, or where there might be concerns about the proposed executor named in the will, or where more than one person seeks to be the executor, the probate court may seek to hold a hearing or receive written comments on the matter, and subsequently make a ruling. The latter process might take a month or more, although the probate court usually seeks to resolve the issue of appointing an executor fairly quickly so that someone can manage the deceased person’s estate during the probate process.

Monday, January 03, 2011

NEET Tips

NEET Tips answers questions posed online to the NEET website

What is abatement?

Abatement is a term used in wills and the probate process for a situation where there are insufficient assets in the probate estate to pay all of a decedent’s debts and legacies. The concept is similar to the priority of creditors claims, where certain creditors are paid (or not paid) before others.

When insufficient assets exist, the Vermont probate statutes require that gifts be “abated”, i.e. not paid, in the following order: first, the decedent's property not mentioned in the will goes unpaid to who would otherwise have received it; second, property making up the residuary estate is not paid, even if someone is named to receive the residuary estate; third, general devises and bequests, which are gifts that don’t specify or describe the gift, e.g. “my real estate,” are not paid; and fourth, specific devises and bequests, or gifts of specifically identified real property or personal property. When abatement ends at a certain level, gifts within that level are pro-rated.

Monday, December 27, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website

In Vermont, if someone dies without a will, is probate necessary?

Whether probate is necessary depends on whether there are any probate assets. If all of a deceased person’s assets pass to a surviving spouse or someone else because the assets were jointly owned, then probate may not be necessary. Also, if a person had a trust and all of the deceased person’s assets were in the trust, then probate may not be necessary.

Most often, when a person does not have a will or a trust, probate becomes necessary to allow creditors an opportunity to ensure the deceased person’s legitimate debts are paid off, and to transfer real property, titled assets and other personal property to the deceased person’s survivors. When the deceased did not have a will or trust, Vermont's intestacy laws determine how the deceased person’s assets will pass to the survivors.

For more information on this topic, see the articles:

 

Overview of Vermont's New Rules for People Dying Without a Will

New Law Allows Vehicles to Pass Probate Free

Probate and Intestacy Are Readers' Biggest Concerns

Wednesday, December 15, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website.

Do the provisions of a will override a beneficiary designation?

No, rather a beneficiary designation overrides the provisions in your will. The reason is that your beneficiary designations form part of a contract that you have with the financial institution managing the account, and contractual provisions overrule language included in a will. For this reason, it is advisable to check every couple years to ensure all of the beneficiary designations on your financial accounts, including retirement accounts and life insurance policies, are up to date and reflect your current wishes. Also, if you are recently divorced or widowed, update your beneficiary designations immediately. It frequently happens that former spouses receive life insurance proceeds, to the dismay of current spouses.

See the articles:

Why Beneficiary Designations Are So Important; and

Beneficiary Designations Are the Final Word

Friday, December 10, 2010

Press Coverage of Estate Planning this Week (December 10, 2010)

Stephen J. Dunn of Forbes provides an overview of estate planning basics, including what a will accomplishes and why it is essential to have one, a way to avoid probate through living trusts, and some advantages of irrevocable trusts. See Estate Planning Overview and Objectives (Dec. 10, 2010).

Maria Baler of Wicked Local Dedham discusses reasons why a revocable living trust makes sense for specific situations, such as ensuring children don’t inherit a cash windfall at age 18, minimizing time and expenses related to settling an estate, and minimizing federal and state estate taxes. See 5 Reasons to Create a Revocable Living Trust As Part of Your Estate Plan (Dec. 5, 2010).

Tuesday, December 07, 2010

NEET Tips

NEET Tips answers questions posed online to the NEET website.

What does “Right of Representation” in a will or trust mean?

Right of Representation is one of three common law survivorship options for passing assets to the descendants of your children that comes into play if a child predeceases you. For example, if you leave assets to three children, but one of your children dies before inheriting, your will or trust should have some default language detailing what percentage of the assets the deceased child’s children will receive.

