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Trustee of Late Singer Tony Bennett’s Estate Sued

What Happened to Tony Bennett’s Estate?

For many, estate planning is a distant concern. However, life events can bring it suddenly into focus. A DailyMail headline involving the late singer Tony Bennett exemplifies this. He passed without a robust estate plan, leaving his children and widow embroiled in a legal battle over his estate. We must ask ourselves an important question: how can we avoid these estate disputes?

Why Do Families Fight Over Inheritances?

Family conflicts over inheritance are tragically common. According to The Conversation, there are several reasons why these disputes arise:

  • Lack of Clear Instructions: A vague will or estate plan leaves room for interpretation and disagreement.
  • Unresolved Family Issues: Long-standing family tensions can resurface during the emotionally charged period after a loved one’s death.
  • Perceived Fairness: Different family members might have varying opinions on what constitutes a fair distribution of assets.

In Tony Bennett’s case, the daughters are suing their brothers and his widow. The brother is the sole executor of the state, and he’s allegedly failed to be transparent with his sisters.

Trustee of Late Singer Tony Bennett’s Estate Sued

Tony Bennett’s daughters, Antonia and Johanna Bennett are the plaintiffs in the suit. The defendant, their brother D’Andrea “Danny” Bennett, has allegedly mishandled the estate. According to his sisters, he has failed to disclose their father’s assets and answer their questions.

The sisters estimate the value of their father’s estate to be much greater than what their brother has reported. They specifically claim that their brother did not account for proceeds from the sale of Tony Bennett’s music catalog and image rights when he worked as their father’s manager. They’ve also named their brother Daegal “Dae” Bennett and Tony’s widow, Susan Benedetto, as defendants.

What to Learn from the Battle over Tony Bennett’s Estate

Tony Bennett’s story is a cautionary tale. Whoever is right, a lack of clarity and ambiguity in their fathers’ finances has torn a family apart. While few of us have an estate the size of Tony Bennett’s, even a more modest estate can spark strife. Avoiding litigation and protecting your wishes requires a thorough, detailed estate plan and an impartial executor.

Can You Avoid Estate Litigation?

Creating a detailed will and trusts are the foundation of good estate planning. A few key principles include:

  • Plan Ahead: Don’t wait until it’s too late. Start planning your estate now.
  • Appoint a Trusted Executor: The battle over Tony Bennett’s estate began with the executor’s alleged mismanagement. Avoiding conflicts requires choosing a capable, impartial executor.
  • Seek Professional Help: An experienced estate planning attorney can help you navigate the complexities and ensure that your wishes are honored.
  • Review and Update Your Plan: Life changes, and so should your estate plan. Regularly update your documents to reflect your changing circumstances and wishes.

How can an Estate Planning Attorney Help?

An estate planning attorney can provide invaluable assistance in several ways. They can draft a detailed will that’s legally binding and reflects your wishes. They can also set up different trusts to manage your assets, protect your wealth, and provide for your loved ones in a structured manner. Intelligent estate structuring can minimize your tax liabilities to preserve wealth for your beneficiaries. At the bottom line, a good estate planning attorney can help you protect your legacy for when you’re gone.

Reliable Estate Planning Attorneys

Don’t leave your family’s future to chance. By taking proactive steps, you can avoid the kind of disputes that Tony Bennett’s family is facing.

Contact us today to protect your estate. Our team is here to help you create a comprehensive estate plan that honors your wishes and protects your loved ones.

Key Takeaways

  • Avoid Family Disputes: Proper estate planning can help prevent conflicts among heirs.
  • Clarity and Communication: Clear instructions and open communication reduce misunderstandings.
  • Select a Reliable Trustee: Choosing a trustworthy executor is crucial for smooth estate administration.
  • Regular Updates: Keep your estate plan current to reflect life changes.
  • Professional Guidance: An estate planning attorney can ensure that your wishes are legally sound and honored.

References: DailyMail (June 15, 2024) “Tony Bennett’s daughters break their silence after suing brothers and late singer’s widow amid bitter inheritance battle over their father’s estate” and TheConversation (May 17, 2022) “Why families fight over inheritances – and how to avoid it”

What’s the Best Way to Simplify an Estate?

