An article in The Washingon Post this week highlighted many of the reasons that I have cautioned clients against reverse mortgages over the years. The Comptroller of the Currency, John C. Dugan, warned in a speech to bankers this week that more federal oversight may be needed for reverse mortgage programs. Here’s a link: http://bit.ly/15cS6r.
June 11, 2009
February 17, 2009
Small Business Stimulus
There are some small business provisions in the new stimulus bill that may help to loosen credit for small businesses. CNN has a good article here http://tinyurl.com/awndty that gives some basic information about the provisions for small business. I guess no one has had a chance to read it all, so no details here, but gives a good basic idea.
January 26, 2009
What Do You Want to Ask an Estate Planning Attorney?
If you had a free hour to sit down with an Estate Planning Attorney, what would you ask? Tell us what your questions are and we will create blog posts around those questions. Email me at msmith@smithbarid.com and we’ll start blogging your questions.
Thanks.
Michael H. Smith
January 5, 2009
How Will You Be Remembered
As estate planning attorneys, we spend a great deal of time helping people to write the final chapter of their own lives, as opposed to letting the government or others write it for them. In many cases, this involves the precise use of wills, trusts, directives, and other estate planning tools to be sure a person’s assets and medical wishes are seen to exactly as that person wishes.
Another aspect of creating that final chapter, however, is giving thought to how you’d like to be remembered very soon after your passing. Do you want an elaborate service with certain music, flowers, poetry and the like? Would you prefer a more sedate memorial in a modest setting with just close friends and family? Like all other aspects of your planning, you should pay attention to these details in order to best smooth the way for those you leave behind.
I’m thinking about this today because, recently, I attended two funerals. The services played out in stark contrast to each other.
In the first case, the woman who passed had been ill for some time and had given time and attention to what she wanted her memorial service to look like. She was well-loved and the chapel was standing room only. A friend had created a beautiful slide show for her, a montage depicting all stages of her life. That show was played on a digital screen while another close friend played and sang a favorite song of hers.
There were beautiful flowers but most of the money that would have gone towards flowers was directed toward a favorite charity of the woman who passed. She’d made those wishes known to her family ahead of time.
I don’t know the family well enough to have asked about the preparations and what sort of effort it took to create such a beautiful memorial. However, I can tell you that no one was rushing around frantically, the whole service was beautifully presented, and the entire service felt like it had been custom-created for this particular woman.
The other memorial service was actually very nice as well. It was much simpler and there were fewer people in attendance – though this person was also well-loved and had many friends. An aspect of this service which struck me as particularly moving was that each attendee (since the attendance was relatively small) was given an opportunity to say something about the dearly departed. Some people talked about his many fine qualities as a family member and friend. Others had wonderful (sometimes tearful, sometimes very funny) stories to tell about him. At the end, everyone felt a part of the service and a little closer to the deceased and his family.
In this case, I do know the family well. Though I did not ask, the person on whom the duties fell to put the service together was quite candid with many in attendance about how difficult the service was to put together in such a short period of time.
The man who passed had, like the woman in the first service, been ill for quite some time. However, he did not make his wishes known as clearly to his friends and family.
As it turned out, the service was beautiful and meaningful. That, however, was due to the herculean efforts of the family member who took charge. The family member lived out of town, making his task even more challenging.
So, in the end, the difference was not in the extent to which the services were meaningful or moving – both were. The difference was in the burden placed on the family members left to make the final arrangements.
We all mourn in our own way. Each of us wants to be remembered in our own way. None of us wants to leave a burden for our family or friends to carry in the difficult days following our passing.
Take some time very soon to give your wishes careful thought. Then put those wishes down on paper so that those you love will know where to find them. A qualified estate planning attorney can help you to get this process started.
July 21, 2008
Helping Grandparents Care for Grandkids
It’s a scenario Georgians (really, people throughout the world) face all to often – an obstacle or challenge arises which is so difficult that parents are unable to care for their own children for a period of time. What should a parent, or grandparent who wants to help, do in such a situation?
Until very recently, in Georgia, the grandparents would need to seek temporary guardianship in order to really, effectively provide full care for a grandchild. However, effective July 1, 2008, Georgia parents and grandparents can use a Power of Attorney for the Care of a Minor Child to help bridge this gap.
If the parent or parents with legal custody of a minor child suffer one or more of the following hardships, this type of power of attorney may be helpful (this list is not exclusive):
(1) A parent being unable to provide care due to the death of the other parent;
(2) A serious illness or terminal illness of a parent;
(3) The physical or mental condition of the parent or the child such that proper care and supervision of the child cannot be provided by the parent;
(4) The incarceration of a parent;
(5) The loss or uninhabitability of the child´s home as the result of a natural disaster; or
(6) A period of active military duty of a parent exceeding 24 months.
Once in place, the Power of Attorney for the Care of a Minor Child will authorize the grandparents to do the following:
(1) Enroll the child in school and in extracurricular activities;
(2) Enroll the child in any health insurance program offered to the grandparent;
(3) Provide access to school records and may disclose the contents to others;
(4) Arrange for and consent to medical, dental, and mental health treatment for the child;
(5) Provide access to medical, dental, and mental health records and may disclose the contents thereof to others;
(6) Provide for the child´s food, lodging, housing, recreation, and travel; and
(7) Any additional powers as specified by the parent.
This power of attorney may be revoked at any time by the parent(s) who granted it.
As with all parenting issues, every situation (and every child) is different. This type of power of attorney is just one more tool in the toolbox for parents and grandparents working to provide the best possible care for the children they love.
Please visit us at www.smithbarid.com today for more information about how best to protect your family, your business, yourself, and your assets.
