One matter involves the proposed climb in the estate tax from the current 40 percent to 45 percent. This hike would only apply to the wealthiest taxpayers, and would go into effect in 2018. In addition, the gift tax exemption would drop from $5.2 million to just $1 million. These are all important factors for those who are considering their estate planning needs. It would simply become far more difficult to transfer gifts to family members without the use of complex estate planning tools.
]]> Spouses would still be able to use any unused estate or gift tax exemptions of their deceased partner without tax consequences. Many see this as a positive aspect of the plan. However, this can also be viewed as a limited benefit, and not an effective way to minimize overall tax liabilities.For individuals who are considering the best way to structure their estate tax planning, it is important that Texas residents understand that there are solutions that can help minimize the financial impact of the proposed 2014 budget changes. While some of these tactics are complex, it is well worth the time and effort required to ensure that the assets compiled in one's estate are passed down in the manner intended. Looking ahead to the possibility of future changes is one step in the right direction.
Source: fa-mag.com, "Weighing The Obama Budget's Impact On Estate Planning," Jonathan M. Forster and Jennifer M. Smith, May 10, 2013
]]>Consider a young adult away at college. While college students often still rely on their parents for guidance and financial assistance, the fact remains that they are legal adults, and are treated as such in the greater world. When a student experiences a serious medical emergency while away at school, many parents are shocked to realize that they have no right to access the personal medical information regarding their child. This can lead to difficulties in determining the best course of emergency medical treatment, and can waste valuable time in determining how authorization for treatment should be obtained.
]]> The best approach to avoid this scenario is to make incapacity planning the first aspect of a young adult's estate planning package. These documents can include a health care directive or living will, which clearly stipulates what type of medical treatment is desired or who is authorized to make medical decisions in the event that the student becomes unable to do so on their own. A great deal of time and confusion can be saved by way of these simple documents.Another consideration is a power of attorney. Such a document outlines who is granted the authority to make important financial decisions in the event that an adult child dies or becomes unable to function at a competent level. Examples can include how to allocate assets such as a vehicle or other possessions.
While the vast majority of Texas families will never need the protections granted to young adults through a health care directive or power of attorney, planning for the worst-case scenario is an important precaution to take. In addition, addressing estate planning needs with your newly-adult child provides an excellent opportunity to discuss the importance of handling these types of issues. Working together to make a responsible plan for the future is a great springboard into adulthood and the wide range of decisions that are to come in the years ahead.
Source: NBC News, "Even young adults should start estate planning," Sheyna Steiner, May 6, 2013
]]>Many parents tend to have outdated estate plans that may end up complicating relationships between siblings. Their estate is sometimes spread out all over the place without clear designations of who is intended to receive a particular asset. This quickly becomes a matter of who gets what as siblings argue over the distribution of property.
]]> Some parents fear insulting their other children if they only name one as the executor and/or trustee. In this instance, the estate ends up with multiple trustees. When this happens, there's a greater chance that the siblings will not agree on how to divide the estate up evenly, and they sometimes end up in Texas court to have matters settled that the parents could have more simply resolved before their passing.The distribution of property and other assets may go more smoothly when these issues are discussed as a family. Parents may gain by involving their children in planning for the estate administration process, and children may benefit by bringing the matter to their parents' attention, if necessary. Parents that ensure their children have a clear understanding of why the estate will be divided in a particular manner may help avert problems before they arise. The best first step is to determine if any existing documents are up to date, and it always make good sense to schedule regular reviews in order to be certain a plan already in place fits current expectations.
Source: patriotledger.com, "MAKING CENTS: What does your parents' estate plan do?" John Napolitano, April 22, 2013
]]>One woman in another state inherited a collection of antique dolls from her mother. While her mother placed a lot of value on the dolls, the woman is finding that other family members aren't interested in taking them.
]]> The same is true for antique furniture. Younger generations are often more interested in living in smaller spaces with less clutter. They often move around a lot. Having a piece of antique furniture is simply a nuisance. To some people's dismay, younger generations are now satisfied with filling their homes with furniture from Ikea.Because of this trend, it is more important than ever before for families to have honest conversations about the distribution of property. If someone knows that certain family members aren't interested in keeping family heirlooms, it may be wise to find someone else to hold onto important property. In addition, families may consider having an estate sale or even donating antique pieces to a museum.
Although it is important for people to make proper estate plans, it is equally important to discuss those plans with family members. By knowing what people want ahead of time, people can be sure that important family heirlooms are distributed accordingly, and in some cases, that they remain in the family.
Source: The Star Tribune, "No longer saved for generations, family heirlooms are being shed," Kim Palmer, April 22, 2013
]]>Google is trying to make the estate planning process easier for people by creating the Inactive Account Manager. The new dashboard allows people to determine what should happen to the data that is stored on various Google platforms after they die.
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"We hope that this new feature will enable you to plan your digital afterlife-in a way that protects your privacy and security - and make life easier for your loved ones after you're gone," a Google product manager said.
