Give While You Live to Avoid a Family Feud

January 8, 2015

An article in the New York Post about brothers battling over a painting from their uncle’s estate serves as a reminder of the importance of designating a destination for your personal property, either through a will or by gifting while you are still alive.

The brotherly brouhaha came about after noted Manhattan interior designer David Barrett died and left his two nephews – Richard and Alan Barrett — “equal shares” in his $5.6 million estate. The estate included a $45,000 piece of art that the brothers flipped a coin over to determine who would take home the painting.

Richard lost the coin flip – and then flipped out, filing a lawsuit to get ownership of the painting, which held up payment to the two estate executors and his brother.

The lesson here is obvious: simply splitting an estate without detailed requests can, and often does, lead to estate litigation.

The better solution is also a simple one: take a complete inventory of your personal property, and then designate a recipient for each asset.

Make these designations via a valid will, or even give them away while you are still living so there is no question as to who you intend to inherit your prized possessions.

Alternatively, consider taking pictures of each item of personal property and writing the name of designees to receive each item on the back of the image. Reference the images in your will.

And remember, if you are a parent, your children may be what you value most. You can protect them by putting in place a comprehensive Kids Protection Plan® to provide for their long-term and short-term care and by establishing a trust to fund their care if you are no longer available to provide for them. While you don’t “own” your children, of course, you do owe them the duty of ensuring their care is handled well if anything happens to you.

If you would like more information about a Kids Protection Plan, providing for your prized personal possessions or creating or updating your estate plan, call Serbin Law Offices today at 408-899-9529 to schedule a time for us to sit down and talk.

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Why DIY Estate Planning is a Bad Idea For the People You Love

June 10, 2014

America is a nation of do-it-yourselfers, but building a deck and creating a legally valid estate plan are two entirely different things – and a less-than-perfect deck won’t devastate your family’s financial future or the relationships among the people you care about most.

The prevalence of online legal services has led many people to believe that they can create legal documents cheaply and those documents will be just as effective as if they had visited an estate planning attorney. And this is why that is wrong:

No legal advice – these sites are little more than document mills that churn out the same generic forms over and over. They are not attorneys and cannot advise or warn you if you make a mistake. Plus, who will be there for your family when something happens to you if you’ve used an online document drafting service?

Think your family doesn’t need an advisor to support them when you are gone? Think again.

Consider this: Erica’s father was killed in a motorcycle accident. Dad didn’t leave much behind, but he did leave an estate plan prepared by a trusted family attorney. Had the family attorney not been there for Erica and her brother, they would have taken what dad did leave and drowned their sorrows in a European backpacking trip. Thanks to this family attorney, though, Erica and her brother now have a healthy trust fund set up for them for life with the proceeds of a successful wrongful death case.

Leaving it to your family to know what to do after you’re gone is a big mistake for the people you love.

One size doesn’t fit all – your family is different from everyone else’s family. Just like every state has different inheritance laws, every family has different situations. An online form will not help you protect a special needs child or relative, or protect a child’s inheritance from creditors or a nasty divorce. An online form cannot tell you how to protect assets from taxes or help you achieve your goals.

And, an online form cannot keep your family out of conflict during a time of grief. Even if you don’t have a lot of assets you are leaving behind, whatever you do have will be subject to distribution between the people you care most about. Some of the biggest disagreements we’ve seen after death, aren’t about loads of money, but about the little things and those little things aren’t going to be dealt with well with form documents.

Save now, pay later – you may think you are saving money by using an online service to create your will or trust, but it is impossible to make a fair comparison since the services provided are entirely different.

An estate planning attorney creates an entire plan tailored to your individual needs in a legal document that will stand up in court, and advises you on ways to cut taxes and save for retirement and long-term care. No online service does that.

In addition, your trusted advisor is going to be there for your family when you cannot be. The people you love will need someone to turn to after you are gone. Do you want them to be stuck with figuring out who that should be during their time of grief? Or do you want to leave behind the gift of having taken care of things well during your lifetime and a trusted advisor to hold their hand when you no longer can?

We invite you to take advantage of our specialized legal services for families with a Family Wealth Planning Session. Call Serbin Law Offices today at 408-899-9529 to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family.

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How to Preserve a Family Vacation Home with a Trust

May 27, 2014

If you are fortunate enough to have a family vacation home, you know the emotional value it holds for every member of your family. Many cherished family memories are rooted in a special place, which makes it important for current and future generations to preserve it properly.

A recent Wall Street Journal article explored the use of trusts to preserve a family vacation home. A trust is often a good choice when the current owners – parents or grandparents – are concerned that joint ownership could lead to disagreements or that maintenance costs may prove too great for the next generation to manage.

Instead of dividing ownership, you can establish a trust to hold title of the property and fund an endowment to handle maintenance expenses. In addition, to avoid paying custodial fees to the trust, you can set up a limited liability company to hold the endowment within the trust.

Once the LLC is registered in the state where the vacation property is located and the trust is created, the next step is to draw up a legal operating agreement that specifies when the property title and endowment would pass into the trust, usually upon the current owner’s death.

The operating agreement would also detail how the property is to be used, and grant each member of the next generation the right to equal access to the property. This is usually preferable to granting equal shares in a property since it prevents any one shareholder from cashing out his or her share and jeopardizing the use of the property by future generations.

As the WSJ article noted, it is usually preferable to have succeeding generations designate a property manager from within the family to make the key administrative decisions and coordinate the use of the property so it is shared equitably.

