Is Your Trust Funded?

Several years ago, while administering a deceased client’s trust, I was closing out what I thought was her last account. As the financial representative and I concluded our telephone call, the conversation went something like this:

Rep: “Now wait, what about this account?”

Me: “Uh, what account?”

Rep: “I see here that she has another investment account with us.”

Me: “No, there are no more accounts. It’s probably one we’ve already dealt with.

Rep: “Are you sure?

Me: “Pretty sure . . . [awkward pause] . . . Alright, alright, so what account is this?

Imagine my surprise when I discovered it was an account that the family and I knew nothing about, and it was worth close to $200,000.00!

My delight soon turned to dismay, however, when I discovered that the account was never titled in the name of the trust, which meant that we needed to open probate. I thought we were finishing up the administration, but in fact we were just beginning. A year later, the money (minus thousands of dollars in probate fees), was finally disbursed to the children.

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Property or People?

The first client I ever met with as a licensed attorney forever changed the way I thought about estate planning.

The young lady had walked into my office with bowed head, shuffling feet, and closed lip. I thought she seemed a bit morose for one who was simply organizing her estate. I had purposely chosen not to practice in areas of law that were full of drama—criminal, bankruptcy, torts, family law, and others. What, in the name of estate planning, could possibly have caused this young lady such an apparent burden?

“My brother just jumped off the Golden Gate Bridge,” she finally eked out. “He committed suicide . . .”

Needless to say, nothing in law school prepared me for that. In short order, I experienced a monumental paradigm change about the real meaning of estate planning.

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2010 – A Challenging Year For Estate Planning (to the financial professional…)

We have known since 2001 that the federal estate tax and generation-skipping transfer tax (GSTT) was scheduled for a one-year repeal beginning January 1, 2010, but few of us thought we would see that repeal actually take effect. Although most experts were confident that Congress would act to prevent the law from playing out, they failed to do so and estate and GSTT repeal, at least temporarily, is upon us.

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2010 – A Challenging Year For Estate Planning (to the taxpayer…)

This has been a landmark year for estate planning. What a mess Congress has created! We are now in a year where there is no federal estate tax, but Congress has substituted another method of taxation that will collect more taxes from individuals and families than the estate tax. Additionally, as has been reported in the local and national press,[1] these changes will, for some, greatly alter the planned for and anticipated distributions among family members and heirs.

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