Arizona Estate Planning

What’s Going to Happen to Ikea Founder’s Billions?

Bloomberg: “When Ikea’s Ingvar Kamprad died Saturday at age 91, he was ranked No. 8 on the Bloomberg Billionaires Index thanks to his control of a global retail fortune valued at $58.7 billion. His wealth will now be dissipated because of a unique structure put in place by Kamprad to secure the long-term independence and survival of the Ikea concept. Kamprad disputed his status as one of the richest men on the planet, having decades earlier placed control of the world’s largest furniture seller into a network of foundations and holding companies.”

On the Net2018-02-12T13:56:12-08:00February 13th, 2018|Beneficiaries, Estate Planning, Rich & Famous, Trusts, Wills|

5 Ways Estate Planning Benefits Businesses

TG Daily : “When most people think of estate planning, they think of their own personal estate. But proper estate planning for a business will help protect the very thing you've worked so hard to build. Without a proper plan in place, your business can go from thriving to bankrupt in the event of your demise.”

On the Net2018-02-05T11:29:14-08:00February 9th, 2018|Estate Planning, Trusts, Wills|

Stepmothers: The Cause of so Many Estate Fights

Forbes : “I read the latest summary sheet of our law firm’s disputed probate, estate and trust cases and came across an insight that should have been obvious (but wasn’t): About 50% of our active disputed-estate cases involve litigated differences between stepmothers and their stepchildren.”

On the Net2018-02-05T11:04:46-08:00February 8th, 2018|Estate Fights, Estate Planning, Estate Planning for Singles, Trusts, Wills|

Managing Tax Basis in Estate Planning

Wealth Management : “In what will likely prove to be one of the more memorable presentations at the 2018 Heckerling conference, Paul S. Lee, of The Northern Trust Company, emphasized the importance of managing tax basis as part of the estate planning process.”

On the Net2018-02-05T09:50:40-08:00February 5th, 2018|Estate Planning, Estate Planning for Singles, Estate Tax, Tax Planning, Trusts, Wills|

This Time Is Different: You Really Do Need to Update Your Will and Durable Power of Attorney

Davis Wright Tremaine LLPP: “With the advent of higher exemptions with respect to the Federal Gift, Estate, and Generation-Skipping Transfer Tax passed last December (referred to as the 2017 Tax Act), it really is necessary to review your estate tax planning and it would also be a good time to review your durable power of attorney in light of the recent adoption of the Washington Uniform Power of Attorney Act, effective January 1, 2017.”

On the Net2018-01-31T08:08:19-08:00January 31st, 2018|Estate Planning, Estate Tax, Gifts, Powers of Attorney, Trusts, Wills|

Estate Planning Opportunities and Considerations Beginning in 2018

Schulte Roth & Zabel LLP: “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (“Act”) was enacted in December 2017 and implements a wide range of changes to existing tax laws. The Act temporarily increases (from Jan. 1, 2018 until Dec. 31, 2025) the federal estate, gift and GST tax exemption amounts from $5.6 million to approximately $11.2 million.”

On the Net2018-01-16T15:13:39-08:00January 16th, 2018|Beneficiaries, Estate Planning, Estate Planning for Singles, Estate Tax, Gifts, Trusts, Wills|

An Estate Planning Checklist to Facilitate Wealth Transfer

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 and what purpose they serve:
- Durable Power of Attorney, Health Care Directive, Living Will – property management; avoiding guardianship; clarifying wishes regarding life-sustaining procedures
- Revocable Living Trust – avoiding guardianship; keeping final wishes private; avoiding probate; minimizing delays, costs and bureaucracy
- Last Will and Testament – a catch-all for assets not transferred into your Revocable Living Trust prior to death, or the primary means to transfer your wealth if you are not using a Revocable Living Trust
- Irrevocable Life Insurance Trust – removing life insurance from your taxable estate; providing immediate access to cash
- Advanced Estate Planning – protecting assets from creditors, predators, outside influences, and ex-spouses; charitable giving; minimizing taxes; creating dynasty trusts

Who will be in charge if you become incapacitated or die – agent named in your Durable Power of Attorney and Health Care Directive; successor trustee of your Revocable Living Trust and other trusts you’ve created; personal representative named in your will

On the Net2016-12-13T20:33:27-08:00November 18th, 2014|Beneficiaries, Estate Planning, Gifts, Probate, Trusts, Wills|

What is a Qualified Terminable Interest Property Trust aka QTIP?

