Wall St. Journal:  “Spouses of those wealthy who die next year might find themselves with nothing if the wills aren't revised — another wrinkle of the impending repeal of the federal estate tax Friday.  Starting Jan. 1, estate taxes will be repealed for 2010 only. That means unless Congress acts otherwise, there is no limit to the wealth that can be passed on to heirs without incurring estate taxes through the end of that year.  Often, wills have been written with an expectation the estate tax structure that has been in place for years would continue, estate planners say. The wills typically direct that assets that aren't subject to estate tax be passed on to children — for 2009, up to $3.5 million — and that the rest go to the spouse.”

New York Times:  “WITH 2010 a few days away, there are several tax matters that wealthy investors need to consider next year. The two at the top of the list are whether they should convert their taxable retirement account to a tax-free Roth individual retirement account and how to deal with the uncertainty over the estate tax. . . . That leaves the wealthy with decisions to make about two of the biggest financial events of their life: retirement and death.”

erblawg:  “It’s always tragic when someone passes away before they have had the opportunity to live a long and fulfilling life. The details are still being released regarding the circumstances surrounding her death but Brittany Murphy is another young hollywood star who’s life was cut short.  Being an estate planner, when someone famous dies the first thing that comes to mind (for better or worse) is whether or not they wrote a will.  To many young people, death seems like a far off occurrence and estate planning is something that can always be put off until another day.”

Bloomberg:  “Estate planner Richard Behrendt helped his client make $5 million loans to each of his children this year, avoiding gift taxes of 45 percent and saving the kids as much as $837,000 apiece in interest.  Rates for so-called intra-family loans have declined as much as 53 percent since 2008.  ‘The timing of it was clearly tied to the rock bottom of these rates,' said Behrendt, who works for Robert W. Baird & Co., based in Milwaukee, Wisconsin.   The loans may be the perfect holiday gift to help relatives this year, according to Carol Kroch, head of wealth and financial planning at Wilmington, Delaware-based Wilmington Trust.  For wealthy taxpayers, they can be used for estate planning purposes, since gains earned will be free of estate and gift taxes”

New York Tiimes:  “Robin Beaulieu was telling me about her daughter’s bike accident.  It was an event that would force Beaulieu not only to confront the death of her child but also to embrace a new way of dying.  We were sitting last spring in the kitchen of her small apartment in Manchester, N.H. Beaulieu took a drag on a Marlboro, poured a cup of coffee and told me that her daughter, Amanda Panzini, had been a rambunctious, bighearted teenager.  She loved animals, even ;flea-ridden, mangy dogs,' Beaulieu said, and was a fiercely loyal friend.  When confronted by the possibility of donating her brain-injured daughter’s organs after the accident, Beaulieu never doubted that Amanda would have wanted them to go to someone who needed them . But Amanda first had to be declared dead, and in her case, the only way that could happen was if her parents chose a precisely choreographed death — one conducted by medical personnel in a hospital procedure meant to allow Amanda to die while preserving her organs.  From this, the doctors and Beaulieu hoped, would come new life.”

The Denton Record Chronicle has an article today on a subject that I stress with my estate planning clients.  The article is called “Estate plans remove the guessing after you're gone.”  I urge my clients to make an inventory in their estate planning portfolio that describes the nature and location of all of their valuable assets and to tell their family where to find the portfolio if something were to happen to them.  Many, many times people contact me and ask how they can determine what property a parent owned and who was supposed to inherit the property.  People who do not create a plan that identifies assets and that is given to their heirs risk that the heirs may never know of the property and may not inherit it.

Estate of Denial:  “As U.S. Senate leaders try to wrap up the debate over governmental control of health care, some dangerous characters are lurking in the wings.  Grave robbers, property poachers, walker stalkers and other opportunists seeking to loot estates are likely applauding this move. Disgruntled family members, wannabe heirs or unscrupulous members of the legal industry will find Obamacare helpful with Involuntary Redistribution of Assets (IRA) actions in which probate venues or instruments like wills, trusts, guardianships and powers of attorney are used to divert assets from intended heirs or beneficiaries.”

Question:  I am an Arizona resident in the process of getting a divorce.  If I form an Arizona limited liability company before my divorce is final, will my wife own a community property interest in my interest in the new LLC?

Answer:  It depends.  How's that for a lawyer answer.  Arizona Revised Statues Section 25-211.A defines community property.  It states:

25-211. Property acquired during marriage as community property; exceptions; effect of service of a petition.

A.   All property acquired by either husband or wife during the marriage is the community property of the husband and wife except for property that is:

1. Acquired by gift, devise or descent.

2. Acquired after service of a petition for dissolution of marriage, legal separation or annulment if the petition results in a decree of dissolution of marriage, legal separation or annulment.

Arizona Revised Statues Section 25-213 defines separate property.  It states:

25-213. Separate property

A. A spouse's real and personal property that is owned by that spouse before marriage and that is acquired by that spouse during the marriage by gift, devise or descent, and the increase, rents, issues and profits of that property, is the separate property of that spouse.

B. Property that is acquired by a spouse after service of a petition for dissolution of marriage, legal separation or annulment is also the separate property of that spouse if the petition results in a decree of dissolution of marriage, legal separation or annulment.

