Audrey Hepburn’s sons battle over her memorabilia 22 years later

When actress Audrey Hepburn died in 1993, she owned a storage locker containing memorabilia of her career – costumes, photos, awards, scripts, posters and the like. In her will, she directed that the contents be divided equally between her two sons.

But some 22 years later, the two sons (who had different fathers) still can’t agree on how to divide the goods. The older son, who is now in his mid-fifties, has filed a lawsuit and asked a judge to split the possessions. [Read more…]

IRS tax crackdown might actually end up helping

IRS officials have been indicating for a few months now that they’re about to start cracking down on certain estate planning techniques that have been popular in recent years. But ironically, this might actually help a number of clients to save on their taxes.

The issue involves family limited partnerships and LLCs. A technique that many wealthy people have used in the past is to create a family business structure of this type, and then give away partial interests in the business to family members. The idea is that the value of these partial interests can be significantly reduced for purposes of estate and gift taxes.

Here’s an example: Suppose Anne creates a family limited partnership to hold $2 million in assets. She then gives her son Roger a 10% interest in the partnership. You might think that this would result in a taxable gift of $200,000. [Read more…]

Two trustees may be better than one

A trustee has two important duties – managing the assets in the trust, and distributing them to the beneficiaries according to the donor’s wishes. But it can be hard to find one person who can do both things well. An aunt or uncle might be the perfect person to know how to distribute assets to family members, but might not have a lot of financial acumen. An investment advisor might be very skilled at growing the assets, but not have a deep understanding of the donor’s values and preferences.

So you might want to have two trustees and divide the duties – put one in charge of investments and another in charge of distributions.

Some 35 states now have “directed trust” laws, which have an added benefit. These laws say that if the investment trustee makes a mistake or does something wrong, the distribution trustee can’t be sued by the beneficiaries. [Read more…]

Asset protection is for everyone

When many people hear the words “asset protection,” they think of billionaires with Swiss bank accounts and offshore tax havens. But in reality, asset protection is for everyone. It’s simply a series of basic techniques you can use to help ensure that the wealth you’ve accumulated stays with you and your heirs, and not someone else.

Hard-earned wealth can quickly disappear as a result of a lawsuit, a business going under, or a similar event. Asset protection techniques exist to protect you from these possibilities. You can also use them to help protect your children or other heirs from the consequences of a divorce, lawsuit, business failure, and so on.

It’s actually more important for people of moderate wealth to engage in asset protection than it is for billionaires. After all, billionaires can afford to lose a lot of money, whereas the rest of us cannot. [Read more…]

Estate; gift before passing away

[Read more…]

‘Longevity insurance’ sales are growing fast

There’s a new product on the market called “longevity insurance.” This is really just a new name for an old concept, the deferred annuity. Unlike most annuities, which are purchased with a lump sum and begin paying out soon afterward, these policies typically don’t begin paying anything until some 10 or 20 years after you buy them.

Sales of these annuities were up 35% last year from a year earlier.

The idea is that, if you outlive your life expectancy, you can receive fairly large annual payments in your later years for a relatively small investment upfront. But there are downsides, too, as there can be with any annuity. [Read more…]

Estate planning for people who don’t have families

A growing number of older people don’t have a spouse, children, or other close relatives. One of the biggest concerns in such a situation is how to prepare in case the person eventually becomes disabled or incapacitated.

Such a person could, of course, give a power of attorney to a friend, and assume the friend will take care of things. However, friends the same age might die or become incapacitated themselves. They might be overwhelmed with all the responsibilities of taking care of a disabled person, especially since it might be a stretch to ask their own family members for help with someone who is not part of the family. And sadly, there have been many cases where friends have gotten into financial straits and ended up taking advantage of a power of attorney. [Read more…]

Some bequests that ‘look’ equal really aren’t

When you’re deciding how to divide your assets among multiple heirs, it’s very important to consider who will pay your estate’s debts out of their share. Two bequests that look equal in theory might be very different in practice once debts are taken into account.

Generally, when a person dies, his or her outstanding debts must be paid out of “probate assets.” This means the assets that pass to someone according to the person’s will. But many assets don’t pass via a will. For instance, a jointly held bank account, jointly owned real estate, an IRA, a 401(k), and a “transfer on death” brokerage account might all pass to someone outside of a will, and thus not count as probate assets.