Yes, you need to create your estate plan and decide how you want your money and real estate property to be distributed upon your death. However, there’s more. A recent article from Morningstar, “Your family will love you even more if you simplify your estate,” says you should also simplify your assets to simplify your estate.

How you have your financial life arranged now may seem simple enough to you as you navigate it regularly. You know where your accounts are, how much is in each account and who the beneficiaries are of any account, having the option of naming a beneficiary. If you don’t know who the beneficiaries are, take care of this right away.

However, for your executor and your heirs, those same accounts are a series of unknowns. If a single financial advisor doesn’t handle your investments, can you bring them under one person’s management? If you have accounts in more than one bank, can you consolidate them into one bank?

A record number of boomers will turn 65 in 2024. The “great wealth transfer” of a generation owning $72.6 trillion and passing this along to younger generations has led many to prepare accounts and heirs for what will come in the next twenty years. This includes creating a comprehensive estate plan with a will and trusts. Most experienced estate planning attorneys advise their clients to create a revocable living trust to avoid probate, which can be costly, stressful and time-consuming.

Probate is considered one of the most complex parts of inheritance. Distribution will be far simpler if you can remove most of your assets from being part of your probate estate. Trusts can also protect assets in a way wills cannot. It’s far more challenging to contest a trust than it is a will. If your family is prone to infighting, you want to place assets into trusts!

Talk with your estate planning attorney about a “pour-over will.” This is a will directing any assets not already in your trust to be “poured over” into the trust upon your death. You’ll also want to have a financial power of attorney, healthcare power of attorney, living will and HIPAA release. These documents allow the people you designate to take care of your financial, legal and health if you should become incapacitated.

Once your estate plan is in place, start consolidating accounts. If you have multiple IRAs or 401(k)s from various employers, combine them. You’ve set your heirs up for trouble if you have individual stock certificates in your bank’s safe deposit box. First, the safe deposit box will be sealed upon your death, unless someone else owns the box. Second, stock certificates must be settled through a stock-transfer company, which requires proof of the owner’s passing and proof of their being legitimate heirs. New accounts need to be opened up for the stocks to be transferred to, and only then can they be retrieved the money from the sale of the stocks.

It can also be difficult for heirs if they have annuities, government-issued bonds, or bank CDs. They all must be found, and distribution rules must be uncovered and processed.

After having your estate plan created and consolidating accounts, create an inventory of all accounts, including digital assets (usernames and passwords will be needed), and place them in a file with keys to your safe deposit box, life insurance policies and estate planning documents in one place. Make copies of your credit cards, front and back as well.

Having this information in one place will make managing your estate far easier. Your loved ones can focus on their memories and not be overwhelmed by the details.

Reference: Morningstar (June 18, 2024) “Your family will love you even more if you simplify your estate”

What Happens When Executors Keep Beneficiaries in the Dark?

A couple who never had children created a will, leaving their six nieces and nephews equal shares of their estate upon their deaths. When the uncle died, the aunt remarried years later but never changed the will, except for giving her second husband a life tenancy in the family home. A recent article from Market Watch asks if what happened next is right: “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”

The problems began when the aunt’s attorney told the nieces and nephews that they were responsible for the taxes and property insurance while the life tenant lived in the home. The nieces and nephews had never seen a copy of the will, so they are unsure of their responsibilities as remaindermen. Nothing in the estate needed to go through probate, so the aunt’s will was not available to beneficiaries through the county court.

This case illustrates several important estate planning points. First, an executor of a will (or an administrator of an estate) is required to keep beneficiaries “reasonably informed” of the will’s contents after probate. It seems reasonable for the nieces and nephews to be able to see the will.

In most cases, the person given the life tenancy is responsible for paying taxes and property insurance and for the general upkeep of the residence. Any other arrangement is unusual, so the nieces and nephews are right to want to see the will.

The life tenant has rights, including the ability to rent out the property. However, they can’t do anything to decrease the house’s value. It’s important to know that elderly people may be unable to apply for Medicaid because they live in the house this way.

If it has been months since the person died and there hasn’t been any communication from the executor, a few different scenarios are possible. It may be that the executor doesn’t know they are required to keep beneficiaries informed. However, it’s also possible that the executor is engaging in illegal behavior.

