Writers of the Uniform Trust Code, which provides a series of model laws related to estate planning that can be adopted by state legislatures, eventually drafted laws regarding a trust designed especially for pets. Pet trusts allow people to set aside an amount of money for the continued maintenance of a pet or pets. Like other trusts, there must be someone to manage the funds and administer the trust on the pet's behalf.
]]> The development of the pet trust followed a period when people attempted to leave money directly to pets. But such arrangements failed because the law considers pets property and therefore incapable of being an heir. Others attempted to leave money to a person or organization that would care for the pet.But even this arrangement has shortcomings. Without the oversight that a trust provides, the pet owner just has to hope that the designated caregiver will use the allotted funds for the care of the pet and will in fact take good care of the animal. There have been reports of funds being spent for other purposes, leaving the pet neglected.
In a trust, an owner can make specific instructions regarding feeding, housing, and veterinary care to make sure that no neglect occurs. Generally, the trust lasts for the lifespan of the animal beneficiary. Money left in trust after the pet dies can be designated for a non-profit animal welfare organization or other purposes.
Source: Utica Observer-Dispatch, "Who cares for Fido after owners have died?" Kathy Antoniotti, May 1, 2012.
]]>Following Kinkade's death, his wife, Kinkade's business holdings and trust representatives filed a request for a restraining order to prevent his girlfriend from releasing confidential personal information about his alleged alcoholism and other issues that would harm Mr. Kinkade's reputation. Such damage to his public image would almost surely have a negative impact on the long-term financial well being of his estate.
]]> In requesting the restraining order, representatives of the trust and others alleged that the girlfriend had broken a confidentiality agreement by suggesting she would reveal confidential information about how Kinkade created his paintings, including specific painting techniques and computer programs. She had first gained access to this information when Kinkade employed her as a personal assistant. A Kinkade attorney argued that releasing these trade secrets to the public would cause "irreparable harm" to Kinkade's businesses.The court has granted the restraining order against the girlfriend, but sources indicate that the parties are attempting to come to a resolution without having to use it.
When a successful artist or musician dies, careful estate planning can ensure that the person's reputation and substantial estate are protected. Asset protection is one aspect of estate planning, but it can also include a well-designed trust. Trustees can help defend a reputation, protect a life's work and provide a plan for future asset growth.
Source: ABC News, "Thomas Kinkade's Death Sparks Feud Over Family, Art Secrets," Colleen Curry, April 30, 2012.
]]>A potentially wider range of people may have to address the estate tax next year, however. At the present, federal law provides for a $5,120,000 exemption from taxation. If an estate exceeds that limit, the rest is taxed at 35 percent. That exemption expires at the end of the year, and unless Congress passes legislation to extend or modify it, the estate tax exemption in 2013 will drop to $1 million. By contrast, the tax rate on the excess will rise to 55 percent.
]]> This looming change has left some wondering whether giving away part of one's estate ahead of the end of the year might be a beneficial strategy. But people should be wary of potential gift taxes, which intersect with and influence a person's estate tax outcomes. The Tax Code allows people a lifetime "unified credit" that can exempt gifts up to a certain amount from taxation. How much of the credit a person has remaining depends on the value of gifts that person has previously made.Some have suggested that a family limited partnership may be appropriate for people with certain types of assets they want to pass on to descendants. But in the end, an estate plan should be closely tailored to fit each person's individual circumstances while addressing potential tax consequences.
Source: Forbes, "Beating The Possible Estate Tax Increase Without Switching To Cat Food - The Midmill Dilemma," Peter J. Reilly, May 2, 2012.
]]>To create that plan for property distribution, a person must consider a number of factors, some that have been around for a long time and others that are rising to newfound prominence. We know from basic human experience that some people are better with money than others. Therefore, some testators may want to put measures in place that protect less financially responsible beneficiaries. Trusts can help accomplish this goal by doling out money in increments.
]]> Divorce is nothing new, but it is certainly more common than it once was. The high rates of divorce and remarriage mean that there are many more "blended families," another term for households with stepchildren. Some parents feel strongly that they want to pass their wealth on to their biological children only, while others want to distribute it equally among all their children. Divorced couples must also confront the issue of whether they wish to leave anything to an ex-spouse, especially if the ex-spouse later remarries.An important conclusion drawn from these considerations is that a person's estate plan will change over time. Divorces and marriages are vital times to consider whether a person wants the current provisions of an estate plan to remain in effect or whether they need revision. Keeping a will, trust and other estate planning documents up to date can ensure that a person's intent is carried out.