Also, life insurance proceeds aren’t dependent on a will and aren’t considered probate assets either. [Read more…]

Supreme Court alters estate planning for gay couples

The Supreme Court’s recent ruling extending same-sex marriage throughout the U.S. has changed the estate planning landscape for gay couples.

The biggest change, of course, will be for couples living in states that didn’t recognize same-sex marriage before the decision. But the ruling is also important for couples in states that previously permitted same-sex marriage, because in the past, their estate planning had to take into account the fact that they might travel, own property, or retire in a state that didn’t recognize their union. This is no longer true. [Read more…]

Help your heirs avoid capital gains tax

In the past, estate planning was mostly about reducing the impact of the federal estate tax. The tax was so onerous, and potentially affected so many people, that the goal was to avoid it like the plague.

One way to reduce estate taxes was to put assets into an irrevocable trust. The tax savings could be accomplished in a number of ways, but the key was that, when the person who created the trust died, the trust assets would go on to benefit his or her heirs, and would not be subject to the estate tax.

This was very smart planning at the time. Over the last few years, however, the situation has dramatically changed. [Read more…]

New laws may clarify estate planning for online assets

Including online assets in estate planning is a new thing, and the legal rules aren’t always entirely clear. But a number of states are now considering laws that will make things easier.

For instance, Delaware recently became the first state to pass a comprehensive law addressing what happens to someone’s online assets when they pass away. And 13 other states are currently considering such laws, so it’s likely the legal landscape will change dramatically in the next few years.

The Delaware law says that if a person dies, his or her executor can take control over the person’s online assets and distribute them to heirs. The same is true for trustees and other fiduciaries. This will be allowed unless the person specifically states otherwise in his or her will. [Read more…]

Converting to a Roth IRA can help with estate planning

Converting a traditional IRA into a Roth IRA has many advantages and disadvantages, but what many people don’t realize is that it can provide some estate planning benefits.

If you convert to a Roth, you’ll have to pay income tax on the value of the IRA right away – just as if you received the entire amount as income. On the other hand, all future withdrawals will be tax-free, and there are no minimum required distributions during your lifetime.

Converting may make sense if (1) you have enough assets to pay the income tax without dipping into the IRA itself, and (2) you won’t need to take distributions from the IRA during your lifetime and can leave it to your heirs. [Read more…]

Families with disabled children get new tax-saving accounts

Congress recently approved a new kind of tax-saving account for the benefit of families with disabled children. It’s called an Achieving a Better Life Experience, or ABLE, account.

An ABLE account is a bit like a 529 college savings account. Family members and others can contribute to it on an after-tax basis, up to $14,000 per year each. The money in the account can be invested tax-free, and withdrawn tax-free for specified purposes. These purposes include a disabled beneficiary’s housing, education, transportation, health, employment support, and use of assistive technology.

The beneficiary must have become disabled before age 26, and can only have one account. Total contributions to the account are subject to the same limits as 529 accounts. [Read more…]

How to avoid common trust mistakes

Trusts can be the linchpin of a solid estate plan. But it’s important to remember that you can’t just set up a trust and forget about it. It’s a good idea to periodically review how your trusts are working, to make sure you and your family are getting the full benefit of them. Not doing so can be costly!

Here are just a few things to consider, and some common mistakes to avoid:

► Is your trustee still the best person for the job? If your trust arrangement allows you to change the trustee, you should periodically give some thought to whether the person you’ve selected is still the best choice. [Read more…]

Using ‘529’ plans for grandchildren’s college can backfire

Grandparents often want to help with their grandchildren’s college tuition bills. But you should be very careful about using a 529 plan for these expenses.

The reason? College financial aid programs generally don’t consider parents’ contributions from a 529 plan as student income, but they typically do consider grandparent 529 contributions as income. As a result, these contributions could reduce a student’s eligibility for grants, subsidized loans, and work-study programs.

Only 11% of grandparents are aware of this problem, according to a recent study by Fidelity.

If a student expects to be eligible for financial aid, in many cases it might be preferable for grandparents simply to give money directly to the parents in order to help out – even though this means forfeiting the tax-sheltered advantages of a 529 plan. Grandparents can also contribute to the parents’ own 529 plan, although not all states allow a tax benefit for doing so. [Read more…]

Your ‘power of attorney’ can name more than one agent

A power of attorney document allows someone else to act as your agent and handle your legal and financial affairs. It’s critical to have such a document in case you become incapacitated.