In most states, the executor is responsible for providing beneficiaries with a complete inventory and appraisal of all the estate’s assets. Depending on the state, probating an estate may take more than six months, and creditors have a certain number of months to file a claim.

Suppose the beneficiaries wish to replace the executor. In that case, they can do so by speaking with an estate planning attorney and being prepared to go to court and prove the executor is either self-dealing, incompetent or has a conflict of interest.

However, once the will is probated, it will become part of the public record and must be filed in probate court. Depending on the jurisdiction, the court will give the beneficiaries the right to access the will.

The best option for the nieces and nephews is to consult an estate planning attorney to explore their options. If they live in a different state, a local estate planning attorney can recommend someone in their aunt’s jurisdiction to help.

Reference: Market Watch (April 28, 2024) “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”

What Will Happen to O.J. Simpson’s Assets?

A wrongful death lawsuit in 1997 found O.J. Simpson liable for the deaths of ex-wife Nicole Brown-Simpson and her friend Ron Goldman. Yet, their families have received little of the $33.5 million judgment levied by a California civil jury. According to an article from The Washington Post, “If O.J. Simpson’s assets go to court, Goldman, Brown families could be first in line,” we may find out soon whether or not Simpson had done any estate planning.

If Simpson had only a will, the estate would go through the probate process in court. Probate laws vary from state to state, but generally, the estate is filed in the person’s state of residence. Simpson resided in Nevada but might have owned assets in California or Florida, where he resided at different times. If that’s the case, separate probate cases will also be opened in those states.

The Nevada probate rule requires an estate to go through probate if its assets exceed $20,000 or the decedent owns any real estate. Probate must take place within 30 days, so things may happen quickly.

If no documents are filed, creditors can file claims to recover assets. The Goldman and Brown families may not be alone in filing for assets, but they’ll undoubtedly have a higher visibility than a credit card company or bank.

In California, the law holds that creditors with a judgment are considered to have “secured debt” and take priority over other creditors. In one instance, a family was awarded $9 million by a jury, but the debtor subjected them to a prolonged series of appeals and delays. When the debtor died, the estate paid the $9 million plus accrued interest of $3 million.

Did Simpson leave an estate big enough to cover his debts? At the time of the civil lawsuit, the court seized many of Simpson’s possessions. He was forced to auction his Heisman Trophy, which brought $230,000. He claimed to only have income from pensions, one from the NFL and the other a private pension.

Whether Simpson had a structured estate plan with trusts could affect how his creditors will be compensated. The creation and funding of the trusts will also affect their accessibility. Irrevocable trusts are robust legal entities but may not always be 100% impenetrable.

A transfer of assets made to avoid paying creditors is considered fraud, so any trust could be deemed invalid. If this occurs, the Goldman and Brown families may file separate lawsuits to attach assets in the trust.

You don’t have to be famous to have creditors trying to get assets from your estate. Seeking advice from an estate planning attorney about structuring your estate to shield inheritances from creditors is always advisable.

The Pitfalls of Adding a Child to Your Home’s Deed

As an estate planning attorney, I’ve witnessed many parents consider adding a child to the deed of their home with good intentions. They often view this as a simple strategy to ensure that their property seamlessly passes to their children without the complexities of probate. However, this well-intentioned move can lead to numerous unexpected complications and financial burdens. This article explains why adding a child to your home’s deed might not be the optimal choice for your estate plan.

Understanding the Basics: What Does Adding a Child to a Deed Mean?

To begin, let’s clarify what it means to add a child to the deed of your home. By doing this, you are legally transferring partial ownership rights to your child. This action is commonly perceived as a method to circumvent probate. However, it is imperative to understand that it also entails relinquishing a degree of control over your asset.

Legal Implications of Co-Ownership

When you add your child to the deed, you are not just avoiding probate; you are creating a co-ownership situation. This means your child gains legal rights over the property, equal to yours. Such a shift in ownership can have significant legal ramifications, particularly if you need to make decisions about the property in the future.

Probate: Is Avoiding It Worth the Risk?

