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The Indiana Lawyer recently published “Do-it-yourself dangers” that explains how do-it-yourself estate planning oftentimes creates more work for attorneys after somebody dies. One attorney represented parties in an estate where a will wasn’t valid, which meant that the decedent’s wishes weren’t met. He had wanted his estate to be shared equally among his children, but because the DIY estate plan wasn’t properly witnessed, it was invalid and the donor died intestate—or without a will. The probate court applied state law and divided the estate between his children. However, because one child had died, that heir’s share passed instead to a grandchild, which was not what the decedent intended. What most people don’t realize is that you don’t find out there’s something wrong until somebody dies, and then it’s too late to fix the mistakes. When online will forms are completed incorrectly, the wills become invalid and the estate is treated as if there was never a will at all. It takes far longer to settle the estate when this happens, and it costs heirs more time and money than if the will was done correctly by an estate planning attorney. A simple will or a power of attorney doesn’t cost that much to have an attorney prepare, plus you get a lot of advice and counsel from an attorney that you don’t get from a downloaded form. For instance, an attorney may advise you to include “I waive a bond” for my executor. This alone can save several hundred or several thousand dollars in fees, depending on the size of the estate. There are also document-recording peculiarities in each state that estate planning attorneys know and deal with every day. You will not get those insights when you rely on downloaded forms. During a face-to-face conversation with an experienced attorney, important issues tend to come out, like providing for a grandchild with special needs or an asset that might be difficult to transfer. Many people may start with simple estate planning documents online but then see that they need to purchase, complete, and file more papers than they originally anticipated. Those costs can soon be comparable to what a client would have paid to have a qualified lawyer do the work in the first place. Online legal form providers don’t give clients the trust they can foster with an attorney. He or she will work with you to meet your goals and provide the peace of mind that comes from not worrying about whether the estate plan was done properly. Reference: Indiana Lawyer (January 27, 2016) “Do-it-yourself dangers” #OnlineForms #ProbateAttorney #WillChanges #HoustonWills #Probate #ProbateCourt #Inheritance #PowerofAttorney #HoustonEstatePlanningLawyer #Trusts #HoustonTrustsandEstates

Thinking about your estate plan can be grim. None of us likes to contemplate how things will be after we pass away. However, the Des Moines Register article “Your checklist for creating or reviewing your estate plan” reminds us that it’s important to not postpone estate planning. A comprehensive, up-to-date estate plan is the surest way to be certain that your wishes are carried out when you die. Whether you’re creating your first estate plan or updating your current plan, review your estate plan every three or four years or after a significant milestone. Also, consider these four steps. Identify your estate plan goals. Before creating or reviewing your estate plan, figure out what you’re trying to do. Do you want to make sure there’s support for your children? Do you want to make sure your spouse is OK if you pass away unexpectedly? Do you want to give to charities? These goals will determine what planning strategies you’ll need for your circumstances. Take inventory of your assets. With your estate plan, take inventory of the items in your estate, such as real estate, investments, family heirlooms and life insurance policies. And also note your current liabilities, like a mortgage or credit card debt. Consider what estate planning elements you need. A will? For sure, but there may be other items you need, such as a trust if you have a lot of assets that may be subject to probate. Also, a health care directive and power of attorney provide instructions if you become incapacitated. Talk with your estate planning attorney to be sure you have these in place to help carry out the goals of your estate plan. Choose a personal representative. The personal representative or executor is responsible for settling your estate’s affairs. It’s a big job, so be sure to select an individual who’s familiar with your situation, is able to carry out all of the tasks associated with the role, and is willing to take this on. This isn’t a full list of important estate planning principles. Speak with an experienced estate planning attorney to find out about specific strategies that may be best for you and your loved ones. Reference: Des Moines Register (February 1, 2016) “Your checklist for creating or reviewing your estate plan” #OnlineForms #ProbateAttorney #TrustsandEstates #WillChanges #HoustonWills #Probate #ProbateCourt #Inheritance #PowerofAttorney #HoustonEstatePlanningLawyer #Trusts

