Orlando Florida Estate Planning Attorney Linda Solash-Reed P.L writes about issues related to Estate Planning, Elder Law, Florida Medicaid, Special Needs Planning, Long-term Care Planning, Estate Taxes and Inheritance, Guardianship, and Probate Administration.
Every stage of life presents its own estate planning issues and areas of concern. Retirement is no different.
Most estate planning attorneys advise people to review their estate plans every couple of years to make sure the plans are still effective and desirable. At a minimum, attorneys advise that any significant life changing event should trigger an estate plan review and possible update.
Retirement is a significant life changing event and a good time to review your estate plan as retirees have special considerations that need to be reviewed in their plans.
Gifting Provisions – Many estate plans include provisions to allow ongoing gifting should that be necessary to avoid the estate tax. Retirees who know their estates will fall under the estate tax exemption might want to remove those provisions as they could be a tool unscrupulous people use in elder financial abuse schemes.
Where to Live – The state you live in during retirement and where you create your estate plan can be very important as income taxes, state estate taxes and estate planning laws are different in different states.
Retirement Trusts – These are interesting vehicles for people with IRAs who are planning on leaving money in the accounts for the benefit of their children. The trust allows the children to disclaim a portion of the IRA for the benefit of their own children. Thus, if the child does not need the full amount because he or she has plenty of other assets, the IRA funds can continue to grow and be available when needed by your grandchildren.
As an estate planning attorney, I encourage you to contact me for help with these and other estate planning matters.
As if the estate of B.B. King did not have enough issues to sort out, a photographer has filed a suit against the estate and Universal Music Group alleging copyright infringement.
Some celebrity estates, such as those of Michael Jackson and Prince, are guaranteed to receive media attention for years no matter what happens. Other celebrity estates are not in the news nearly as much, but that does not mean they are not every bit as messy as those receiving more attention.
B.B. King’s estate is one of those that has not received much attention and it is shaping up to be a big mess.
King is known to have fathered at least 15 children by 15 different women. It is going to be difficult to sort out who gets what. With that battle underway the last thing the estate needed was to face a lawsuit.
Photographer Glen Craig alleges that pictures he took have been used without permission on King’s albums since 1971. The pictures have been used on several different albums, including those that have come out within the last year.
Craig is suing King’s estate and Universal Music Group, which produces King’s albums.
At this time there is very little detail available about the lawsuit, but it should be cause for great concern for the estate. The penalties for copyright infringement can be very high.
Should Craig prevail the pool of assets available to divide between King’s 15 children could be reduced significantly.
Some people like to use their own deaths as a last way to take shots at and settle scores with people that they do not like as those people have no way to respond directly. A German man did so in an unusual way.
Some people do not like certain members of their families. That is only natural as we cannot choose who is in our family and it is unrealistic to think everyone will get along well with everyone else. Most people tend to minimize their differences with family members and not look for disagreements that could hurt other family members. However, there are some people who just cannot do that.
Take the case of a German man named Hubert Martini. Hubert was definitely not one to let conflicts with family members go. He wrote his own obituary, which was dutifully printed by a newspaper when he passed away.
In it Martini wrote that his five siblings and their families were all banned from his memorial service.
While most people do not go so far as to ban certain relatives from their funerals, the desire to take shots at disliked family members is not all that rare. Many people have sought to do so in their wills or by creating separate documents that should be distributed at their deaths to air their last grievances with family members.
The problem? This often creates discord in the family and hurts even those family members who are not mentioned negatively. People who want to use their deaths to settle scores should first consider whether they really do want other family members to take the collateral damage.
The laws concerning digital asset estate planning are a patchwork. Some states have specific laws and others do not. The technology companies that host digital accounts each have their own policies which further complicates things.
What happens to your digital assets after you pass away? This is something of a legal grey area.
If you live in a state that has not passed any laws concerning access to a deceased person's digital accounts, then the policies of each company with which you have an account will determine who will have access to them and under what circumstances.
A few states have specific laws on the books, including Florida as of July 1, 2016, but even those laws vary from state to state. In 2014, the Uniform Law Commission sought to remedy this situation by drafting model legislation for states to pass. More than half the states looked like they were going to pass some version of the legislation. However, technology companies lobbied fiercely against it.
In response, the model legislation was revised in 2015 to address the concerns of the technology companies. As Private Wealth points out in "The Virtual Estate," there is an extremely important difference between the two versions of the legislation.
In the original version someone who did not want his or her digital assets to be handled under the law could "opt-out" of it. However, the revised version requires people to specifically "opt-in" to the provisions of the legislation in their wills for their digital assets to be handled under the law. Thus, people without wills would not have their digital assets handled according to the legislation's provisions.
Creating a trust can be complicated and even experts make mistakes. There are some common mistakes that are made that you should be aware of to make sure that your lawyer does not make them.
When you hire an attorney to create a trust for you, do not assume the attorney should do everything. Creating a trust should be a partnership between the attorney and the client.
The attorney needs the client to adequately work with him or her so the attorney has all the information needed to draft an effective trust. If that does not happen, then, as Barron's Penta Daily discusses in "Five Killer Mistakes Trust Lawyers Make," there can be problems with the trust.
Common mistakes include:
Inheritance Planning – An attorney can make sure all of your current assets are planned for, but if you are expecting to receive a large inheritance in the future, then your attorney needs to know about that so it can be planned for as well.
Multiple Attorneys – If you have different attorneys for different estate planning documents, then it is more likely that there will be contradictions in those documents. That can be expensive to sort out.
Multiple Beneficiaries – It should not be assumed that one trust will work for everyone you wish to name as a beneficiary. Treat them as uniquely as circumstances require.