Sometimes, people want to name more than one agent. For instance, a person may have two children, and not want one child to feel that the other is being favored. Sometimes a parent will name two children and give them both access to all his or her affairs, so one child won’t suspect that the other is abusing the power.

Naming more than one agent has some advantages. For one thing, if one agent is hard to reach in an emergency, the other may be able to step in. [Read more…]

How to ‘fix’ a trust that isn’t working as intended

Sometimes, despite everyone’s best efforts, things change and the terms of an older, irrevocable trust just don’t work as well as they could in the present circumstances. But there’s a movement afoot to allow people in such a situation to solve the problem by moving the assets from an older trust into a newer one with more appropriate rules.

This is sometimes called “decanting” a trust, because you’re basically pouring the assets from an older container into a newer one.

Today, some 22 states allow decanting of irrevocable trusts in some circumstances. That’s up from 11 states just three years ago, so there’s a lot of momentum behind the change. [Read more…]

Some older wills can cause unnecessary capital gains taxes

As a result of changes in the law, a lot of wills that were drafted even relatively recently may now result in a capital gains tax issue, and if you have such a will, you might want to consider revising it to save taxes.

Here’s the background: When a person dies, he or she can leave an unlimited amount of assets to a spouse without incurring the federal estate tax. If assets are left to anyone else, including children, then everything above the “exemption amount” is subject to a very significant tax.

In the past, the exemption amount was not very large. As recently as 2001, it was only $675,000. Back in 2008, it was $2 million. [Read more…]

Parents disagree as to when children can handle an inheritance

If you’re wondering at what age your children or grandchildren will be old enough to handle an inheritance, well, you’re not alone.

U.S. Trust recently conducted a survey of wealthy Americans (with assets of $3 million or more) and asked them that precise question. The issue is important because many parents leave assets in a trust for children or grandchildren until they reach a certain age, so the parents have to choose an age at which to release the funds.

The survey answers varied widely. Here’s a closer look at the results:

Age 18-24: 4%

Age 25-29: 23% [Read more…]

Should you tell your children about your estate planning?

Often, one of the hardest decisions people make in the estate planning process is how much (and when) to tell their children or other heirs about their plans.

There’s no single right answer for everybody; what to do depends on the nature of your planning and your family circumstances. But it’s worth giving the issue some consideration.

Many people are very hesitant to reveal the details of their family’s expected inheritances. A recent survey by UBS of almost 3,000 investors showed that only 54% had discussed their estate plans with their heirs, and only 34% had mentioned specific dollar figures. [Read more…]

Some gifts to charity should be made now, not in your will

In the past, many people’s wills included a sizable donation to charity. Because the federal estate tax was so burdensome, including charitable bequests in a will was a good idea since it reduced the amount of tax the estate had to pay.

Now, however, the federal estate tax applies only to estates of well over $5 million. As a result, for a great many people, leaving money to charity in a will no longer provides any tax benefit.

On the other hand, the federal income and capital gains taxes have gone up, new surcharges have been added on investment income, and many states have raised their income and capital gains taxes as well. As a result, many people could reap significant tax savings if they made planned annual gifts to charity while they’re alive, as opposed to making bequests in a will. [Read more…]

Saving taxes with WINGs, NINGs and DINGs

Some taxpayers with large state income tax bills have been trying to avoid them through the use of out-of-state trusts.

These trusts have been created in three states that have no or minimal state income tax – Wyoming, Nevada and Delaware. The idea is that people in high-tax states can set up trusts in these low-or-no-tax states to hold the investments that produce the income.

The trusts are called “incomplete non-grantor gift trusts.” A Wyoming incomplete non-grantor gift trust is known by the acronym WING. In Nevada and Delaware, there are NINGs and DINGs.

In theory, you can put income-producing assets into a WING, NING or DING and be an income beneficiary. You’ll pay no federal gift tax on the transfer to the trust, and no state income tax on the income you receive. [Read more…]

Eight states are easing their estate taxes in 2015

Eight states are reducing their estate tax burden in 2015, which is good news for anyone who lives or owns property in those states.

