Writing Your Tulsa Estate Planning Blog

Many people put off estate planning because they mistakenly believe that it will be too difficult and time-consuming.

Younger people delay getting estate plans for all sorts of reasons. Some think that they are too young for it. Some think that they do not have enough assets to bother with it. Others think that it will be too difficult or take too long.

A columnist for The Gleaner put it off because she and her husband could not agree about who would care for their children. She wrote about their experience in “HARDY: No reason to delay estate planning.”

The article is instructive and enlightening. The writer details how once she and her husband did come to an agreement about their children, the process of getting an estate plan was not as difficult as they thought.

This might be because they took the critical step of going to an estate planning attorney instead of trying to do things for themselves.

The attorney provided the couple with a questionnaire that allowed them to think about things that they had not even considered and make their own decisions about those things. If the couple had tried to create their own estate plans, they likely would have been incomplete because of the things they did not know.

The important lesson to learn from the column is that there really is no reason to delay getting an estate plan. If you go to an estate attorney, the process will be simple and you will get a complete plan.

Reference: The Gleaner (Dec. 10, 2016) “HARDY: No reason to delay estate planning.”

The death of actress Debbie Reynolds just days after the death of her daughter Carrie Fisher, has sparked a renewed interest in Reynolds’ work.

If most people were asked what the bestselling DVD on Amazon is at any given time, they would likely choose a recent action blockbuster, an animated children’s feature or perhaps a recent Oscar winner. However, if that question had been asked at the end of 2016, they would have been wrong.

The bestselling DVD at that time was Singin’ In The Rain starring the recently deceased Debbie Reynolds. The movie was also placed on the New and Noteworthy list on iTunes.

TMZ reported on this story in “Debbie Reynolds Singin’ In The Gains Death Causes Spike In Sales, Searches.”

This comes as no surprise to estate planners and others who follow celebrity estates.

Whenever a major celebrity passes away, their work almost always sees an increase in sales. Reynold’s case is a bit unusual, since she had not been in the limelight for quite some time. However, as her death came only a few days after her daughter passed away, the increase in sales should not be a surprise.

While sometimes these increased sales are temporary, they are not always so and can continue for many years. This means that celebrities, even minor ones, will want to make sure their estates are prepared to handle increased revenue and potentially new commercial opportunities
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Reference: TMZ (Dec. 29, 2016) “Debbie Reynolds Singin’ In The Gains Death Causes Spike In Sales, Searches.”

If you have a trust and would like to make it the beneficiary of your IRA instead of an individual, you can do so. However, there are some important things to consider before doing so.

When people get trusts, one of the first things they are told is that they should put all of their important assets into the trust. They are often told that they can designate their trusts as beneficiaries of their life insurance policies and retirement accounts, and that they should consider doing so.

However, for tax purposes, it is not always a good idea to designate a trust as the beneficiary of your IRA, as Financial Advisor explains in “Is Naming A Trust As Beneficiary Of A Client’s IRA A Good Idea?”

The biggest and most important issue is that IRA beneficiaries must take required minimum distributions or face tax consequences. This requirement does not go away when the beneficiary is a trust and not an individual.

Satisfying the requirement with a trust can get technical.

Every beneficiary of the trust must be identifiable and must be an individual. While that might seem easy to accomplish, it is not always the case. Every successive beneficiary must be an identifiable individual. Therefore, the beneficiaries who would automatically receive the trust assets when a previous beneficiary passes away, must be an identifiable individual.

This can be an issue if a residual clause in the trust includes giving assets to a charity, for example.

That is not the only complication with designating a trust as the beneficiary of an IRA. There are other potential problems, which is why you should consult with an estate planning attorney before doing so.

Reference: Financial Advisor (Dec. 2, 2016) “Is Naming A Trust As Beneficiary Of A Client’s IRA A Good Idea?”

There are many reasons why you should get an estate plan, but one of them stands out above the others. Estate planning is the best way to make sure that your family does not have problems after you pass away.