Source: The Huffington Post, "Estate Planning: What You Don't Say Can Hurt You," Ann Brenoff, April 23, 2012.
]]>Some trusts can be established during a person's lifetime, while another type is created after a person's death. That latter type of trust is called a testamentary trust because it is named in the testator's will. One of the chief benefits of a trust is that it obviates the need for a guardian to manage assets left to minor children. Instead, a named trustee takes over that responsibility. Additionally, although a testamentary trust is created through the public process of probate, the management of trust assets remains private.
]]> There are a few key points to consider when creating a trust:• When do you want the beneficiaries to come into possession of their share of the trust's assets? Trusts are flexible on this issue and can even provide for partial distribution as a beneficiary attains certain enumerated ages.
• Who should serve as trustee? Trustees are empowered with a wide array of abilities and charged with many duties. It is best to choose someone with integrity, but also someone who has experience managing financial assets. Selecting the proper person to serve as trustee is essential.
• Will there be a conflict between the trustee and the beneficiaries? The trustee owes an impartial duty to all beneficiaries. If the trustee is also a beneficiary or has ties to one or more of the beneficiaries, there is a chance that the terms of the trust might not be carried out with complete disinterestedness.
A person can also create additional terms for a trust. It is important to consider what trust option suits a person's circumstances best and, as with any aspect of estate planning, think ahead so that everything is in place when the need for it arises.
Source: The Missourian, "Common Estate Planning Mistakes Failure to Use Testamentary Trusts," Walter A. Murray, Jr., March 28, 2012.
]]>When talking about his father, Fox News host Chris Wallace revealed that his dad was battling with dementia during his final years. A man that had been such an enduring figure was beginning to show the effects of aging. The younger Wallace said his father could still recognize his family, but was often "uneven."
]]> It's likely that Mike Wallace would have had difficulty making important financial decisions toward the end of his life. At that point, he probably needed someone he trusted, such as a family member, to make important decisions for him. By establishing power of attorney, the former newsman would have felt secure knowing that his financial affairs would be handled appropriately.There are a couple ways to establish power of attorney. Individuals considering this option can make the legal agreement effective as soon as it's signed or when certain conditions, such as medical incapacitation, exist. This, of course, requires a veritable medical opinion to ensure that the specified conditions have been reached.
Handing over absolute control of your financial affairs to someone else, even if you love and trust them, can be a scary prospect. As such, you can provide that specified individual or your attorney with specific instructions for implementing the power of attorney plan. Furthermore, you should have another person in line to do the job if the first person cannot perform their duties.
As with most elements of estate planning, establishing powers of attorney can never be done too soon. Though many medical conditions, such as dementia, typically come with old age, a person can become incapacitated at any time. Rather than leaving your family and other loved ones with a lot of unanswered questions, planning ahead can prevent a lot of unnecessary stress and heartbreak.
Source: Forbes, "Mike Wallace Death Underlines Need To Prepare Financially For Risk Of Dementia," Deborah L. Jacobs, April 8, 2012
]]>The question becomes: How should one provide for the distribution of personal property in a will? Furniture and paintings cannot be as neatly divided as stocks or money, and separating items in a collection can often decrease their value. There are steps a person can take before drafting a will to give specific gifts of property to friends and family members.
]]> An important initial step is engaging in communication with potential recipients of property and asking them what they would like to have. This process can reveal conflicts between people who want the same item. It can also show whether some items are unwanted, and whether selling them or donating them to an organization or charity might be more worthwhile. When two or more people want the same piece of property, a possible solution may be to let the recipients share it, if practicable.There are also other issues to consider. For example, an antique car and a jewelry set may differ significantly in their monetary value, which will invariably fluctuate with time. People concerned about equal distribution of property among children and other loved ones may want to turn to appraisers to discover the value of what each person stands to receive.
Source: The Register-Guard, "When heirs loom over heirlooms," Vanessa Salvia, Mar. 28, 2012.
]]>According to the estate documents, Winehouse had created little, if any, estate planning. She died intestate--that is, without a will. In general, when a person dies without having drawn up a will, the law steps in and distributes a person's estate according to established rules. Under English law, Winehouse's parents inherited the entirety of her net estate, which amounted to $4.66 million.