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 that is greater in value than the federal estate tax exemption amount ($5,250,000 for people who die after 2012).

A QTIP contains certain language required by the IRS so that the assets transferred to the QTIP will qualify for the federal estate tax marital deduction and not be included in the estate of the first spouse to die and taxed when the first spouse dies. Without the special language necessary to qualify as at QTIP the assets transferred into the trust by the first spouse to die would not be eligible for the federal estate tax marital deduction in determining the federal estate tax due on the death of the first spouse.

I typically create a trust for a married couple that creates two or three trusts after the death of the first spouse. These new trusts created after the death of the first spouse are frequently referred to as the A & B […]

Richard Keyt2016-12-13T20:33:27-08:00July 30th, 2013|FAQ, Trusts|

Do You Need An Estate To Create An Estate Plan?

Forbes: “When I would tell people that I was working on a book about estate planning, many of them looked at me quizzically because they weren’t sure what I meant. Others said, “Oh, that’s not something I need, because I don’t have an estate.”

Contrary to popular misconception, you don’t have to own a big house to have an estate. Your estate consists of everything you own when you die, including your home, personal property, investments, bank accounts, retirement plans and any interests in a family business or partnership. Beneficiary designation forms control who gets retirement accounts, along with life insurance proceeds. For most other assets, you need a will or living trust that says who gets your stuff.”

On the Net2016-12-13T20:33:28-08:00July 11th, 2012|Beneficiaries, Estate Planning, FAQ, Trusts, Wills|

Question: I was recently divorced, but my estate plan names my former spouse in a few places. What should I do?

Answer: Revise your estate plan! You should always think about updating your estate plan when a major life event happens. Divorce or legal separation from your spouse is one of these events. There are probably a number of places in your current estate plan that name your former spouse. These are the areas that you should consider updating:

Incapacity planning. Who did you name as your agent under your healthcare power of attorney or financial power of attorney? If you were to become incapacitated, your current estate plan probably says that your spouse should make all of your healthcare decisions and should have the ability to access your finances and make financial decisions. Since you probably do not want your former spouse to make these decisions for you, consider changing your healthcare agent and financial agent to someone like a trusted friend or family member.

Inheritance planning. Your current estate plan probably states that if something were to happen to you, all of your assets should go to your former spouse. After a divorce, you probably don't want your former spouse to inherit everything. As such, you should change the primary beneficiary of your will or trust.

Life insurance. Your current life insurance policy might name your former spouse as the beneficiary of that policy. Talk to your life insurance company about updating the beneficiary designations on the policy. Another life insurance issue could arise if your divorce settlement requires you to maintain life insurance for your children. If so, you should consider creating an irrevocable life insurance […]

Richard Keyt2016-12-13T20:33:28-08:00July 9th, 2012|Beneficiaries, Estate Planning, FAQ, Life Insurance, Powers of Attorney, Trusts, Wills|

California Recognizes Tort of Intentional Interference with Expected Inheritance

California has finally joined the majority of states and recognized the tort of intentional interference with expected inheritance (“IIEI”). This adoption was done by the California Court of Appeals based on the fact that the IIEI claim is consistent with other California laws, the fact that of the 42 states that have considered adopting an IIEI claim, 25 states have adopted the claim, that the US Supreme Court has called IIEI as “widely recognized” tort, and other public policy considerations.

The ruling came out of the California Court of Appeals for the Fourth Appellate District, after the deceased's longtime partner was denied any inheritance by the California probate court. Brent Beckwith was in a committed relationship for nearly 10 years with partner Marc Christian MacGinnis. MacGinnis had no living family members other than his sister, Susan Dahl. But MacGinnis was estranged from his sister.

