Today many estate plans contain irrevocable trusts that will continue for the benefit of a spouse’s lifetime and then for the benefit of several generations.  Since these trusts are designed to span multiple decades, it is important that they include trust decanting provisions to address changes in circumstances, beneficiaries, and governing laws. What is Trust Decanting? When a bottle of wine is decanted, it is poured from one container into another.  When a trust is “decanted,” the funds from an existing trust are removed and distributed into a new trust that has different and more favorable terms. When Should a Trust Be Decanted? Provisions for trust decanting should be included in trusts that are intended to last decades into the future. Decanting allows the following

Today many estate plans contain irrevocable dynasty trusts that will continue for the benefit of a spouse’s lifetime and then for the benefit of several generations.  Since these trusts are designed to span multiple decades, it is important that they clearly define who will be included as trust beneficiaries at each generation. Who Are Your Descendants? In the past the definition of “descendant” was straightforward:  A person who can be traced back to a specific ancestor through the same blood lines.  But the modern family now encompasses much more than just blood heirs: Adopted beneficiaries.  In your trust, should the definition of “descendant” include a minor child who is legally adopted by your child, grandchild, or great grandchild?  What about an adult who is legally

Today many estate plans contain irrevocable trusts that will continue for the benefit of a surviving spouse’s lifetime and then for the benefit of several generations.  Since these trusts are designed to span multiple decades, it is crucial to choose the right succession of trustees. Should You Name Family Members as Your Successor Trustees? Choosing the right succession of trustees for your irrevocable trust that is intended to continue for years is critical to its longevity and ultimate success. Initially you may think that a family member, such as your spouse, a sibling, or an adult child, will be the best person to serve as your successor trustee. You may think family members will better understand the varying needs of your beneficiaries and keep the

Today many estate plans contain trusts that will continue for the benefit of a spouse’s lifetime and then for the benefit of several generations.  Since these trusts are designed to span multiple decades, it is important for the trust creator to consider including powers of appointment in the trust agreement to allow trust beneficiaries to be added or excluded at each generation. What is a Power of Appointment? In broad terms a power of appointment is the right granted to an individual under the terms of a trust to change the provisions of that trust. Powers of appointment can be given to the current beneficiaries or trustees of a trust or to an outside third party such as a trust protector.  They also come in

A will or trust contest can derail your final wishes, rapidly deplete your estate, and tear your loved ones apart.  But with proper planning, you can help your family avoid a potentially disastrous will or trust contest. If you are concerned about challenges to your estate plan, consider the following: Do not attempt “do it yourself” solutions.  If you are concerned about an heir contesting your estate plan, the last thing you want to do is attempt to write or update your will or trust on your own.  Only an experienced estate planning attorney can help you put together and maintain an estate plan that will discourage lawsuits. Let family members know about your estate plan.  When it comes to estate planning, secrecy breeds contempt. 

As a result of a 2010 tax law, a surviving spouse can receive his or her deceased spouse’s unused estate tax exemption. This is called a “portability” election. You may have seen it called the “deceased spousal exclusion amount” or “DSUE amount.” In essence, a portability election allows a surviving spouse to apply the DSUE amount to his or her own taxable transfers during life and after death. Using the portability election can save a significant amount of estate tax and income tax, depending on your circumstances and assets. Portability under the 2010 law was originally only a temporary option, available for estates of people dying during 2011 and 2012. But as a result of a 2012 tax law, the portability election became “permanent.” But,

Studies have shown that 70% of family wealth is lost by the end of the second generation and 90% by the end of the third. Help your loved ones avoid becoming one of these statistics. You need to educate and update your heirs about your wealth transfer goals and the plan you have put in place to achieve these goals. What Must You Communicate to Future Generations to Facilitate Transfer of Your Wealth? You must communicate the following information to your family to ensure that they will have the information they need during a difficult time: Net worth statement, or at the very minimum a broad overview of your wealth Final wishes – burial or cremation, memorial services Estate planning documents that have been created

Why do people procrastinate when it comes to estate planning?  There are many reasons.  See this article on EstatePlanning.com for a good list of reasons.

A recent article on EstatePlanning.com contains the following lists of misconceptions about a Living Trust: A living trust is expensive Trusts are for wealthy people Most people go through probate anyway so a living trust is a waste of money Giving up control over assets High Trustee Fees Separate Tax Identification Number and Tax Return to file However, most of these misconceptions are not true.  First, a living trust can save money even though the cost to setup the living trust is higher than the cost to setup a will.  A properly funded living trust can avoid a costly conservatorship during the life of the Trustmaker and avoid the need for a probate at the death of the Trustmaker.  Further, asset protection benefits may exist

Jay Adkinson:  “If you don’t want to read this whole article, and then just take this quick summary and go on to something else: The 2011 decision in Dahl v. Dahl does not, absolutely not, nope, nada, nein, nyet, nuh-uh, support an argument that DAPTs provide protection to settlor/beneficiaries against third-party creditors who are not a party to the trust document. If you want to know why it doesn’t support this, or why somebody might suggest that it would, then read on.  On May 17, 2013, the U.S. Bankruptcy Court for the Western District of Washington issued an Order in the case of In re Huber, which was the subject of my article, Domestic Asset Protection Trust Blows Up Bigger Than Alaska In Huber Case.