KOMO News recently ran a news item, “Daughters of Casey Kasem, Peter Falk tackle elder visitation,” which tells their similar stories. Both Kerri Kasem and Catherine Falk were blocked from visiting their fathers, Casey Kasem and Peter Falk, because of personal disagreements with family members. Both men were suffering from serious illnesses. The daughters had to take legal action to see their fathers. As a result of their experiences, the women are independently working in several states to provide a way for close friends and relatives to visit ailing or incapacitated elder family members without needing to file for guardianship. Kasem introduced legislation in 11 other states this year and fought for previously passed legislation in Texas and California, as well as a successful bill in Iowa. Falk introduced legislation in more than 20 states this year. However, in Washington, their proposals haven’t found overwhelming support, as some feel the new legislation is unnecessary and that the current laws protecting vulnerable elders are adequate. Radio personality Casey Kasem had dementia. His three adult children from a previous marriage and Jean Kasem, his second wife, fought a heated legal battle over his care. Peter Falk, star of the 1970s TV series “Columbo” became incapacitated in 2008 due to dementia. Likewise, Catherine Falk battled her father’s second wife in court to win occasional visits with her father. Falk’s Washington bill says a guardian can’t restrict an incapacitated person’s right to visit and communicate with anybody. Their consent is presumed based on their history with people, such as close relatives with positive relationships. However, the guardian could block visitation if they showed good cause. The bill would also require guardians to notify close relatives and others if the incapacitated person moves to a new home, spends time in the hospital, or dies. Kasem’s main bill permits a person to petition a court for visitation rights. Another proposal Kasem supports is one that requires a guardian to tell close relatives and friends if an elder spends significant time in the hospital or has died. None of the bills has been scheduled for a vote. Kasem said she would be interested in joining forces with Falk or others for guardianship reform legislation. Reference: KOMO News (January 31, 2016) “Daughters of Casey Kasem, Peter Falk tackle elder visitation” #Dementia #HoustonElderLawAttorney #HoustonGuardianship

According to a recent article from The Motley Fool entitled “Planning for Retirement When You’re Single,” singles need to have more emergency savings than someone who’s married. Why? Because you’re the only source of income if you lose your job or fall ill. Single people also get fewer income tax breaks than married couples filing jointly. Living on one income without someone else to share expenses is not easy. Single people have a harder time saving than married folks and, consequently, saving money and funding retirement accounts is definitely more difficult. Single people also have fewer options when it comes to Social Security benefits since those who are married, widowed, or divorced can claim benefits based on their current or former partners’ earnings. By contrast, single folks are limited to benefits based solely on their own earnings. Against these challenges, however, here are some great ideas for singles: Start early. Your best bet is to ramp up your savings early and take advantage of whatever matching programs your employer has. The good news for singles is that when companies offer 401(k) matching dollars, they do it equally, regardless of marital status. So, make sure to budget money to your 401(k) to max out on employer contributions. Make plans to take care of your health. Healthcare costs in retirement can be a significant financial hardship. The average couple retiring in 2015 at age 65 can anticipate spending about $245,000 on healthcare costs in retirement, not including long-term care expenses. Nursing homes currently run in excess of $90K a year, and around-the-clock home care can be as much as $170,000. About 70% of adults aged 65 and older will require some type of long-term care at some point in their lives. If you’re single, purchase a long-term care insurance policy to cover nursing-home or home-care costs, as there’s a good chance you’ll need it. Use your freedom to your advantage. When you’re single, you can go where you please. This means you can pursue career opportunities that may prove more lucrative than your current job in other areas of the country. FYI: for 2016, the Social Security Administration’s cost of living adjustment was $0. Zilch. This doesn’t just mean that those receiving Social Security benefits won’t get an increase; companies that have given cost of living raises may not give their employees any extra this year. If you’re offered a higher-paying job at a new company, take advantage of the fact that you’re free to uproot yourself with less stress. Lower your housing costs. You have options for saving money on housing expenses. A smaller place might seem cramped if there’s another person with you, but if you’re on your own and want to increase your savings, start by downsizing your living space. If you lower your rent by $200 a month, over a three-year period, that’s an extra $7,200 in savings. Get some documentation in order. You need some estate planning and should draft a will and name your power of attorney and beneficiaries. While being single might be some disadvantage financially, you do have the opportunity to take control of your finances—you have the option to invest your money as you see fit. Reference: The Motley Fool (January 26, 2016) “Planning for Retirement When You’re Single” #Pearland #HoustonWills #Friendswood #Beneficiaries #PlanningfortheFuture #PowerofAttorney #Clearlake #HoustonEstatePlanningLawyer #Webster #TaxPlanning