New York and Maryland are increasing their exemption amounts (the amount of assets an estate can have before any tax is due). For 2015, the New York limit goes from $1 million to just over $2 million, and the Maryland limit goes from $1 million to $1.5 million. Both states plan to gradually raise their limits to the amount of the federal limit by 2019. (The federal limit was $5.34 million in 2014 and will be $5.43 million in 2015.)

Tennessee’s limit will be $5 million in 2015, and the tax will be repealed altogether in 2016. [Read more…]

New danger for IRA rollovers

There’s now a big danger if you’re rolling money over from one IRA into another IRA, as a result of a decision from the U.S. Tax Court.

Under federal law, you can only do one IRA-to-IRA rollover per year. If you try to roll over more than one IRA in a 365-day period, it’s considered a distribution, and you’ll be subject to significant taxes and penalties.

In the past, the IRS has told taxpayers that this means you can’t roll over the same IRA within a year. So if you rolled your Fidelity IRA over to Schwab, and you later wanted to roll the same IRA over to Vanguard, you had to wait at least 365 days.

But the Tax Court says this is wrong, and in fact you can’t roll over more than one IRA per year even if they’re different IRAs. [Read more…]

Inherited IRAs aren’t protected from creditors

If you’re planning to leave an IRA or other retirement account to your heirs, you might want to consider creating a trust to hold the account. That’s the upshot of a recent ruling from the U.S. Supreme Court.

That’s because IRAs that are inherited from anyone other than a spouse are no longer protected from creditors in a bankruptcy.

Heidi Heffron-Clark and her husband Brandon filed for bankruptcy after their pizza shop failed in 2009. They owed their landlord $74,000, but didn’t have enough cash on hand to pay the debt.

Heidi did, however, have $293,000 in an IRA that she inherited from her mother.

In general, IRA funds are exempt from creditors in a bankruptcy. Congress created this rule in order to protect Americans’ retirement savings and to prevent elderly people from not having enough to live on. [Read more…]

How to help your trustee make good decisions for your family

As Yogi Berra supposedly said, “It’s hard to make predictions, especially about the future.” Yet when you create a trust for your heirs, you have little choice but to make predictions about what their needs will be many years down the road.

Because circumstances change, it’s a good idea to make your trust flexible enough to accommodate the unexpected. If you tell your trustee what to do in too much detail, the trust might end up being useless or counter-productive if something unforeseen happens.

That’s why most trusts give trustees quite a lot of discretion. For instance, a trust might say that a trustee can make distributions to a spouse to help maintain his or her lifestyle, or to children for their health, education and support. But it’s up to the trustee to decide when and in what amounts these distributions should be made. [Read more…]

Planning for estate tax vs. planning for income tax

Traditionally, the federal estate tax was extremely burdensome to wealthier individuals, and the bulk of estate planning involved finding ways to minimize this federal tax.

In the last few years, though, the federal estate tax rates and exemption amounts have changed and become much less of a problem. On the other hand, federal income taxes, capital gains taxes and other investment taxes have gone way up. And many states have increased their income, estate and inheritance taxes.

As a result, these days smart estate planning involves looking at all the different possible taxes that heirs might be facing, and figuring out how best to reduce the overall tax burden. [Read more…]

Thinking of retiring abroad? Know the rules first

The idea of retiring on a beach in Central America or in a quaint village in Europe might seem idyllic. But before you think seriously about retiring in another country, be sure you know all the tax and estate planning rules.

A lot of people have been tripped up by these rules in the past. For instance:

  • If you keep more than $10,000 in a foreign bank account, you’ll have to file annual reports with the U.S. government. And be sure you can even open a local account – a law passed by Congress in 2010 requires foreign banks to file detailed disclosures on accounts held by Americans, and many smaller foreign banks won’t even accept Americans as account holders anymore because they don’t want to deal with the paperwork.

[Read more…]

IRS allows many estates to save taxes – if they act quickly

A federal estate tax return doesn’t have to be filed every time someone dies. In fact, a return typically doesn’t have to be filed unless the estate is worth more than the federal estate tax exemption amount (which is currently $5,340,000). As a result, most estates never have to file one. However, a change in the law back in 2011 makes it advantageous to file a return if the deceased person is survived by a spouse – even if the estate is below the exemption amount and thus a return isn’t legally required.

