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Recent Blog Posts
Estate Planning in the Digital Age: New Challenges
Traditional estate planning has always involved the creation of documents designed to avoid costly and lengthy probate proceedings and minimize taxes, such as wills, trusts, and other related documents. However, estate planning attorneys are facing new challenges as an increasing amount of people store their financial information online and handle their assets digitally. As these digital assets are typically secured behind usernames, passwords, and security questions that surviving spouses and family members may not be aware of, dealing with or even finding these assets following a person's death can be difficult or even impossible in some circumstances.
According to a recent article in Smart Money, 36% of adults aged 45 and older are now doing banking online, and those numbers continue to grow. Unfortunately, traditional estate planning documents tend not to address online accounts, and the estate-planning industry has been slow to advise its clients about the need to address and deal with these digital assets so as to properly preserve them for their heirs in the future, and to ensure that those assets are not lost altogether.
It's Never Too Early - or Too Late - to Avoid End-of-Life Taxes
No matter what stage you are at in life, avoiding end-of-life taxes is a smart move. By taking certain steps, you can reduce your income taxes, federal estate taxes, and state estate and inheritance taxes. Although a recent Chicago Tribune article states that these techniques work best for a U.S. citizen who is married to his or her U.S. citizen spouse, with living descendants, they can also work as a starting point for people in other, more complex, situations, as well.
First, granting a power of attorney for your spouse will allow him or her to make financial, tax-saving decisions in the event that you become incapacitated. This saves your spouse from having to pursue lengthy court proceedings to appoint a decision-maker in court and potentially miss important tax deadlines at the end of the year.
Next, ensure that you and your spouse have separate investment accounts. This move allows you to freely transfer assets back and forth between spouses so as to minimize taxes in various situations.
Baby Boomers and the Truth about Estate Planning
Estate planning for baby boomers is becoming increasingly important. The reality of the situation is that people are living longer yet they often don't continually update their wills, trusts and other important financial planning documents to reflect the changes they experience. Just as you would continue to see the doctor every year to make sure your body is in top health, make it a priority to visit your estate planning attorney every couple of years to keep up with changes in laws, taxes and other situations in life.
Most people experience changing priorities and changing friendships throughout their lives. When you are younger, you should have different goals than when you are advanced in age. If you have young kids, it is important to guard their futures with the proper estate planning concerning care arrangements and trusts. When those kids have their own families, you may reconsider how you're planned your estate and eliminate protective devices you have detailed in your plan.
Myth: Only the Rich Need Wills
According to a report recently done by Consumer Reports, over 55% of the United States population does not have a will. Most people polled believe that wills are for those who are very wealthy. That could not be further from the truth. Everyone over the age of 18 needs to have a will and think about doing some estate planning.
There are three major considerations when thinking about estate planning. If you have property, it needs to be allocated to someone. If you have any money, that needs to be allocated as well. Also, if you have young children, have you thought about who you would want to take care of them if you were to pass away before they become of age?
Having minor children is perhaps one of the best reasons to have a will. There have been many horror stories about people fighting over the custody of children who have recently lost a parent so that they can take financial control of the child. If you have a will, you will be able to name a chosen guardian instead of having a court make that important and final decision for you.
Sherman Hemsley's Will Contested
According to The Chicago Tribune, although Sherman Hemsley passed away on July 24, to this date he still has not been buried. His body is reportedly being held in a cold storage unit in an El Paso funeral home while his will is being fought over.
The Associate Press reports that Hemsley executed a new will just six weeks before he lost his battle with lung cancer that named Flora Enchinton as his "beloved partner" and the sole beneficiary of his estate. Enchinton also claims that she has been his manager for well over the last two decades.
The validity of his will is being contested by a Philadelphia man named Richard Thornton who claims to be the brother of the late Hemsley. He states that his alleged brother did not write this will.
Enchinton has expressed her confusion and concern over this claim stating that Hemsley had never mentioned having relatives.