While the settlement fully resolves the Will contest claims of James’ children, the fight is far from over. Brown’s wife, Tomi Rae Hynie, is still contesting the Will, making the status of the Will’s validity still unresolved. About a year ago, the South Carolina Supreme Court put everything on hold. Now the only thing still in progress is the question of whether or not Tomi Rae Hynie is the legal spouse of James Brown. That issue is being heard by the Court of Appeals. It is the one issue where all the Brown children are united: they want the judge’s ruling that Tomi was Brown’s spouse overturned. If she’s his wife, she controls the money flow from Brown’s copyrights. That’s money that should go into a trust, according to the Will. If Tomi Rae isn’t Brown’s wife, the kids control that money. If the appellate court rules that Tomi Rae is indeed the legal wife of James Brown, then they’d have to next determine if the prenuptial agreement is valid. The court could hold that she’s not the wife, or they could decide it’s a jury issue. If so, this could go on for years. As it stands now, the four adult children named in the settlement would keep the property Brown wanted them to have, remove the Will contest clause, and give them $147,000 collectively. As a part of the deal, they’ll cooperate with the estate and end their legal fight. Reference: WRDW.com (January 26, 2016) “James Brown Estate: What a settlement means for other pending lawsuits” #Pearland #ProbateAttorney #HoustonEstatePlanning #HoustonWills #Friendswood #Probate #ProbateCourt #Inheritance #Clearlake #HoustonEstatePlanningLawyer #Webster

Some of the benefits of a 529 savings plan are that you can use the annual exclusion gift, now set at $14,000 per year per person. If you have three grandchildren, that’s $42,000 a year that you can exclude from your estate. If you put the funds in 529 plans, you still have control of them as the owner of the account, and you can make the grandchildren the beneficiaries. Another nice thing about the 529 plan is that if you need the money down the road, as the account owner, you can withdraw money. You would however be hit with a 10% penalty, plus taxes on the growth of the investment. Based on how much you want to give, you can front load five years of contributions in a single year. The cons concern what you see as the future need of your grandchildren. A 529 plan is only designed to pay qualified secondary educational expenses. That means things like tuition, books and other supplies. However, if one grandbaby doesn’t want to enroll in college, you can always switch the beneficiary to one of the others who is going to school. Another option is that the child could take the funds out for non-college expenses, but he or she would be hit with the same 10% penalty and taxes owed. If you decide on these educational accounts, you should open a separate 529 plan for each child. An estate planning attorney can help evaluate if a trust is a better option all around. You should also talk to your grandchildren’s parents, as your plans might have unintended consequences for the kids’ financial aid prospects. Be sure you have a solid understanding of other money that may be available to your grandchildren for college. If they inherit the money outright, it’ll also affect financial aid because funds in the child’s name will be considered when financial aid packages are offered by prospective colleges. Reference: New Jersey 101.5 (January 25, 2016) “How you can leave money to your grandkids” #HoustonAssetProtection #Pearland #Friendswood #Clearlake #HoustonEstatePlanningLawyer #Webster #HoustonTaxPlanning #529

The County Treasurer Kurt Prenzler said he was ordered by the probate court to pay the heirs in Mary Petroff’s $1.36 million estate. Four dozen family members from Granite City to Bulgaria will receive the money left behind by the 97-year-old woman who died in 2011. Mary and her sister didn’t marry, and in their 90s, they began to suffer from dementia. Each was appointed a legal guardian. When Anne died in 2009, her estate passed on to Mary. Both sisters lived a modest life. After Mary passed away, the state of Illinois discovered she was a millionaire with no known heirs or will. Prenzler said following Mary’s death, her estate was placed with his office for safekeeping in accordance with Illinois law, which stipulates that unclaimed monies are kept in the county for a period of 10 years before being turned over to the state. However, in Mary’s case, there were people who came forward and claimed to be her relatives. The familial relationship was determined last month by a probate judge. Then the County Treasurer’s Office cut checks for 48 relatives. Mary’s heirs will receive anywhere from about $3,000 to $110,000 from her estate. The largest amount of the estate will be headed to Mary’s relatives in Bulgaria. An attorney who was tasked with distributing the checks for his clients—most of whom are from Bulgaria—commented that the laws regarding estates are different in each state. If Mary had lived in Missouri, mostly likely the distribution would have gone to fewer family members. Reference: The (Alton IL) Telegraph (January 25, 2016) “Treasurer distributes Granite City millionaire maiden’s fortune” #Intestacy #HoustonGuardianship #TrustsandEstates #HoustonEstatePlanning #HoustonWills #Probate #ProbateCourt #Inheritance