If you know someone whose spouse passed away and who didn’t take advantage of this opportunity, the IRS is now giving them a second chance to file a return – but they must act by the end of this year in order to do so.

Here’s the background:Generally, when a person dies, his or her estate can give an unlimited amount to a surviving spouse tax-free. After that, if the person’s bequests (plus large lifetime gifts) total more than the exemption amount, then an estate tax is due. [Read more…]

What will happen to your online accounts if you pass away?

As more and more people live their lives online, the question of what happens to online assets and records after someone dies is becoming more important – and confusing.

Consider all the things that you might “own” on the Internet – thousands of photos and e-mails, Facebook and other social media accounts, music libraries, blogs, genealogy records, domain names, and much more.

Then consider how many financial accounts you have or manage online – including PayPal and other accounts with credit balances, as well as online accounts with detailed financial records, automatic bill-paying processes, etc.

If you haven’t given any thought to what will become of these things – and who will manage them after you’re gone – it’s probably a good time to do so. [Read more…]

How to leave items of sentimental value to your heirs

Often, the issue that causes the most hard feelings among family members after a death isn’t how much money everyone received in the will, but who should get the plate on which Grandma served her famous Thanksgiving pie year after year.

Most people don’t think much about items of sentimental value when they do their estate planning. But they should, because doing so can avoid a lot of awkward situations.

For instance, you might plan to leave everything to your children in equal shares, but what about the piece of jewelry that you always promised to your eldest daughter, or the antique vase your cousin loved that no one else in the family liked? Or what if you have a valuable item such as a piano that can’t be divided equally? [Read more…]

Should life insurance be part of your estate plan?

Traditionally, the purpose of life insurance is to replace a person’s income for their family in the event they die before they stop working. For this reason, many people buy “term” insurance that ends when they reach retirement age.

However, there are also some very good uses for life insurance as part of an estate plan. For example:

• You might want to make sure that your heirs won’t have to sell important assets (a business, real estate, etc.) after you die in order to pay estate taxes or because of a lack of liquidity in the period after your death. Life insurance can provide your heirs with ready cash to cover taxes and other expenses. [Read more…]

What you can learn from Philip Seymour Hoffman’s will

When actor Philip Seymour Hoffman died unexpectedly this past February, he hadn’t updated his will in about 10 years, and his estate planning left something to be desired.

Hoffman’s will created a trust for his son Cooper, and left the rest of his roughly $35 million fortune to his longtime companion Mimi O’Donnell.

It’s worth taking a look at what Hoffman might have done differently:

► First of all, apart from the trust for his son, everything passed through probate, which tied up the assets and caused the estate distribution to be made public (which is how we know these details). If Hoffman had used additional trusts, the world wouldn’t know the extent of his wealth or how he planned to distribute it. [Read more…]

Thousands of retirement accounts are ‘ticking time bombs’

Americans have more than $12 trillion stashed away in IRAs, 401(k) plans, and similar retirement accounts. Yet very few people have given careful thought to what will happen to the assets in those accounts if they should pass away unexpectedly. In a surprising number of cases, what would happen is not at all what they would expect – or want.

Over the next decade, as the Baby Boomers continue to age, we will hear many stories of “inheritance disasters” as heirs are surprised by the laws surrounding these accounts. That’s why it’s important to make sure your retirement accounts have been considered as part of a complete estate plan for your family.

Many people assume that if they’ve written a will, then the people they named as heirs in the will are entitled to the assets in their retirement accounts. [Read more…]

I have a will but want to provide for my nieces and nephews, do I need to establish separate trusts for each of them?


All of my nieces and nephews are under the age of 18. I want to be sure that they are the direct beneficiaries. I also want to prevent my drug addicted brother from getting any of the funds.


You should establish a trust and fund it during your lifetime. Upon your death, the assets will be held or distributed as you have directed in the trust. The trust can break down into separate shares for your nieces and nephews.
You do not want to direct that your nieces and nephews receiving anything directly under your Will if they are under 18 and your brother is a drug addict. Probate is expensive and time consuming. You brother, being a family member will have notice of your death and the ability to read you Will at the Probate Court. If your nieces and nephews are to receive assets under the age of 18, the court will require a guardian be appointed for them, adding to the cost. You brother could apply to be the guardian and then gain access to the funds.
If you establish a trust, after your death, your successor Trustee can instantly being serving as Trustee. Your brother would have no access to the funds and the trust will remain private.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice. Circular 230 Disclaimer: Any information in this answer may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

Beliveau Law Group: Massachusetts | Florida | New Hampshire

The estate planning attorneys at the Beliveau Law Group provides legal services for estate and asset protection planning. The law firm has offices and attorneys in Naples, Florida; Boca Raton, Florida; Danvers, Massachusetts; Waltham, Massachusetts; Quincy, Massachusetts; Manchester, New Hampshire and Salem, New Hampshire.

