Estate planning is not something that comes up on a day-to-day basis, even though people make other financial decisions every day. Sometimes it can be helpful to be reminded that having a will or estate plan in place may be one of the most important financial decisions that a person can make. Recently, billionaire and influential business leader Warren Buffett tackled some questions related to his own personal estate plan.
]]> Buffett was attending a meeting where he was asked several questions related to his business and finances, but he also gave some great insight into what might happen to all of this after he is gone.Buffett has long been an advocate for responsible giving and does not simply want to give his heirs all of his vast wealth. His personal goal is to leave his children enough money that they will be taken care of, but not so much that they do not have to do anything to contribute to their own success.
The billionaire also stated that he frequently updates his will about every five years. He says that his views on leaving his children more money has changed as they have grown and matured. Leaving them more money as well-adjusted adults makes more sense as the years go by.
It may be surprising, but Buffett also states that he views his will as a family matter, not an individual matter. By giving family members the ability to review a will before a person is gone, he says, they are able to ask questions and have them answered.
The billionaire reiterated his dedication to financially contributing to society, and he stated that he continues to support the inclusion of charitable giving as part of an estate plan.
Creating an estate plan is a very personal process. What is right for one person may not be right for another. However, there are certainly lessons to be learned from people like Warren Buffett who have been successful in so many areas of financial planning.
Source: The Globe and Mail, "Lessons in estate planning from Warren Buffett," Thane Stenner, May 19, 2013
]]>This is one critical question that people should ask themselves before developing an estate plan. By first determining what should be protected and how that can best be accomplished, a person can begin putting together a comprehensive and effective estate plan.
One solution that many people in Massachusetts consider is to set up a trust. There are a few areas that a person will want to think about before setting up a trust.
]]>Keeping these things in mind can be very helpful for people who are thinking about how they can best protect their assets. It may also be a good idea to work through these complicated processes with an estate planning attorney.
Source: Forbes, "8 Ways To Benefit From A Trust," May 14, 2013
]]>People in Boston may be familiar with the recent stories about the young actress Amanda Bynes. Over the past few weeks, the young celebrity has been making headlines with her erratic and risky behavior. Sources indicate that the bizarre behavior all started shortly after she was given access to millions of dollars that she had earned earlier in her career. Many people have suggested the starlet is in need of a conservatorship or guardianship to protect her.
]]> Bynes' legal troubles started after she was charged with drunk driving. Shortly after that incident, she caused and left the scene of two other car accidents. Her Twitter account exploded with strange comments and worrisome pictures. She shaved part of her head and has been dramatically altering her appearance. Sources also suggest she has been abusing alcohol and drugs.Many people believe that her actions suggest that she may not be capable of acting in her own best interests. Adults who need help managing their health, safety and financial affairs may benefit from a conservatorship. If she continues to act out in ways that she knows are harmful, it may be necessary for the court and her family to intervene.
The standards and requirements that must be met for a guardianship or conservatorship vary from state to state. People who are considering these options can speak with an attorney who understands the process and importance of protecting the assets of a minor child or incapacitated adult who cannot control or manage the assets themselves.
Source: Forbes, "Amanda Bynes' Comeback Could Begin With A Guardianship," Danielle and Andy Mayoras, May 2, 2013
]]>A person's will may end up surprising many people. He or she may include or omit certain people who were not expecting such treatment. There are also instances in which a person who has died has much more money than anyone else realized. In some other cases, people are very surprised to learn that not only is a person wealthy, but he or she has not left a will behind.
]]> This was the case recently when a man who had led a relatively private and mysterious life passed away. He was a 97-year-old survivor of the Holocaust and counted a few other survivors as his friends. However, little else is known for certain about his life. Some people say he had been married and had a child before they both died in the Holocaust. The man had reportedly gotten remarried years later, but the couple divorced and never had children. Without any heirs that anyone knows about, the man's estate now lies in the hands of a public administrator.But perhaps the biggest mystery about this man was what he left behind and what he did not. According to reports, the man was a very successful real estate developer and had built an estate worth about $40 million at the time of his death. To the best of anyone's knowledge, he had no will or plan in place that dictated what was to be done with the money after his death.