Avoiding probate is often cited as the primary reason for adding a child to a home’s deed. Probate can be a lengthy and sometimes costly process. However, it’s essential to weigh these concerns against the potential risks and challenges of joint ownership.

The Complexity of Bypassing Probate

Probate avoidance, while seemingly beneficial, does not always equate to the most advantageous approach. The process of probate also serves to clear debts and distribute assets in a legally structured manner. By bypassing this process, you might be opening the door to more complicated legal and financial issues in the future.

Gift Tax Implications: A Costly Oversight

One of the most overlooked aspects of adding a child to your deed is the gift tax implications. The IRS views this act as a gift, and if the value of the property exceeds the annual exclusion limit, it could lead to a taxable event.

Understanding Gift Tax Rules

It’s important to understand that the IRS has established specific rules regarding gifts. If the value of your property interest exceeds the gift tax exclusion limit, you might be required to file a gift tax return. This could potentially lead to a significant tax liability, an aspect often not considered in the initial decision-making process.

Loss of Control: What Happens When You’re No Longer the Sole Owner?

The loss of control over your property is a critical consideration. Once your child becomes a co-owner, they have equal say in decisions regarding the property. This change can affect your ability to sell or refinance the property and can become particularly problematic if your child encounters financial issues.

Risks of Co-Ownership

In a co-ownership scenario, if your child faces legal or financial troubles, your property could be at risk. Creditors might target your home for your child’s debts, and in the case of a child’s divorce, the property might become part of a marital settlement.

Capital Gains Tax: A Long-Term Financial Burden

A significant financial consideration is the potential capital gains tax burden for your child. When a property is inherited, it usually benefits from a step-up in basis, which can significantly reduce capital gains tax when the property is eventually sold. However, this is not the case when a child is added to a deed.

Implications of Missing Step-Up in Basis

Without the step-up in basis, if your child sells the property, they may face a substantial capital gains tax based on the difference between the selling price and the original purchase price. This tax burden can be considerably higher than if they had inherited the property.

Family Dynamics and Legal Complications

Adding a child to your deed can inadvertently lead to family disputes and legal challenges, especially if you have more than one child. This act might be perceived as favoritism or create an imbalance in the distribution of your estate, leading to potential conflicts among siblings.

Navigating Family Relationships

It’s crucial to consider the dynamic of your family and how adding one child to the deed might affect relationships between siblings. Equal distribution of assets is often a key consideration in estate planning to maintain family harmony.

Alternatives to Adding a Child to Your Home’s Deed

There are several alternatives to adding a child to your home’s deed. Creating a living trust, for instance, allows you to maintain control over your property while also ensuring a smooth transition of assets to your beneficiaries.

Benefits of a Living Trust

A living trust provides the flexibility of controlling your assets while you’re alive and ensures they are distributed according to your wishes upon your death. This approach can also offer the benefit of avoiding probate without the downsides of directly adding a child to your deed.

Seeking Professional Advice: Why It’s Crucial

Given the complexities and potential pitfalls of adding a child to your home’s deed, seeking professional legal advice is essential. An experienced estate planning attorney can help navigate these complexities and tailor a plan that aligns with your specific needs and goals.

The Role of an Estate Planning Attorney

An estate planning attorney can provide invaluable guidance in understanding the nuances of property law, tax implications and family dynamics. They can help you explore all options and devise a strategy that best protects your interests and those of your family.

While adding a child to your home’s deed might seem straightforward to manage your estate, it’s fraught with potential problems and complications. It’s vital to consider all the implications and seek professional guidance to ensure your estate plan is effective, efficient and aligned with your long-term intentions.

Key Takeaways

  • Gift Tax Risks: Be aware of potential gift tax implications when adding a child to your deed.
  • Loss of Control: Understand that you will lose some control over your property.
  • Capital Gains Tax Issues: Consider the long-term capital gains tax burdens for your child.
  • Family Dynamics: Think about the impact on family relationships and potential legal disputes.
  • Better Alternatives: Explore other options like setting up a living trust.
  • Seek Competent Guidance: Consult with an estate planning attorney for personalized advice.

