Writing Your Tulsa Estate Planning Blog

Most of the estate disputes that get reported, involve large fortunes that are being fought over. In reality, most family estate fights involve much smaller things such as personal items.

You may not realize it, but many of the personal items you have around the house have a special meaning to your adult children. Some items might remind them of childhood memories. Some items might remind them of you. Other items they just might like for one reason or another.

While you are alive, these items are unlikely to cause any problems. However, after you pass away, they could very well cause problems for your estate.

If you have more than one child that wants a particular piece of personal property, there needs to be a way for them to decide who gets it, as Business Vancouver points out in “Wills: Leave’em laughing.”

There are several different things you can do to make sure that your children do not argue over your possessions. If you want a child to have something in particular, then you can give it to them before you pass away or you can make specific designations in your estate plan.

Another method is to direct that your children use a reverse draft method. One child picks an item. Then the next child goes and so on. When every child has picked something, then the order of choosing is reversed and they all pick again.

A list could also be presented to each child of all the important items and they can rank them all by preference. The estate executor can then use those rankings to guide the distribution of personal items.

The important thing is that you need to think about the potential problems in your estate plan and have a way for those problems to be resolved.

Reference: Business Vancouver (Jan. 31, 2017) “Wills: Leave’em laughing.”

It is every parent’s worst fear. A child will agree to give away their inheritance for far less than it is worth for quick money.

Recently, MarketWatch published an advice column with the following question as its title: “My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?”

The title is an almost complete description of what happened. A reader wrote in with a story about his friend who inherited $800,000 from his father’s will. The friend was addicted to drugs and agreed to sign his rights to the inheritance away to his own brother for only $10,000.

Now, that the friend is sober, the reader wonders whether there is any way to get the inheritance back.

The column writer suggests that the friend hire an attorney and sue the brother for fraud based on the premise that he knowingly took advantage of someone who was mentally incapacitated. That might work in some cases.
But not so fast.

There are some states and courts that are not quick to undo agreements that drug addicts voluntarily enter into, especially if it cannot be proven they were high at the time of making the agreement.

This is the type of scenario about which many parents have nightmares, when it comes to their addicted children. Leaving the child an inheritance outright can quickly be lost.

Fortunately, there are ways to avoid the problem altogether without disinheriting the drug-addicted child. A trust can be used to protect the inheritance with a trustee who is granted the discretion to only distribute money when the child is able to handle it.

Reference: MarketWatch (Jan. 24, 2017) “My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?”

Increasingly wealthy people are paying for medical services that could potentially help them live for over a century. That creates estate planning challenges that did not exist for previous generations of the ultra-wealthy.

No one can guarantee that they will live a longer than normal life, no matter how much money they have to spend on their health care. However, medical advances and new personalized medical care plans, such as concierge care, make it so that those with enough means can make it far more likely than ever that they will live much longer than their peers.

This could mean that in the near future it will be common for the ultra-wealthy to live for 100 years and even decades longer, in some cases. This will have some benefits, but it also comes with some unique estate planning challenges.

Forbes recently discussed some of the challenges in “Estate Planning For The Ultra-Wealthy When Living To 120 Or Beyond.”

The biggest issue is that it is common for people to retain control of their own assets until they pass away. That can become a problem the longer people live. Scientists still do not have a cure for dementia and the longer people live, the more likely they are to suffer from it.

A long life of carefully managing money could easily be undone. Younger family members might also start to grow impatient waiting to take control and cause problems.

The ultra-wealthy who plan to live long lives, might want to consider an estate plan that gives control to someone else before they pass away. At what age should that be done and under what circumstances, are matters these families should discuss.

Reference: Forbes (Jan. 18, 2017) “Estate Planning For The Ultra-Wealthy When Living To 120 Or Beyond.”

Every year thousands of wealthy people temporarily move from their cold, northern homes to residences in warmer states. Many consider making their warmer homes their permanent residence, especially as they grow older.

Given the choice, many people would much rather live in the warm, sunny climates of states such as Florida and Arizona instead of the colder climates of northern states. However, for most people, that is not an option since they have good jobs they cannot leave in northern states.

