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.

Should Alan Thicke’s widow or sons inherit his estate?

Alan Thicke died on December 13, 2016. His two older sons, who are co-executor’s of their dad’s living trust, have filed a petition in court to get instructions on how his 1988 trust (amended last year) and a 2005 prenup signed by him and his third wife, Tanya Callau should be considered. Basically, what’s in question is what’s separate property, what’s community property, and how it should be split among the co-executors and their third brother and Callau.

“It’s a question of what Alan wanted, and we’re just attempting to honor his intentions and enforce his trust,” says Alex Weingarten, the litigator representing Thicke’s sons. “It was Alan’s money; it was Alan’s career; it was Alan’s talent; he had the right to decide what would happen to it upon his passing.”

The prenup, attached to the court petition, shows that before the couple built a life together, with Callau helping to raise Thicke’s youngest son, Carter, they came into the marriage with vastly different resources. Thicke listed his net worth as $14 million at the time. By contrast, Callau, a model, listed a $40,000 ring as her sole asset, and $3,700 in debts.

According to the article in Forbes, one big issue in the estate dispute is the division of the $3.5 million Carpenteria, Calif. ranch which Thicke listed as separate property in the prenup but the couple called home. The prenup says Thicke was to name Callau as beneficiary in his will to get 25% of his net estate, including a 5-acre parcel split of the property, but the trust doesn’t give her any part of it, just the right to live there so long as she pays 100% of expenses.

Unfortunately, these disputes between later spouses and kids from earlier marriages are common. There are so many lessons in these battles. One—As circumstances change, know that a prenup can be revoked by both parties, or amended by a postnup. You need good advice—separate advisors for each party– from both a divorce lawyer and an estate lawyer in either case.

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

Have you made these 5 life insurance mistakes?

We came across an interesting article about life insurance on the Edward Jones web site. It gives you some valuable information and some things to think about. It’s reposted here in its entirety.

“If you already have life insurance, you’ve taken an important step to ensure your family is taken care of in case of an unexpected event. But just having it isn’t always enough. Do you have the right type or amount? Have you reviewed your policy lately?

These are the 5 most common life insurance mistakes people make.

1. Having the wrong amount of coverage

Studies show that 1 in 4 people feel they need more life insurance protection.* So how do you decide how much is enough? Use our life insurance needs calculator, or “L-I-F-E,” to get a quick estimate. It will help you calculate your:

Liabilities (mortgage, car loans, student loans, other debt)
Income replacement – how much your family will need for ongoing living expenses and savings needs
Final expenses
Education expenses for your children or children

Once you have that number, compare it to your current policy amount and see how close you are.

2. Having the wrong type of policy (term vs. permanent)
Do you need insurance to cover you while you have a mortgage to pay or children at home? Or are you looking to build cash value in a policy that you can later pass on to your heirs? Each insurance type has its own advantages. Here are the basic differences:

Term insurance covers you for a specific time frame, typically less than 20 years. It’s the most basic, and affordable, type of insurance, which makes it a popular choice for young families who are balancing debt and saving for the future.

Permanent Insurance provides lifetime coverage and allows you to build cash value that you can later pass on to your beneficiaries. It’s more expensive than term insurance, but the premiums typically don’t increase with age.

Learn more about the differences between these two insurance types here.

3. Relying solely on employer-provided insurance

Life insurance coverage provided by your employer might be okay if you’re single and without kids, but if you have dependents and large financial obligations, it may not be enough. Employer policies rarely cover more than 3 times an annual salary (the general recommendation is 10 times your annual salary) and sometimes only cover as little as 6 months’ salary. Plus, if you change jobs, you can’t take your policy with you.

4. Neglecting to designate beneficiaries

Naming beneficiaries helps ensure that your insurance money goes directly to the people you intended, helping them avoid probate (the legal process of distributing your estate). This could save your family time and expense. If you have insurance from Edward Jones, your financial advisor can help you set up beneficiaries for your policy.

5. Ignoring your policies

Life insurance is an important part of your overall financial plan and should be reviewed at the very least every 3-5 years. If you’ve recently gotten married, divorced or welcomed a new baby in the home, it’s time to review your policy to ensure your coverage amount and policy type still work for your situation.”

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

What happened to Ernie Ulrich’s estate?

Who, you might ask, was Ernie Ulrich.

Ernie was just an average blue collar guy who served in the army during World War II and died in Chicago at age 85 on December 21, 1999. He never married and had no children. His two sisters were his only family. One sister, Margaret, died three months before him and his other sister, Lillian, died one month after him.

What he did have was a $1.5 million estate. In his will, which was prepared in 1992, he specified that if his sister, Margaret, predeceased him, the entire estate was to go to charity. He didn’t leave anything to Lillian because he felt that she was well provided for.

Late last year, more than 17 years after his death, it was discovered that his $1.5 million had never been distributed as he specified. The lawyer who was supposed to be his executor never carried out his wishes and, since the lawyer died in 2007, there’s no way to find out why.

Most of the money was in investment accounts which were eventually declared inactive. Once that happened, his assets went to the Illinois state treasurer as unclaimed property. That included 155 unclaimed properties such as 5,344 shares of Exxon Mobil stock and 6,460 shares of AT&T.