For each of the following situations, assume there are three children, Peter, Paul and Mary who each inherit one-third of your assets. Peter has one child (Andrew), Paul has two children (Bob and Chris), and Mary has three children (Denise, Eunice and Francine).

Per Stirpes. The most common survivorship method is known as “per stirpes,” which means shares are determined by the number of children at the first level. Under this approach, if Peter and Paul predeceased, but Mary was still living, allocation among children and grandchildren would be as follows: Mary receives her one-third; Andrew receives one-third; and Bob and Chris each receive one-sixth. If all three children had predeceased, Mary’s one-third would be evenly split among her three children, so that each received one-ninth. In short, this approach means that each child receives their one-third share, and if the child predeceases, their share is evenly divided among their children.

By Representation. An alternative approach is known as “by representation,” which means shares are determined by the number of descendants at the first level that has living descendents. This is the same as per stirpes if one or more children are alive, but different if only grandchildren survive. If no children survive, the estate is divided equally among living grandchildren. Thus, Mary’s children do not receive a lesser amount because Mary had more children than Peter or Paul; instead Mary’s children, as well as Peter and Paul’s, each receive an equal one-sixth of the total estate.

Per Capital at Each Generation. An infrequently used alternative is known as “per capita at each generation,” which means shares are determined by the number of descendents at each level. Under this approach, each living child receives their one-third, and at the next generation, all grandchildren inherit equal shares, regardless of whether they have several sibling or no siblings. For example, suppose Peter and Mary predecease. Paul receives his one-third, and the children of Peter and Mary inherit equally, in this case each receives one-quarter of two-thirds, or one-sixth.

Friday, September 10, 2010

Press Coverage of Estate Planning this Week (September 10, 2010)

Deborah L. Jacobs of Forbes lists some of the many problems that can go wrong with do-it-yourself estate planning, including ambiguity leading to court battles, forfeiture of estate tax breaks costing millions of dollars, and the wrong people inheriting your assets because of missing language. See The Case Against Do-It-Yourself Wills (Sept. 7, 2010).

Gary Brooks writes in The News Tribune (Tacoma, Wash.) that small business owners should have an exit plan that follows one of three strategies: identifying and grooming a successor; preparing for acquisition by a third party; or engaging in a managed wind down of the business. Too often, however, small business owners don’t plan ahead and a default fourth approach is required: closure and liquidation of business assets. See Exit Plan a Crucial Aspect to Small Business Ownership (Sept. 3, 2010).

Friday, August 27, 2010

Press Coverage of Estate Planning this Week (Aug. 27, 2010)

Deborah L. Jacobs of Forbes points out steps to take if a family member dies in 2010. Although there is no federal estate tax this year, in its place are new rules for income taxes on inherited assets, also known as the carryover basis rules. The article lists seven steps, including having assets appraised, finding cost basis records, delaying the selling of appreciated assets, and other steps to avoid costly mistakes. See Seven Steps for 2010 Heirs (Aug. 23, 2010).

Ms. Jacobs also writes about estate planning strategies known as estate freezes, which remove assets and their future appreciation from the owner’s estate and can be particularly effective during periods of low interest rates. Options include intentionally defective grantor trusts, grantor retained annuity trusts (GRAT), and charitable lead annuity trusts (CLAT), among others. See Five Ways to Freeze Out Uncle Sam (Aug. 25, 2010).

Tara Siegel Bernard of the New York Times addresses six questions regarding writing a will, including whether a will is necessary, whether it’s advisable to write your own will, and whether a revocable trust makes more sense than a will. See Getting a Will: Six Common Questions (Aug. 26, 2010).

Friday, August 13, 2010

Press Coverage of Estate Planning this Week (August 13, 2010)

Chuck Jaffe of Marketwatch discusses conversations with his late brother, who advised that people should get their estate planning affairs in order so that they can focus on more meaningful issues when death is near. The brother, who contracted an illness and died 46 days later, suggested that talking about estate planning with an attorney when everyone is healthy is easy, talking about death when one is dying would be unimaginable. See 46 Days to Live: What’s Your Plan? (Aug. 2, 2010).

