What is the quickest way to un-do an otherwise carefully planned estate? Open a bank account, brokerage or retirement account. Why? Because the beneficiary designations on these accounts override your will. Yes, it’s true – the beneficiary designation is the estate planning trump card. And many an estate plan has come undone because of carelessly named beneficiaries. The Wall Street Journal last week issued a warning in an article entitled Beware the Beneficiary Form. “People don’t realize the importance of this,” says Martin Shenkman, an estate planning lawyer in Paramus, NJ. A carelessly named beneficiary on a financial account can…
Some people who thought they had covered all their bases and acted responsibly to care for loved ones in the event of a debilitating illness or incapacity are finding their plans un-done by strict banking policies. Bank of America recently updated their online security procedures, and no longer accepts a power of attorney for online banking. As Bernard Krooks wrote last week for Forbes, this strict policy came to light when Chicago resident Eva Kripke was blocked from accessing her husband’s Bank of America account. According to Krooks, Mrs. Kripke had been handling her husband Sidney’s bank accounts as agent…
With the new estate tax laws in place, including the $5 million exemption ($10 million for a married couple), many people are enjoying a false sense of security about any potential estate tax liability. First, as Forbes recently pointed out, keep in mind this new generous law expires at the end of 2012 … and it’s anyone’s guess what will happen next. In the meantime, also remember that if your state imposes a state estate or inheritance tax, the likely outcome is that combined federal and state taxes could pack a surprising punch for those above the $5 million exemption…
Most experts recommend The financial consequences of failing to keep your legal and financial documents in order can be significant. As pointed out in a recent Wall Street Journal article, state treasurers currently hold $32.9 billion in unclaimed bank accounts and other assets. Additionally, some of the country’s largest life insurers are under investigation for failing to pay out unclaimed life policies to beneficiaries. Insurers say they are behaving lawfully and under their policy contracts are required to pay a claim only when beneficiaries come forward. Will your family members reap the full benefit of your estate planning efforts, or…
As of July 1, it’s official: Ohio has repealed its state estate tax, as reported through Forbes. Of course, it’s not quite dead yet as the estate tax provision of the new law doesn’t go into effect until Jan 1, 2013. Once it kicks in, though, the Ohio estate tax repeal is meant to be permanent. This will leave New Jersey with the distinction of being the state with the lowest estate exemption of $675,000. Other states are in the news as well, with both Maine and Oregon tweaking their state estate taxes. The Maine budget makes a prospective change…
Sometimes when people get into financial trouble, they look for an easy way out. Whether out of sheer desperation or an attempt at trickery, some resort to making what the law considers a fraudulent transfer. Fraudulent transfers have a tendency of coming back to bite you and several recent cases serve to demonstrate that fact, as in one of Lewis Saret’s recent posts on Forbes (and the much longer list in the Wealth Strategies Journal.) One case is that of re Quaid, (2011 WL 285645, Bkrtcy.M.D.Fla., Jan. 26, 2011,) where a Florida man sought to use a self-settled trust to…
There is an old saying, quite true, that wealth is difficult to amass but easy to squander … especially by those who did not earn it. Many parents – and grandparents – come to us asking how they can leave an inheritance to their loved ones, without “spoiling” them. They want the fruit of their labors – the wealth they pass on – to inspire their loved ones to greater causes, and not cause that dread disease known as “affluenza.” Incentive trusts offer an opportunity to try and nudge younger generations to solid values, but as explained in a recent…
July offers a GRAT opportunity to make some strategic estate planning moves. The IRS just published the applicable federal rates (AFR) for July: Section 7520 Interest Rate: 2.4% Applicable Federal Mid-term, Annual Rate: 2.0% These rates continue to slide, and are set now at historical lows. These low rates make certain estate planning opportunities much more attractive, to include: loans to family members installment sales to grantor trusts grantor retained annuity trusts (GRATs) and charitable lead annuity trusts (CLATs). A recent article in Forbes focuses primarily on the GRAT opportunity for savvy planners. As Forbes writes, GRATs are particularly attractive…
The economy is starting to show some life in a number of sectors but, unfortunately for many, the housing market is not one of them. The good news for the crafty estate planner is that the poor housing market coupled with the tax laws that went into effect with last December’s compromise offer a rather unique opportunity, one that may very well rate amongst the smartest estate planning moves one will ever make, according to Forbes columnist Rob Clarfeld. Now might be time to give away the house. The poor housing market remains perhaps the largest unhealed wound of the…
If you’re a member of the Baby Boomer generation, there’s a good chance you have not done even the most basic of estate planning. In fact, only 56 percent of you have a will, according to a 2011 survey by Rocket Lawyer. So, if you have covered that base, give yourself a well-deserved pat on the back … but not too heartily. As SmartMoney recently pointed out, most people overlook another crucial element in their estate plan: a letter of final instruction. The letter of final instruction is a non-legal document that guides your family through important tasks after your…
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