Downton Abbey’s Financial Lessons

January 28, 2015

Filed under: Estate Planning,Finances,Wills — admin @ 9:00 am

The British television series Downton Abbey might not seem the likely place to get financial advice, but there are some lessons to be learned from the program.

An article on CNN says there are five financial lessons to be learned from the show.

  • Don’t put all your eggs into one basket. The family patriarch, the Earl of Grantham, learned that lesson when he loses the entire family fortune by betting on a Canadian railroad company that goes bankrupt.
  • Ask for a raise. Daisy, who starts out as a kitchen maid, staged a campaign for better pay. She got it.
  • Make a will – and revisit it. The show begins with a crisis over finding a new heir. The man who was to inherit the estate died on the Titanic. None of his three daughters is allowed to take over his fortune.
  • Learn about supply and demand. A devious resident decides to make a killing on the black market after the war. He buys some goods from a man at a bar at an incredibly good price, but the food is junk and no one will buy it from him.
  • Watch out for gold diggers. Several characters marry for money. You can never be sure.

Can You Deduct Estate Planning Fees?

January 21, 2015

Filed under: Estate Planning,Tax Planning — admin @ 2:19 pm

Is it allowable to deduct the fees you pay for estate planning work?

A column in the Albuquerque Journal says that it may be possible.


A reader wrote in to the writer of the column saying that he and his wife had paid $3,095 to update to their estate plan. It included a trust for their kids as well as advance directives and guardian choices. The reader wanted to know if any of that fee could be tax deductible. The reader also noted that their estate’s worth might be increased in the future and that their tax burden might grow.

The columnist replied that, yes, they probably can deduct, but that there is a burden of proof issue that needed to be satisfied. While he said there is no deduction allowed for fees paid for purely personal advice, the law does permit a deduction for any fees paid for the collection, determination or refund of any tax due.

He said this has been broadly interpreted to include advice with respect to the avoidance of future taxes.

Much of the work described by the reader appears to concern personal issues, but any work having to do with how future estate taxes might affect the couple and how they could structure their affairs to have the flexibility to deal with future changes in tax law as well as the growth of their estate would be deductible, the columnist said.

The issue is figuring out how much of the work was for which purpose. It would require an itemized bill, he said.

If any of the fee was used for business planning, the fees could be allowed as ordinary business expenses, he noted.

Some Can’t Stay Retired

January 14, 2015

Filed under: Retirement Planning — admin @ 9:00 am

Many people can’t wait for the day they can retire. Others, though, have no plans to quit working. Or they do retire, then decide they can’t handle it.

A story in the New York Times recounts the stories of several folks of retirement age who “failed” at retirement.

One woman opened a fitness club after she retired. She said she loves working.

The story says people over age 55 are swelling the ranks of the work force. Some, of course, work because they have to. In all, the government says there are 33 million people over age 55 still working. That’s about 10 million more than ten years ago.

Many are rethinking the idea of retirement. After all, with people living longer, many are facing 30 or 40 years with nothing to do.

A survey said many are taking steps to figure out what they are going to do next. It could be going back to school or learning a hobby. For some, it was to find another way to earn money, as only 54 percent surveyed said they were financially ready for retirement.

An AARP survey found 55 percent who were still working after age 55 were doing so because they wanted to. Many who found a job after retirement stayed for years.

“Retirement is boring” was a frequent comment.

Why Do Old Folks Smile?

January 7, 2015

Filed under: Elder Care — admin @ 2:14 pm

A famous medical ethicist wrote that the perfect age to die would be 75. But a column in the New York Times offers that by doing so, the ethicist might be missing out on his happiest years.

Surveys show that people in their 20s generally rate their well-being as very high. Then happiness declines in middle age and bottoms out around age 50. But then happiness shoots up again, so that those in their 80s are the happiest.

This may happen because of changes in the brain, the column suggests. Older people are more relaxed. They may get more pleasure out of ordinary activities.

The columnist guessed that people get happier by accomplishing specific skills and get better at handling challenges.

The article also suggests that older people are better at seeing things from differing perspectives. There is more empathy. More insight.

Its an interesting issue to ponder as we age.

Mike Nichols Did It The Smart Way

December 24, 2014

When fabled movie director Mike Nichols died recently, a story in the New York Daily News said that he “left his estate to his widow, Diane Sawyer, and his three adult children.”

The article went on to say that his $20 million estate was split between Sawyer and his three children, “according to estate papers.”

It quoted from his will that he left his “tangible personal property” to Sawyer. But that applies only to such items as jewelry, art and furniture, says a later story on

In all likelihood, the second story says, he had a revocable living trust so that his wishes were shielded from the public. So, it says, the public does not know how he split his assets, aside from the tangible personal property. We do not know whether he split his assets between his wife and children, or left them all to his wife, or all to his children, or all to charity.