Floyd Norris of the New York Times recounts how the Bush tax cuts of 2001 came into being, and how politics will affect whether the estate tax comes back in 2011 at a threshold of $1 million. Congressional factions, even more partisan now than in 2001, remain in no mood to compromise, and a return to the $1 million estate tax threshold and higher tax rates appears increasingly likely. See Taxes No Longer So Certain (Aug. 12, 2010).

Pamela Yip of the Dallas Morning News points out that estate planning is not just for the rich. She states that everyone should have a will, and reviews some common estate plan mistakes that people make, including not knowing the value of everything you own, failing to update your plan, leaving everything to your spouse, over-relying on joint tenancy, and picking the wrong people as executors and trustees. See Estate Planning Lets Your Will Rule After You’re Gone (Aug. 6, 2010).

Jeffrey McKenna, Esq., writes in the Lincoln County Record that almost always a financial account that has a beneficiary designation will overrule provisions in a will that would have the account pass to someone other than the listed designated beneficiary. Beneficiary designations are common on life insurance, annuities, and IRAs, all of which are contracts. The associated beneficiary designations are a part of the contract, and a provision in a will cannot change the contract. Reviewing your beneficiary designations every couple of years on these and other accounts is essential to ensure your estate plan works the way you intended it to. See What Controls: The Will or “The Box” (Aug. 13, 2010).

Irving Blackman, Esq., writes in ContractorMag.com, about the estate planning issues that arise when a client is planning for second or third marriages. Types of issues that are prevalent include age differences between the new spouses, health issues, kids from prior marriages, lack of a premarital agreement, and how to provide for the surviving spouse without disinheriting your children. See Estate Planning for Second, Third Marriages, Etc. (Aug. 9, 2010).

Friday, June 18, 2010

Press Coverage of Estate Planning this Week (June 18, 2010)

Daisy Maxey of the Wall Street Journal offers some reasons why college students ought to have wills, including ensuring that their parent’s estate planning is not disrupted. Absent a will, intestacy laws in most states would pass assets back to the parents where the son or daughter is not married and has no children. Passing money up a generation may lead to its being needlessly taxed when the parents pass on. See Planning for the Unthinkable (June 14, 2010).

David Kocieniewski of the New York Times questions the real impact of a return to the estate tax threshold of $1 million in 2011, suggesting estate planning and favorable tax provisions for small businesses make fewer estates liable for estate taxes. Furthermore, even with the low estate tax threshold, the number of affected estates would be low by historical standards. See What An Estate Tax Looks Like to the Taxman (June 11, 2010).

Paul Sullivan of the New York Times finds that the one-year repeal of the estate tax is making this a busy time for estate planners, both to fix older estate planning documents that didn't anticipate repeal of the estate tax, and to take advantage of estate planning methods that will likely soon be less appealing because of new legislation. See Confusion Over the Dormant Estate Tax Keeps Advisors Busy (June 11, 2010).

Annie Gasparro of the Wall Street Journal recounts some of the reasons that converting a traditional IRA to a Roth IRA may not make sense. She lists large near-term tax increases, owners too close to retirement, and potentially higher tax brackets during retirement. See Why You Shouldn’t Convert to a Roth IRA (June 14, 2010).

Kristen McNamara of the Wall Street Journal reviews actions taken by various states to attract trusts, including relaxing or voiding limits on how long a trust can last, eliminating income taxes for trusts, and enhancing asset protection features. See States Want Your Trust (June 14, 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, March 05, 2010

Press Coverage of Estate Planning this Week (Mar. 5, 2010)

Deborah L. Jacobs of the New York Times writes about the advantages of parents discussing their estate plan with their children, including being able to head off disagreements among children, and even some surprises about children wanting less than the parents intended to give them. See Estate Planning as a Family Conversation (Mar. 3, 2010).

