Power to You : Write Your Will!
December 10, 2007 | Leave a Comment
Death and taxes: how to prepare for one while reducing the other. A tounge-in-cheek approach.
Power of an Attorney
Even a signing mistake can weaken your will’s validity, and it only takes one greedy nephew to tie it up in court for months and lop off up to eight percent of your estate in legal fees. Skip the sites and get a flesh-and-blood attorney to draft you an airtight document.
Power of Planning
According to David T. Phillips, author of Estate Planning Made Easy, leaving everything to your spouse could mean losing 25 percent of a $4 million estate to taxes. Shelter half of that in a Bypass Trust instead: Wifey gets paid, the kiddies get their tax-exempt cash.
Power of Persuasion
Unless you want your trust-fund baby living as an “artist” in a $3 million loft purchased with your retirement, set some rules. Whether it’s graduating college, getting married, or turning 30, any milestone can determine when they receive your hard-earned dough.
Power of Protection
Real estate is a great investment…till taxes are due. To pay off death taxes imposed on your home or business, jack up your life insurance policy (otherwise you’ll lose the assets just to pay the IRS). Just $12,000 in payments can cover an estate-tax bill of $1 million!
Excerpted from http://www.maxim.com/WriteYourWill/articles/6699.aspx
Can I use a do-it-yourself will kit or trust kit?
November 26, 2007 | Leave a Comment
I get this question all the time by potential estate planning clients calling both my Germantown and Olive Branch offices. Here is the short answer, yes but beware. (As a side note I had a friend once who told me that he’s never heard a lawyer simply say yes before. I told him that’s because in law school virtually every exam answer starts with either “yes, but” or “no, but”. Unfortunately there is almost no straight answer for anything when it comes to legal issues.)
A well-tailored estate plan ordinarily has many more elements than can be successfully addressed in a do-it-yourself estate planning kit, will kit or trust kit. While a do-it-yourself will or trust should be valid in both Tennessee and Mississippi if it is propertly executed and witnessed, the likelihood of ending up with a proper will or trust is about the same as if you attempted to fly and land a 747 by just reading the flight manual. Heck, you might get away with it, but the affects if you don’t are catastrophic. There is simply no substitute for the experience of a professional estate planning lawyer.
One probelm with the use of these cheap (and I truly mean “cheap” here, with all the bad connotations that come with that word) estate planning kits is that people simply fill in the blanks and think that what they have done constitutes an estate plan. What many people don’t understand is that a poprer estate plan or trust must actually be funded. An estate plan is not complete simply because a piece of paper was signed. Assets must be transfered properly or else the plan is worthless. Also, all types of assets that the person owns or controls that pass to beneficiaries independently of a will, such as retirement plans and life insurance, must be considered. The beneficiary designation forms for these assets will not be found in a kit.
In my years of experience I’ve found that people who believe that they need a “simple” estate plan are often surprised to find that they have failed to consider critical points, such as the possibility of simultaneous deaths and the significant benefits that trusts offer.
A do-it-yourself kit may pass muster from a basic legal standpoint if executed properly, but its success should not be measured by whether the resulting documents are legal, but by whether one’s objectives are accomplished.
Will Contests Featured on Dr. Phil Show Today
November 13, 2007 | Leave a Comment
The November 13, 2007 episode of the Dr. Phil show will be all about will contests and estate planning blunders. For all of you out there who wonder if people really fight over wills this should be your chance get an earful.
The teaser for the show identified four sisters who were bitterly embattled in a will contest for the $400,000 inheritance left by an aunt. It seems that the aunt went away to stay with one of the sisters immediately before passing away, and during that time the original will was changed (this is a called a codicil to a will) in a way so that the sister and her kids received quite a large proportion of the estate.
This brings up an interesting question that each and every one of you should be thinking about when doing your estate planning here in Tennessee and Mississippi. Are you sure that your heirs will not be fighting over what you leave them in your will? Probably not.
This is another reason why almost everyone should seriously be considering having a Mississippi lawyer or Tennnessee Lawyer create a living trust for them. If a living trust had been in place for the Aunt all of the bickering, hurt feelings and very costly legal fees would have been avoided.
To find out more information about how the Ferrell Law Firm can help you with your Memphis living trust or Mississippi living trust give us a call today at 901-881-6352.
Celebrity Estate Planning Blowups
November 12, 2007 | 2 Comments
I received the following article courtesy of WealthCounsel. I’m including it here for all of my Tennessee and Mississippi Estate Planning clients who might find it interesting.
The Worst Estates of the Year
Life is short-sometimes tragically so-and an estate plan is never truly
finished. The year’s most notable estate blowups were all sadly avoidable, if
only they had left clear intentions for everyone on their list.
Anna Nicole Smith
A $500 million baby . . . maybe
Only 39 when she died in February of an accidental overdose, Anna Nicole
Smith had not updated her 2001 will that named her son, Daniel, who had died of
an accidental overdose several months earlier, as sole heir. Probate court
will most certainly award her modest assets of roughly $700,000 to her only
surviving child, daughter Dannielynn. As for her share of billionaire
ex-husband J. Howard Marshall II’s estate, the court will likely name her daughter
the rightful heir of close to $500 million.
But where that money ends up will depend on the man who controls it-either
Dannielynn’s biological father, Larry Birkhead, or her mother’s lawyer and
companion, Howard K. Stern, who is named as executor and is likely to be a
trustee. Dannielynn’s financial future would have been safer if her mother’s
will had spelled out full provisions for a trust, says James Ferrell, a
trusts-and-estates attorney in Memphis, Tennessee. Ferrell has handled many estate
disputes involving people who have omitted certain children from their
wills, but the Smith case is virtually unprecedented. In most states, if a
wealth holder wishes to prevent a biological child from inheriting assets, it
must be stated in the will. Otherwise laws of intestacy will assume the child
was omitted unintentionally.