Prevent Difficulties in Probate with Advance Planning

If you think gathering your papers, passwords, logins, account information and estate planning documents is a challenging task, consider your heirs trying to do it after you’ve passed and while they are grieving your loss. By preparing all the information they’ll need, you’ll make their inheritance process as easy as possible, says a recent article from Next Avenue, “6 Ways To Save Your Heirs from a Painful Probate.”

A List of Passwords for Hardware, Online Accounts and More Our cellphones, tablets, computers, online accounts and other technology all hold important information. If your executor tries to access information and accounts, they’ll need more than your passwords. If you have accounts with two-factor authentication, for instance, they’ll need to be able to access your email and/or cellphone to access other digital assets. The list should include things like social media usernames and passwords. The information must be kept somewhere safe where a spouse or executor can find it. Some tech platforms allow you to name a legacy contact with the right to access accounts after you pass. A password manager system might be helpful. However, this may add another layer of frustration for non-technical people.

List All Assets and Accounts with Contact Information. Whether you use a spreadsheet or a notebook, this is crucial information. Make sure to include investment accounts, checking and savings accounts, 401(k)s, IRAs, pension accounts, brokerage accounts, etc. Provide contact information for your estate planning attorney, accountant and financial advisor.

The information must be well organized because it will be a lot of data. Your executor will also need the accounts for running your household, paying utilities, mortgage, cable, etc. The same goes for health insurance, Medicare or Medicaid information, life insurance policies, car insurance and deeds to your home and car.

Tell the Executor and/or Heirs Where Your Information is Located. One estate planning attorney reports receiving a few monthly calls from grieving heirs who have no idea where the estate planning documents are, who takes care of the financial accounts, or how to access these accounts. Sometimes, the calls come from people who aren’t even clients but are hoping there might be some special resource known to estate planning attorneys to provide this information. There is no such thing.

Plan for the Unexpected A significant part of estate planning is planning for financial and healthcare decisions while you are still living. A living will details whether or not you want to be kept alive by heroic or artificial means, and a power of attorney authorizes someone to make decisions on your behalf. Without a POA, the person may recover from their medical emergency to find a financial mess of late bills, missed insurance premiums, or a host of issues that could have been dealt with on their behalf. Without healthcare surrogate documents and discussions of your wishes in difficult health situations, the family will need to make difficult healthcare decisions in highly stressful situations.

If the proper documents are not in place, the family must go to court to have someone named a guardian, who can then make health care decisions for you. The same process will be needed to have someone manage your financial affairs, called conservatorship. These are expensive and invasive court processes that can easily be avoided.

Talk with your estate planning attorney and family members to plan for the future. You’ll all feel better knowing that you’ll all be prepared when difficulties arise.

Reference: Next Avenue (Jan. 9, 2024) “6 Ways To Save Your Heirs from a Painful Probate”

Top 5 Estate Planning Nightmares You Can Avoid with a Will

In the realm of estate planning, a common adage rings true: “Failing to plan is planning to fail.” As an experienced estate planning attorney, I’ve witnessed firsthand the turmoil and heartache that can ensue when individuals neglect the crucial step of drafting a will. This blog post is a clarion call to take control of your future and protect your loved ones from the all-too-common nightmares that arise from inadequate estate planning.

Family Disputes and Conflicts

The absence of a will can be the catalyst for family disputes that echo for generations. Imagine a scenario where siblings are torn apart, not by grief, but by the ambiguity of asset distribution. A will acts as a clear voice from beyond, guiding your family during a time of loss and preventing disputes that can irreparably fracture familial bonds.

Unintended Beneficiaries

Imagine your hard-earned assets falling into the hands of a distant relative you barely know, or worse, someone you wouldn’t have chosen to benefit from your estate. This isn’t just a hypothetical situation—it’s a reality for many who pass away without a will. Your will is a beacon, ensuring that your assets find their way into the right hands—those you specifically choose.

Delays and Additional Expenses

The probate process without a will is akin to navigating a ship through a storm without a compass. The journey is longer, fraught with legal complexities, and often more costly. By drafting a will, you provide a map that steers your estate through the probate process swiftly and efficiently, sparing your loved ones from unnecessary financial and emotional burdens.