Some of them, however, are able to maintain residences in warmer states where they can live during the winter. As they near retirement, many consider switching residences completely and making their southern home their permanent home.

This is reported by the Middletown Transcript in “MAKING CENTS: From snowbird to flamingo.”

What many people do not realize is that if they change their state of residence, then they may also need to change their estate plans.

An estate plan crafted by an expert estate planning attorney is created with your individual state of residence in mind and making sure that state laws are followed. The estate plans are designed to work for the individual states. That means they may need to be changed to reflect the laws of a new state of residence.

If you do move to Florida or Arizona, or any other state, make sure to see a local estate planning attorney so your estate plan can be changed to take advantage of your new state’s laws.

Reference: Middletown Transcript (Jan. 17, 2017) “MAKING CENTS: From snowbird to flamingo.”

When people are approaching death, they could choose to talk about anything that they wanted. Most talk about their friends, families and other loved ones.

You might think that when people are dying and they are visited by a chaplain that they would want to speak to the chaplain about religion and seek reassurances about what will happen to them after they pass away. However, CNN recently published an article by a long time hospice chaplain “What people talk about before they die.”

According to the chaplain, people never talk about God or any formal religion. That is not what is on their minds. Instead they talk about the people and things that they loved in life, mostly the people. That, of course, is not the people they worked with usually. It is their friends and especially their families.

This is actually an important insight.

For most people, their families are not just the most important thing to them when they pass away but the most important throughout their lives.

We might not always act like it when we have work to do, but most of us would miss our families more than we would miss our jobs. Knowing that when we pass away it is likely that our families will be on our minds, we can also presume that we would be a lot more comfortable at the time if we can rest at ease knowing our families will be taken care of.

The best way to make sure that your family will be taken care of is to get a professionally crafted estate plan.

Reference: CNN (Dec. 20, 2016) “What people talk about before they die.”

A new study in the United Kingdom provides an ominous warning about the wealth prospects of younger people.

It seems we’ve been hearing the terms “income inequality” or “wealth inequality” frequently used in recent years to describe a growing economic trend of wealth concentration among a shrinking segment of the population.

These terms are now commonly used: from the work of economist Thomas Pikkety, to the Occupy Wall Street Movement, to every speech given by Senator Bernie Sanders, and even to the pages of The Economist. While we like to believe that everyone has a fair shot and that hard work is rewarded, a new study out of the United Kingdom raises some doubts.

Recently reported in The Independent article titled “Inherited wealth will decide how rich young people will become, a study warns,” the study suggests that due to rising home prices, stagnant wages and diminishing pensions, the wealth of young people will not come from their own hard work. Instead, it will be primarily determined by the inheritances they receive from their parents.

Although this study was conducted in the United Kingdom, many of the same sentiments and perceptions also exist in the U.S.. In the U.K., this is prompting many young people to oppose estate tax cuts or repeal. As one liberal Democrat was quoted as saying, “It cannot be right that the wealthiest families amass vast fortunes, while millions of young people see their incomes fall and home ownership slip out of reach.”

As the new Congress and President Trump undertake discussions about the future of the estate tax here in the U.S., the debate may turn at some point to discussions of income inequality, wealth concentration and the potential social role of estate taxation.

Reference: The Independent (January 5, 2017) “Inherited wealth will decide how rich young people will become, a study warns.”

Boxer Muhammad Ali’s family is set to have a massive fight over his estate.

It never took much prompting to get Muhammad Ali to claim that he was the greatest fighter of all time. He was a legend for not only the power of his fists and the quickness of his feet, but also for his sharp wit and talking up himself and talking down his opponents.

The controversial and beloved figure passed away last year, after a long struggle with Parkinson’s disease.

While Ali can no longer fight, his family still can and it appears they are going to, according to the Daily Mail in “Revealed: Muhammad Ali’s widow will receive DOUBLE the $6M inheritance awarded to each of his nine children sparking ‘World War Three’ between warring relatives.”

The heart of the dispute appears to be longstanding animosity between Ali’s children and his widow.

The children are upset, even though all nine of them will receive $6 million from their father’s estate. They are not happy that the widow will receive twice the amount they will get.

Although the children have often feuded with each other, they have apparently agreed to set those disputes aside for now, until they have their say about their father’s widow.

