We’re all about equality, but the fact is that women have different estate planning needs than men.  Whether they’re single or married, have children or no children, women have different things to think about when it comes to estate planning. This means that women need to be involved in the planning process: Express their own wishes, voice their own concerns, and ask their own questions.  Here are three of the ways that women are different from men—and how it affects their estate planning.

1. Women live longer than men. Among the senior citizen population (65 and older) more than three times as many women as men are widowed. This longer life expectancy means two things; first of all it means that women are the ones who will likely have to deal with taxes.  When a married person dies their assets can transfer to their spouse tax free.  This doesn’t avoid taxes it merely delays them, and the surviving spouse (the woman) will have to be the one to minimize the tax burden on the children.  Second of all, women have to worry more about their retirement savings lasting them to the end. Estate planning is partially about distribution of your remaining assets when you die—it takes careful planning to ensure that you’ll have remaining assets after a long and active life.
2. Women are the caregivers. This includes taking care of young children and elderly parents.  Statistically, women are the ones who will initiate the estate planning process—mainly because they are concerned about the guardianship of young children.  Women are also the ones who will eventually have most need of a caregiver agreement or help navigating the Medicaid application process when they’re caring for their older relatives.
3. Women need to be most concerned about loss of primary income. Because men are still generally the primary breadwinners in a family, women are the ones most often left out in the cold when their spouse passes away and they lose that income stream.  Women need not only to make sure they and their partner both have adequate insurance policies, they need to plan to keep those insurance proceeds and to avoid heavy taxes upon death.

All of these things can be discussed and planned for with your estate planning attorney—and it doesn’t take away from your spouse or children.  In fact, having your own plan in order actually helps the important people in your life.  So don’t wait any longer, plan to protect yourself today and in the future.

There seems to be some confusion nowadays about whether “a dog’s life” refers to a life of ease or toil, but for these wealthy canine heirs life is definitely the former!  Whether it’s a wealthy eccentric leaving millions to a dear canine companion or whether it’s a lover of animals leaving a portion of their estate to charity, more and more dogs (and other animals) are being included in wills and trusts.

Naming your pet in your will or trust may be odd, but it’s perfectly legitimate.  Unfortunately, disinherited family members may not always agree.  When Leona Helmsley passed away in 2007 she left $12 million to her dog Trouble, but that amount was reduced by Judge Renee Roth of the Manhattan Surrogate Court to a mere $2 million.  The current canine court battle is over the will of Miami heiress Gail Posner, which leaves $3 million to her dog Conchita, as well as $26 million split between seven of her bodyguards, housekeepers and other personal aides.

Naming your pet in your will may be perfectly legitimate, but the truth is that there is nothing to stop disgruntled family members from contesting your wishes.  If you choose to do something “unusual” in your will or trust, or if you know of family members who are likely to make trouble, it may be necessary to take extra precautions to ensure your wishes are followed.  Inform your estate planning attorney of the potential conflict and discuss what steps can be taken to prevent it.  In some cases “no contest clauses” can be added to a will or trust to discourage court battles.  In other cases a simple meeting of all family members with your attorney to explain your wishes and reasoning will do the trick.  Talk to your attorney or call our office to find out what can be done to keep the peace in your family—canine or human.

Six months into 2010 and the estate tax repeal is still making news.  This time it’s a story about Texas billionaire Dan L. Duncan who died in March, leaving all of his billions to his spouse, family and various charitable organizations… and none to the government:

“Had his life ended three months earlier, Mr. Duncan’s riches — Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world — would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher… Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan’s four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.”

According to the NY Times article this news is meeting with mixed reactions.  Opponents of the estate tax (sometimes called the death tax) are hoping to make the repeal permanent.  Others, however, don’t agree:

“’The ultrawealthy in this country will still be able to pass on enormous wealth to the next generation,’ said Chuck Collins, who studies income inequality and has worked with billionaires like Warren E. Buffett and Bill Gates to promote an estate tax. Mr. Collins argues that the tax is a ‘recycling program for economic opportunity.’”

Whatever happens in future years, considering that this year is already half over it can only be hoped that heirs and executors won’t have to worry about the tax being reinstated and made effective retroactively; which leaves us free to look ahead and plan for 2011 when the estate tax comes back at a whopping 55%. If you’re wondering how all these changes will impact your estate plan today, tomorrow, or years in the future please call our office.

If you have a family trust—or are considering creating a family trust—to protect your assets you may want to ask your attorney about creating an out of state trust. It’s a grantor’s market (so to speak) and creating a trust these days doesn’t mean you have to simply accept the tax laws of your state of residence.  Creating a trust in another state—with tax laws that are friendlier to trusts—is a perfectly legal option, “the only real requirement is that [you] choose an in-state trustee.”

