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.

Estate Planning For Your Collectibles

November 12, 2014

Filed under: Asset Protection,Collectibles,Estate Planning — admin @ 2:43 pm

People can spend a lifetime amassing things they love, like baseball cards or comic books, even art. But they often pay scant attention to what happens to these prized possessions when they die.

They may hope their children will develop a passion for the collectibles that they loved, or they may hope some other collector will pay a lot of money for these items.

Without planning, however, the odds are that these dear items will be dumped at a yard sale, says a story in the Wall Street Journal.

And the owners could miss out on tax savings, the story adds.

Here are a few things collectors can do whether they decide to pass their items along, sell them or even donate them to a collection:

  • If you want to pass them on, make sure there is someone in the family who is interested in the collection. And be sure that person can afford the upkeep, including insurance and storage. If more than one person is interested, how do you split the collection up? You may need to have the collection appraised to answer these questions. You could also start gifting parts of your collection before you die.
  • If you choose to sell, you need an independent appraisal to determine the collection’s fair value. Collectibles are taxed at the higher capital gains rate of 28 percent, by the way.
  • Donating. It may not be that easy to find an institution willing to accept the items.

‘Do It Yourself?’

November 5, 2014

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

Some people like to do things for themselves. They grow their own fruits and vegetables. Raise their own chickens. Fix their own toilet problems.

But one place where doing it yourself may not be such a smart idea is estate planning, says a story in the Times Herald-Record newspaper in New York’s Hudson Valley.

You can find do it yourself tools for estate planning easily on the internet. They are inexpensive and not hard to use. You can create wills and trusts at a fairly low cost.

But the article says not to forget: you get what you pay for.

One estate planning attorney quoted in the story said such documents are easy to contest in court.

If your circumstances include children from a previous marriage, those with special needs, a business or any substantial assets, you really need the expertise of an estate planning attorney, the story notes.

Do it yourself sites provide documents, but not legal advice.

In addition, laws change all the time. Just this year, New York changed its estate tax exemption.

Bottom line: Weigh the risks and rewards of doing it yourself. If in doubt, seek the advice of an estate planning attorney.

Some Myths About Trusts

October 29, 2014

Filed under: Estate Planning,Trusts — admin @ 1:51 pm

Lots of people misunderstand how trusts work. And there are several common myths about trusts that should be dispelled.

Three of these myths, according to a story on, are:

  • Trusts are only for the rich.

Many people think trusts are so costly they only make sense for the rich. The truth is that while trusts can be more expensive than only having a will, the upfront costs help produce valuable savings later by avoiding costly probate. In addition, if a family member is willing to be the administrator, the administrative costs can be minimized.

  • Trusts are too much work.

Moving assets into trusts doesn’t have to be difficult. In many cases, simple methods may be used such as naming the trust as a payable-on-death or transfer-on-death beneficiary to fund the trust without having to take immediate action. These also avoid the need for probate.

  • Trusts are not needed before death.

A trust established before death can handle management of your affairs while you are alive if, for example, you are incapacitated.

Estate Planning Not Just For The Rich

October 22, 2014

Filed under: Estate Planning,Estate Tax,Trusts,Wills — admin @ 1:39 pm

A common misconception holds that estate planning is only for the wealthy, as a way to save on taxes.

An article on says that nothing could be further from the truth.

Estate planning is all about giving what you want to whom you want, how you want and when you want – with the least amount of taxes and expenses, it says.

Your estate includes anything you own or have control over — your house, retirement accounts, a business or proceeds from a life insurance policy.

A will names the person who will distribute the estate and the recipients. Everybody should have a will, the story suggests.

Those without a will have their assets subjected to the whims of state law.

A revocable living trust can be established by parents to segregate any existing assets from those of a future new spouse and protect their own children from the negative impact of a second marriage.

Say a married couple with two children has a will and enough resources to support the surviving spouse and children should the husband pass away. That’s great. But if the widow remarries, puts her assets in joint name with her new husband, the children from the first marriage are effectively disinherited.

A living trust sets the terms according to what the parent thinks is in the children’s best interest. Most young people would have trouble managing a large windfall.

If you are self-employed, who will run your business if you pass away? A trust could set out the terms of who might take it over and how.

And there is the matter of estate taxes of course. The article recommends you talk to your estate planning attorney to come up with a plan that would minimize federal and state inheritance taxes if they apply to you. While there is currently a federal exemption for estates worth under $5.34 million, states may impose taxes on estates worth considerably less than that.

What To Consider When Picking Heirs

October 15, 2014

Filed under: Asset Distribution,Beneficiaries,Estate Planning,Family — admin @ 9:00 am

Photo Credit: Getty

Who is going to get your money when you die?

A story in Forbes says the most difficult part of estate planning is determining who gets what and when.

The article says the process is emotional and involves a number of trade offs.

It suggests using the following questions to help you make your decisions:

  • How much money would you like to give to charity and how much to your family?
  • Are you going to divide your assets equally among your heirs, or will you base the division on some other factors, like good behavior?
  • Are your heirs able to handle managing the money?
  • Do you want to give gifts now or after you die or both?
  • What do you intend to do with items such as art?
  • How to you plan to convey your decisions to your heirs?

You need to think seriously about these things before making your decisions. Of course, your estate planning attorney can help you with these issues.

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