Forbes.com:  “Nearly 2.5 million Americans die each year, and many haven’t signed the basic documents needed to protect loved ones. But let’s say you took this important step. How often do you need to revisit your estate plan?

Forbes.com:  “It’s possible that the legacy of Michael Jackson could turn out to be a string of court cases. He has kept lawyers and business managers happily employed since he died – and his tax lawyers are no exception. The estate for the King of Pop is planning to go to the mattress in the fight against the Internal Revenue Service over taxes and penalties assessed as a result of values reported on his federal estate tax return. . . . the estate is suing the IRS. The case has been captioned (after an August 14, 2013 amendment) Estate of Michael J. Jackson, Deceased, John G. Branca, Co-Executor and John McClain, Co-Executor, Petitioner(s) v. Commissioner of Internal Revenue, Respondent (017152-13 U.S. Tax Court) and was

Arizona Senate bill SB 1232 will become effective September 13, 2013.  This new law modifies Arizona Revised Statutes Section 14-3971 to provide that the small estate probate exemption amount for personal property will increase from $50,000 to $75,000 and the exemption for real property will increase from $75,000 to $100,000.  To learn more about Arizona probate and small estate exemptions go to Arizona Probate Law.

Question:  What is a Qualified Terminable Interest Property Trust? Answer:  A QTIP trust is a type of irrevocable trust that can be used to give income and principal to a surviving spouse after the first spouse dies and then after the surviving spouse dies give the assets that remain in the trust to the beneficiaries selected by the first spouse to die.  Any irrevocable trust can be drafted to do the same thing. Estate planning attorneys use a QTIP trust when both of the following facts exist: The first spouse to die wants to leave assets to the surviving spouse that can be used only by the survivor during his or her life (aka a “life estate”). The first spouse to die has an estate

Forbes:  “the new stretch IRA limits, which Finance Committee Chairman Max Baucus (D-Mont.)  first floated in the Senate last year, would require most retirement accounts inherited by anyone other than a spouse to be distributed (and in the case of non-Roth accounts taxed) within five years of the owner’s death. Disabled heirs would still be able to stretch out withdrawals over their life spans and minor heirs wouldn’t have to take all the money until reaching 26.”  The article lists four steps to take if the legislation becomes law.

The reality of our immortality is a chilling thought to come to terms with. Planning for the future by implementing your wishes in a trust and estate plan, presents many tough questions to ask.  Who will raise your children if you die? What happens to your pets? When do you want to pull the plug? Don't let your concerns or fears become a living nightmare for your loved ones. “For most people, estate planning is more painful than a root canal without Novocain. . . .it forces us to acknowledge that we may become demented; decide who gets what after we pass away; and make provisions for end of life care.”

To most, our Facebook and Twitter accounts are the furthest thing from our mind when it comes to getting our affairs in order after death, or perhaps it is a legitimate concern.  Blog posts, pictures, and content that we share with the world through our social media accounts give people a glimpse of our personal lives.  So what happens to those accounts after we die? “Technology companies are making it possible for you to send a pre-written email, Facebook status update or Tweet after death. Some are even coming up with ways to keep your Twitter account active with regular updates that mimic your Twitter personality after you die.  The founder of DeadSocial said, it's a social media savvy way for people to say their

George Washington's Will Leisure Hours, the Ninth day of July, 1799 George Washington composed his own will without the consult of an attorney or a person of professional character. His distinctive style of writing both powerful and lucid, left no room for question as to how is estate was to be distributed upon his death. Washington's will showed his strong sense of character and views about his divergent and valuable properties that he had attained over the course of his lifetime. “The extraordinary care and precision with which he spelled out how and under what conditions his land and other possessions should be distributed among the numerous members of his extended family, among his old friends, and among various dependents, provide further insight into the

The passing of high-profile celebrities thrust the issue of proper distribution of their estate.  Most notably being Michael Jackson, who ranked as the top earning deceased celebrity in 2010-2011.  Jackson's estate accrued $170 million, a significant drop form the previous year with $275 million, from sales in music and his stake in Sony/ATV catalog. “It's clear that while the stories may all be tragically unique, the contributing factors remain relatively consistent.  Collectively, these cases obviate the need for a unified approach to wealth management that balances short- and long-term lifestyle concerns against the desire to effectively transfer wealth and preserve legacies. . . .Without an estate plan, a celebrity is unable to ensure that the proper individuals are left in control of their estate and