Ashlea Ebeling of Forbes highlights a recent survey finding that more than half of Americans do not have any estate planning in place, and discusses some of the reasons people give for not planning ahead. See Americans Lack Basic Estate Plans (Mar. 1, 2010).

Nolan Baker and Mark Clair write in the Toledo Free Press about the differences between wills and trusts, and what factors go into choosing one approach over the other. See A Will? Or a Trust? (Mar. 5, 2010).

Friday, December 11, 2009

Press Coverage of Estate Planning This Week (December 11, 2009)

Anne Tergesen of the Wall Street Journal provides an overview of new Roth IRA rules that allow more people to convert a traditional IRA to a Roth IRA starting in 2010. Because Roth IRAs have no required minimum distributions, they can be a valuable estate planning tool for those planning on leaving asset to children. See Get Ready for 2010 – The Year of the Roth IRA (Dec. 6, 2009).

David Lester of the Yakima Herald-Republic reviews basic estate planning documents, discusses when to move from fill-in-the-blank will kits to working with an estate planning attorney, and notes a few common mistakes in estate planning. See Will, Do: Talk to an Estate Planner to Map Out Future Plans (Dec. 6, 2009).

Friday, November 13, 2009

Press Coverage of Estate Planning This Week (November 13, 2009)

Victoria E. Knight of the Wall Street Journal writes that a weak economy makes for a bad time to sell a family company, but a good time to pass it on to the next generation. Several methods involve freezing the value of the business at today’s trough in the business cycle. See Wealth Transfers for Family Businesses (Nov. 9, 2009).

Daniel O. Tully, Esq., writes in the Bristol Press (Bristol, Conn.) about some of the fundamental differences between wills and trusts. See Senior Signals: Difference Between Will, Trust (Nov. 8, 2009).

Bob Carlson of KCI Investing discusses what recipients should know about inherited IRA’s. The rules are not complex, but neither are they obvious. And mistakes can be needlessly costly. See What Your Heirs Should Know About IRAs (Nov. 12, 2009).

Arden Dale of the Wall Street Journal writes that converting a traditional IRA to a Roth IRA can make sense even for people in the 60s and 70s, particularly where the goal is to transfer wealth and not just shelter money from taxes. See Roths as Tools for Wealth Transfer (Nov. 10, 2009).

Friday, November 06, 2009

Press Coverage of Estate Planning This Week (November 6, 2009)

Lisa Munniksma of Successful Farming discusses some approaches for handling a family meeting focused on estate planning. Having a strategy for communication before the discussion and listening to find out the concerns and interests of other family members often leads to better outcomes. See Taking Emotions Out of Estate Planning (Nov. 3, 2009).

Rebecca Price, Esq., writes in the Lakewood Observer (Lakewood,Ohio) about the need for young families to engage in estate planning. She cites naming a guardian for your children and determining who receives the family assets (without leaving out children from a prior marriage). See Estate Planning for Young Families: The Job You Don’t Want to Do But Must Get Done! (Nov. 4, 2009).

Bill Bischoff of SmartMoney reviews what you should do, and some of the options you will face, regarding taxes related to a loved one’s final medical bills. See Handling a Loved One’s Final Medical Expenses (Nov. 5, 2009).

Tuesday, November 03, 2009

Estate Planning Tip of the Week

Does a Living Trust Need to Be Filed with the Probate Court?

No. The only time this might be necessary is if there is a dispute involving a trust document and resolving that dispute requires court intervention. Generally, living trusts remain out of reach of the courts during the grantor’s lifetime, during administration when subtrusts are created or assets are being distributed to beneficiaries, and during any subsequent periods when subtrusts, such as beneficiary controlled trusts, remain in existence. A well drafted trust makes provision for all contingencies that are likely to arise, thus the likelihood of needing to take the trust to court is very small.