As we mention frequently on our blog, there are many reasons for families to create a trust: credit protection, keeping assets in the family, estate planning, educational savings, and many more.  Furthermore, trusts are no longer an exclusive tool for the rich and famous; trusts are useful for just about everybody, and the states recognize this.

“States such as Alaska, Delaware, Nevada, New Hampshire, South Dakota and Wyoming have modified their trust laws in recent years to make them more attractive to individuals and families, including nonresidents, looking to minimize taxes, shield assets from creditors and preserve family assets in the event of a divorce, among other things.”

If you would like to explore your options for out-of-state trusts we recommend working with your local attorney, someone you trust who can meet with you when needed, who can draft the trust documents for you.  Your local attorney can then have a licensed attorney from the state of your choice review the documents for state-specific issues.

Serving as someone’s executor or personal representative is a HUGE job, and not for the faint of heart.  Although it is commonly considered an honor, there is a lot of work involved, and an executor must have a great capacity for organization, attention to detail, meeting deadlines, and more.  You may be tempted to name your favorite sibling or eldest child just to keep from hurting any feelings, but your family and heirs will not be well served if you choose your executor based on emotion rather than ability.

Keeping this in mind, here are 4 things to consider when choosing your executor or personal representative:

1. Your executor should be trustworthy. Your executor will be privy to all of your financial secrets: reviewing estate assets, determining your liabilities and paying off creditors, settling outstanding debts, and making distributions to heirs. Chances are you don’t want all that information spread throughout the family or community.
2. Your executor should be organized. The person you choose will be in charge of a number of detailed tasks, both large and small.  He or she will be making lists of assets, meeting court deadlines, making timely distributions for estate taxes, and more.  Missing or being late for one of these many steps can draw out the entire process, costing your heirs both time and money.
3. Your executor should be financially savvy. One of the responsibilities of executor is to keep the estate viable (making sure the mortgage and fees continue to be paid) during the probate process. If you have investment accounts you’ll want to ensure they won’t languish and lose their value before they can be distributed to your heirs.
4. Your executor should have heart. Although probate is a can be a difficult and detailed process, it is at its core about the people you love.  Your executor should have the ability to be caring and compassionate during this emotional time.

If you don’t know anybody you would trust with all of these responsibilities don’t lose faith, there are other options.  You can choose a bank or financial institution as your executor, or you can ask your estate planning attorney to partner with the person you choose as executor—helping them with the difficult tasks and ensuring a smooth probate for all involved.

Do you know how your retirement plan fits into your estate plan?  Ideally you would never have to worry about this; you would spend the last penny of your savings on the day you die.  But life rarely works out according to ideal circumstances, and the reality is that doing a little bit of estate planning for your retirement savings can save your heirs a whole lot of money and confusion.

The good news is that it’s fairly quick and easy to make arrangements for the distribution of your retirement assets after you die—that’s why you fill out all those beneficiary forms when you start a new job or open a new retirement account.  The bad news is that it’s also fairly easy to forget about these forms as the years go by, which is how too many people end up inadvertently leaving their retirement assets to a divorced spouse or aging parents rather than to their current spouse or children.  How can you ensure that your retirement savings will go to the right people?

• First and foremost, you’ll want to review your beneficiary designation forms frequently: every 2-5 years, and whenever you experience a major life event.
• Second, always name contingent beneficiaries!  You may feel that if you name your spouse as the primary beneficiary you’ve done all you need to do, but in life you should always have a fallback plan, and your retirement assets are no exception.
• Third, don’t count on your will to take care of everything.  Your named beneficiaries on your retirement account will override the beneficiaries named in your will.  If you are certain you want to leave your retirement assets to your estate, do so through a living trust and under the advice of an estate planning attorney.
• Fourth, if you’ve named minor children as beneficiaries (either primary or contingent), make sure you name a guardian for your kids and a trustee for their assets.  You may want to use those retirement funds to provide for the kids if anything happens to you, but minors cannot legally control assets, and they’ll need someone to manage their inheritance for them until they come of age.

If you have more questions about fitting your retirement assets into your estate plan, more information is available in this article from InvestorGuide.com, or call our office for more detailed and personalized information.

How much does it cost to raise a child from birth to age 18?  Online calculators now estimate the cost at about $250,000 (varying depending on where you live around the country), but any parent will tell you that it costs much more than that to raise a family.  This is because children don’t grow up in a vacuum.  Raising a child includes the cost of food, clothing, diapers, child care, and other necessities… Raising a family includes all of the above plus college education, insurance, retirement savings for mom and dad, and let’s not forget a little bit of estate planning.

