Category Archives: Estate Planning

Estate Planning Facts. Last Will and Testaments versus Living Trusts. Estate Taxes. Gift Taxes. Inherited IRAs. Guardians for minor children. Pet Trusts. Funeral Agents. Avoiding Probate. Get Your Affairs In Order.

Do I Really Need a Will?

last-willYes, you do.  A will is a legal document which ensures that your property is transferred according to your wishes after your death.

If you don’t have a will, here are five things that can happen.  We found this list at nerdwallet.com.

  • Spendthrift heirs – If you have heirs who aren’t equipped to handle a large sum of money, receiving it may cause damage.  Perhaps these heirs are bad at handling money or, maybe, they’re drug or alcohol addicts.
  • Unexpected or contested heirs –  There may be confusion about who the beneficiaries really are.  Sonny Bono, musician and politician, died without a will.  His ex-wife, Cher, and a man who said he was Bono’s son tried to claim part of his estate, which his wife, Mary, contested in court.  Prince’s estate is another classic example.  Many people came out of the woodwork claiming to be relatives, entitled to a piece of his assets.
  • Property (and probate) in multiple states – If you own property in more than one state, your estate will have to go thru the probate process more than one.  Probate is a costly and timely process, even if you just go through it once.  Image if you own property in four states and your heirs have to hire four attorneys and go through the whole process four times.
  • Fabricated wills – If you don’t have a real will in place, it’s possible for someone to create a fake one – especially if your estate is large.  A famous case involved the estate of tycoon Howard Hughes.  When he died, several supposed wills surfaced, and his estate spent millions of dollars defending against the false documents.
  • Beneficiaries don’t like the court appointed executor – If there’s no will, the probate court will appoint one.  It may likely be an experienced attorney but not necessarily one the family knows.  It may take a great deal of time for this person to take inventory, appraise assets and distribute the estate.  If you have a will and name a family member as executor, that person will usually do a much faster job, possibly because that person is also a beneficiary.

If you don’t have a will, you should prepare one now.  Otherwise, your assets may not be distributed the way you want them to and a lot of extra money will go to attorneys and the probate court and not to your heirs.

For more information about wills, trusts and other estate planning documents, go to www.diesmart.com.

Do celebrities make money after they die?

michael jackson

In one word “yes”.  Following is the article recently released by Forbes that lists the highest paid celebrities who died this year.

While the Pearly Gates seemed to welcome an unusual amount of celebrities in the past year (David Bowie, Prince and Arnold Palmer, to name just three), the long-departed King of Pop had the time of his afterlife.

The March sale of Michael Jackson’s half of the Sony/ATV music publishing catalog, famous for its library of Beatles tunes, for $750 million puts him at the top of our annual ranking of the top-earning dead celebrities, an ironic finish given that many critics and even advisors once derided the catalog as a badly overpriced investment. Jackson’s total pretax payday of $825 million ranks as the biggest annual haul by any celeb dead or alive.

“He was always doing stuff that was the best, the greatest, the biggest,” says Jeff Jampol, who manages the estates of Janis Joplin, Jim Morrison and others. “That was a big fight when he wanted to buy that catalog … it turned out to be one of the greatest investments ever.”

In 1985, Jackson paid $47.5 million ($140 million in 2016 dollars) to buy the Beatles-packed ATV publishing catalog. Ten years later, Sony paid him $115 million to form a 50/50 joint venture, then purchased his remaining half in March. In all, the sales (and accompanying distributions) gave Jackson’s estate, which is overseen by lawyer John Branca and music exec John McClain, a 30% annualized return on investment.

Peanuts creator Charles Schulz claims the second spot with $48 million. The cartoonist died of colon cancer 16 years ago, but lives on through the franchise—and its licensing revenue, boosted by last year’s well-received 3-D Peanuts movie. Golf legend Arnold Palmer rounds out the top three with earnings of $40 million, most of which was accumulated in the mortal realm, as he passed away just days before our cutoff.

Our set of 13 Halloween-spooky estimates are for pretax income from October 1, 2015, through October 1, 2016, before deducting expenses for agents, managers and lawyers. Sources include Nielsen SoundScan, Nielsen BookScan, PollstarPro, IMDB and interviews with estate experts.

Michael Jackson: The King Of Pop–and celeb earnings–dead or alive (Photo: Mike Powell /Allsport).

Recently deceased superstars Prince and David Bowie also rank high on the list. The Purple One passed away while still at the top of his touring game (grossing nearly $2 million per show) and sold more than 2.5 million albums over the past year, more than any other dead musician. Bowie, meanwhile, released his final album, Blackstar, just two days before his death; the ensuing sales spike helped him outsell Jackson and Elvis Presley (No. 4, $27 million) in the last year.

Presley’s total represents a 50% drop from last year’s figure (a change in how we accounted for Graceland ticket sales, not plummeting demand, accounts for the change). The King of Rock n’ Roll still moved more than 1 million albums on the year—most of them physical, not digital—remarkable for someone who’s been gone for nearly 40 years.

As for Jackson, the Sony/ATV payday gives him the last laugh over doubters. But a decade ago, he already knew what a good deal he’d made, as detailed in my book Michael Jackson, Inc. On a 2007 conference call, the King of Pop reminded Sony/ATV chief Marty Bandier of the acumen that had earned him a nine-figure return on paper by that point.

“See,” he told Bandier. “I told you I knew the music publishing business.”

13. Elizabeth Taylor ($8 million)
12. Steve McQueen ($9 million)
11. David Bowie ($10.5 million)
10. Bettie Page ($11 million)
9. Albert Einstein ($11.5 million)
8. John Lennon ($12 million)
7. Theodor “Dr. Seuss” Geisel ($20 million)
6. Bob Marley ($21 million)
5. Prince ($25 million)
4. Elvis Presley ($27 million)
3. Arnold Palmer ($40 million)
2. Charles Schulz ($48 million)
1. Michael Jackson ($825 million)

You may not be a celebrity and you may not have an estate worth millions of dollars but you still need to do some planning for what you want to have happen to the assets you do have.  For more information about this topic, check our our website www.diesmart.com.

