Anytime someone in their twenties passes away, it's a tragedy. That's the same for Amy Winehouse, regardless of her addiction history. However, from early reports, it appears that proper planning may prevent the tragedy from turning into a legal circus.
http://money.usnews.com/money/blogs/alpha-consumer/2011/07/27/amy-winehouses-financial-legacy
Something this article points out is that her estate plan will likely prevent portions of her estate to be awarded to her ex, Blake Fielder-Civil. This is an important point. Most jurisdictions, whether in the US or in another country, have rules about how an estate will be split out when you don't have a will, what we call dying intestate. These rules use assumptions about how most people would want their estate to be dispersed. However, those assumptions may do something that you don't want to do; for example, apparently in the United Kingdom, filter assets to exes. If you know anyone in your life that you want to make sure doesn't receive your estate, meet with a licensed attorney to review the likelihood that person could receive a portion and what you can do now to prevent a circus later.
Friday, July 29, 2011
Thursday, June 16, 2011
Who's in Their Right Mind Anyway.
A probate court in Pennsylvania is determining whether the heir to the DuPont fortune had the capacity to execute a valid will. http://www.philly.com/philly/news/pennsylvania/123980894.html
In Minnesota, testamentary capacity means that the person executing the will knows the "nature, situation, and extent" of their property, the claims of others on their estate, and be "able to hold theses things in their mind" long enough to make a rational decision in distributing their assets. Check out the case of In re Estate of Torgersen, 711 N.W.2d 545, for more explanation. You don't have to be a financial genius to have capacity, just need to meet those three minimum requirements.
If you are setting up your estate plan and are thinking about disinheriting someone, a good idea is to request that your attorney ask you questions to demonstrate your capacity and record that conversation. That way, if anyone questions whether you had capacity when you made the will, there will be evidence showing that you did. If you're setting up a plan that disinherits someone, speak with a licensed attorney in your area about preventing questions of capacity.
In Minnesota, testamentary capacity means that the person executing the will knows the "nature, situation, and extent" of their property, the claims of others on their estate, and be "able to hold theses things in their mind" long enough to make a rational decision in distributing their assets. Check out the case of In re Estate of Torgersen, 711 N.W.2d 545, for more explanation. You don't have to be a financial genius to have capacity, just need to meet those three minimum requirements.
If you are setting up your estate plan and are thinking about disinheriting someone, a good idea is to request that your attorney ask you questions to demonstrate your capacity and record that conversation. That way, if anyone questions whether you had capacity when you made the will, there will be evidence showing that you did. If you're setting up a plan that disinherits someone, speak with a licensed attorney in your area about preventing questions of capacity.
Tuesday, May 31, 2011
Pre-nups Have a Place in Estate Plans
There are a variety of good reasons to enter into a pre-nuptial agreement, also referred to as an ante-nuptial agreement, with your soon-to-be spouse and not all of them include divorce. A more important, and hopefully likely, scenario is that you will be happily married until one of you passes away. However, without proper planning, property could pass in a way that neither you nor your soon-to-be spouse intend.
For example, if you have family farm property, normally your interest will go to your spouse upon your death. If your spouse gets remarried and fails to properly plan, their new spouse may get an interest in your family’s property. Additionally, even if you specifically give property to someone other than your spouse in your will, there are statutory rights for the spouse that can only be waived through an ante-nuptial or post-nuptial agreement. This can especially become a concern if you have children from a prior relationship.
If you have family farm land or this will be a second marriage, a pre-nuptial can be a valuable addition to your estate planning documents. If you think a pre-nuptial or post-nuptial might be right for your circumstances, contact a licensed attorney in your state.
For example, if you have family farm property, normally your interest will go to your spouse upon your death. If your spouse gets remarried and fails to properly plan, their new spouse may get an interest in your family’s property. Additionally, even if you specifically give property to someone other than your spouse in your will, there are statutory rights for the spouse that can only be waived through an ante-nuptial or post-nuptial agreement. This can especially become a concern if you have children from a prior relationship.