Too many people think getting an estate plan implemented is an unnecessary and time-consuming bother. It is true that properly planning for an estate requires gathering up all of your financial documents, thinking about where you want all of your property to go and spending time meeting with lawyers. Almost everyone can think of other more enjoyable things that they would rather do with their time.

However, there is a very good reason to make the effort now and get an estate plan as J Weekly suggests in “Estate planning wards off problems later on.”
If you think estate planning is difficult and time-consuming for you now, imagine how difficult it will be for someone else to do it after you pass away. It is very likely that a close family member will have to figure out what property you have and go to court to figure out who should get all of your property.

To give just one example of how difficult this can be, you can now easily go to your bank and get all of the information you need concerning your accounts. Your children cannot do that easily now and they would not have an easier time of it after you pass away, unless they have a court order requiring the bank to give them the information.

Getting that court order will, of course, be time-consuming and require the hiring of an attorney for assistance.
Any way you look at it, taking the time to get an estate plan now will be less expensive and less time-consuming than it will be for your family to figure things out if you do not get an estate plan.

Reference: J Weekly (Dec. 1, 2016) “Estate planning wards off problems later on.”

Many family dynasty trusts created during the Great Depression to avoid rising taxation, will automatically terminate soon. Trustees and beneficiaries need to be prepared.

One of the lasting legacies of the Great Depression will soon come to an end. In response to that crisis, the government greatly increased the gift and estate tax rates. Wealthy families responded, in turn, by creating dynastic trusts to hold their wealth and preserve it for future generations.

Most of the trusts created at that time have mandatory termination dates at which time the trust assets must be distributed to the residual beneficiaries.
Successfully carrying out that process will require some planning as the Wills, Trusts & Estates Prof Blog explained in “Preparing for Trust Termination.”

The first challenge for many trusts and trustees will be determining the residual beneficiaries. In many cases, they could be distant relations of the original trust settlors and not the same people who currently receive regular distributions from the trusts.

Once the beneficiaries are determined, they will need to plan for how receiving the trust assets, will impact their lives and financial futures. Depending on the amount of money received, the beneficiaries’ tax and estate plans could change dramatically.

Those who do not plan appropriately, could face negative consequences that could have been avoided.

If you are a residual beneficiary of a depression era trust, you should seek independent legal advice. It might not be a good idea to rely on the advice offered by the trustees and their legal advisors.

You need an attorney who will be acting only in your interests.

Reference: Wills, Trusts & Estates Prof Blog (Dec. 5, 2016) “Preparing for Trust Termination.”

What policies President-elect Trump chooses to pursue and whether they prove to be successful or not, could have a dramatic impact on charitable giving.

Whether it is to set up a lasting charitable legacy or to avoid paying the estate tax, creating plans for charitable giving has always been an important part of estate planning. After the unexpected results of the Presidential election, it is not clear exactly how estate planners will deal with their clients’ charitable wishes. It is actually not clear which policies President-elect Trump will pursue after his inauguration that will have an impact on charitable giving.

Bloomberg looked at some of the possibilities in “Where Charitable Giving May Head With Trump.”

Trump has stated that he will increase GDP growth by 4% per year, which would likely lead to more charitable giving. However, many economists doubt he will be able to fulfill that promise due to economic and demographic circumstances which are beyond his control.

The President-elect campaigned on cutting taxes, especially on the wealthy. This would also likely increase giving to charity. However, his nominee for Treasury Secretary has cast some doubt on those tax cuts, by recently stating that any cuts on the wealthy will be offset by reducing deductions.

It is also thought that Trump would like to eliminate the estate tax. This could reduce some charitable giving, at least when the impetus for the giving is to shrink the value of the estate.

Some of this uncertainty should be cleared up soon, when the President-elect begins submitting budget proposals to lawmakers. They should give an indication of what policies he will pursue.

Reference: Bloomberg (Nov. 27, 2016) “Where Charitable Giving May Head With Trump.”

Drafting your own will or using a form that you purchased online to create a will, might seem like a good idea that will save you money. However, those wills often fail to do much more than create large legal bills in probate.