At one point, MacGinnis showed Beckwith a will on his computer that divided his $1 million plus estate between Beckwith and Dahl. MacGinnis never signed the will. MacGinnis wanted to print and sign the will, but was never able to do so. MacGinnis later fell ill. He asked Beckwith to print the will. When Beckwith couldn't locate the will, MacGinnis asked Beckwith to prepare a new will, based on the distribution plan MacGinnis had already discussed with Beckwith. When Beckwith called Dahl to discuss the will, Dahl claimed that she had friends who were attorneys and she would have them draft a trust for MacGinnis, which she claimed was more appropriate for her brother. She told Beckwith not to give the new will to MacGinnis for signing. A few days later, MacGinnis went in for surgery. […]

Richard Keyt2012-07-09T12:37:52-07:00July 9th, 2012|Beneficiaries, Common Problems, Estate Fights, Lawsuits, LGBT Planning, Probate, Trusts, Wills|

If You Like Your Privacy, Create A Trust

Should you create a will based estate plan or a trust based estate plan? It depends on your goals. While a will and a trust serve some of the same functions, some of the major differences become apparent when you examine how each is administered. A will must be entered into probate. Probate is a court proceeding, which means that documents filed during that court proceeding become public record. This means that when a person's will is admitted to probate, it becomes a public record, just as we saw in Joe Paterno's case. On the other hand, trusts do not need to be admitted to probate. This is because if a trust is properly funded (meaning a person's assets are all transferred into their trust) then probate is unnecessary. One of the major purposes of probate is to effectuate the transfer of property from the deceased to his or her heirs. By using a trust, probate can be avoided since the deceased already transferred property out of his or her own name and into the name of the trust. Once a person who has a trust passes, the terms of the trust take over and the deceased's property is transferred according to the terms of the trust.

Any estate planning lawyer worth their salt will always inform clients that a trust is the best possible option. However, if someone decides to go with a will based estate plan, here is an explanation for “Dummies” about one needs to know about probate:

Probate is a term that is used in several different ways. Probate can refer to the act of presenting a will to a court officer for filing — […]

On the Net2016-12-13T20:33:28-08:00June 21st, 2012|Estate Planning, Probate, Trusts, Wills|

Joe Paterno’s Will Unsealed

After Joe Paterno's death, his estate was admitted to probate. Typically, documents filed in a court proceeding are public record. If a Will was filed as part of a probate case, that too would normally be public record. However, Joe Paterno's family requested that his Will was sealed, which the court later did. If someone had a Will but not a Trust, I can understand why they might want to do this. Joe Paterno had a sizable estate and perhaps the family didn't want the world to know about his plans for distribution. Recently, Paterno's Will was unsealed. Turns out, Joe had already planned for this eventuality by creating a Trust. Paterno's Will was a typical “pour over” Will, meaning that any asset that he owned that was not already in his Trust was “poured” into his Trust. A pour over Will typically doesn't list what these assets are, but instead functi0ns more as an all encompassing provision by transferring assets that didn't quite make it to the Trust. The meat of Paterno's estate plan and the part everyone wants to see is the Trust. Unlike Wills, Trusts are private and need not become a public record after a person's death.

For more information about trusts, read Richard Keyt's Article Understanding the Significance of Trusts.

Richard Keyt2016-12-13T20:33:28-08:00June 15th, 2012|Estate Planning, Probate, Rich & Famous, Trusts, Wills|

Eliza Presley Back In Court

Probate Lawyer Blog: “We've written extensively about the efforts by Eliza Presley to prove that she is half-sister to Elvis Presley and daughter to Vernon Presley, based on DNA and other evidence. Much of this same evidence also supports Eliza's claim that Elvis Presley is actually alive. You can get caught up to speed starting here, if you haven't followed this case before.

It's been more than a year since we last wrote that Eliza's case was dismissed on jurisdictional grounds. This meant that the court in which she filed her lawsuit was not able to hear the case; rather, the case had to go to a different court. Because of this and other legal hurdles, Eliza has never had her “day in court” to present her evidence to a judge or jury.

As we wrote then, Eliza was at the end of her road — emotionally and financially — and was not able to continue with the case. Trying to re-write the history books, which is what Eliza was literally trying to do, is no easy task. This is especially true when there are those who will go to extraordinary means to try to stop her.”

On the Net2016-12-13T20:33:29-08:00June 6th, 2012|Estate Fights, Rich & Famous, Trusts|

Estate Planning Mistakes New Parents Don’t Want To Make

Lawyers.com: “It’s official: Jacob and Sophia are America’s most popular baby names. Once you’ve settled on a name for your new bundle of joy, it’s not too early to make legal preparations as your child enters the world.

…

Jacob has been the No. 1 boy’s name for 13 years, according to the Social Security Administration, which released the list of top baby names for 2011. Sophia knocked Isabella to No. 2 after a two-year stint at the top of the list for girls.