If you have family farm land or this will be a second marriage, a pre-nuptial can be a valuable addition to your estate planning documents. If you think a pre-nuptial or post-nuptial might be right for your circumstances, contact a licensed attorney in your state.
Friday, April 15, 2011
Being Late to Your Own Funeral: How to make your funeral wishes known.
In a final act demonstrating her sense of humor, Elizabeth Taylor gave instructions that she be late to her own funeral.
http://content.usatoday.com/communities/entertainment/post/2011/03/elizabeth-taylor-late-for-her-own-funeral/1
Every once and awhile, I'm asked how to make your funeral wishes known. In fact, some people believe that is the main purpose of a will. However, I don't recommend funeral and burial wishes be placed in a will. A big reason is that it can take some time to locate the will, especially if it is in a safe deposit box that only you have access to. Burial decisions need to be made quickly and some decisions might be made before anyone sees your will.
A better place to put your burial instructions is in your health care directive. Health care directives name the person, the health care agent, who has the power to make decisions regarding your health care if you are incapacitated. It also is a way to communicate your wishes regarding end of life care. While burial wishes do not necessarily fall under the powers of a health care agent, a health care directive can be used to communicate those burial wishes. Once you have your wishes stated in your health care directive, you can share a copy with your named agent.
It is important to note that practically, it may be impossible to ensure your wishes are enforced. Anyone petitioning the court on your behalf won't get a hearing until likely long after you've been buried.
http://content.usatoday.com/communities/entertainment/post/2011/03/elizabeth-taylor-late-for-her-own-funeral/1
Every once and awhile, I'm asked how to make your funeral wishes known. In fact, some people believe that is the main purpose of a will. However, I don't recommend funeral and burial wishes be placed in a will. A big reason is that it can take some time to locate the will, especially if it is in a safe deposit box that only you have access to. Burial decisions need to be made quickly and some decisions might be made before anyone sees your will.
A better place to put your burial instructions is in your health care directive. Health care directives name the person, the health care agent, who has the power to make decisions regarding your health care if you are incapacitated. It also is a way to communicate your wishes regarding end of life care. While burial wishes do not necessarily fall under the powers of a health care agent, a health care directive can be used to communicate those burial wishes. Once you have your wishes stated in your health care directive, you can share a copy with your named agent.
It is important to note that practically, it may be impossible to ensure your wishes are enforced. Anyone petitioning the court on your behalf won't get a hearing until likely long after you've been buried.
Tuesday, April 5, 2011
Minnesota Estate Planning and Probate a LexisNexis Top 25 Blog!
I'm honored to announce that Minnesota Estate Planning and Probate has been named a top 25 estate planning blog in the nation by LexisNexis. http://www.lexisnexis.com/community/estate-elderlaw/blogs/topblogs/archive/2011/03/31/the-lexisnexis-top-25-estate-planning-and-elder-law-blogs-of-2011.aspx Click on the link to find other top 25 blogs and to vote on your favorite. They'll announce the top blog on April 20th. I know I'm going to check out the competition and find some new blogs to follow.
Monday, March 14, 2011
You Don't Have to be American to Fear the Tax Man.
As Ronald Reagan said, “If it moves, tax it.” This statement is no more appropriate than in the case of those who make movement between nations a way of life. Obviously, American citizens have to deal with estate taxes, or at least know whether their estate isn't big enough to have to pay taxes. However, as a recent article on the Wall Street Journal reminds us, even non-citizens... and, in fact, non-residents may have to be concerned with US estate taxes.
Non-resident, non-citizen decedents, who have real property, personal property or securities located in the United States are liable for estate tax for those assets if the total fair market value of the assets located in the US exceeds $60,000.00. This is unlike American citizens or residents who are liable for their worldwide estate. In fact, if the decedent made significant gifts during their lifetime, that $60,000.00 exclusion could be even lower.