In November 2014, Michael Frerichs became the new state treasurer and he made it a priority to try to resolve high dollar unclaimed accounts. Ulrich’s was one of these. Using information from Ulrich’s financial records, the treasurer looked for rightful heirs and, eventually, located the will.

A new executor was named and she finally was able to fulfill Ulrich’s last bequests. He bequeathed one third of his estate to the Salvation Army; the remained was to be split among five other charities.

This is definitely a case of better late than never.

I know you can’t guarantee that your executor won’t make a mistake. However, you should take steps to ensure that more than one person knows where your will is located so that, hopefully, it won’t take 17 years for your estate to be distributed after you die.

For information about estate planning, go to our website www.diesmart.com.

Are you making celebrity estate planning mistakes?

This article appeared in the September 17, 2016 edition of cnbc.com. It contains some important information you should review.

“Celebrities, they’re just like us. At least, they are when it comes to estate-planning mistakes.

You’d think that high-profile individuals with substantial and varied assets, often-complex family lives and a team of high-powered advisors at their disposal would have this locked down, more so than your average American. But that’s not so, attorney John Scroggin, a partner with Scroggin & Company in Roswell, Georgia, told advisors Thursday at the Financial Planning Association’s annual conference in Baltimore.

“Celebrities make the same mistakes,” he said. “It’s just that the nature of their celebrity exaggerates and balloons the impact of what the mistake was.”

Mistake #1: Not having a will

Nearly two-thirds of Americans don’t have a will, according to a July survey by Harris Poll for Rocket Lawyer, which queried 2,000 consumers. Famous individuals who have died without a will, include Abraham Lincoln, Prince, Sonny Bono, Jimi Hendrix and Pablo Picasso, according to Scroggin.

Not having a will can result in a number of potentially disastrous consequences, notably that assets may not be distributed in the manner in which you would have liked — or even intra-family battles. State intestacy laws will apply, and dictate who gets what share of the estate. (State law often cuts out stepkids, for example.)

Without specific instructions from the deceased, an estate may also be subject to drawn-out court battles as family members fight for what they perceive as their fair share.

“A lack of a will for any individual increases the conflict and increases the cost,” Scroggin said.

Mistake #2: Not having a current will

Signing a will is the beginning of the process, not the end, Scroggin said. Regularly update estate planning documents and beneficiaries as your financial and personal situation changes.

He points to the estate of singer Barry White, who was separated but not divorced from his second wife at the time of his death. His wife got everything, Scroggin said, while White’s live-in girlfriend of several years got nothing.

Mistake #3: Not planning for taxes

Even if your wealth falls under the federal estate tax threshold — in 2016, up to $5.45 million per person is exempt — it may be subject to state estate taxes, which often have lower caps.

Poor planning could force your heirs to sell valuable or sentimental items because they don’t have the liquid assets to pay those taxes, said Scroggin. He used the example of Joe Robbie’s family, which sold its stake in the Miami Dolphins and Joe Robbie Stadium to pay estate taxes.
Mistake #4: Not mentioning for personal property

Robin Williams’s family has engaged in a legal battle over the late actor’s film memorabilia, Scroggin said, while Martin Luther King Jr.’s children fought over his Bible and Nobel medal.

Individuals often fail to account for personal property in their estate planning, which can generate plenty of fights (legal and otherwise) over the future of family heirlooms, collectibles and other items of sentimental value.

Even when such items are mentioned, Scroggin said, it can be difficult for heirs to prove provenance if another party disputes the claim — that this is mom’s vase, for example, and not a newer one the deceased gifted to his second wife.

Scroggin also had some advice on this point for clients untangling the estate of someone recently deceased: “Change the friggin’ locks.”

It’s not unusual for family, friends and neighbors to help themselves to items they say the deceased told them they could have, he said.”

For more information about estate planning and how to get your affairs in order, check out our website www.diesmart.com.

Who’s the owner of a 1958 Corvette convertible?

This story is taken from one published in the Daily Republic.

“A California judge will apparently decide who owns that yellow Corvette in June.

One thing we do know for sure is that 75-year-old George Bristol owned the Corvette, valued at some $97,000, prior to his death in a traffic accident on Dec. 14, 2016.

After that, though, the picture grows murky.

An administrator of the estate, Jared Bristol, says the Corvette is now in the possession of Laura Hazelett, who he claims in his lawsuit was having a relationship with George Bristol before he died late last year in his 2004 Toyota Tacoma, which left the road, went airborne, and crashed into the side of a large drainage canal.

Jared Bristol filed a lawsuit against Hazelett on Wednesday in Fairfield, Calif., claiming that she forged George Bristol’s signature on forms that she filed in January 2017 with the Department of Motor Vehicles saying that George Bristol had given her the car two days before his death.

The lawsuit asks that the DMV not be allowed to transfer ownership of the Corvette to anyone while the estate is in probate.

The Daily Republic reached out to Hazelett for comment on the allegations of the suit but received no response.”

If George Bristol had included his Corvette in his estate planning, this issue would not have arisen. He could have named Hazelett or anyone else as the owner of the valuable car. Whoever was named would have inherited it and there would have been no court fight.

Be sure that you have an estate plan and that it includes any valuable assets you own. That way, you will save your loved ones time, effort and expense…and your wishes will be carried out.

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