Side-effects Of Disinheriting A Relative
The Trust Advisor published a story about disinheriting relatives, the reasons behind it, and the effects it may have on the relatives who are left behind by the deceased. The choice of disinheriting a relative in your will may be backed by many different reasons. Maybe the relative is a degenerate gambler, an addict, or maybe they hurt the deceased in some way before he drafted his will.
The story talked about Nigel Ruddy, who was always careful with his money, unlike his son. Ruddy tried to teach his son to use money more wisely, but the son did not really listen. Ruddy married a Persian woman, and the two did not have any problems before Ruddy passed away. Yet, Ruddy left the majority of his property to his son, only leaving his wife with 12,000 dollars and a permission to stay in their house until she dies. The reasons the deceased had for disinheriting someone are not always clear to others.
The Illinois Safety Deposit Box Opening Act
We have talked about critical documents, living wills, and how to plan your digital estate, but now we will look at a different but related subject. The Illinois State Law has a Safety Deposit Box Opening Act as part of the estate law. The act sets the conditions under which a safety deposit box may be opened after a lessee's death.
Section one states that after being given satisfactory proof of death of a sole lessee or the last surviving co-lessee of a safety deposit box, the lessor shall open the box and examine the contents in the presence of a person who presents themselves and has an affidavit. The affidavit needs to state that: the person is interested in filing of the lessee's will or in the arrangements of their burial; the person believes the box may contain the will or burial documents of the lessee; he is an interested person within the meaning of the Safety Deposit Box Opening Act. An experienced estate planning attorney in Cook County can help educate you about safety deposit boxes and estate planning.
Joe Paterno's Last Will and Testament Released To The Public
In mid-June, republicanherald.com posted a story about the release of Joe Paterno's last will and testament. Paterno was the football coach for the Penn State Nittony Lions of Pennsylvania State University, until he was dismissed in 2011 after the Sandusky child abuse scandal. Paterno's family made his last will and testament public after the Citizens' Voice of Wilkes-Barre said that the will had been sealed by an unusual court order.
Paterno named his widow, Sue, as his personal representative, and according to the will, he left all personal property to Sue. The rest of his estate went to the trustees of the Joseph V. Paterno Revocable Trust, but the trustees were not named, and trust documents are not usually public records. Paterno's business interests were left in the hand of his widow.
Paterno died of lung cancer in January, and in April, the attorney for the estate asked that his last will and testament would be sealed. Paterno's family said that the request is not unusual when the deceased is a well-known person, and their only goal was to preserve a little privacy for the family. To avoid speculation, the family made the will public later on.
The Purpose of Establishing a Trust Despite the Existence of a Will
A trust agreement is a document that spells out the rules that you want followed for property held in trust for your beneficiaries. Common objectives for trusts are to reduce the estate tax liability, to protect property in your estate, and to avoid probate.
Think of a trust as a special place in which ordinary property from your estate goes in and, as the result of some type of transformation that occurs, takes on a sort of new identity and often is bestowed with super powers: immunity from estate taxes, resistance to probate, and so on.
You don't have to be a Rockefeller to need a trust. A trust can be a useful estate-planning tool for lots of people. But given the expenses associated with opening one, it's probably not worth it unless you have a certain amount of assets.
Here's a good rule of thumb:
The Difference Between a Will and a Living Will and What it Means for Your Estate
A will, also known as a last will, distributes a person's property after his death. A living will, on the other hand, explains what kind of medical care that person wants when he is still alive but unable to explain his wishes. In most states, both a will and a living will have similar requirements as to format, but the two documents serve very different functions.
The purpose of your will is to explain what you want done with your property when you are gone. It also allows you to name a guardian for your minor children. Your will does not legally take effect until after you die. Your living will, on the other hand, gives instructions to your family and doctors about how to treat you if you become incapacitated. You may explain what kind of care you do and don't want, as well as name someone to make your medical decisions on your behalf.