Using a trust can help guarantee that a beloved vacation home is preserved for generations to come, as well as preserve the family harmony that the home has played such a key role in developing.

If you would like some guidance on establishing a trust, call Serbin Law Offices today at 408-899-9529 to schedule a time for us to sit down and talk.

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What’s Changed In Your Life?

May 20, 2014

Estate planning is not a “set it and forget it” kind of thing. Your life changes, your assets change, the laws change — and if your plan doesn’t change, your family gets caught holding the bag. The people you love most end up bearing the brunt of your failure to act.

Conducting a proper review of your estate plan will help identify the potential need to update your plan because of:

Life transitions: Have any babies been born, loved ones died, people gotten divorced or married? If so, you need to revisit your plan.

Changes in the law: Changes in federal and state tax laws may require updates to your healthcare and financial powers of attorney. State regulations can also be revised to open up new wealth planning strategies that should be a part of your estate plan.

Changes in assets: Has your net worth gone up or down? Have you invested in any new assets, such as businesses, opened new bank accounts, retirement accounts, insurance policies, real estate or anything similar? If so, your plan needs to be revisited. And the spreadsheet of assets you have for your family (you DO have one, right?) needs updating.

Funding of assets and beneficiary designations: One of the most common mistakes people make is not properly completing the transfer of assets into a trust within their estate plan. Another common error is having beneficiary designations that are inconsistent with the distribution language in the estate plan. We recommend a review of those matters at least annually.

If you do not review your plan and update it regularly, your family will have to deal with the consequences.

If you would like more information about creating or updating your estate plan, call Serbin Law Offices today at 408-899-9529 to schedule a time for us to sit down and talk.

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Divorce After 50: Common Mistakes That Can Ruin Retirement

October 10, 2013

Beyond the emotional impact that divorce can have on couples of any age that decide to split, it can have a potentially devastating effect on the retirement plans of those who divorce later in life. Divorce after 50 usually results in a loss of income for both parties, which can mean working longer to fund a single retirement.

A recent article at Forbes.com pointed out four common mistakes made by those over 50 who are divorcing that can ruin retirement plans:

Choosing the house over other assets. For many people, choosing the family home in a divorce is more of an emotional than a rational choice. If the housing bust of the last few years has taught us anything, it’s that you can’t count on a house as a nest egg. Plus, a house is likely to cost you more as well in property taxes, maintenance and unexpected expenses like a roof or furnace replacement. So don’t automatically sacrifice retirement assets for a house until you weigh the costs.

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7 Steps for Effectively Managing an Inheritance

October 3, 2013

Research shows that a majority of baby boomers will receive an inheritance at some time during the lives, with the average inheritance estimated at almost $65,000. Should you be the recipient of family largesse, here are 7 steps you can take to be sure your inheritance is managed wisely:

1. Re-examine your financial goals. This should provide you with the direction you need to determine how to invest your inheritance, either for short-term gain or long-term benefit.

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How to Reduce the Risk of Identity Theft When a Loved One Dies

September 26, 2013

A new trend in identity theft – afterlife identity theft – is on the rise, with thieves scouring obituaries for personal information to steal the identities of those who have passed.

When you lose a loved one, it is important to take quick action and notify a number of institutions and government agencies about the death to help prevent afterlife identity theft.

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Why You Should Get Your Kids an Estate Plan

September 25, 2013

We are fairly certain the last thing your 18-year-old kid is thinking about is an estate plan. And you are probably not thinking about one for them either, but you should be.

Here’s why: once your child turns 18, you are no longer entitled to know about their medical records or make decisions about their medical treatment.

Can you imagine your child needing medical treatment in some college town and you are not able to help in any way without a court saying you can? It can, and does, happen.

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7 Good Reasons You Need An Estate Plan — Even If You Only Have $500 in the Bank

September 6, 2013

Contrary to popular belief, estate planning is not just about money or taxes. Far from it. Today, it’s more about protecting your assets for yourself and your loved ones, achieving your financial goals and safeguarding your health care. Money and taxes aside, here are 7 good reasons you need an estate plan:

1. Your Health care. Defining how your medical needs will be addressed in case you cannot make health care decisions for yourself is a primary objective of having an estate plan. You also need to consider how you will meet the costs of long-term care. You need to name someone to make decisions for you and tell them how you want them made. This must be legally documented or the person you want caring for you, cannot.

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Learn From the Expensive Mistakes & Smart Decisions Made By Actor James Gandolfini In Planning for His Estate

August 13, 2013

James Gandolfini, the actor best known for his portrayal of Tony Soprano on HBO’s The Sopranos, died suddenly last month while on vacation in Italy. His will is already on the Internet, available for everyone to read – which is the first lesson we should all take away from what he did and did not do right in his estate plan: establishing a trust keeps your private financial matters private!

Estate planning attorney Julie Garber, who writes a column on Wills & Estate Planning on About.com, lists 5 other estate planning lessons learned from James Gandolfini:

Lifetime trusts are often better for beneficiaries. James Gandolfini’s 13-year-old son and infant daughter will inherit a large portion each of the actor’s estimated $70 million estate once they reach the age of 21. It may have been better to establish lifetime trusts for each of the children, then making them co-trustees at 25 or 30, then sole trustees at the more mature age of 35 or 40. This would have protected their inherited assets for life, from creditors, bankruptcy, lawsuits and divorce.

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