The Motley Fool cautions that the taxation of these trusts can become extremely complicated, and the structure of a family trust is critical in how the trust gets taxed. In the January 18 article “Taxation of Family Trusts,” The Fool notes that those who want to avoid complications can generally include provisions that will keep things simple for at least some of the trust’s existence. For tax purposes, the big factor in a family trust is whether it qualifies as a grantor trust. To qualify, a trust has to satisfy at least one condition in a list of requirements. Most commonly, this condition involves the person creating the trust (“the grantor”) retaining the right to take assets back out of the trust. That means that revocable trusts will typically qualify as grantor trusts. Also, powers like the ability to capture trust income, the ability to retain a remainder or reversionary interest in the trust, or the ability to have certain administrative powers over trust assets can constitute grantor trust status. The resulting benefit is that the trust doesn’t have to file a separate tax return at the entity level. Instead, the grantor must include any income from trust assets on his or her individual tax return and pay any tax liability. Sometimes, a grantor trust will have to file a return on Form 1041, but it need only state that all income was carried out to the grantor’s tax return according to the grantor tax rules. What if the trust doesn’t qualify? Then it will have to file a trust tax return; however, there are more complex rules, such as a result where the trust itself pays the tax and rules which can lead to other trust beneficiaries having taxable income. If grantor trust rules don’t apply, then the big issue is who is entitled to the trust income. The trust generally must pay income tax on any income its assets generate. However, if the terms of the trust require it to pay out its income to a beneficiary, then the trust gets a deduction for any distributable net income. Any remaining income not distributed gets taxed to the trust directly. So if the trust gets a deduction, those receiving the income have to include that income on their own individual tax returns. The trust will need to create an income statement on Schedule K-1. Got it? Well, as you can see, income taxes on trusts get real complicated real fast. Talk with an experienced estate planning attorney to see if this might be applicable for your family. He or she can do the heavy lifting, allowing you to enjoy the benefits. Reference: Motley Fool (January 18, 2016) “Taxation of Family Trusts” #HoustonAssetProtection #EstatePlanningLawyer #EstateTax #NonGrantorTrust #GrantorTrust #HoustonInheritance #FamilyTrust #TaxPlanning

If your estate plan includes a revocable living trust, start by examining the provisions for potential revisions. First, look at who was named as successor trustee and make certain that he or she is still willing and able to serve in that role when called upon. Also, terms governing how assets in the trust are to be distributed after your death should be reviewed carefully to make sure the named beneficiaries and amounts they are to receive from the trust are still as you would like. Providing for your spouse is typically an estate planning goal for couples, as well as ensuring that property is transferred with the least amount of loss from estate taxes. You can do this by adding a “credit shelter” or “bypass” provision to revocable trust documents. Federal estate and gift tax rules state that spouses can pass an unlimited amount of property to each other without incurring gift or estate tax. Each spouse is also given a specific exemption amount to shelter property from tax liability when passed to others at their death. When the first spouse dies, estate tax can be avoided by leaving all property to the surviving spouse. At the survivor’s death, the estate tax will be due to the extent that the couple’s remaining assets exceed the federal estate tax exemption. However, the problem with leaving all property outright to a surviving spouse is that the first spouse can’t use his or her estate tax exemption. It would be wiser to include a bypass provision in the trust that transfers an amount equal to the federal estate tax exemption amount to a separate trust—with the remainder going directly to the survivor. The bypass trust can provide income to your survivor spouse and can make additional distributions for his or her health, support, education, or maintenance. However, the trust can’t give him or her unlimited access to the funds. This way, the bypass trust’s assets will not be a part of the surviving spouse’s estate and subject to the estate tax. Taxes are minimized by the bypass trust because both spouse’s estate tax exemptions are fully utilized. Bypass trusts were an effective planning tool when the federal estate tax exemption was just $1 million, but in 2012, Congress upped the exemption amount and portability of the exemption between spouses. In 2016, the estate tax exemption amount is $5.45 million. As a result, bypass trusts may no longer be needed to avoid federal estate tax. However, there may still be good reasons to keep the bypass trust language, including protecting the trust’s assets against creditor claims, preserving assets for minor children, or having the ability to make larger gifts to children without gift tax consequences. If you live in or move to a state with its own estate tax, a bypass provision may still be a good idea so that the tax liability is minimized. Reference: foster.com (January 17, 2016) “When to amend your revocable trust” #AssetProtection #Guardianship #EstatePlanningLawyer #EstateTax #ProbateAttorney #TrustsandEstates #HoustonEstatePlanning #WillChanges #HoustonWills #GiftTax #Probate #ProbateCourt #Inheritance #RevocableTrust #BypassTrust #PowerofAttorney #LivingTrust #TaxPlanning #Trusts