However, that doesn't mean that every non-resident, non-citizen whose US assets exceed $60,000.00 will have tax due. Tax treaties may reduce the amount owed. For example, if you are a German national, the 1998 Protocol Between the US and Germany amending the 1980 tax treaty allows for an exemption equal to the greater of the ratio of property situated in the United States included in gross estate to property included in gross estate wherever situated times the unified credit allowed for citizens in that year or the $13,000 credit allowed to all non-resident non-citizens. The IRS has a handy link to the current tax treaties in force.
If you are a foreign national with American assets, speak to an attorney versed in US estate tax and international tax treaties to determine how you may be affected.
Non-resident, non-citizen decedents, who have real property, personal property or securities located in the United States are liable for estate tax for those assets if the total fair market value of the assets located in the US exceeds $60,000.00. This is unlike American citizens or residents who are liable for their worldwide estate. In fact, if the decedent made significant gifts during their lifetime, that $60,000.00 exclusion could be even lower.
However, that doesn't mean that every non-resident, non-citizen whose US assets exceed $60,000.00 will have tax due. Tax treaties may reduce the amount owed. For example, if you are a German national, the 1998 Protocol Between the US and Germany amending the 1980 tax treaty allows for an exemption equal to the greater of the ratio of property situated in the United States included in gross estate to property included in gross estate wherever situated times the unified credit allowed for citizens in that year or the $13,000 credit allowed to all non-resident non-citizens. The IRS has a handy link to the current tax treaties in force.
If you are a foreign national with American assets, speak to an attorney versed in US estate tax and international tax treaties to determine how you may be affected.
Tuesday, February 22, 2011
Why does my estate planner need to know if I'm a citizen?
When I put an estate plan together, I always start out with a will questionnaire so that I have all of the information I need to determine what documents are needed and to draft those documents. One of the questions is the client's citizenship and place of birth. I've had quite a few clients ask why I have that on the questionnaire.
One of the big reasons that your planner needs to know your citizenship is to know what estate tax rules apply to you. I've posted about this issue before, but the basic concept is that the estate tax exemption is not always available to non-US citizens. Another reason is to know if an international will is appropriate and to know if foreign law may apply to certain portions of your estate and plan accordingly.
A basic reason is Minnesota law requires that, for any decedent either born in a foreign country or leaving heirs or devisees who reside in a foreign county, notice for any probate proceeding must be provided to the consul or other representative of that country. Giving proper notice is important, because it starts the window that creditors or possible heirs can bring claims. If proper notice isn't given, claims can be brought against the estate long after the family and personal representative thought the matter was closed. I include a reference in my wills regarding the client's citizenship and location of birth, if in a foreign country, in order to give the personal representive and their counsel a head's up so they can give correct notice.
If you have foreign citizenship or were born in a foreign country, be sure to let your estate planner know. Also, be sure to work with a planner who knows the consequences that your citizenship or place of birth will have on your estate plan.
One of the big reasons that your planner needs to know your citizenship is to know what estate tax rules apply to you. I've posted about this issue before, but the basic concept is that the estate tax exemption is not always available to non-US citizens. Another reason is to know if an international will is appropriate and to know if foreign law may apply to certain portions of your estate and plan accordingly.
A basic reason is Minnesota law requires that, for any decedent either born in a foreign country or leaving heirs or devisees who reside in a foreign county, notice for any probate proceeding must be provided to the consul or other representative of that country. Giving proper notice is important, because it starts the window that creditors or possible heirs can bring claims. If proper notice isn't given, claims can be brought against the estate long after the family and personal representative thought the matter was closed. I include a reference in my wills regarding the client's citizenship and location of birth, if in a foreign country, in order to give the personal representive and their counsel a head's up so they can give correct notice.
If you have foreign citizenship or were born in a foreign country, be sure to let your estate planner know. Also, be sure to work with a planner who knows the consequences that your citizenship or place of birth will have on your estate plan.
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