This means that the future of the man's estate is anything but secured. A large portion of his money will go towards tracking down any possible heirs and investigating whether or not a will was ever completed.
Even people who do not wish to leave anything to any of their relatives should strongly consider having a will. Rather than leaving an estate in the hands of a stranger, a will can ensure that a person's personal wishes are carried out after he or she has passed away.
Source: New York Times, “Holocaust survivor left $40 million, but no heirs,” Julie Satow, April 27, 2013
]]>One of the most upsetting illnesses that a person suffers in the late stages of life is Alzheimer's. Massachusetts residents know about the devastating effects of this disease on a person, which includes dementia and memory loss, but what may be less obvious is the financial and emotional toll it can take on those who are tasked with caring for an Alzheimer's patient.
]]> Alzheimer's, which is also referred to as "the long goodbye," gets worse over the course of many years. On average, it can cost about $56,000 every year to care for a person with a dementia-related illness such as Alzheimer's. Rather than ignore these high costs or hope that a loved one will be able to make responsible care and financial decisions, people can take action and develop a long-term care plan to make this process easier if and when they are diagnosed with this illness.People who cannot make their own decisions related to their own care often rely on a spouse or family member to help out. However, depending on the severity of the disease, an Alzheimer's patient may not be able to clearly discuss these options or their wishes with anyone, no matter how close their relationship is. This is why it can be crucial for a person to clearly and thoughtfully outline their financial and medical wishes prior to the onset of any symptoms of dementia or memory loss.
Whoever is assigned the role as caregiver can experience many challenges, both emotional and financial. The strain of caring for loved one can be significant, as can the cost of securing the necessary medical services. The anxiety of also having to make difficult decisions can simply be too much to expect from a person. However, with a long-term care plan in place, care decisions and financial allowances can be clearly outlined so that caregivers are sure they are acting in the best interests of a loved one.
Source: Everyday Health, "Having an Alzheimer's Action Plan," Dr. Sanjay Gupta, April 24, 2013
]]>The issue of transferring ownership over digital property has been a very complex situation. Privacy laws in the United States make it virtually impossible to give another person control over online data and accounts, although there are legislative moves being made to tackle this issue. However, some Internet companies are taking matters into their own hands.
]]> Google has taken a new approach to handling a person's data after they have passed away. While they cannot transfer control of a person's YouTube, Google+, Gmail or cloud storage actual account to another person, Google has made it possible for users to assign someone else control over the data. So, while a person would not be able to send an email from another person's account, he or she would be able to access the user's data.With the new tool, current Google product users dictate what to do with their data after a specified period of inactivity. Users can either have all their data deleted or they can have the data sent to another person who can then decide what to do with the information.
Like any plan that dictates what should happen to a person's assets after he or she has died, the Google data transfer should be considered carefully. It is important that the recipient of this responsibility understands that caring for a person's digital afterlife can be a difficult task, as it may involve serious emotional and legal challenges.
While Google is leading the way in giving people control of their digital data after they have died, they are certainly not alone. Many other companies are working to develop similar plans, and legislative actions are being explored which could give people the same type of control over their digital assets that they have over their tangible assets.
Source: The Wall Street Journal, "Google Lets Users Plan 'Digital Afterlife' By Naming Heirs," Geoffrey A. Fowler, April 11, 2013
]]>This was the case recently for one woman who passed away without any leaving any documentation about what to do with her $1.5 million estate. The story started out across the world in Ireland but ended up right here in Massachusetts.