“What’s the Best Way to Choose a Guardian for Your Kids?” The question, discussed in a recent Huffington Post article, is simple. Arriving at an answer that you and your spouse are comfortable with is not always easy. Selecting a potential guardian is an emotional decision—and a very important one. Remember, if you don’t name a guardian, the state will choose one for you. Create a list of all the important factors and considerations for this individual or individuals. Then your spouse and you can discuss each one from a practical perspective, as well as an emotional one. Hopefully, you’ll come to an agreement fairly easily. In addition, you can ask your estate planning attorney to help you with the process. Some of the questions you might consider include the following: Does the prospective guardian share your values? These can be religious, moral, political, or personal. Most of us would prefer that the guardian raise our children with the beliefs and attitudes that we hold dear. How closely does this person know you and your family? Are your kids comfortable with him or her? The closer the children are to a potential guardian, the better they will handle a very difficult transition. How many kids does the prospective guardian already have and what is his or her parenting style? If they have a full house, will that make things overly stressful when you kids are added? Also, you’ll want someone who can provide a sense of continuity in discipline and personal responsibility. What’s the age and health of the prospective guardian? Depending on the age of your children at the time, this could be a long-term commitment, which may be tough for an older person or couple. Where does the prospective guardian live? If it’s across country, that may be OK for a two-year-old but a whole different ballgame when talking about a teenager and moving him or her from junior high or high school where they have long-time friendships. While we’re on the subject of caring for your kids, think about how much it will cost. You and your spouse should have enough life insurance to provide for your kids financially through college. It’s one thing to ask someone to care for your kids and another to ask them to support them. Your children will most likely have some type of inheritance that needs to be managed carefully, and you can choose to appoint both a personal guardian and a guardian of the estate. They don’t have to be the same person. Nonetheless, it’s important that the guardian of the person and the guardian of the estate get along and will be able to agree on what’s best for the children. Once you and your spouse agree on the prospective guardian, talk to that person and make sure he or she understands why you’ve chosen them and whether he or she is willing to take on the responsibility. Agree on a back-up in case the first choice can’t fulfill the role. Remember that you can revisit your choice every few years. If something changes, contact your estate planning attorney to change your guardian choice. Hopefully your guardian will never have to step in, but do the right thing for your children and make your designation now. Put it in writing. Then you and your family can live a full and happy life knowing your kids are taken care of—just in case. Reference: Huffington Post (January 18, 2016) “What’s the Best Way to Choose a Guardian for Your Kids?” #EstatePlanningLawyer #HoustonGuardianship #ProbateAttorney #TrustsandEstates #WillChanges #HoustonWills #PersonalGuardian #Probate #ProbateCourt #Inheritance #GuardianoftheEstate

