A scenario that plays out far too often: a parent’s intended beneficiaries lose most of their inheritance to the IRS, court costs, and lawyers. This recent Tax Court case provides a cautionary tale about the perils of incomplete planning.
Posts Categorized: Trusts & Estates
By dying in 2010, the billionaire and long-time New York Yankees owner’s wealth avoids the federal estate tax, likely saving his heirs enough money to field an entire team of Alex Rodriguezes.
Some words of wisdom for people who have assets in, or reside in, multiple jurisdictions.
Heartbreaking stories like this are way too commonplace. We have had our share of similar, well-publicized problems in Hawaii. A primary mode of elder financial abuse is by the misuse of durable powers of attorney. Powers of attorney can be helpful tools, but they must be carefully managed and maintained, and they must be judiciously granted. It pays to have checks and balances, as well as systems of accountability, in place.
Premarital agreements may not be the most romantic things in the world, nor the easiest to discuss with a prospective spouse. However, they do have a place in estate planning. A scenario we see way too often is where a widowed individual marries late in life and leaves assets to a second spouse. The second spouse subsequently leaves those assets to his or her kids, to the exclusion of the children of the original owner. This is fertile ground for lawsuits and long-term resentments that could easily be avoided with proper planning. A premarital agreement is not necessarily a concession that a marriage work out. In fact, it can promote long-term stability in the marriage, with the added benefits of encouraging friendly relations between the surviving spouse and members of the next generation, as well as between his and her kids after the marital partners are both gone.
The good news is, these folks have plenty to fight over and the lawyers are going to make a ton of money. The bad news is, when people fight over estates, the lawyers often end up being the only winners.
It’s looking more and more like the estate tax will be coming back with a vengeance in 2011. It’s not too early to plan for how to minimize the bite. This WSJ article provides a pretty good explanation of the current situation and future prospects.
Dan L. Duncan, a soft-spoken farm boy who started with $10,000 and two propane trucks, and built a network of natural gas processing plants and pipelines that made him the… Read More »
Vermont independent Sen. Bernie Sanders and three Senate Democrats Thursday proposed an estate-tax plan that would hit wealthier taxpayers harder than another proposal on the table. The estate tax lapsed… Read More »
About half a dozen states are actively vying to attract wealthy families' trusts, as well as the jobs and tax revenue that come from the companies that administer these estate-planning… Read More »