Section 25-211 states the general rule and subsections 1 and […]

Tax Girl:  “Taxpayer asks:  Can you tell me what the tax implications are for donating inherited items? My mother passed away about a year ago and I’m the executor of the estate. Now, my siblings are interested in taking deductions for items they feel they “inherited,” yet were actually immediately donated to charity without my siblings ever having taken actual possession of the items. Is this legal? No documentation exists showing a transfer of the property to the beneficiaries so it could be argued that the items were actually donated by the Estate.  Taxgirl says:  I can’t tell you how many times this comes up in an estate

Wealth Strategies Journal:  “One common issue facing those who create trusts is how to protect beneficiaries from creditors. One of the biggest, baddest creditors out there is the Internal Revenue Service (IRS or Service), wielding two weapons of mass collection: the federal tax lien and the federal tax levy. These weapons regularly pierce boilerplate spendthrift provisions. Discretionary trusts do not fare much better. Court decisions over the past ten years make it increasingly likely that even pure discretionary trusts contain clauses that traitorously turn over the treasure house keys to the federal tax lien. Once the lien attaches, the IRS can enforce it through either administrative or judicial attachments, blowing through state law barriers that keep out other creditors.”

This Article offers some ideas on how to keep the federal tax lien locked out from trust assets using property law concepts of springing and shifting executory interests. This Article posits that a properly drafted tax lien lockout provision can deflect the federal tax lien.

This is a three part article.  See Part 1, Part 2 and Part 3.

Yakima Herald:  “Eric Gustafson has seen it too many times.  Families estranged or survivors forced to spend large sums of money in the absence of an estate plan or — just as importantly — a plan that hasn't been updated to account for changed circumstances such as divorces or deaths.  Such plans should include a durable power of attorney for health care and finances, a will, a community property agreement for a couple and, in some cases, a revocable trust.”

Wall St. Journal:  “Videos offer a chance for the dying to offer some final thoughts—as well as head off legal disputes.   Some individuals have found a way to breathe life into dry estate-planning documents:  They're supplementing them with personal messages via video.”

The age.com.au:  “TWO penniless brothers who live in a cave outside Budapest are to inherit most of a reported $A7.2 billion after an astonishing twist in their family fortunes.  Zsolt and Geza Peladi have no fixed address and eke out an existence by selling junk they find in the street.  But their scavenging days are about to be over. The brothers have been told they are entitled to their long-lost grandmother's fortune, along with a sister who lives in America.  Charity workers in Hungary broke the news to them after being contacted by lawyers handling the estate of their maternal grandmother who died in Baden-Wurttemberg, Germany.”

Bloomberg.com:  “Individuals who want to transfer wealth to their children may have a limited opportunity to put some assets in trusts that let them give the money tax-free.   Grantor-retained annuity trusts, known as GRATs, or irrevocable, intentionally defective grantor trusts allow the appreciation of certain assets to pass to heirs free of estate and gift taxes, said Brittney Saks, a partner in New York-based PriceWaterhouseCoopers’s Private Company Services.”

The Probate Lawyer Blog:  “Across the country in December, families will be coming together for the holidays.  Sometimes the holidays are one of the few times of year that family members see each other. They eat, share stories, and laugh together. Of course, there may be a few family squabbles, but hopefully no mash-potato flinging. Or will there be? Overall, the holidays are rare opportunities for family members to have face-to-face conversations.  One critical conversation is talking about estate planning — what happens legally when a loved one passes away.”

Wall St. Journal:  “Milton Hershey had no children so he said he would make the “orphan boys of the United States” his heirs.  To that end, the chocolatier founded the Milton Hershey School, which today serves 1,700 underprivileged children and has an endowment of $6.2 billion.  In 2005, Hershey had the nation’s fifth largest endowment, which was about half the size of Princeton’s and Stanford’s but larger than that of the Massachusetts Institute of Technology.”

Estate of Denial:  “An industry exists in which lawyers, accountants and other unethical participants – sometimes with complicity from probate and other courts – can separate any of us from our property when certain (not that unusual) circumstances occur.  These situations can also be orchestrated at the behest of disgruntled family members or wannabe heirs.  Whether through the misuse or abuse of wills, trusts, guardianships or other probate-related scenarios, Involuntary Redistribution of Assets (IRA) actions can and do occur as a means of calculatedly diverting assets away from intended heirs/beneficiaries.”

Patriot News:  “Decide now how to distribute your assets and protect your family after your death, or the state  . . . will decide for you.  ‘Dying without a will — everything gets thrown in one big pot, and goes in an undefined way to undefined recipients,' said Elyse Rogers, a partner with Keefer Wood Allen & Rahal LLP in Harrisburg.   Even the most basic estate planning may require professional assistance, but help can be affordable and often prevents litigation that can tie up your estate or diminish your legacy.  ‘I try to make people understand that your estate planning is a lot more than writing a will,' Rogers said.  ‘It’s beneficiary designation and joint ownership and how we pass assets outside the will.'”

Wall St. Journal:  Natalie Choate, an estate-planning lawyer and retirement plan expert answers the following question:

My wife and I are retired and both are covered by my medical practice's “professional practice corporation” retirement plans. We are in the process of discarding our old wills and creating a living trust. We have one daughter and two grandchildren and would appreciate knowing how to designate the beneficiary forms so that when one of us dies, the maximum benefits go to the living spouse first, then get stretched on for the daughter and grandchildren.