As a result, the latter story says, you cannot believe everything you read. The original story in the Daily News only gave part of the picture.

The moral of the overall story is to use a revocable living trust, as Nichols apparently did, to avoid probate and provide a privacy advantage.

Joan Rivers’ Unusual Estate Planning Move

December 17, 2014

Filed under: Estate Planning,Estate Tax — admin @ 9:00 am

Comedienne Joan Rivers, who passed away in September at age 81, had an unusual estate planning strategy.

Her will shows she sought to reduce her tax burden by claiming residency in one state and being based in another.

Her will, according to an article on, stated that Rivers is a resident of New York, but declares her state of domicile — the place where she intends to reside indefinitely on a permanent basis – is California.

It claimed that the laws of California will apply if she were domiciled in California when she died.

The declaration may make a difference with respect to estate taxes, according to the story.

New York and California have high income taxes, but New York still has an estate tax of 16 percent, the story says.

The ruling may be left to state tax authorities who look at voter and vehicle registrations, driver’s licenses, and other factors to determine where a person is based.

Estate Planning For Singles Is Different

December 10, 2014

The ranks of those who are single are growing by leaps and bounds. Today, about half of Americans are single, compared to just one-third in 1970.

Singles, however, have some unique challenges when it comes to estate planning.

For one thing, if you die without a will and are married, your estate goes to your spouse. But if you are single and die without a will, your assets may be distributed in ways you might not have wanted, says a story in the Wall Street Journal.

In most cases, your estate would pass along bloodlines, first to children, then to parents and then to siblings. If no living relatives were to be found, the money would go to the state. There would be no chance for any money to go to close friends, unmarried partners or charities.

For these reasons and others, it is important for single people to at least have a will or revocable living trust stating specifically how their assets should be distributed upon death.

In addition, if a single doesn’t appoint someone to handle his or her financial and medical affairs in the event of incapacity, the duties could fall to a distant relative or a stranger appointed by the state.

So you should sign a power of attorney and health care directive.

Accounts with beneficiaries, such as retirement accounts, go to those who are named as beneficiaries, no matter what your will or trust says. So it is important these documents be up to date.

Care At The End Of Life

December 3, 2014

A huge issue is how people can obtain the best possible care – and the care they want — at or near the end of life.

An editorial in the New York Times describes the ordeal a New York City woman went through trying to get care for her ailing father, constantly being frustrated at every turn by rules and facilities that operated at cross purposes and not necessarily in the best interests of the patient.

The patient was bounced back and forth among hospitals, nursing homes and agencies that seemed most interested in grabbing the money that comes with the patient. But he couldn’t get the home hospice care he wanted.

One of the problems was no coordination between Medicare and Medicaid.

But the story says such patients may soon get help. The state of New York says it will appoint an ombudsman to protect patients’ interests in seeking community or home care.

The state has also appointed a private contractor to determine who is eligible for managed long-term care. And it has set up a demonstration program in certain counties in which teams will work with patients and family members to develop care plans to meet patients’ needs.

The actions come after the Institute of Medicine called for an overhaul of how care is delivered at the end of life.

Uptick In Pet Pre-Nups

November 26, 2014

Filed under: Married Couples,Pre-Nups — admin @ 8:50 pm

The latest thing that divorcing couples are fighting over?

Custody of pets.

A story in the Boston Globe says because more and more couples are fighting over pets lawyers are recommending prenuptial provisions for pets — pet prenups.

One reason is that pets are considered property, not dependents.

Thus, the pet’s needs or best interests are not considered in court.

Some judges refuse to hear arguments about pet custody and insist the couples settle such matters on their own. They don’t want to hear about who walked the dog most often or who fed it.

Similarly, when couples are fighting over a car, a judge doesn’t want to know who changed the oil the most.

Because of all this, some lawyers are recommending couples sign pet prenups.

But joint custody is not seen as ideal, the story says.

That’s because animals like consistency.

But, then, don’t children too?

How Your Ex Can Inherit Your Savings

November 19, 2014

If you have a will, you probably believe you’re all set. Everything seems in place.

But that’s not necessarily so. An article on notes that many people are not aware that wills don’t have the final say about money that is in your retirement plan, such as a 401(k) or IRA.

The one who is listed as the beneficiary of these accounts gets the money no matter what your will says.

So if you divorce and don’t update the forms for these accounts, your ex gets the cash.

The lesson: make sure those forms are up to date.

If you have an IRA, check with your financial institution that holds the account. If you have a 401 (k), talk to your company’s human resources department. And if you still have an old 401 (k) from a prior employer, roll it over into an IRA.

In addition, make sure to designate secondary beneficiaries on these accounts in case your primary beneficiary dies before you do.

If you have a will, talk to your estate planning attorney about having your estate be the beneficiary of your retirement plans.

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