Decanting – Attorneys and clients need to discuss whether the client wants trustees and beneficiaries to be able to modify the terms of the trust at a later date, to include "forum shopping" when it comes to finding more favorable state laws.
Trust Termination – It is not always a good idea to create a trust that terminates at a specific time no matter what happens.
If you are considering retiring to a state with community property laws, you should consider how your estate plan could be affected.
Chances are you do not live in a community property state (you do not if Florida is your legal residence). Only a handful of states have community property marriage laws. However, some of the states that do have them are popular destinations for people to move to. For example, Arizona is a popular retirement destination with community property laws.
The main difference between community property states and other states is in how marital assets are considered to be legally owned. In a community property state everything acquired during a marriage is considered to be equally owned by the husband and wife except for any inheritances solely made to one of them. Property acquired before the marriage is not community property.
This is different from other states where spouses can continue to acquire separate property after marriage.
Capital Gains – Community property states have a benefit for surviving spouses because the spouse receives a step-up basis on an entire home, for example, instead of only half the value of the home in other states.
Gifts – If one spouse gives a gift of community property without the permission of the other, the spouse who did not make the gift can revoke it later.
Life Insurance Trusts – Funding a life insurance trust for the benefit of a spouse needs to be done from non-community property or the entire purpose of the trust will be defeated.
A recent study revealed that more Americans than ever are unhappy or dissatisfied in retirement. If you are one of them, getting your affairs in order might help your security and satisfaction.
When working people think about retirement, they normally look forward to it. After all, retirement is supposed to be the reward for years of long work. Once retired, retirees no longer have to pay attention to a work schedule. They can do what they want when they want to do it.
Life is complicated enough. No longer "having to work" is not a miracle cure that can make everyone happy. It seems today that a greater percentage of people are unhappy and dissatisfied in retirement than in previous decades.
The reason for the increase is not exactly known. It has been suggested that more retirees are financially insecure than in previous generations. Others say it might be the result of more people having unreasonable expectations about retirement or merely a generational shift as Baby Boomers retire in greater numbers.
While happiness can be very elusive, satisfaction can be less so. For most people there is a certain level of satisfaction in knowing their affairs are in order in case there is an emergency. Thus, getting advanced medical directives and a general durable power of attorney will help with retirees' satisfaction levels.
Getting a complete estate plan should help as well because there is also satisfaction in knowing that family will be taken care of should anything untoward happen to you.
Senior citizens who make arrangements to pay for their own funerals should be on the lookout for hidden fees in the plans they purchase.
Bob Lockler of Kansas City did not want to leave his family with the burden of paying for his funeral, so he made his own arrangements. He purchased a burial plan from a local funeral home and paid installments on it for 12 years. When he thought he had paid for everything, he was surprised by another bill that suggested he still owed thousands of dollars.
Some of the items on this new bill turned out to be suggestions and not necessary. However, there were other charges that were necessary for him to pay, including the costs of digging his grave, opening and closing the casket, and the sales tax on the casket. That Lockler would have to pay these additional charges was buried in the fine print of his contract with the funeral home.
It is important to be certain exactly what you are "buying" when you purchase a funeral plan. Senior citizens on fixed incomes cannot afford to be hit with a larger bill than they expected. Ask the person selling you the plan if there is anything the plan does not cover.
The Federal Trade Commission offers a checklist you can use to make sure you are getting everything you need. If you are still uncertain about what you are paying for, then you can always ask an elder law attorney to review any contracts before you sign them. If I can assist with this or other types of contract concerns, please get in touch.
Michael Jackson's estate has enough legal problems and certainly did not need any more controversy, especially the latest publicity nightmare to hit the news.
The estate of Michael Jackson is currently embroiled in a fierce battle with the IRS over how much it owes the federal government in estate taxes. If the IRS wins the case, then the estate will need millions of dollars to pay an extraordinary bill.
One way the estate could pay those taxes is by profiting off of the expected renewed interest when the 10th anniversary of the singer's death comes in 2019. However, the latest revelations could make that more difficult.
At the time of his death Jackson was disgraced, but hoping to make a comeback. Although he was found not guilty of child molestation charges the accusations had taken a toll on his popularity. Much of that was forgiven by fans after Jackson passed away.
The estate claims everything in the police report is false. However, the Santa Barbara County Sheriff's Office has confirmed that the released documents appear to be their reports generated during the investigation into the child molestation charges.
In order to maximize the value of Jackson's music and publicity rights, Jackson's estate will have to hope fans either forget or forgive these latest revelations. If fans do not, the estate's fight with the IRS over the estate tax will take on even more importance.
According to reports the Colorado inmate who claimed to be Prince's long lost son has been determined to not be related to the deceased musician.
In the first of what will most likely be many paternity determinations in the estate of Prince, it has been reported that Carlin Q. Williams has been determined to not be related to Prince through DNA testing. Williams in currently serving time in federal prison.
Nevertheless, Williams' mother, Marsha Henson, claims she had an affair with Prince in 1975 and no one else could have been Williams' father. She continues to believe Prince is the father of her son and disagrees with DNA findings that someone allegedly close to the case informed the press of on condition of anonymity.
Out of the known people who claim to be related to Prince and who are requesting a share in his estate, Williams received the most attention because of his status as a federal prisoner and also the plausibility of his mother's story. However, as the judge overseeing the estate wisely ordered that Prince's DNA be preserved, Williams' claims could be dismissed easily and quickly.
More challengers still remain and one of them may yet still prove to be the child of Prince. Those claimants will also have to prove it through DNA testing.