No good deed goes unpunished, as Philip Marshall and his brothers are disinherited for their role in stopping their father, Anthony Marshall, from financially and physically abusing his mother, Brooke Astor.
A recent New York Times article points out that some nursing homes are using guardianships to gain control of the assets of seniors in order to pay for past due medical bills. While it is sometimes appropriate for a nursing home or hospital to bring a guardianship petition on behalf of a senior, these nursing homes are using the court process as a debt collection mechanism. As we are growing older and living longer, it is vitally important for us to have proper planning in place for incapacity as well as long-term care planning. With a proper plan, the senior can qualify for government assistance to pay for long-term care costs and avoid the possibility of a guardianship being initiated by a nursing home.
This month’s alert covers the importance of planning for tangible and intangible personal property. Often items that are little financial value are of significant sentimental value and the distribution of those items can lead to disputes among children, grandchildren and other relatives who were “promised” the items or otherwise feel entitled to them. On other occasions personal property can have significant value, such as art, collectibles, licenses and royalties. Proper planning can help reduce any problems that may arise in the distribution of this property after death.
This month’s Alert examines the case of Charles Kuralt. Kuralt lead two separate lives. Had he planned better, he could have reduced the financial turmoil left at his death. This month’s Alert explains how proper planning can reduce the financial sting even if the emotional sting remains.
Annual gifts, especially through trusts with “Crummey powers,” can lead to significant estate tax savings. Read more about a recent taxpayer victory involving a “Crummey Trust” with no less than sixty beneficiaries with withdrawal powers.
“It’s not fair!”
Parents hear this protest all the time, and it often comes from children who confuse being treated fairly with being treated equally.
One of the challenges of parenting is figuring out how to be fair to your children when, often, that doesn’t mean treating them exactly the same. Here’s an example:
Andy is ten years old and Emma is sixteen. Emma has her driver’s license and a part-time job. If you wanted to treat the two equally, you could insist that Emma ride the bus home from school, eat dinner with the family every night, and be in bed by 9:00 just like her brother. This arrangement would be equal, but it would hardly be fair to Emma. She’s older, she has more responsibilities, and she’s ready for more privileges.
The fair vs. equal dilemma doesn’t end when your children leave the nest. In fact, it often extends into your estate plan. It’s easy to feel that you must divide your assets equally among your children. In reality, though, this isn’t always the best plan for your family. The real question is how to accommodate your children’s unique needs so that your estate plan strikes a fair balance.
Imagine you have three children, Tom, Adam, and Amy. Each of your children has a thriving career. Tom is an IT specialist, Amy is a doctor, and Adam has helped you build the family business into the success it is today. In fact, your family business is so successful that it makes up much of your net worth.
This leads to a dilemma: how do you divide your estate? It makes sense to leave your family business to Adam. He has a passion for it, and he’s poured his life into it for years. The problem is, doing so would mean that Adam would inherit most of your estate – a result that is neither fair nor equal.
Another option would be to leave each of your children an equal interest in your business. However, this solution would likely be neither fair nor practical. Tom and Amy have their own careers, with little interest in the day-to-day running of the family business. Entangling them in its operations would not only be a cause of pressure for them, it might turn into a source of conflict, ultimately harming your children and the business.
The solution might be to leave the business to Adam, and buy a life insurance policy on yourself to benefit Tom and Amy. The life insurance policy would increase your net worth in an amount sufficient to fund Tom’s and Amy’s inheritances and ensure your children are treated fairly, meeting their individual needs.
This is only one of a range of possible solutions. An experienced estate planning attorney can help you sort through all your estate planning options and settle on the plan that best meets your family’s needs so you’ll never again have to hear, “It’s not fair!”
This month’s Alert examines the rules regarding distributions from IRAs and retirement plans. In particular, it examines reasons to make a trust the beneficiary and rules regarding who is the measuring life for minimum required distribution purposes.
This month’s Alert examines two high-profile cases which illustrate the importance of naming guardians for minor children.
This month’s Alert examines how the “fiscal cliff” legislation could result in changes for estate plans. Depending on the couple, it might mean they could simplify their plan. However, there are many non-tax reasons that they may want to keep a more complex plan.
This month’s Alert discusses how the “fiscal cliff” legislation impacts your clients’ estate plans.