Loss of Control Over Asset Distribution

Without a will, you relinquish control over who inherits your assets. State laws, devoid of personal sentiment, take the helm. This loss of control is especially critical if you have minor children or dependents whose future you wish to secure. A will is your tool to ensure that your specific wishes for your children’s guardianship and the distribution of your assets are honored.

Increased Legal Challenges

An estate without a will is fertile ground for legal disputes. These battles can drain your estate’s resources and leave your loved ones embroiled in legal quagmires. A well-crafted will is a shield, protecting your estate from the arrows of litigation and providing a solid legal foundation that upholds your wishes.

In conclusion, the nightmares of estate planning can be easily avoided by drafting a will. It is a fundamental step in ensuring your peace of mind and the well-being of your loved ones. Remember, a will is more than just a document; it’s a testament to your life, wishes, and legacy.

Don’t let indecision today lead to turmoil tomorrow. I invite you to take the first step in securing your legacy and safeguarding your family’s future. Contact me for a free consultation to discuss your estate planning needs. Together, we can craft a will that reflects your wishes, protects your assets, and provides clarity and comfort to your loved ones in times of need.

Remember, planning today creates peace of mind for tomorrow. Let’s embark on this journey together.

Key Takeaways

  1. Prevent Family Disputes: A will is essential to avoid familial conflicts over asset distribution, ensuring your wishes are clearly understood and respected.
  2. Control Over Beneficiaries: It enables you to designate precisely who receives your assets, preventing unintended beneficiaries from inheriting your estate.
  3. Efficient Probate Process: Drafting a will streamlines the probate process, reducing delays, complexities, and additional expenses for your loved ones.
  4. Guardianship of Dependents: A will allows you to make critical decisions about the future of your minor children or dependents, ensuring they are cared for as per your wishes.
  5. Legal Protection: Having a will minimizes the risk of legal challenges, protects your estate from potential disputes, and preserves its value for your beneficiaries.

Frequently Asked Questions

Why is a will important if I don’t have a large estate?

A will is crucial regardless of the size of your estate. It ensures that your assets are distributed according to your wishes, no matter how modest. It also helps appoint guardians for minor children and can minimize legal complexities for your loved ones.

Can I write my own will, or do I need an attorney?

While writing your own will is possible, consulting an experienced attorney is advisable to ensure that it meets legal requirements and accurately reflects your wishes. An attorney can help avoid common pitfalls that might render your will invalid or ineffective.

What happens if I die without a will?

If you die without a will, your estate will be distributed according to state intestacy laws, which may not align with your personal wishes. This can lead to unintended beneficiaries receiving your assets and complicate matters for your loved ones.

How often should I update my will?

Reviewing and possibly updating your will every 3-5 years or after major life events such as marriage, divorce, the birth of a child, or significant changes in your financial situation is recommended. This ensures your will remains relevant to your current circumstances.

Can a will reduce taxes on my estate?

A well-planned will can help in minimizing estate taxes. An estate planning attorney can guide you in structuring your will and other estate planning tools to maximize tax efficiency and preserve the value of your estate for your beneficiaries.

Don’t Gamble with Your Future: Why Choosing the Right Estate Planning Attorney Matters

Introduction

Estate planning: two words that encapsulate the entirety of your life’s work and the legacy you wish to leave behind. It is a profound yet often misunderstood aspect of personal finance and legal preparedness. As an experienced estate planning attorney, I’ve seen firsthand the turmoil and heartache resulting from inadequate or nonexistent estate plans. This post aims to illuminate the crucial role of a skilled estate planning attorney in securing your future and the well-being of your loved ones.

Understanding Estate Planning

Estate planning is not merely drafting a will; it’s a comprehensive approach to managing your assets, health directives, and your legacy after you pass away or if you become incapacitated. Common misconceptions, such as the notion that estate planning is only for the wealthy or that it can be postponed until later in life, often deter people from taking the necessary steps. In reality, estate planning is a vital process for everyone, regardless of the size of their estate.

The Risks of DIY Estate Planning

In the era of do-it-yourself solutions, it’s tempting to cut corners and opt for online templates for estate planning. However, this approach is fraught with risks. Personalized advice is crucial since every individual’s situation is unique. DIY estate plans often fail to account for state-specific laws, complex family dynamics, or future changes in assets. Real-life cases abound where such oversights have led to legal battles, unintended disinheritance, or significant tax burdens for heirs.