One of the primary purposes of creating a revocable living trust is the fact that your family can avoid the expenses, delays and inconveniences of the probate process. If you have a will, or no estate plan at all, your survivors will have to pass through probate every asset that does not automatically pass to someone else through joint tenancy, beneficiary designation or similar operation of law.

Friday, October 30, 2009

Press Coverage of Estate Planning This Week (October 30, 2009)

Ashlea Ebeling of Forbes.com writes about how to lend money to your children in ways that satisfy IRS requirements. See How to Arrange a Loan Between Family Members (Oct. 29, 2009).

Deborah L. Jacobs of the New York Times writes about no contest clauses in wills and trusts, which provide that if a person contests a will or trust in court and loses, they do not receive an inheritance. Standards for applying these clauses, and whether to use them, are discussed in this article. See Clauses Aimed at Keeping the Heirs Quiet (Oct. 29, 2009).

Sandra Block of USA Today writes about common misperceptions regarding wills, such as the myth that if you have a will, your estate will avoid probate. See 5 Myths About Wills and What You Should Really Do (Oct. 23, 2009).

Philip Moeller of U.S. News & World Report writes that the economic turmoil has resulted in an increase in litigation regarding estate planning and intra-family relations. He offers some advice on lessening the chances your estate plan will be contested. See 8 Tips to Avoid Nasty Estate Surprises (Oct. 23, 2009).

Kelly Greene of the Wall Street Journal discusses inheriting a Roth IRA, both the benefits and how to title the account correctly. See The Gift That Keeps on Giving: A Roth IRA (Oct. 24, 2009).

Friday, October 16, 2009

Press Coverage of Estate Planning This Week (October 16, 2009)

Laura Saunders of the Wall Street Journal recommends checking your will or trust to determine if the provision funding the “bypass” or “credit shelter” trust requires the full federal exemption amount be placed in that trust. While sensible planning a couple of years ago, because the exemption amount is much higher now, such provisions may leave the surviving spouse little or nothing. See Is There a Trap Lurking in the Language of Your Will? (Oct. 16, 2009).

Ashlea Ebeling of Forbes cautions about what can go wrong with a power of attorney for finances, and suggests seven tips to protect against the misuse of a power of attorney. See Protect Your Assets: Write a Safe Power of Attorney (Oct. 15, 2009).

Van Sievers writes in the Montgomery Advertisor reasons people give for not doing an estate plan, including being too busy and not wanting to think about death. He adds that he has never had a client say they were glad their parents did not do any estate planning. See 7 Reasons Given for Not Doing An Estate Plan (Oct. 13, 2009).

Tuesday, September 22, 2009

Estate Planning Tip of the Week

Do Wills and Trusts Have to Be Registered with Probate Courts?

Prior to the death of the creator of the will or trust, no.  Wills are often kept for safekeeping in the Probate Court located in the Vermont County where the creator is living, but that is not mandatory.  After a person dies, their will must be submitted to the relevant Vermont Probate Court within 30 days of their death, at which time the probate process commences. 

Many trusts, including most revocable living trusts, need not ever be provided to the Probate Court.  In most instances, a revocable living trust is a will substitute.  In practice, this means that administering the trust settlor’s estate is done outside of probate, which is one of the primary reasons people choose a trust over a will when first engaging in estate planning.

If a person dies without a will or trust, known as dying intestate, the probate process usually begins in the relevant Vermont Probate Court following submission of a petition to open a probate estate by a survivor of the decedent.

Friday, September 11, 2009

Press Coverage of Estate Planning This Week (September 11, 2009)

Kara McGuire of the Minneapolis Star Tribune writes about the importance of cabin trusts when passing a family camp from one generation to the next, particularly if several families will be sharing it going forward.  A cabin trust lays out how the camp should be owned, cared for and used once the current owners die.  See How to Handle Ownership of Family Cabin Through Generational Change (Sept. 5, 2009).

