Estate planning attorneys routinely look for ways to help their clients with little risk. There is a strategy which can be used to pass significant value to the next generation without the use of any lifetime applicable exclusion. The strategy is the Grantor Retained Annuity Trust or “GRAT.” With a GRAT, the grantor retains the right to annuity payments during the term of the trust. Whatever is left over at the end of the term goes to the remainder beneficiaries such as the grantor’s … [Read more...] about Get it While You Can: Short-Term, Zeroed-Out GRATs
Community property is a regime of marital property. It traces its roots to civil law systems. This is compared to the common law marital property regime tracing its roots back to common law. With community property, all earnings are owned by the “community” and each member of the community has an undivided one-half interest in that property. This sounds simple enough but attorneys from non-community property states typically do not understand this concept completely. There are two common … [Read more...] about Community Property Traps in Estate Planning
Estate Planning attorneys may come across scams that their clients may be involved in, wittingly or unwittingly. It’s important that we are up on the latest scams to protect our clients and ourselves. Here are some of the latest scams reported by the IRS: Return preparer fraud. Tax return preparers have access to sensitive, personal financial information. Especially if your client is using a tax preparer other than an attorney, CPA, or enrolled agent, keep your eyes open for potential … [Read more...] about Estate Planning Attorneys and Tax Scams
As we know, an estate plan must be crafted carefully to achieve the desired results. Hopefully, through the coordination of various strategies, the result is reached. Imagine the upheaval if you crafted an estate plan for someone whom you thought was unmarried and he or she turned out to be married! In several American jurisdictions, it is still possible for someone to be married without a formal license certifying their relationship. “Common law marriage” can occur when a couple holds … [Read more...] about Common Law Marriage Could Be a Wrench in Your Estate Plan
It is often beneficial to name the spouse as the primary beneficiary of a retirement plan or IRA. In fact, with a retirement plan like a 401(k), 403(b), etc., the spouse must be named as the primary beneficiary unless they sign a “spousal waiver” consenting to having a different beneficiary named. Even if the participant were not married when they completed the beneficiary designation form, their surviving spouse would have a right to the retirement benefits unless the spouse signed a waiver. … [Read more...] about Retirement Plans and the Spouse: Special Relationship, Special Rules
As Academy members know, Natalie Choate, the author of the definitive resource Life and Death Planning for Retirement Benefits, will be speaking at the Academy’s upcoming Spring Summit event in Boston. The Summit will be from April 29th – May 2nd, 2010. Life and Death Planning for Retirement Benefits is currently in its 6th edition. A 7th edition is well underway. Natalie will be selling the book at our Spring Summit event. As a special deal, for those purchasing the 6th edition at the Academy … [Read more...] about Natalie Choate’s Academy Summit Session and Offer!
Clients and even attorneys are often confused by “rollovers” and for good reason. So, just exactly what does a “rollover” mean? A rollover is essentially moving the funds from one investment vehicle to another, from your 401(k) or ERISA plan to an IRA for example. There are a number of reasons you might choose to rollover your funds, but the most common is to take advantage of greater investment options. Upon your death, your surviving spouse can do a “spousal rollover” to his or her own … [Read more...] about Rollover Confusion
In an interesting decision, the 9th Circuit U.S. Court of Appeals decided Marshall v. Stern. The case is a good review of the complex interplay between federal and state law in matters concerning probate and bankruptcy. Of course, the case is also interesting because of the notoriety of the individuals involved. Anna Nicole Smith married Texas oil tycoon J. Howard Marshall II. When Marshall died, litigation ensued between Marshall’s son, Pierce Marshall, and Smith. There were simultaneous … [Read more...] about 9th Circuit Rules on Anna Nicole Smith Case
My blog posting on February 18th, "Client Suicide and Attorney Ethics " got me thinking. Is suicide itself legal? It used to be illegal, dating back to British common law. As late as 1963, several American jurisdictions criminalized attempted suicide. But, today, no state has a statute against suicide itself. But, what about laws against acting to end another person's life? Certainly ending someone else's life is illegal if you do the act without the victim's consent; that's … [Read more...] about The Best Place to Die in 2010
Washington, D.C., joins the list of jurisdictions offering marriage to same-sex couples. In May 2004, Massachusetts became the first state to allow same-sex couples to marry. Since then, same-sex marriage has been legalized in Connecticut, Iowa, New Hampshire, Vermont, and now the District of Columbia. California allowed marriages for a brief period until a voter initiative denied the right. Additionally, California, New Jersey, and other states allow couples to enter “Domestic Partnerships” … [Read more...] about Same-Sex Marriage Inches Forward
Powers of Attorney can be wonderfully flexible documents. They allow the principal to appoint an agent to do all the things that the principal could do. That seems pretty straightforward. However, it is significantly more complicated than it appears. State laws vary regarding how to interpret silence in a POA on various issues. For example, if the POA simply states that the agent has general authority to do anything that the principal could do, many states find that does not authorize gifting. … [Read more...] about Powers of Attorney and Their Pitfalls
How many times have your clients asked you that? As estate planning attorneys, we know that producing a comprehensive estate plan to meet the unique needs of the client is not as simple as pressing a button. It takes years of legal education and experience to identify and address potential issues. Now, one of the leading providers of interactive legal forms for the public, Legal Zoom, is being sued in a Missouri court for the unauthorized practice of law. The complaint includes reference to a … [Read more...] about Isn’t It Just Some Form?