The Value an Estate Planning Attorney Adds

A dedicated estate planning attorney brings a wealth of knowledge and experience. We don’t just draft documents; we craft a plan tailored to your specific needs, considering intricate legal frameworks and tax implications. Our expertise ensures your estate plan is robust, flexible, and up-to-date with current laws. Furthermore, we navigate the emotional and complex aspects of estate planning, offering peace of mind that your affairs are in competent hands.

What to Look for in an Estate Planning Attorney

When seeking an estate planning attorney, consider the following:

  1. Experience and Expertise: Seek attorneys with significant experience in estate planning. They should have a strong track record in handling cases similar to yours.
  2. Communication Skills: Your attorney should be someone you can talk to openly and who can explain complex legal concepts in understandable terms.
  3. Reputation and Reviews: Research their reputation. Online reviews and referrals from friends or financial advisors can be valuable resources.

The Process of Working with an Estate Planning Attorney

Working with an estate planning attorney typically involves:

  • Initial Consultation: Discussing your goals, family dynamics, and financial situation.
  • Document Preparation: Drafting wills, trusts, powers of attorney, and other necessary documents.
  • Regular Updates: Estate plans should evolve with your life changes. Periodic reviews are essential.

This process is not a one-time event but an ongoing relationship to ensure your estate plan remains relevant and effective.

Financial and Emotional Benefits of Proper Estate Planning

A well-constructed estate plan offers significant benefits:

  • Financial Savings: Minimize taxes, avoid probate costs, and prevent legal disputes.
  • Peace of Mind: Knowing your loved ones will be cared for and your wishes will be honored.

These benefits extend beyond the financial; they offer a sense of security and clarity for you and your family.

Key Takeaways

  1. Estate Planning is Essential for Everyone: It’s not just for the wealthy; everyone should have a plan to manage their assets and health directives.
  2. DIY Comes with Risks: Online templates and DIY solutions are often insufficient and may lead to legal complications.
  3. Professional Guidance is Key: An experienced estate planning attorney can provide tailored advice and ensure your plan is legally sound and up-to-date.
  4. Choose the Right Attorney: Look for experience in estate planning, strong communication skills, and positive client reviews.
  5. Ongoing Process: Estate planning is not a one-time task. It should be reviewed and updated regularly to reflect life changes.

Frequently Asked Questions

Why can’t I just use an online template for my will?

Online templates are generic and may not adequately address your specific needs or comply with state-specific laws. An estate planning attorney can provide a customized plan considering your unique situation and legal requirements.

At what age should I start thinking about estate planning?

It’s wise to start estate planning when you have any significant assets or responsibilities, such as owning a home, having children, or starting a business. It’s never too early to start planning for the future.

How often should I update my estate plan?

You should review and possibly update your estate plan every 3-5 years or sooner if you experience significant life changes like marriage, divorce, the birth of a child, or substantial changes in your financial situation.

What happens if I don’t have an estate plan?

Without an estate plan, the distribution of your assets will be determined by state laws, which may not align with your wishes. This can lead to family disputes, unnecessary taxes, and legal complications.

Is estate planning only about distributing my assets?

No, it’s more than that. Estate planning also includes making arrangements for your healthcare decisions if you become incapacitated, designating guardians for minor children, and potentially reducing taxes and other expenses.

Can I Prevent Children from Fighting over my Estate?

Even the best of sibling relationships can become strained after the death of a parent. This is especially true if the estate includes real estate, like a family or vacation home. More than one adult child often wishes to inherit the asset for sentimental and financial reasons, according to the recent article “Estate Planning: Reducing risk of family in-fighting” from Lake County News.

Sometimes, a family discussion between parents and children about the planned property division can reach an agreement, becoming part of the parent’s estate plan. However, there are times when this isn’t possible.

When the family is a late-in-life blended family, gaining consensus among the siblings may be more difficult, especially if the two sets of children were never close or never got along.

Some children may expect their biological parents to leave the assets brought into the second marriage to their biological children. Stepparents need to take steps to ensure that their separate property goes to their own children. Their stepchildren don’t have to approve of the gift. However, it is crucial for proper estate planning to be done in advance.