The deposition will be conducted privately without the public and the media, and the deadline is fewer than two weeks before the start of a scheduled jury trial over control of a trust created in 1980 after the death of Tom Benson’s first wife, Shirley Benson. The trust assets include nearly all of San Antonio-based Lone Star Capital Bank, 50% of five auto dealerships, a portion of a large Texas ranch, a private plane, real estate, and cash. The deposition request was made by Renee Benson and has been at the center of a sharp disagreement for more than a month. Tom Benson’s lawyers filed a brief last month opposing any deposition, claiming there was nothing left to discover in the case since Renee has owned all the Shirley Benson Testamentary Trust documents for more than 10 years. Tom Benson’s lawyers say that the request amounted to “harassment.” Renee Benson’s lawyer, Bennett Stahl, stated that the only way the court will receive Benson’s testimony is through a deposition since the 88-year-old billionaire isn’t expected to testify at the trial. Tom Benson’s lawyers say that if he has to give a deposition, it should be in New Orleans. Stahl added that he was happy with the order. “A deposition allows me, as Renee Benson’s attorney, the opportunity to ask important questions directly to her father and hear the answers in his own words,” he said. What happens to the deposition if a settlement occurs? A jury trial would be avoided and the deposition would be part of the settlement. But sources say that a possible settlement is not imminent. The purpose of the litigation is to establish a new trustee for the Shirley Benson trust. Judge Rickhoff recently appointed former San Antonio Mayor Phil Hardberger and estate planning lawyer Art Bayern as temporary co-receivers of the trust, removing Tom Benson as trustee. Renee Benson wants to become the trustee. About a year ago, the twice-widowed Tom Benson said he was changing his succession plan to cut out his only surviving child, Renee and her children, in favor of his third wife. That news triggered several lawsuits challenging the elder Benson’s mental capacity to make estate decisions. Renee has alleged in lawsuit briefs that Tom Benson is being brainwashed and manipulated by his current wife and business associates. A judge in New Orleans ruled last June that Tom was competent. Reference: San Antonio Express-News (January 13, 2016) “Billionaire Benson ordered to give deposition in estate fight” #WillChanges #Inheritance #WillContest #HoustonEstatePlanningLawyer #TaxPlanning #HoustonProbateCourt

If you want to remain anonymous but didn’t purchase the winning ticket in one of those states, you have to leverage strategies and legal entities to help you remain more private when you strike it rich. There are two different strategies that are described in Forbes article entitled “How to Remain Anonymous If You Win The $1.5 Billion Powerball.” (1) Blind Trusts. The term “blind trust” has morphed to include a trust or entity that attempts to hide the true ownership from the public and asset searches. Here you create an entity (a trust or LLC) and name it something other than your name. You have 100% control of the trust, assets, and decisions. It doesn’t completely cloak the account, but it can make tying the trust to you more difficult in an asset search. (2) A Trust within a Trust. High profile lottery winners who want even greater anonymity may consider a trust within a trust structure. It’s an advanced strategy that should only be created with a qualified trust attorney. The trust within a trust requires two trusts: First, create a Claiming Trust. It’s called the Claiming Trust because this is the entity that claims the prize. As the winner, you assign the ticket to the trust. This is a short-term trust that simply claims the prize and then distributes the win to the Bridge Trust (see below). The Claiming Trust should have a unique title not related or traceable to you. Although most revocable trusts use the Social Security Number of the grantor (i.e., you – the person setting up the trust), you want to avoid this because state lottery commissions are state agencies, and their records are subject to the Freedom of Information Act. That makes it easy for a reporter (or anyone else!) to request these documents and trace the Social Security Number back to you. For greater anonymity, depending on the state lottery commission’s rules, you may be able to have a limited liability company (LLC) act as the grantor. In that scenario, the winning lottery ticket would be owned by the LLC, and it would be the grantor of the Claiming Trust. If a reporter gets a hold of the Claiming Trust, they wouldn’t see your name—just the name of the LLC. That catch is that some states have requirements when forming an LLC that would identify the name of the person who owns the LLC. So you can see how important it is to work with an attorney who is well versed in the laws of your state. Second, create a Bridge Trust. In this strategy, the lottery proceeds are paid into the Claiming Trust and then almost immediately transferred into the Bridge Trust. The Claiming Trust helps shield the true identity of the winner and makes it hard to determine the true owner. The details of this trust aren’t subject to Freedom of Information Act requests, so your name can be listed as grantor and trustee. However, because the trust name will be listed as beneficiary of the Claiming Trust—and is subject to FOIA requests—don’t name the Bridge Trust with personal information. Reference: Forbes (January 12, 2016) “How to Remain Anonymous If You Win the $1.5 Billion Powerball” #AssetProtection #HoustonEstatePlanning #BridgeTrust #HoustonTrusts #ClaimingTrust #LivingTrust #TaxPlanning #BlindTrust