If you have a young child in your home, it’s already time to start thinking about estate-planning issues to protect your newborn. Following are the five most common estate-planning mistakes that parents make after having a baby.”

On the Net2016-12-13T20:33:29-08:00May 24th, 2012|Common Problems, Estate Planning, Life Insurance, Trusts, Wills|

An Estate Plan Is More Than Just A Will

The Journal: “Far too many people think, “I don't have an estate. I don't need to do any estate planning.”

But there are more aspects to estate planning than just signing a will. Medical, current financial and other decisions also play an important role.

The differences between the similar sounding living will and living trust often causes confusion. The first is for medical purposes; the other is financial.

A living will provides authority for certain last medical measures when in a terminal condition and has nothing to do with transferring assets or property after death.”

On the Net2012-05-08T10:29:37-07:00May 8th, 2012|Estate Planning, Healthcare Directives, Powers of Attorney, Trusts, Wills|

Avoiding Common Issues With Trusts

RGJ.com: “George Bernard Shaw said “Marriage is an alliance entered into by a man who can’t sleep with the window shut and a woman who can’t sleep with the window open.” Like marriage, estate planning takes work — optimism, contingency planning and adjusting.

I want to share some of the pitfalls I’ve experienced so that you avoid a head-on collision on your life journeys. They’re talking points with your family, business partners, tax experts, lawyers and financial advisors. And please think about estate planning as planning to live (not death) and preparing your heirs for your estate (not vice versa).

My No. 2 kid is trustee … I don’t get along with the others. The trustee holds an important position, wearing many hats and has a fiduciary standard of care. Duties include accounting, compliance, loyalty to beneficiaries, impartiality and prudence. Trustees may be able to hire professionals to help. However, the buck ultimately stops with the trustee. Name the “right” trustees to make those King Solomon decisions and see your well-intentioned plans become reality.”

On the Net2017-10-07T11:14:46-07:00April 9th, 2012|Common Problems, Estate Planning, Trusts|

Everyone Can Benefit From A Trust – Regardless Of Their Net Worth

SeacoastOnline.com: When I talk with couples about estate planning, a frequent question is whether they have enough assets to warrant the use of trusts.

Trusts have long been considered a tax-saving tool for the wealthy. Now that Congress has increased the federal estate tax exemption to $5 million and made that exemption portable for spouses, including trusts in an estate plan may seem to be overkill. Benefits other than estate tax reduction, however, often tip the scales in favor of trusts, even for couples with smaller estates.

A trust is an alternative to individual or joint ownership as a means for owning property. The person establishing the trust, known as the grantor, transfers assets to a trustee, who is charged with managing the property for a beneficiary according to the terms of the trust document. When a revocable living trust is part of an estate plan, the grantor, trustee and beneficiary are often the same person. Because the trust will also specify a successor trustee, the grantor is assured the assets will continue to be managed for his benefit should he become unable to manage his financial affairs on his own.

Continue reading how everyone can benefit from a trust – regardless of their net worth.

On the Net2016-12-13T20:33:31-08:00March 28th, 2012|Estate Planning, Trusts|

How Billionaires Avoid Taxes

Forbes: In 2010 Max R. Levchin, chairman of social review site Yelp, sold 3.1 million shares of Yelp held in his Roth individual retirement account. Most of the $10.1 million he received was profit. But Levchin, a 36-year-old serial entrepreneur who started PayPal with billionaire Peter Thiel in 1998, won’t ever have to pay a penny of income tax on those gains. That’s because all earnings in a Roth IRA are tax free so long as its owner waits until age 59 1/2 to take money out.

Moreover, Securities & Exchange Commission filings show Levchin still has 3.9 million shares of Yelp, now trading near $22, in his Roth. So it appears his tax-free “retirement” kitty is worth at least $95 million—and maybe a lot more. We don’t know, for example, if Levchin’s Roth owned stock in social app company Slide, which he started in 2004 and sold to Google for $182 million in 2010. If Levchin doesn’t spend his mega-Roth in retirement, he can leave it to his kids or grandkids, who can, under current law, stretch out income-tax-free growth and withdrawals for decades.

Continue reading how billionaires avoid taxes.

On the Net2012-03-28T10:17:50-07:00March 28th, 2012|Tax Planning, Trusts|

Scottsdale Estate Planning Attorneys