Does estate planning really rank up there with college savings and retirement?  If you have a growing family the answer is an absolute yes.  Financial experts such as the one quoted in this article in the Boston Globe will agree; your estate plan is a kind of family insurance, and is just as important as your homeowners or life insurance policy.

Raising a family and creating your estate plan both require the kind of split thinking that allows you to look at the long-term future while still keeping yourself firmly grounded in the necessities of the here and now.  Just as parents must consider both onesies and universities, roller skates and retirement—so must your estate planning take into consideration what your family would need if you were to disappear today, as well as planning for the possibility that you could be alive and well and spending your money long past the age of 85 or 90.

If you have a growing family—or are a young couple about to jump into the joys of parenthood—don’t let the demands of the here and now blind you to the needs of the future.  Schedule time every few months or so to sit down with your partner and re-evaluate your current financial situation as well as your future financial portfolio and your estate plan.  Make sure they continue to reflect your long-term needs and desires.

In many of our previous posts we’ve stressed the importance of keeping your estate planning documents up-to-date.  Changes to the law, as well as changes to your own personal, medical and financial status can wreak havoc on a well-crafted estate plan if these changes aren’t addressed.  A good rule of thumb is to have your attorney review your estate planning documents every 2-5 years, but are there other changes or life events that might necessitate a more immediate review or update?  The answer to that question is YES!

Andrew Chan has written a short article for the Boston Globe in which he lists 13 significant life events that should have you reaching for the phone to call your attorney.  To go to the article and read his list click here.  To Mr. Chan’s list we would add just a few more life events that could have an effect on your estate plan:

A change in residence—especially if you move to a new state.

Children or grandchildren turning 18 or graduating from college—this may or may not change your estate plan, but at the very least your young adults will now need their own health care directives and privacy forms.

If you anticipate one of your relatives or heirs disagreeing with your wishes and challenging your will.

There are of course a great number of things which could impact your estate plan, not all of which can be named in one article or blog post; but if you stay aware—and stay in touch with your estate planner—you can rest easy that your plan will continue to function exactly as you intend.

Wills and estate plans are always touchy subjects among family simply because they can have so much hidden meaning… at least that’s what heirs often think:

I got mom’s jewelry but my sister got a cash gift—does that mean mom loves her more than me?

What’s wrong with me that Dad didn’t choose me as executor?

I never really liked the vacation home, but is my brother trying to cheat me by buying me out?

If I ask my parents about their estate plan now will they think I’m eager for them to die?

Wouldn’t things be so much easier if we could just lay all the estate planning issues on the table and discuss them openly and without judgment?  Well, that is exactly what this article on abc.com suggests we do.

The article includes 3 “Estate Planning 101 Inheritance Lessons” to help your family become better prepared for the inevitable: 1. practice honesty and transparency, 2. plan ahead and update often, and 3. think through your own wishes and the wishes of your heirs.  Three simple suggestions that can save you and your heirs a world of fighting, hurt feelings, and high legal fees later on.

But it’s not always easy to start such a sensitive conversation with family—that’s where our firm comes in. We can help you with the tough questions and decisions, and when the time comes we can help you discuss those questions and decisions with the rest of your family.  Although it’s tempting to simply bury your head in the sand, the longer you put it off the more difficult it becomes.  Let us help your family find a peaceful solution today.

2010 has been anything but ordinary as far as the estate tax is concerned.  First there was the unexpected repeal of the estate tax (unexpected not because the repeal was unplanned, but because nobody expected it to actually happen), then the idea that congress could reinstate the estate tax and make it effective retroactively, and now there are rumblings that certain  Senators are considering a prepaid estate tax!

According to this article in the Christian Science Monitor, “News reports suggest that the Senate may soon consider restoring the estate tax with an option allowing people to prepay their tax before they die. Details are apparently still in flux as senators negotiate. We—and maybe they—don’t know yet what they’ll propose for the basic estate tax but it’s unlikely to be harsher than the 2009 version.”

If something like this gets passed, a visit to your estate planning attorney will be more important than ever, especially if you have the wealth to protect and the means to spend some money now to save a lot of money later.

Of course, this is all just speculation right now, but even the idea of prepaid estate taxes tells us just how much the government is counting on that revenue—one way or another.  If you were under any illusions that the repeal of the estate tax might turn into a permanent thing this should be more than enough to convince you that the estate tax is here to stay.