It used to be very common for estate plans to include a two-part trust scheme, often called an AB trust, designed to avoid or minimize estate taxes. In 2012, Congress finally passed “permanent” estate tax legislation, with the estate tax exemption set at $5,000,000 per person adjusted for inflation. In other words, married couples who have less than $10,000,000 in assets no longer face serious estate taxation concerns. It might be tempting to think that the once-common trust is now a relic ...
Win!
Clear And Concise – Just The Way I Like It
Blogger Seth Godin posted something thoughtful this morning, which sums up my philosophy about legal writing — indeed my philosophy toward communication by lawyers in general: There’s actually no legal requirement that an agreement not be in specific, clear, everyday English. To do otherwise disrespects the person you’re hoping to engage with. There’s no legal requirement that even the terms of service for a website can’t be clear and easy to understand. In fact, if the goal is to avoid ...
Idaho Has A Plan For Your Money
The next estate planning myth I want to address is the belief that, if you die without a will in place, the state will get your money. Idaho (as with all states) has a series of laws that control who gets what in the event you die without a will, called the laws of “intestate succession.”These laws govern what happens to your “estate,” the legal term for a part of what you owned when you died. Not everything that you owned becomes a part of your estate. Typically, life insurance proceeds ...
Estate Planning: Not Just For Elders And The Rich
I’ve been thinking about common myths about the estate planning process (creation of wills, powers of attorney, living wills, trusts, and the like), and I’ll be blogging about those myths for the next few entries. The first myth I want to tackle is that estate planning is only for the wealthy or the elderly. It is true that estate planning for rich people is somewhat different than estate planning for folks of more modest means. However, estate planning is mostly about making sure you, ...
Should We Get A Prenup?
I’ve been asked about premarital or prenuptial agreements — what they do and who might need one. A prenuptial or premarital agreement, as the name implies, is an agreement entered into by two people who are planning to get married. Although certainly not the most fun or romantic aspect to planning a marriage, a “prenup” is a topic many couples should discuss. (I prefer the term “premarital agreement,” so that’s what I’ll use for the rest of this post.) A premarital agreement is ...
Naming A Trust As A Beneficiary Of An Ira
This discussion comes up a lot in my estate planning – should I name a trust as a beneficiary of an IRA? The answer is almost always no, although the pros and cons need to be weighed on a case by case basis. Typically this question boils down to whether the tax consequences of naming a trust as the beneficiary are outweighed by the original purpose of the trust. To address this question, we first need to think about why the trust was created. It might be a trust designed to protect ...
Pet Cemetery Story On Channel 6
I Don’t Need An Estate Plan, Right? I Don’t Really Own Anything… Wrong!
When I talk to people about “estate planning,” the most common response is, “I don’t need an estate plan because I don’t have an estate.” The problem is that the word “estate” conjures visions of Hearst Castle or the Biltmore estate. People wrongly assume that they don’t need an estate plan unless they are uber-rich. But the reality is that, in the law, the word “estate” just means “all the stuff someone owns at the time of their death.” So, anyone who owns something (a favorite pair of ...
Get Your Billion Back? Reality Check.
I was struck by the H&R Block ad campaign, claiming that Americans who did their own tax paid an extra billion dollars last year, enough to put $500 on every seat in every pro football stadium in the U.S. I got to thinking about how, while that sounds like a lot, and seems to imply that people stink at doing their own taxes, the ad might actually indicate that we “self-preparers” do a decent job at it. Firstly, the ads each feature small print stating, “In a study of self-prepared ...