It is not clear exactly what the children plan to do and if they have any grounds to dispute the amount their stepmother was left in Muhammad Ali’s will.

Reference: Daily Mail (January 3, 2017) “Revealed: Muhammad Ali’s widow will receive DOUBLE the $6M inheritance awarded to each of his nine children sparking ‘World War Three’ between warring relatives.”

Whenever you have significant changes in your life, you should change your estate plan. But, what counts as a significant change?

Estate planning attorneys always tell their clients that anytime the client undergoes a significant change in life circumstances, the client should come back to the attorney so the estate plans can be changed to reflect the new circumstances. However, that leaves open the question of what changes are considered significant enough to require immediate change to an estate plan.

While it is impossible to list all of the possible significant changes, Forbes recently listed some common ones in “6 Reasons To Revise Your Estate Plan As Soon As Possible,” including:

•If you get divorced, you should change your estate plan to exclude your ex-spouse.

•If you get re-married, then changes need to be made to include your new spouse in your estate plan, especially if you have children from a prior relationship that need to be provided for.

•If you have another child, it is important to change your plan to make sure that the new child is included.

•If you have a serious illness or injury, then your estate plan should be reviewed to make sure you can meet your needs.

•If the tax laws change, consider reviewing your estate plan to determine how the changes could affect your planning.

•If you receive a large inheritance, then you will want to change your estate plan to reflect your new financial circumstances.

Reference: Forbes (January 2, 2017) “6 Reasons To Revise Your Estate Plan As Soon As Possible”

One of the biggest questions concerning estate planning right now, is whether Donald Trump will carry out his campaign promise to eliminate the estate tax and whether or not he should.

The estate tax is a one of those hot button issues over which political parties are sharply divided. While campaigning for the presidency, Donald Trump repeatedly said he would eliminate the tax. His is a position that most Republicans in Congress share. Now that Donald Trump and congressional Republicans have the power to do away with the estate tax, the question becomes whether they will actually do so.

Financial Advisor addressed that question in “Death to the Death Tax?”

“I think there’s a chance he [Trump] will repeal the whole thing,” said tax attorney Martin Shenkman, whose namesake firm in Jersey City, N.J., and New York City focuses on estate and tax planning for high-net-worth individuals, closely held businesses and real estate professionals.

Shenkman also said there’s speculation about abolishing the gift and generation-skipping taxes. He pointed out that, while these taxes do not raise a lot of revenue, they were at one time intended to minimize the wealth-concentration in our country. Whether or not they still serve this social purpose, or should, is up for debate.

With all of this uncertainty, no one can predict the final outcome, but, as Shenkman said, “There’s no reason to stop planning because of this uncertainty, if the end result of the planning is to get assets in a better place than they are now regardless of the tax.”

Reference: Financial Advisor (January 3, 2017) “Death to the Death Tax?”

If you think that you do not need to have a will or other estate plan, then you might want to pay attention to an ongoing crisis in China.

Not too long ago, the Communist Party in China had strict rules about the accumulation of wealth and passing it on to heirs. During the Cultural Revolution, things were very simple. A person could not accumulate wealth at all, so there was nothing to pass on.

This led to most Chinese people not bothering to create wills or estate plans.

However, the Communist Party has since loosened its rules and many Chinese people are now extremely wealthy. Unfortunately, most of them have stuck with the habit of not getting estate plans and that is causing problems.

This was reported recently by USA Today in “Chinese don’t have wills — and now it’s a big problem.”

The Chinese courts have seen a flood of inheritance disputes that are clogging up their system and slowing down affected business. Families are fighting over this new wealth in the country and even the Communist Party is growing concerned.

It is estimated that only 1% of the country’s senior citizens have wills. Even those who do have wills of some sort, cannot avoid issues.

Some 60% of wills challenged in the country are found to be invalid. The Communist Party is now actively encouraging people to get proper wills.

While the problem is not as severe in the U.S., too many people here also do not have wills.
That causes the same issues as the Chinese have.

Make 2017 the year to get your estate plan completed or reviewed!

Reference: USA Today (Jan. 2, 2016) “Chinese don’t have wills — and now it’s a big problem.”