]]> Although the estate of a person who died intestate may be distributed to family members, it is a less than ideal situation. We will never know Winehouse's intent regarding the distribution of her property, but perhaps it could have been significantly different than the parceling out provided by the laws of intestacy. Winehouse was married at one time. Although she and her ex-husband divorced in 2009, it is not unheard of for people to provide for ex-spouses in their wills.In addition, she may have had other family members, friends and charities she wanted to benefit. But her parents now control her wealth. While not necessarily a bad thing, they may use the $4.66 million in ways markedly different from the way she would have intended. Wills effectuate a testator's intent and help people control the distribution of assets after their death.
Source: USA Today, "Amy Winehouse leaves $4.7 million estate," Ann Oldenburg, Mar. 28, 2012.
]]>For example, a number of unreleased photographs of the actress will be sold at auction later this month. The photos come from the estate of her longtime personal makeup artist and friend. Also included in the auction sale will be some of the man's personal effects related to Monroe, such as a gold money clip that she bought him at Tiffany's. Sales from a deceased person's estate are not unusual, but can raise questions about whether they were part of the overall estate plan.
]]> The man died 18 years ago in 1994. Details are not available on what sort of estate planning documents, if any, the man had in place when he passed away. The sale of presumably valuable Marilyn Monroe memorabilia could indicate that the estate is in need of money. In fact, some of the photographs could turn out to be very valuable, because buyers will receive not just a picture, but the copyright along with it. A popular photograph could earn the purchaser handsome royalties each year.How one's estate is distributed is a matter of personal preference. But some may want particularly valuable or sentimental objects to be passed on to close loved ones or perhaps a museum instead of ending up in the hands of the highest bidder. Proactive estate planning can ensure that a person's wishes are fulfilled after death.
Source: MSNBC.com, "Never-before-seen Marilyn Monroe photos up for auction," Randee Dawn, Mar. 16, 2012.
]]>Parents of Boomers have benefitted from remarkable advances in medical technology. They are living longer than any prior generation. In fact, there has been a 30 percent rise in the number of people aged 85 to 94 during the past 10 years. But longevity does not come free. Many elderly people owe their additional years to new treatments, medicines and surgeries. Healthcare costs are steep, and some seniors are finding that they have little wealth to pass on to the next generation.
]]> Boomers potentially stand to inherit less, but they have additional problems. Divorce and remarriage rates are high, and a number of Boomers have children and stepchildren from multiple marriages, which can significantly complicate wills. According to the Pew Research Center, the number of adults who have one or more stepbrothers or stepsisters exceeds 40 percent.These issues can create difficult decisions when it comes time to draft an estate plan. While seniors are confronting how to protect their assets, Boomers must tackle how they want to divide assets among their potential heirs. Some parents may want to provide only for their natural children in their wills. One remarried man in particular expressed concern that if he died without tailoring his will to benefit his biological children, his property could bypass them and end up entirely in the hands of his wife and his stepchildren.
Sitting down with your family and discussing how you want to distribute your estate can be uncomfortable in such situations. But a well-crafted estate plan can ensure that your property is parceled out according to your wishes.
Source: USA Today, "With more blended families, estate planning gets ugly," Haya El Nasser, Mar. 14, 2012.
]]>Recently, Houston's will was released. In it, she leaves all her property -- furniture, money, clothing, jewelry and cars -- will go to her only child, 19-year-old Bobbi Kristina.
All the money will be placed into a trust until Bobbi Kristina turns 21. At that time, she will have access to some of the money and more will be made available to her when she turns 25. The balance will be an option when Bobbi Kristina turns 30.
]]> This trust arrangement is becoming something of a trend in estate planning. In the past, trusts were made available to their beneficiaries at 18 or 21. However, it eventually became clear that in many cases, it was not a good idea to give so much money to someone who is so young. That is why many people have begun to stagger the disbursements or else make the trust funds available when the recipient is older, like 25 or 30.If you have been thinking about placing property in a trust, you will want to make sure you and your estate planning attorney discuss when might be a good time to make the property available to its recipient or recipients and how you would like those disbursements to be made. Trusts may be more flexible than you think and an estate planning attorney may be able to help you decide which option is best for you.