]]> According to reports, the Irish woman passed away after her husband had died. The two had no children and she had no siblings who would have inherited the estate under Irish law. It took the dedication and hard work of three genealogists and a documentary crew to eventually track down the woman's maternal and paternal cousins would were entitled to portions of the woman's estate.All told, 17 beneficiaries were identified and notified. Each of the cousins was told they would receive $36,000 from the estate of a woman they had never known. In fact, the cousins themselves had never met each other even though some of them lived just a few miles away from one another.
Luckily, this story has a happy ending. However, the significant efforts and resources that were utilized in this particular situation are generally not available for every person who passes away without a will. Without this documentation in place, others will have to take on the extra work of figuring out what to do with a person's estate. Rather than leave an estate up for the interpretation of others, people can work with an attorney to clearly and specifically document their wishes.
Source: The Boston Globe, "Residents find family and fortune," Katheleen Conti, March 14, 2013
]]>In these situations, it is not uncommon for family members, spouses or loved ones to contest a person's will. This can administering an estate much more difficult, and can draw out the probate process considerably. Take, for example, the estate of J. Seward Johnson Sr., who was heir to the Johnson & Johnson fortune. After he passed away in 1983, a three-year battle over the terms of his will took place. His widow, Barbara Piasecka Johnson, was at the center of the argument.
]]> Johnson and his wife were married in 1971 when he was 76 and she was 34. The marriage took place even though none of Johnson's six children attended or were even invited. The pair was married for 12 years before Johnson passed away and the family learned that he had left nearly all of his fortune, about $500 million, to his wife. Five of his children were left out of the will completely.Not surprisingly, the children challenged the will and made accusations that Johnson's wife had exerted undue influence on him while he made changes to will. Witnesses claimed that the couple was unhappy and the wife had been abusive towards her elderly husband. There were allegations of conflicts of interest and favoritism.
All told, it took three years for the case to be settled, and it cost more than $24 million in legal bills. The family's private issues were dredged up and exploited in court before the bitter battle finally came to an end. Johnson's wife kept about $300 million and his children were given a total of $40 million.
The probate battle over her husband's estate became one of the costliest and ugliest probate battles in the country. Unfortunately, this case ended up to be one of the defining life events for Johnson's wife. She recently passed away and it is unclear if the administration of her vast estate will be subject to the same challenges.
Source: The New York Times, "Barbara Piasecka Johnson, Maid Who Married Multimillionaire, Dies at 76," Bruce Weber, April 3, 2013
]]>Increasingly, young people who inherit large amounts of money through a trust fund are struggling with what it means to have that kind of wealth. Some of them feel anxiety over receiving high-value assets they do not believe they have earned or they feel guilty for having immediate financial security when others around them do not. This group of people, referred to as trust-fund progressives, is looking to make a change with the money they inherit instead of keeping it all for themselves.
]]> Many of these trust-fund progressives run into some issues when it comes to managing these inheritances. Emotionally, they may not believe they deserve to be wealthy. Financially, they may not feel they need the additional funds. Politically, there is a desire to share this sudden wealth with others who may not have been given the same economic opportunities. Instead of seeing this money as a way to secure their own financial wellbeing, trust-fund progressives feel inclined to share this wealth with others.People setting up a trust fund for these young people may want to take this into consideration when they are developing their estate plans. Knowing that a person does not want to receive a large amount of money and will ultimately give it away can have a significant impact on whether a trust should be set up for that person in the first place. And if it is set up, the value of this trust may be adjusted to more appropriately fit the lifestyle of the person receiving it.
Setting up a trust fund is something that many people do with good intentions. They want their family and loved ones to be taken care of financially. However, some inheritors see this influx of wealth as a burden and they do not want that type of responsibility. Discussing the most appropriate way to leave money to loved ones is important so that the intents and benefits of an inheritance are appreciated.
Source: The New York Times, "Among Young Inheritors, an Urge to Redistribute," Paul Sullivan, March 25, 2013
]]>A survey was recently conducted of 1,700 adults in regards to the importance of having end-of-life wishes put into writing. Despite an overwhelming majority of respondents, about 80 percent, who agree that having this type of plan in place is important, only about a quarter of them have actually taken steps to do so.