The Inactive Account Manager lets people decide whether or not their data should be passed on to family or friends or deleted entirely after periods of inactivity. People can choose to have their data distributed or destroyed after anywhere from three months to a year of inactivity.
Most Texas residents and others elsewhere don't want to think about their death. While it can feel strange to make plans for your own death, it can be highly beneficial for surviving family members.
As we mentioned last week, a lot of our personal information lives online. It is no surprise that a company like Google would begin helping people with estate planning for their digital assets. Only time will tell if other companies will follow in their footsteps.
Source: The Wall Street Journal, "Google Lets Users Plan 'Digital Afterlife' By Naming Heirs," Geoffrey A. Fowler, April 11, 2013
]]>As many Houston residents already know, estate planning is about preparing for the future and protecting important assets. People who take the time to create estate plans can rest easy that their family members will be taken care of when they are gone. In addition, family members can be reassured that they won't become embroiled in lengthy legal disputes.
]]> However, because of the changing world we live in, people should make sure they have also considered their digital assets. To start with, people in Houston and others living elsewhere would be wise to make a list of their online accounts with corresponding passwords. It may be best to put one person in charge of those accounts.Estate planning for digital assets is a new concept and one that will likely continue to evolve. Because there are a lot of unknowns when it comes to estate planning for digital assets it may be best to consult with an attorney who has a broad understanding of the estate planning process. An attorney can help people sort through more traditional estate planning matters as well as help them protect their digital assets.
Source: nwi.com, "Estate Planning: Estate planning for digital assets, part two," Christopher W. Yugo, April 6, 2013
]]>People who turn to trusts for their estate planning needs can create specific guidelines for the receipt of benefits. For instance, money from a trust can be designated to be used for educational purposes. People can also have funds dispersed over time to be sure it isn't all used up at once.
]]> After a recent New York Times article, some people in Houston may be inclined to outline even more guidelines for beneficiaries. The article pointed out that some people who inherit large sums of money feel undeserving and end up giving away every penny.One man, for instance, inherited $900,000 when he was 18. Six years later he decided to split that money with two of his friends who were less fortunate than he was. In 2007, he split the money with a third friend.
Others have given money from trusts to charitable organizations. One young woman has already given away about two-thirds of her $500,000 inheritance. The rest of it will be donated within three years.
While some would argue that what these young people are doing is noble, others might suggest that they make more thoughtful decisions over time. After all, once the money is gone, there is nothing that can be done to get it back even if people find themselves in a desperate situation.
Creating estate plans, and more specifically trusts, can be complicated. In order to be sure a person's wealth is protected and that they make thoughtful decisions about the distribution of that wealth, they would likely benefit from speaking with an estate planning attorney.
Source: The New York Times, "Among Young Inheritors, an Urge to Redistribute," Paul Sullivan, March 25, 2013
]]>Steps can be taken to ensure certain people are included in estate plans. However, estate plans can be created to strictly prohibit certain people from inheriting valuable property and other assets from a person's estate.
]]> It was recently revealed that Vidal Sassoon, the well-known hairstylist and creator of hair care products, specifically excluded his adopted son from his will. By doing so, Sassoon's 41-year-old son will receive nothing from the $150 million estate.Sassoon died almost a year ago. Sadly, it appears that he never resolved his issues with his adopted son. An autobiography revealed that Sassoon's son was troubled for much of his life. The two even stopped speaking for almost two years at one point.
Sassoon made sure that his son would not receive any of his vast fortune. He specifically stated in his will that his son "shall be deemed to have predeceased me, leaving no surviving issue."
While some might say that this story is tragic, it is an example of what proper estate planning looks like. By making such clear distinctions in his will, Sassoon's wishes will likely be followed.
This story shows how important it is for people with large estates in Houston and beyond to make proper plans. However, everyone should make estate planning a priority.
Source: Christian Post, "Sassoon Disinherits Son: Vidal Sassoon Excludes Son From $150M Fortune After Dispute," Jessica Rodriguez, March 25, 2013
•· Our firm works with people throughout the probate and estate administration process. To learn more, please visit our website.
]]>People want to provide for their children after they have died. However, a person's bank accounts can quickly be drained if they have to pay for extensive medical treatments over a long period of time. As people are planning for their retirement, they should make sure they are doing what they can to take care of their financial and personal health.
]]> As humans, we are susceptible to serious health conditions. Although there is nothing a person can do to guarantee they won't get sick, people should try to live healthy lives. One way to be sure a person is doing what they can to prevent illness is to meet with a nutritionist, physical therapist or personal trainer. They may learn that there are simple and easy lifestyle changes that can be made to improve their health.As people are preparing for retirement it would also be wise to set aside money specifically for medical expenses. That may minimize the impact on money intended for children and other beneficiaries.
To make sure they are creating appropriate plans and doing what they can to ensure their loved ones will be taken care of when they are gone, Houston residents would be wise to reach out to an experienced estate planning attorney.