Roseann DiStefano writes in the Eagle-Tribune, North Andover, Mass., that married couples should write an estate plan, even if they disagree strongly about who should inherit their estate.  The harms associated with not writing a plan almost certainly outweigh the difficulty of resolving your differences.  See How Do You Resolve Differences About Your Wills? (Sept. 4, 2009).

Friday, September 04, 2009

Press Coverage of Estate Planning This Week (September 4, 2009)

Kate Ashford of CBS MoneyWatch.com wrote three articles addressing getting your finances and estate planning in order, what questions to ask your parents about their estate planning, and what steps are necessary when a loved one passes away.  See Keep the Money in the Family (Sept. 2, 2009).

Heidi Brown of Forbes.com writes about several areas of estate planning, including planning for minors, planning gifts for charities or family members, ensuring your medical wishes are known, and ensuring beneficiary designations are up to date, particularly if your marriage is ending.  See Your Go-To Guide to Estate Planning (Sept. 2, 2009).

Barbara Kate Repa of Caring.com covers some of the basic provisions that you should consider including in your will, such as naming an executor, specifying beneficiaries and alternate beneficiaries, how taxes should be paid, and providing for pets.  See Aging and Caring: 10 Things to Consider Including in a Will (Sept. 2, 2009).

Mark Kanny of the Tribune Review (Pittsburgh, Pa) reviews a recent book on blended families – where one or both spouses has children from a prior marriage – and highlights some of the major issues that tend to arise.  See How to Estate-Plan Your Blended Family (Aug. 31, 2009).

Kelly Greene of the Wall Street Journal discusses naming a trust as a beneficiary of an IRA, including some of the benefits and drawbacks, and what to avoid.  See Trust as Beneficiary of IRA is a Popular Strategy (Aug. 29, 2009).

Friday, August 28, 2009

Press Coverage of Estate Planning This Week (August 28, 2009)

Kelvin Collins of the Better Business Bureau of Central Georgia writes in the Augusta Chronicle that the Better Business Bureau advises consumers that if they own something of value that they would like to pass on to loved ones at their death, they should create an estate plan. He provides and overview of the basic estate planning documents and provides tips on communicating with family members about the plan. See Estate Planning Assures Control of Your Assets (Aug. 24, 2009).

LaTina Emerson of the Augusta Chronicle recounts how procrastinating on an estate plan can lead to problems in families of all types. She states that parents should start planning as soon as they have children to determine who would raise the children and manage the family's money in a worst case scenario. See Estate Planning Can Prevent Family Feuds (Aug. 23, 2009).

Kevin Reardon of BizTimes (Milwaukee, Wis.) suggests that business owners ensure they have a business exit plan if retirement is near, and review it regularly in light of the current economy. He recommends key questions every exit plan should address and questions that business owners should be discussing with their family. See Business Exit Plan Should Be Reset in Tough Economy (Aug. 21, 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).

Friday, June 05, 2009

Press Coverage of Estate Planning This Week (June 5, 2009)

Tyra Pacheco of the Cape Cod Times (Hyannis, Mass.) finds that many people spend more time planning for a vacation than they do planning their estate.  Although the reasons are numerous, she lists why drafting at least a will makes sense.  See Why You Need a Will (May 31, 2009).

Stacey L. Bradford adapted a portion of her recent book "The Wall Street Journal Financial Guidebook for New Parents" to address whether you should consider setting up a trust for your children.  In a Q&A format, she addresses many of the most important questions facing parents.  See Deciding if Your Kid is Trust-Worthy (June 3, 2009).

Janet Morrissey of Fortune Magazine covers some basics in reducing the size of your estate to avoid estate taxes.  See How to Avoid the "Death Tax" (June 4, 2009).

William Edy, Esq. writes in the News-Press.com about how to leave an IRA to children to achieve tax deferred savings and protect children from taking the money out too soon for imprudent purchases.  See Elder Law: IRA Can Be Stretched to Pay Out Over Lifetime (May 31, 2009).