]]> Having the discussion about what medical treatments are and are not desirable for the end of a person's life can understandably be very difficult for many people. People avoid talking to their loved ones about it because they do not think it is relevant now or they simply do not want to talk about end-of-life issues. However, having a clear plan in place that explains your wishes can save a lot of anxiety, confusion and money in the long run.In situations when a person is too ill or injured to make their own health care decisions, these difficult choices fall to those closest to us. Without a clear understanding of what to do, family and friends can be put in a very complicated position. They may make decisions that are undesirable but without any other direction, they cannot exactly be faulted for this.
People should have their wishes clearly defined and laid out when it comes to want they want in terms of their health care and their assets. This can go a long way in protecting a person's interests when they can no longer express themselves. Without an advance directive or estate plan in place, a person is leaving his or her care and wealth at risk of being controlled by others.
Source: amednews.com, "76% of patients neglect end-of-life care planning," Kevin B. O'Reilly, Feb. 27, 2012
]]>An increasing number of families may find themselves in the position of examining the options available for the care of an elderly loved one. In fact, by the years 2030, there will be more than 72 million people over the age of 65 in U.S. This is more than twice the number reported in 2000. For this reason, it can be crucial to work with an attorney to develop a long-term care plan.
]]> Skilled-nursing care is something that many families pursue as they look to help an elderly family member. However, the high cost of maintaining these services make in an unrealistic option for many people. For this reason, families generally have to consider many programs and plans to cover the cost of elderly care.Medicare can cover the cost of the first 20 days that a person is in a nursing facility, but after that there is a significant co-pay that a family or supplemental plan must cover. In terms of Medicaid, the primary payer for elder care services, there are rigid financial and medical requirements that must be met consistently. There are also folks who end up paying for care by themselves, which can end up being extremely costly.
There are currently groups who are working to develop clearer and more accessible long-term care solutions, but an immediate or definitive plan is not expected to be available any time soon. Until and unless this happens, families can work with an estate planning attorney who understands the challenges that many people face when it comes to the issues of elder care. Developing a long-term care plan can make this transitional time, which is already difficult enough, a little easier to cope with.
Source: ModernHealthcare.com, "Long-term tab," Jessica Zigmond, March 9, 2013
]]>As complicated as it may for a person to decide what to do with his or her own assets, there are some folks in Massachusetts who are either too young or are incapacitated and cannot control their own assets. In these cases, it may be necessary to consider a conservatorship.
]]> Situations in which a person may require a conservatorship can be accompanied by difficult legal and emotional issues. They often are necessary when a person is disabled or lacks the mental capacity that may be required to manage and control their own assets. A separate person or party is then appointed to be the conservator and control the assets.Recently, the co-founder of Upper Deck Trading Card Company passed away from what is reported to be alcohol poisoning. The 59-year-old man had long struggled with an addiction to alcohol and was also battling dementia in the time leading up to his death. Based on these medical conditions and the extent of his mental incapacity, the man had been under a court-ordered conservatorship.
It is important for a person to be reassured that their assets and estate will be properly managed and taken care of, especially if he or she cannot do it themselves. While it can be a difficult topic to discuss, a conservatorship may be a necessary solution if a person is not able to make financial or legal decisions on their own.
Source: NBC San Deigo, "Upper Deck Co-Founder Died of Alcohol Poisoning: Report," Paul Krueger and Monica Garske, March 7, 2013
]]>These issues were highlighted during the fight over the will of legendary entertainer James Brown. Even though Brown passed away in 2006, it has taken six years for the feud over his will to finally come to a close.
]]> According to sources, Brown had drawn up a very clear will and trust leaving specific funds and assets to his family and wanted the rest of his substantial fortune to be donated to help underprivileged students in his home state. He was very outspoken in who should and should not benefit from his estate and people assumed there would be little room for ambiguity.However, because he had drawn up the will in 2000, before an alleged marriage and the birth of another child, family members challenged the accuracy of the will. Additionally, claims of misconduct on the part of his trustees and estate planning attorney marred the legitimacy of the documents.