Source: CBS Moneywatch, "Retirement planning: Get non-financial help," Steve Vernon, March 6, 2013
]]>That is not always true for families dealing with probate issues. Families can become involved in heated arguments when proper estate planning isn't done or when a family member's wishes have not been previously discussed.
]]> People in Houston often spend their whole lives building up wealth and doing what they can to protect it. However, that work may be for nothing if proper estate plans aren't put in place. A will, for instance, is a common estate planning tool that outlines what should happen to an individual's valuable assets when that person dies. Shockingly, only about 30 percent of people have a valid will in place.When a person in Houston or in another city dies without a will, surviving family members may be forced to deal with complex legal issues. The process can be lengthy and expensive. Getting an estate in order can prevent family members from having to deal with challenging legal issues during an emotional time after a loved one has died. Proper estate planning can also prevent heated disputes between family members.
A commonly held misconception is that estate planning is only intended for people with vast amounts of wealth who want to avoid estate taxes. While proper planning can help people avoid tax obligations, estate planning can also help people from all walks of life document what should happen to their valuable property.
Source: Observer & Eccentric Newspapers, "Estate planning not only for the wealthy," Rick Bloom, March 7, 2013
]]>The author of a recent news article wrote about her brother's cancer diagnosis and subsequent death. The 44-year-old father of two was diagnosed with Stage IV Malignant Melanoma. The disease had progressed so far that it had spread to other organs.
]]> The man was given the option of pursuing chemotherapy to prolong his life. He didn't want to give up without a fight. However, the treatments would have taken him away from his children. After talking with his doctor, he decided to forge ahead without the chemotherapy. He died 12 weeks later.While tragic, this case is a reminder that people should be in charge of their health care decisions, especially end-of -life decisions.
A survey by John Hopkins revealed that most physicians would prefer to forgo life-sustaining measures if they become incapacitated. Whether or not that is true for other individuals, those kinds of decisions should be documented in a living will. In addition, those decisions should be discussed with family members and an individual's doctor.
No one knows what tomorrow will bring. While the future is uncertain, people in Texas and beyond have the power to make advanced plans. People with a living will can be certain that their wishes will be carried out when they are not longer able to make medical decisions for themselves.
Source: PennLive.com, "Linda Rhodes: Surveys show most doctors oppose life-sustaining treatment for themselves," Linda Rhodes, March 4, 2013
•· Our firm helps prepare, review and revise wills for people, including living wills. To learn more, please visit our Houston estate planning page.
]]>One of the great benefits of a revocable trust is that it is a trust that gives you flexibility to change, adjust, or even terminate all the way up until your death. The revocable trust also allows you to avoid having to go through the probate process by bequeathing your assets through the terms of the trust rather than a will.
]]> Most of the downsides to the revocable trust have to do with tax benefits. There is no income tax or estate tax benefit with this kind of trust and the assets of this trust can also be reached by creditors upon your death. However, in certain states where probate cases become public record, a revocable trust can go a long way in keeping your assets and family's name out of public scrutiny. These types of trusts can also often speed up the distribution process as estate tax waivers are not required for properties held in trust and therefore prevents the freezing of assets in many cases upon death.Establishing a revocable trust can be a costly process due to the complexities involved and need to transfer all assets except for retirement accounts and life insurance policies into the trust's name. However, with the help of knowledgeable and skilled estate planning attorneys, this process can be made more seamless and beneficial in the long run. If you are interested in exploring this type of estate planning, please contact an estate planning attorney that you can trust your present and future to.
Source: NJ.com, "Biz Brain: The benefits of a living trust," Karin Price Mueller, Feb. 18, 2013
]]>Well, according to sources, Jerry Buss' death places his 66 percent ownership in a trust that is shared among his six children. So, those Houston Rockets fans that were hoping that perhaps a greedy owner might cause the Lakers history of franchise success to go down the tube, rest easy, they are currently doing a good job of that to themselves anyways.
]]> The trust set up by Buss and his attorneys stipulates that the team cannot be sold off in smaller portions than the Buss family controlled 66 percent. Therefore, the children cannot "split" in their decision should they ever consider selling their ownership stake. While the vote does not have to be unanimous to sell, it would take a two-thirds majority vote to sell the family stake.The Buss family did state that it was their father's will, desire, and expectation that the franchise would remain a family owned enterprise and he crafted his will and trust accordingly. Jerry groomed some of his children throughout his ownership for their eventual ownership having one son run basketball operations for the team and one daughter run the business aspects of the team.
Jerry Buss' foresight in how he envisioned leaving his legacy, both in terms of wealth and imprint on the franchise, just goes to show how a well crafted vision and estate plan can make those visions a reality. A skilled and knowledgeable estate planning attorney can help with the crafting of those visions and further assist in the execution of them when the time arises.
Source: Los Angeles Times, "Lakers expected to remain a Buss family-owned team," Mike Bresnahan, Feb. 19, 2013
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