Friday, May 08, 2009

Press Coverage of Estate Planning This Week (May 8, 2009)

William Edy of news-press.com discusses a type of trust designed to protect an inheritance over several generations, with asset protection features to guard against your children's divorcing spouses and creditors.  He also compares this trust against a simple will to demonstrate how your children would fare under each scenario.  See Elder Law: Dynasty Trusts Can Protect Children and Grandchildren (May 3, 2009).

Greg Roberts recounts in the Aiken Standard advice regarding wills, specifically what to avoid when making a will.  See Mistakes to Avoid When Making Your Will (May 3, 2009).

Kelly Greene of the Wall Street Journal answers a reader's question regarding finding useful information for planning a funeral in advance.  She also includes some pointers on what to do, and what to avoid.  See Planning for Your Funeral: Here's a Guide for Smart Shopping (May 2, 2009).

Friday, May 01, 2009

Press Coverage of Estate Planning This Week (May 1, 2009)

Michael G. Shinn writes in The Seattle Medium that estate planning is the most overlooked area of financial planning.  He quotes a funeral home director who claims that 80-90 percent of decedents don't have any estate planning.  See Your Money Really Matters: "An Encounter with the Undertaker" (Apr. 29, 2009).

Paul Sullivan of the New York Times writes about the basics of life insurance and disability insurance, and how they sometimes function as estate planning tools.  See Life and Disability Insurance: What You Need to Know (Apr. 29, 2009).

Kathleen M. Rehl writes in Investment News how a legacy letter, also known as an ethical will, can enhance what you leave to your children, and also be a profound experience for the writer.  See Passing on More Than Just Money (Apr. 26, 2009).

Kirk Shinkle of U.S. News and World Report discusses ways to efficiently make lifetime and testamentary gifts to those most important to you, including your pets.  See How to Give: Tips for Passing on Wealth to Kids, Your Charity, and Your Dog (Apr. 28, 2009).

Shaila Dani of the Associated Press discusses how the depressed economy makes this a good time to pass on assets to your children through gifts, intra-family loans, family limited partnerships and charitable lead trusts.  See Downturn Markes it a Good Time to Share Wealth (Apr. 26, 2009).

Friday, April 17, 2009

Press Coverage of Estate Planning This Week (April 17, 2009)

The Wall Street Journal's most recent Wealth Manager Report (Apr. 13, 2009) includes five stories focused on estate planning.  All are worth reading.  In The Mess They Left, Suzanne Barlyn gives advice on how to find a decedent's key documents, including the will or trust, financial statements, personal property memorandums and others.  In The Right Steps, Michaela Cavallaro discusses the unique problems that face blended families, where one or both spouses has children from a prior marriage. In Financial Prescription, Shelly Banjo and Kristen McNamara address estate planning in the context of a chronic illness and incapacity.  In A Time for Giving, Nate Hardcastle reviews why a low interest rate environment is an ideal time to give assets to children.  Finally, in Covering Your Assets, Mark Klimek provides a status report on Family Limited Partnerships with advice on common pitfalls to avoid.

Friday, March 20, 2009

Press Coverage of Estate Planning This Week (March 20, 2009)

John T. Brooks and Erika A. Alley of Foley & Lardner LLP write in Registered Rep. about an Illinois court case involving marriage restrictions in an estate plan.  Most often, restraints against marriage and religion are considered void because they are against public policy.  In this case, where beneficiaries are disinherited if they marry outside the Jewish faith, the Illinois Supreme Court will revisit the validity of such restrictions.  See The Jewish Clause: Putting Conditions on an Inheritance Into a Will (Mar. 17, 2009).

The Motley Fool provides a short overview on the advantages and disadvantages of wills when compared to revocable trusts.  See The Pros and Cons of Wills (Mar. 19, 2009).

Jeffery J. McKenna of Barney, McKenna and Olmstead writes in thespectrum.com about estate planning when minor children are involved.  Issues include guardianship, conservatorship and the use of trusts to prevent young adults from wasting a windfall inheritance.  See Keep Your Dependents in Mind (Mar. 18, 2009).