Articles Tagged with Estate Plan

1.28.19You know that health care, taxes and not saving enough for retirement can derail retirement. However, what about the risks you never saw coming?

Consider these three risks to retirement says Wealth Advisor in the article, “The Three Risks To Prepare For In Retirement.” They are a little less obvious than the ones you usually worry about, but no less dangerous for your later years.

  1. Complacency. Don't let yourself fall victim to complacency risk. This involves feeling smug or uncritical satisfaction with your own achievements. In this case, it’s thinking that you have your retirement plan all set and forgetting about it.

Black and White man wagging fingerGuardianship is a fairly straightforward and basic function. A person who is not able to handle her or his own affairs, for any number of reasons, is assigned a guardian by the court, who is to act on their behalf for financial, medical and care-taking purposes. The guardian is charged with putting the interest of their ward first, and the guardian is entrusted with a great deal of responsibility.

However, as the Wall Street Journal reports, in "Abuses Plague Guardianship Systems Across the Country," the financial abuse of elderly people by guardians is rampant throughout the United States.

Court appointed guardians with no family relationship to the elderly wards too often act in their own interests and deplete the wealth of the wards.

Person-woman-eyes-face-mediumThe media tends to place a great deal of focus on federal income tax, but despite that, the number of estates that actually pay this federal tax are proportionately small. Less than 12,000 estate tax returns were filed with the IRS in 2014, and of those, most of the estates did not even have to pay any federal estate taxes.

Thus, the estates that do pay the tax are those of the wealthiest of the wealthy in the country. By looking at the data on the returns where an estate tax was due it is possible to get an idea of what kind of assets wealthy people have.

As reported by the Wall Street Journal, in "When the Superrich Die, Here's What's in Their Wallets," the IRS has recently released that information for estate tax returns filed in 2014.

Professor at chalk boardIn many cases, knowledge is power. But in estate planning, knowledge by itself can be a dangerous thing. You need to pair knowledge of the most common estate planning mistakes with another kind of knowledge: what to DO about those mistakes. And we would even add a third thing: knowing WHO to ask for help!

For example, you might know that it is desirable to avoid probate, but that is of little use unless you also know how to create an estate plan that will keep an estate out of probate. For the same reason it is important to not only know what common estate planning mistakes are but also to know how to avoid them.

A recent article by The Street entitled "How to Avoid the Most Common Estate Planning Mistake" discusses the most common mistakes and how to avoid them. Tips from the article include:

Stack of law booksThis is a great example of a failure to think outside of the box. Literally. A California man created a handwritten will that left all of his property to his wife if he were to predecease her. He also wrote that if they should both die at the same time, he wanted his property to be distributed to a number of charities that were important to them both.

What Duke did not contemplate in his will is the possibility that his spouse would pass away before he did, which is exactly what happened.

As Duke had never redrafted his will after his wife passed away, the trial and appellate courts declared that his property should go to his relatives under the laws of intestacy. However, the California Supreme Court ruled that an unambiguous will can be reformed by the court if it can be established by clear and convincing evidence that a mistake was made in expressing the testator's intent at the time the will was drafted.

Couple holding handsWhen most people think of wills and estate plans, they usually think about the primary function of distributing assets to children. The natural next thought is, if they have no children, then they don't need a will. But estate plans, and especially wills, actually serve a number of important purposes, only one of which is conveying assets to children.

As U.S. News & World Report points out in, "No Kids? You Still Need an Estate Plan," people without children need, at the very least, to have a will if they want to have a say in who gets their assets after they pass away.

People who pass away without a will are said to have died intestate. Every state has a law that determines who gets the assets of people who die intestate. The laws all operate similarly, in that the assets are given to the person's closest living relatives.

Butterfly collectionAmericans love collections and homes across the country boast music collections, rock collections, sea shell collections and the list goes on.  Often, these personal collections hold a great deal of sentimental value while their market value is nil.  Typically, favored items are passed on to the family members who will treasure them while the collections’ value presents very little impact on the estate.

However, an art collection is different because works of art can be extremely valuable.

As the New York Times points out in "Estate Planning Can Get Tricky When Art Is Concerned," art collections require very careful estate planning. The biggest issue is that art is illiquid. If the estate tax is due, then the heirs have to come up with cash to pay it. This requires them to use other estate assets or to sell the art.

Camera lensSeveral nude photographs of the late artist Jean-Michel Basquiat were taken by his ex-girlfriend Paige Powell. The photographs, which were shown as part of an art exhibition in 2014, show Basquiat reclining on the bed, smiling at the camera. Subsequently, they were posted on several art websites.

One of those websites, Animal, posted the images in 2014.

The attorney for the artist's estate, however, recently sent a letter to the website demanding that the images be removed as they are disparaging to the artist. Powell claims that Basquiat was proud of his body and would want the photographs to be seen. Page Six reported this story in "Estate fighting release of Basquiat's nude photos."

Sunlit forestUpon British actor and director Lord Richard Attenborough's death, the value of his estate and his last wishes were made public via his will.  His estate in the United Kingdom was worth approximately £1.5 million, not including the value of any assets held in trust or any foreign assets.

However, his will also revealed that Attenborough requested that his body be cremated.

His wish was that one-third of his remains be placed at his Scottish estate and another third be taken to an estate in France. The final third of his remains he wants intermingled with the remains of his daughter and granddaughter at a church near Attenborough's estate in the UK.

Fight over moneyIt’s hard to imagine legendary guitarist Jimi Hendrix preparing a will; only 27 when he died, he likely did not have a great deal of assets. However, his estate grew after his death, and his not having a will, combined with a lopsided will of his father, led to years of legal battles between the Hendrix siblings.

It’s ironic that when Jimi Hendrix died at the tender age of 27, only one of his legacies was his amazing artistry with the electric guitar. The second legacy was his estate, which grew to vast proportions after his death, as did his fame.

His brother Leon Hendrix and his adopted sister Janie Hendrix have been fighting with each other over that legacy. Both of them have sought to profit from it and have worked at cross-purposes. The latest battle between them was over a trademark infringement lawsuit.

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