6 ways to foil hackers, phishers and pushy marketers

phishingI’ve written a lot in the past about identity theft and the importance of protecting your online accounts.  These six points were contained in an email from my mortgage broker and I think they definitely are worth repeating.

1. Update software. The latest computer, smartphone and apps software is the most secure. Update now and choose ‘Update Automatically’ in Settings. Update your WiFi router on its app or Web setup page.

2. Strengthen passwords. Make them long strings of random upper and lower case letters, numbers and symbols. Use a different one for every site. Turn on two-factor authentication for Apple ID, Google, Facebook (‘login approvals’), Microsoft, Twitter (‘login verification’) and banks. Use a password manager to sync devices.

3. Encrypt data.
Makes it hard for someone to access information if they get your device. Encrypt with a password or fingerprint screen lock, or turn on ‘encryption’ in Settings. Use Disk Utility on external drives.

4. Privatize browsers. Select ‘clear browsing data.’ (This deletes passwords which shouldn’t be saved on sites anyway.) Activate ‘Do Not Track’ in Settings. Block trackers with an extension (Ghostery, Disconnect, EFF’s Privacy Badger). Opt out of ad tracking at http://www.aboutads.info/choices/

5. Check apps.
Find out which ones access locations and data and turn off if not used. Check Settings for Privacy permissions. Check Google and Facebook security. Delete Facebook apps you don’t want.

6. Think!
Don’t click on email links or attachments you don’t expect. Make online payments only on secure “https” sites. Double-check public hotspot names, or use a VPN—HotSpot Shield (Windows, Android), Cloak (iPhone, Mac). Use PayPal on unfamiliar sites. Don’t pay online with debit cards or put account info in emails.

For more information about protecting your digital assets, go to www.diesmart.com.

My father left his home to his kids — my stepmother sold it for $1 million

moneyologistWe read this recent column from MarketWatch and found it interesting enough that we are repeating it in its entirety.  If you have step children or step parents, you should be aware of what might happen if proper planning isn’t done.

He made his wishes clear, but his second wife had other ideas

Dear Moneyologist,

My brothers and I are mentioned in our father’s will as what he “wishes to happen” with the house he purchased for his second wife. He put the house in her name, but stated that if he should die first, he would like the wife to live in the house till she dies, but wanted the house to be sold and the proceeds to be split among his children.

After he died, my stepmother has sold the house for $1 million. She bought a new house for $500,000 and kept the difference. She has not put all the children on the ownership of the new house. Also, she has children from her first marriage who might want a percentage of the estate, including the new house. The will was made in Taiwan. I live in Texas.

Where do I and my brothers stand in this situation?

Betrayed Daughter

Dear Daughter,

When it comes to family drama, stepmothers fare about as well as mothers-in-law. That is, they get a hard time. Sometimes, it’s deserved, other times I think they fall victim to negative stereotypes. In one case, the stepmother wanted to cut her husband’s children out of his life insurance policy. And another stepmother obsessed over her husband’s children and what might happen to his credit score should he die. It’s easy to come down hard on stepmothers, mostly because of Grimm Fairytales. This 2009 book “Stepmonster: A New Look at Why Real Stepmothers Think, Feel, and Act the Way We Do” tries to debunk that myth. On this occasion, the jury is out.

Your father can’t leave his children something that he no longer owns. That’s not how life or the law works.

Your stepmother has downsized and created a nice nest egg. That was her prerogative. Your father can’t leave his children something that he no longer owns. He put his house in your stepmother’s name and, judging by his will, it seems that he wanted her to give it back. That’s not how life or the law works. If you could prove undue influence, you might have a case. You would need to provide evidence that (a) your father was not of sound mind when he signed over the house and/or (b) your stepmother somehow did not have his best interests at heart and tricked him into signing over the home. That would be an expensive and difficult process.

It’s still unclear whether U.S. or Taiwanese law would apply here. According to Taiwanese law, “The making and effect of a will are governed by the national law of the testator [your father, in this case] at the time of the making of the will.” But that may prove fruitless. “If you can prove that the testator was the true owner, you can file a litigation against your father’s second wife,” says Ou Yang, Hung, managing attorney at Brain Trust International Law Firm in Taipei, Taiwan and adjunct assistant professor of law at Soochow University. “It will be very hard to prove that the testator was the true owner of the house.”

Put it in simpler terms: You may have to kiss that $1 million goodbye.

For information about estate planning, check out our website www.diesmart.com.

Want to avoid probate?

estateplanningYou may think that if you have a will and in it you name the person who should inherit your home, that’s all you have to do.  Yes, it is if you’re willing to have the home go through a probate process.  That probate process will cost the beneficiary a lot of money as well as time and will be a public record.

However, there’s now a way that many can avoid the whole probate process and that’s thru the use of a transfer on death (beneficiary) deed.

There are several states that have a similar law and California just joined their ranks in January of this year.

If you live in one of these states, you now have the option to complete a Revocable Transfer On Death Beneficiary deed and name a beneficiary for your home.    After your death, the beneficiary can directly claim ownership rights to the property without involving the probate court and paying probate fees.

The deed can be completed and filed without hiring a lawyer or paying a third party to record the deed with the county recorder.

For some homeowners, a TOD Deed can be a cost effective way to avoid probate on the death of the last owner.   If you own a home and have it listed in your will, you might want to consider this new option.

For more information about probate and estate planning, go to www.diesmart.com.