Wills often sound like simple legal documents. In a sense, they are. They are just a legal way to write down who gets your possessions after you pass away.

When it comes to estate planning generally, wills are among the simplest ways to express your parting wishes. However, the truth is that wills are only simple from an estate planning attorney’s perspective. They are not so simple that anyone can just write their own wills or purchase a form online to fill in and use as a will.

Those homemade wills do not always work very well for a variety of reasons, as the Huntsville Item explains in “A humorous look at the danger of homemade wills.”
Some homemade wills do not work for very simple reasons of formalities. In most states, executing a will requires that a specific number of people be present to witness the will being signed.

People who create their own wills often fail to either have the right number of people present or they do not leave any indication of how a court can contact the witnesses, if necessary.

Other homemade wills do not work for less technical reasons. The directions in these wills are often contradictory or impossible to carry out.

Getting a will does not have to be a complicated process but it should begin with hiring an estate planning attorney.

Reference: Huntsville Item (Nov. 27, 2016) “A humorous look at the danger of homemade wills.”

If you receive an inheritance, it should not put you in a worse position than you were before. That happens all too often.

A common myth about people who inherit wealth is that it brings them financial security and they no longer need to worry about money. However, as is the case with people who win the lottery, people who suddenly inherit wealth are often soon in a worse financial position than they were previously.

Most of the time, inheritances do not grow a person’s or a family’s wealth.

They end up subtracting from it as Chase News & Stories reports in “How to make sure your inheritance is a boon, not a bust.”

The biggest problem is overspending, especially on unnecessary things. While it might be fine to splurge on one or two things, spending can quickly snowball until there is nothing left. There is always something more that can be purchased and heirs who are not careful, keep purchasing those somethings.

The best way to prevent this is to plan ahead.

Talk to your older relatives about what inheritance you might receive from their estate plans and ask for guidance in wealth management. Your relatives who have wealth, can teach you how they maintained that wealth.

If you do not know ahead of time that you will receive a large inheritance and get one suddenly, then you can still make plans if you are patient. Do not do anything with the inheritance for at least six months. You should take that time to think carefully and to get good financial advice.

Reference: Chase News & Stories (Nov. 23, 2016) “How to make sure your inheritance is a boon, not a bust.”

If you want to be remembered for charitable giving, then you should get started with an estate plan.

At this time of year, it can seem like giving to charity is something done with little forethought. It can require no more than dropping loose change in a bell ringer’s bowl at the grocery store or putting a new toy in a designated box at the mall.

While anonymous giving like that is helpful, having a true charitable legacy requires more work and considerable forethought.

People who want to be remembered for being charitable benefactors, need to get comprehensive estate plans as the Port Huron Times Herald explains in “Plan today to make a difference tomorrow.”

With an estate plan, you can set up your charitable giving to be ongoing after you pass away. If you want, you can leave one time gifts in your plan but also create new legal entities that will continue to give to charity indefinitely. You can even dictate what charities these entities will give to and for what purposes.
The entities can be relatively simple trusts or they can be complex family foundations.

Without proper planning, however, creating a charitable legacy is nearly impossible. Attempts to do so can easily fall afoul of the law and IRS regulations. Thus, if you would like to leave a charitable legacy, visit with an estate planning attorney to review your options.

Reference: Port Huron Times Herald (Nov. 25, 2016) “Plan today to make a difference tomorrow.”

Geography is a factor that my clients frequently fail to consider when naming a guardian for their minor children. If it is possible, name someone who lives close.

If something happens that renders you unable to care for you minor children, it will be a stressful time for the children and for the named guardian. The last thing that you want is to add more stress to the situation. If the children have to move a long distance to the guardian, or if the guardian has to move to the children, the relocation will add additional stress.

If possible, name someone who lives close. Of course, some of us do not live near the person or person that we feel would be the best guardian of our children. If that is true for you, it is ok. Geography is one of many factors to consider when deciding on who should act as guardian. Very few people will have a guardian who fits perfectly when considering all of the factors. Just do the your best to consider the factors and seek the counsel of a competent estate planning attorney if you feel you need to.