Source: Los Angeles Times, "Whitney Houston's will: Bobbi Kristina is the heiress," Christie D'Zurilla, March 7, 2012
]]>A living will is also known as an advance health care directive and has gained popularity since it was first introduced in the 1980s. But like airbags, living wills are no less important because they are a relatively recent development. In fact, living wills are essential for adults concerned about what level of medical treatment they would like to receive in the event of an incapacitating illness or injury.
]]> Specifically, a living will declares whether you want certain life-sustaining measures withheld in particular circumstances. This means that you can request that you do not want to be kept alive on, for example, a respirator or a feeding tube. You can even request that doctors not use CPR or certain surgeries. Living wills also often have a person's wishes regarding organ and tissue donation.What to include in a living will is an intensely personal decision and requires careful reflection. But it is an important document for every adult to have in their estate plan. While we imagine hopefully that we will lead long lives, it is prudent even for a young person to prepare for the unexpected accident or illness. With a living will in place, people can achieve peace of mind that their health care decisions will be followed and that their family members will not have the burden of making those decisions instead.
To ensure that a living will is followed, you should communicate your wishes to your doctor and family members by giving them copies of the document.
Source: Shreveport Times, "Protect loved ones with living wills," Devin White, Feb. 27, 2012.
]]>Certain elements of an estate plan are essential for everybody. One important document is called a durable power of attorney, which names a person who will manage your affairs if you lack the capacity to do so because of injury or illness. Without a durable power of attorney, someone who does not know you and your wishes could be assigned to take care of your finances and other concerns.
]]> But some people in particular may benefit from the protection of a power of attorney and other estate planning documents. There are currently 12 million single parents in America, and in some cases, they cannot depend on the other parent to take care of their affairs and their children if something were to happen to them.Single parents with children will want to lay out a plan for their children if they die from an accident or illness. Depending on the state's laws, the children may be given to a relation the parent dislikes, but estate planning can address that. In addition, a single parent can take out a life insurance policy that can provide for the children if they are unable to. The proceeds can be administered through a trust to give the children money when they are ready.
So while estate planning is important for everyone, single parents, who often lack the safety net of a second spouse's income, can benefit greatly by creating a plan that provides for their children.
Source: Financial Advisor, "Planner Offers Advice for Single Parents," Karen DeMasters, Feb. 21, 2012.
]]>Houston earned a great deal of money during her career from movies, record contracts and song royalties. Experts estimate that her estate will grow substantially as nostalgic listeners purchase her music in the coming weeks and months. Michael Jackson's estate experienced a similar, though larger, financial bump following his death. This has led some to speculate whether Houston created a revocable trust for her young daughter, the presumed main beneficiary of her estate.
]]> Houston's daughter, only 18 years old, stands to inherit a princely sum. The question is what estate planning mechanisms Houston had in place. Some believe that she would have been wise to create a revocable living trust for her daughter so that the inheritance is distributed a little at a time. Others suggest that if Houston had a life insurance policy, she should have made a trust the beneficiary for the same reason.Trusts can be an effective part of an estate plan and can help avoid the costs of probate. Trusts may also be appropriate in cases like Houston's, where a beneficiary is young. Even if a beneficiary is financially mature, it may be prudent to stagger payments to the beneficiary through a trust to ensure that the inheritance is not squandered.
Source: ABCNEWS.com, "Whitney Houston's Estate Expected to Get Boost After Death, But Less Than Michael Jackson," Susanna Kim, Feb. 14, 2012.
]]>A complete and strong estate plan requires thoughtful monitoring, and when necessary, additions and modifications. Changes in your life may require corresponding tailoring of your estate documents. A divorce, marriage, or an addition of a child through birth or adoption should prompt you to reexamine the documents you have already executed. Failure to do so can lead to expensive and unintended consequences.
]]> For example, when the writer Michael Crichton died, his wife was expecting a child. His will specifically stated that any subsequent children would be excluded from his estate. Crichton's adult daughter and his pregnant wife went to court over whether he intended to deny the unborn child a share of his estate, or whether he intended to include it, but merely forgot to revise his will. If Crichton had simply taken a short amount of time to update his will, he could have made his intent clear and saved his family the pain and expense of going through probate.A thorough estate plan also depends on communication with family members. You should tell your family where they can find relevant estate documents in the event of an emergency. If they are kept at a bank or with an attorney, give them the contact information of the attorney or a person at the bank.
Source: Forbes, "Etta James, Others Remind of Need for Estate Planning in 2012," Danielle Mayoras and Andy Mayoras, Jan. 24, 2012.
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