April 17, 2008
Reasons To Have A Living Trust
This is a link to an article on Andrew Ewalt’s blog. He’s an estate planning attorney in Connecticut. In the article, he gives a very succinct list of all of the great reasons that a Living Trust is simply the best way to plan your estate. It’s not the only way, and it’s not the right answer for every client, but in most cases, the Living Trust should be the preferred Estate Planning tool.
March 5, 2008
Anna Nicole Smiths daughter Dannielynn named heir | Entertainment | Reuters
Anna Nicole Smiths daughter Dannielynn named heir | Entertainment | Reuters
Story from Reuters bringing the news of the end of the saga for Dannielynn. She will inherit Smith’s estate which is still involved in a will contest in Anna Nicole’s late husband’s estate.
February 19, 2008
Britney’s Family Takes Control
I don’t usually pay much attention to pop culture, except when it intersects with estate planning. Britney Spears’ recent problems did not even register on my radar until I stumbled across this article which indicates that Britney’s family has taken over management of her affairs through a conservatorship. A conservatorship is a probate proceeding to appoint a petitioner (who is usually a family member or other responsible party) to manage financial matters for an incompetent adult (in Georgia anyway). The petitioner must prove to the court through testimony and affidavits from doctors that the ward is unable to handle his or her own affairs.
June 21, 2007
To My Dog, Lucky, I leave $10,000
Since the dawn of time, pets have held an important place in our hearts and our homes. Ancient Egyptians used to mummify faithful pets and have them buried with themselves. Of course, this was a dubious honor for the pet. Even in modern America, people have attempted to take their pets with them. For example, Mary Murphy died in 1979, leaving $200,000 to Pets Unlimited, a shelter for pets. But, the more controversial provision in her Will was her command that her pet collie, Sido, be euthanized. The probate court found that Mary did not have the authority to have her pet euthanized.
The trend has been toward providing for your pets, rather than trying to take them with you. In 1993, Doris Duke, heiress to a tobacco fortune, left $100,000 to her dog, Rodeo. Actress Betty White’s Will reportedly leaves her entire estate to her pets. States are increasingly recognizing the validity of pet trusts.
How Does a Pet Trust Work?
You name a trustee to hold funds for the benefit of your pet. In times past and even on occasion today, the funds to care for the pet were simply left in trust for the pet’s caretaker. Many states now provide for a trust naming the pet as beneficiary. The most common amount left in a pet trust is $25,000. Of course, more may need to be set aside if you have a pet with a longer life expectancy, if your pet requires expensive medical care, or if you desire more extravagant care for your pet.
You can specify the caretaker of the pet and backup caretakers. You can set forth your exact wishes for your pet, including: Diet, daily routine, toys, grooming, socialization, medical care, and disposition of the pet’s remains. The trustee and caretaker may be the same person, or you may choose different people for each role. By choosing different people, it provides a check and balance.
Pet trusts can be a great way to ensure your pets are cared for, even after you are gone. A qualified estate planning attorney can help you plan for your pets, so that they continue to get the love and care they deserve even when you are not around to provide for them yourself.
May 23, 2007
Gifting to Children as an Estate Planning Strategy
Most people with substantial assets are interested in benefiting those around them. The fruits of success are best when shared with those close to you.
Each person can give up to $12,000 per year to any other person without any gift taxation. It’s important to note that you can give $12,000 to each and every person you wish. With most friends and relatives, this is not much of a problem. However, gifting to minor children presents unique issues. Minors do not have the legal capacity to receive gifts. Perhaps more importantly, minors do not have the maturity to handle the money.
Let’s look at two common ways to give money for the benefit of minors:
- A Section 2503(c) trust
- A Crummey trust
With a “Section 2503(c) trust” (named after the part of the Internal Revenue Code allowing it), you make a gift to the trust for the benefit of the child. The trust has terms you specify, but it must be able to be used for the child’s needs while they are a minor. The child decides where any unused funds eventually go. Once the child reaches age 21, they must have the opportunity to withdraw the funds. Even if the child dies before reaching age 21, the funds must go to the child’s estate or as the child directs. The funds in the trust may only be used for the benefit of that particular child. So, each child needs a trust that is administered separately.
A “Crummey trust” (named after a legal case pioneering the method) is another strategy for gifting assets into a trust that takes advantage of the $12,000 annual gift tax exclusion. Unlike the Section 2503(c) trust, this trust can hold the assets long after the child has reached age 21. In fact, this trust can continue for the life of the child. This makes the trust a good choice for those who are concerned about the immaturity of 21-year olds. The downside to a Crummey trust is that the minor, or his or her guardian, must have the right to withdraw the funds when contributed. While this may seem like a significant downside, the withdrawal right may be limited to exercise in a thirty-day period. After that period, the withdrawal power can lapse. Further, if the power is exercised, you do not have to make another contribution in subsequent years. Another advantage to the Crummey trust is that you can use one trust for multiple beneficiaries. This can make the Crummey trust much less complicated. Further, it allows you to “pool” money for the use of whomever needs it. For example, if you put $12,000 in Section 2503(c) trusts for five beneficiaries, the trustees of each beneficiary’s trust may only expend up to $12,000 for that beneficiary’s welfare. If you used one Crummey trust for all five beneficiaries, you could gift 5 x $12,000 = $60,000. If the trustee concluded that one beneficiary needed the entire $60,000, it could be expended for that one beneficiary.
Clearly, gifting in trust for minors is a powerful, flexible way to get assets to minors and other beneficiaries. A qualified estate planning attorney can help you decide what kind of trust makes sense in your situation.