If the parent wishes to give each child an equal share of their inheritance and the inheritance includes real property, it may be best to use cash gifts to equalize their shares. The monetary gifts might be funded through life insurance proceeds or by having the successor trustee borrow against the real estate.

This may mean the child who inherits the real property will take it subject to the loan, which they will pay off, or refinance the debt upon distribution.

Families who own businesses require special consideration because some children may be actively involved while others are not. Succession planning will need to be done, including placing the business in a partnership or a corporation. The children involved in the business may be made general partners or executive officers in the corporation. In contrast, the children not involved in the business could be made passive partners or given ownership interests without an active participation role.

Suppose the estate includes valuable heirlooms or items with great sentimental value. Conversations about the individual items should occur while parents live. In that case, the wishes should be incorporated into the will.

If it seems as if the family can anticipate disputes over possessions or assets, an experienced estate planning attorney can prepare an estate plan designed to withstand challenges. This type of protection varies depending on the circumstances and the anticipated nature of the challenges.

One common scenario is a disgruntled child pressuring the parents to change their will to favor the child. If a no-contest clause is used, where anyone who disputes the will and loses the lawsuit will also lose what they would have otherwise inherited from the estate, other siblings may lose out entirely. Preparing a will for challenges requires a lot of strategy and planning .

In some states, it is possible to petition the court to confirm the terms of the trust while the grantor is living. This forces any contest to occur while the parent is still living and can testify to their intentions. In some high-value estates, this is a pre-emptive strategy to be considered.

Reference: Lake County News (Dec. 9, 2023) “Estate Planning: Reducing risk of family in-fighting”

Should You Gift Kids Inheritance Now, or After You’ve Passed?

This is a genuine dilemma facing millions of parents and grandparents as they prepare to pass an enormous amount of wealth—$73 trillion—to the next generation. There are pros and cons to both approaches, according to the article, “Give the Kids Their Inheritance Now or Make Them Wait? 3 Things to Keep in Mind,” from Barron’s.

Giving too much too early could put parents in an economic bind in their later years. Therefore, this needs to be considered in light of today’s longer life spans. However, if you can afford to make a generous gift and your children could use the money now for a good purpose, it’s hard to justify making them wait.

How much to give is as critical as when to make the gift. The predominant concern is if you give your children too much, they won’t be motivated to earn their own wealth, or other family members will resent the gift. Estate planning attorneys and financial advisors routinely speak with families about these issues. These conversations always consider the values they want to instill in their children.

In some cases, parental support can help a child while working at an entry-level (i.e., low paying) job in their dream career. Covering the cost of rent for a few years can offer young adults a support net until they achieve financial stability.

This is very different than paying the expenses of a young adult with no career goal whose primary focus is a robust social life.

Anyone can make a yearly gift to any other person of up to $17,000 tax-free, or $34,000 per couple, but there are ways to make gifts without triggering gift taxes. Direct tuition payments to schools are tax-free. Unlike putting money into a 529 account, there is no limit to how much can be paid directly to a college or university. Parents and grandparents could also help with a downpayment on a child’s home without paying gift taxes.

Gifts don’t have to be large to have an impact. Some parents and grandparents give their children or grandchildren a small amount to start saving for retirement. A gift of a few thousand dollars during their 20s can grow into a nice sum over many decades. If the recipient has earned income, you can contribute to their IRA or Roth IRA accounts.

If assets are limited, consider giving personal possessions, such as jewelry or family heirlooms, to younger generations. You’ll get to see them enjoy their gifts, without putting your own financial situation at risk.

Whenever the decision is made to make these gifts, families should talk about their values and intentions around money.

If there are concerns about children losing an incentive to work because of the family’s wealth, a spendthrift trust might pass wealth along while controlling its distribution.

Remember that today’s generous federal estate tax rules are set to expire in 2026. Currently, individuals can gift up to about $13 million ($26 million for couples) tax-free in their estate plans. If the exemptions expire, this amount will be cut by approximately half.

Reference: Barron’s (Nov. 4, 2023) “Give the Kids Their Inheritance Now or Make Them Wait? 3 Things to Keep in Mind”

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