Tag Archives: Estate Planning

Are your beneficiary designations up to date?

Do you have a bank account? What about a brokerage account or life insurance policy? Have you set up an annuity or a retirement plan?

You probably have a least one or two of these types of accounts. When you set them up, you were asked to name a beneficiary for each. At the time, the person you named was someone you wanted to receive these assets when you died. It might have been a spouse or significant other.

It’s been several years since you named that person. Have your circumstances changed? Are you now divorced or no longer involved with him or her? Have you remarried or had children you want to be sure are protected?

Most people name a beneficiary and then forget about it. They never go back and update the information provided so it reflects their current wishes. They figure it doesn’t matter because they have a current will that designates who should inherit what. However, it does matter. Whoever is named as a beneficiary receives that asset when you die, regardless of what it says in your will. So your ex-husband or former girlfriend may receive a large sum of money that you didn’t want them to have.

Don’t let this happen. Review your beneficiary designations whenever your circumstances change and be sure that your assets will go where you want them to when you die.

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

You need a will. Why shouldn’t you write your own?

Most blank will forms are based on the assumption that you are part of a traditional nuclear family with a husband, a wife and a common set of children. It will further assume that you wish to follow the traditional path of inheritance: The surviving spouse will inherit the deceased’s assets and they will they pass to the children upon the second spouse’s death.

Instead, as is very often the case today, you may be part of a blended family. If so, you should definitely see an attorney and prepare a will that will protect every member of that new family.

Let’s look at an example of what might happen if you don’t have a well written will.

John and Susan had both been married previously. John had two children from his first marriage and Susan had three. When they got married, all was well for several years. Then John died suddenly. Susan inherited all of John’s estate (which included assets he had brought into the marriage).

When Susan died, her three children inherited her assets; John’s children got nothing. Why, because they were not Susan’s legal children and neither John or Susan’s will legally protected them. A lengthy legal battle ensued with the biggest winner being the attorneys.

Although this blog is based on an article from the Sydney Morning Herald, it is critical for everyone in a blended family to take heed.

Make sure your legal paperwork protects your family and distributes your assets the way you want them allocated. Don’t take a shortcut now that may result in unnecessary pain and suffering at a later date.

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

Why didn’t Prince have a will?

That’s a question that we’ll never know the answer to. If he was like more than half of the people in this country, he just hadn’t gotten around to writing one, didn’t think he needed a will or didn’t care what happened to his estate once he was gone. Regardless of his reason, the fact remains that he didn’t have a will and the probate court will decide what happens to all of his assets.

Minnesota law is quite clear. If a person dies intestate (without a will), the estate goes to his children, grandchildren, spouse or parents. Since Prince had no children, grandchildren or spouse and his parents are deceased, his entire estate will go to his brothers and sisters. Prince had six half-brothers and half-sisters as well as a full sister, Tyka Nelson. In Minnesota, half siblings are considered to have the same inheritance rights as those who are full siblings.

To muddy the waters, hundreds of people have come forward and said they were relatives of Prince. In addition, a Minnesota man in his 30’s has said that he’s Prince’s son as a result of a relationship between the deceased and his mother in the 1980’s.

Prince’s estate has been estimated at between $150 and $300 million. In addition to real estate and money, there are several unpublished works and a lot of unreleased music that can be worth millions.

Something that hasn’t been discussed in any of the articles we’ve read is Prince’s digital estate. He kept many unpublished works in a vault bank but what if he kept others in an electronic account? What if there is a will but it is stored in Drop Box or some other online storage facility? Unless he left instructions or provided someone with a list of his digital accounts and their passwords, we may never know the full extent of his assets and their value.

Whatever the final disposition of Prince’s estate – who receives what based on Minnesota probate law – and its final value, there are two lessons we should all learn from this.

See an attorney and get a will prepared. Even if you don’t have the kind of assets Prince had, it’s still a very important thing to do. Don’t let state statutes determine what happens to your estate. You decide.
Document your wishes related to your digital assets. Do you want anyone to see what’s in your private emails or do you want them destroyed? Do you want your Facebook account shut down or do you want it to be memorialized and continue? What do you want to happen to your Bitcoin account? What are your logons and passwords for accounts that have financial implications?

Don’t wait. You don’t know what will happen tomorrow or how long you’ll be on this earth. Get your legal paperwork in order now.

To find out more information about estate planning, go to our website www.diesmart.com. To find out more about digital estates, check out our book, Access Denied: Why your passwords are now just as important as your will.

Why is Michael Jackson’s estate back in the news?

When Michael Jackson died in 2009 at age 50, he left a will that specified what should be done with his assets.

He may not have taken into consideration what those assets would be worth in subsequent years…but the IRS has now done so. There is now a huge dispute between the Internal Revenue Service and Michael Jackson’s estate over what should be paid in estate taxes.

According to Michael Jackson’s representatives, the value of the estate is currently $2,105; according to the IRS, it’s more like $434 million. “With interest and penalties, lawyers estimate the case – set for trial at a Los Angeles tax tribunal in 2017 – could be worth more than $1 billion.” The outcome of this trial could impact celebrity estate planning.

Howard Weitzman, the estate’s lead attorney, that the Michael Jackson name has “experienced a commercial rebirth thanks to the savvy executors who have managed the estate’s assets.” He estimates that Jackson earned no more than $50 million for the licensing of his name and image when he was alive and doesn’t think that what’s been done since Jackson’s death should impact what the estate pays.

It is important to note that this is the first time ever that the IRS is pursuing estate taxes for name and likeness earnings after a celebrity’s death.

If the estate loses the case, Michael Jackson’s heirs will be hit with a huge tax bill. If the IRS wins, this will probably be the first of many celebrity estate cases that it will pursue.

You are probably not worth $434 million and your heirs won’t be faced with this kind of issue when you die.

However, knowing what your estate is worth and putting into place the correct type of plan to protect these assets for your loved one is critically important. If you don’t have a will, you should consult an estate attorney and get one written today. Otherwise, the government will decide what will happen to your assets and your family will have no say in the matter.

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

Do presidents forget to write their wills?

Even though more than 50% of US citizens still don’t have a will, you’d think that the presidents of the United States, with all of their legal advisors and staff, would definitely have protected their property by preparing one.

Not true – Abraham Lincoln, Andrew Johnson, William Garfield and Ulysses S. Grant did not!

Two presidents who did leave wills freed slaves in them. George Washington left his entire estate to his wife Martha. He requested that, upon her death, all of their 317 slaves should receive their freedom.

Thomas Jefferson actually freed some of his slaves in his will – 3 older men who worked for him for decades and two of Sally Heming’s four children.

Most other presidents left fairly standard wills, leaving their assets to family members, though a few left special bequests.

Richard Nixon bequeathed his personal diaries to the Richard Nixon Library and Thomas Jefferson gave his friend and former president James Madison his gold-mounted walking staff.

Regardless of what presidents have or have not done, you should definitely consider getting a will prepared today. Otherwise, the government will decide what happens to your assets, not you.

For more information about wills and other end-of-life planning, go the www.diesmart.com.