After six years of legal battles, court hearings and questionable settlement brokered by the state Attorney General, the state Supreme Court recently stepped in and made a final ruling on the execution of the will. It was ruled that a compromise offered in the Attorney General's ruling effectively destroyed the original intent of the will. The charitable donation portion of Brown's estate had been cut in half, and the alleged wife and son that were not included in the will were given a portion of Brown's assets.
The recent Supreme Court ruling noted that the original challenges to the will were not valid and the resulting compromise went against the Attorney General's duty to protect charitable trusts. It was also noted that the entire situation was completely avoidable and unnecessary. For six years, the challenges to Brown's estate plan prevented his final wishes from being carried out. While much of the blame falls on those who unfairly challenged his will, it is suggested that all of that could have been prevented if Brown had taken a few more precautions in the drafting and updating of his will.
Source: Forbes, "Court Scolds SC Attorney General For Hijacking James Brown Estate," Feb. 28, 2013
]]>Recently, a number of billionaires across the United States and in other countries have made a unique pledge to a charity organization called The Giving Pledge. More than 100 people and families have signed a pledge to give away about half of their total wealth to various charities during their lifetime.
]]> The pledge is not legally binding and is referred to as a moral contract. But with their pledge, billionaires like Bill and Melinda Gates, Warrant Buffett and Richard Branson will focus on donating 50 percent of their wealth in ways that they see fit. They are reportedly taking more control over how their vast wealth is distributed to charity and philanthropic efforts.Some people are likely wondering why these folks would give away such enormous amounts of money, especially those who have children and grandchildren. Many of the people on the list would like to be regarded as a philanthropist and make sure their money is being invested in ways they see fit. After a person is gone, his or her money may continue to benefit others through charitable gifts.
When it comes to the level of wealth of the people participating in the Giving Pledge, there may also be such a thing as too much money. One media mogul stated that he would like give away half of his wealth because simply giving it to his children would rob them of the sense of motivation and achievement. Leaving all his money to his children would burden them, he says, with the weight of the enormous wealth.
No matter what a person decides to do with his or her money and assets, it is crucial to plan ahead. Whether a person's estate is significant or modest, making sure that the terms of an estate plan are executed properly can be important for everyone.
Source: The Huffington Post, "Gates, Buffett Giving Pledge Gets Richard Branson, 11 Overseas Billionaires To Donate Half Fortune," Jessica Prois, Feb. 20, 2013
One of the main reasons that people ultimately set up an estate plan is to make sure their assets are distributed to the proper parties. Interestingly, these parties are not always children, spouses or even parents. Across this state, more people are creating a trust for their pets because Massachusetts is just one of the 46 states that have authorized people to create pet trusts.
]]> People with pets generally consider the animal to be a part of their family and have spent years caring for their furry companion. However, when a person dies, his or her pet will likely be taken care of by someone else. By establishing a pet trust, a person can make sure that the animal's welfare will be protected by setting aside money that is specifically reserved for the ongoing care of a pet.Pet owners understand that the cost of caring for an animal can be significant and they want to make sure their dog, cat, horse, bird or other animal is properly cared for when they are no longer around. An animal cannot inherit money, so setting up a trust will ensure that the pet's needs continue to be met. There are some well-known examples of people leaving significant funds to a pet in the form of a trust. For example, Leona Helmsley famously set up a $12 million trust for her dog.
According to some sources, there are over 72 million households in the country that have a pet. This means that millions of people may want to consider setting up a trust for their beloved companion so that the cost of caring for the pet will not fall in someone else's lap after an owner has passed away.
Source: telegram.com, "Trusts provide safety net for pets," Lisa Eckelbecker, Feb. 10, 2013
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