Can we stop a nominated executor from filing probate ? We are seeking in process of uncontested guardianship.


My sister is POA for my mother and father. Her 4 siblings have filed for guardianship after 2 yrs of obvious receipt from her concerning our folks assets , her obvious drug issues, misuse of both cash& credit and the selling of our parents house and estate without honest disclosure. Father passed 3 days prior to the first hearing in which she perjured herself concerning a lapsed life insurance policy which was discovered by her siblings while making funeral arrangements. She spent 2 yrs borrowing against the policy while telling her siblings premiums were being made. As POA , having hidden all of our parents assets, on the day of funeral planning, she refused to pay for either florist or funeral expenses. Yesterday, she hired an attorney to negotiate the discovery ordered April 2, 2014.


Your father’s Will needs to be probated only if there are probate assets. It is unclear whether your mother is still alive. Were all the assets owned jointly with your mother, have a beneficiary designation on them, or in a trust? If so, those assets avoided probate.
To probate the assets, the Will must be submitted to the probate court. The heirs of your father will be notified. If it is your sister who is the nominated the executor, you can ask her to decline to serve as executor. If she petitions to be appointed executor, you have the right to object.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice. Circular 230 Disclaimer: Any information in this answer may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

Beliveau Law Group: Massachusetts | Florida | New Hampshire

The probate attorneys at the Beliveau Law Group provides legal services for estate and asset protection planning. The law firm has offices and attorneys in Naples, Florida; Boca Raton, Florida; Danvers, Massachusetts; Waltham, Massachusetts; Quincy, Massachusetts; Manchester, New Hampshire and Salem, New Hampshire.

Which prevails, bank registration or trust document?


If a bank has an INVESTMENT ACCOUNT titled “Transfer on death” to one beneficiary and a Living Trust document (unfunded) lists the INVESTMENT ACCOUNT as trust property to another beneficiary, which document prevails?
The Grantor is deceased.


A trust must be funded in order for it to do any good. A trust may be funded either during a person’s life, which is the least costly way, or via probate if directed by the Last Will and Testament to fund the trust. In your case, the asset was not transferred during the grantor’s life. His Will will not govern because any account with a transfer on death avoids probate. The investment account will go to the beneficiary listed on the account.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice. Circular 230 Disclaimer: Any information in this answer may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

Beliveau Law Group: Massachusetts | Florida | New Hampshire

The estate planning attorneys at the Beliveau Law Group provides legal services for estate and asset protection planning. The law firm has offices and attorneys in Naples, Florida; Boca Raton, Florida; Danvers, Massachusetts; Waltham, Massachusetts; Quincy, Massachusetts; Manchester, New Hampshire and Salem, New Hampshire.

How do I word a legal guarantee that my sister’s children will be given our mother’s rings when our other sister dies?


There is a very tense relationship between sisters at this point there is only a verbal promise


The inheritance of the rings will governed by your sister’s Last Will and Testament. If she wants her nieces to inherit her rings, it should be written into her Will.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice. Circular 230 Disclaimer: Any information in this answer may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

Beliveau Law Group: Massachusetts | Florida | New Hampshire

The estate planning attorneys at the Beliveau Law Group provides legal services for estate and asset protection planning. The law firm has offices and attorneys in Naples, Florida; Boca Raton, Florida; Danvers, Massachusetts; Waltham, Massachusetts; Quincy, Massachusetts; Manchester, New Hampshire and Salem, New Hampshire.

Have an estate plan? Great – but you need to follow through

One of the most common mistakes people make in estate planning is that they finally create a complete, thorough, highly advantageous estate plan – and then forget to follow through and put it all into effect.

It’s not uncommon for people to have detailed documents drawn up, and then not get around to signing them. Or they create a trust, but forget to transfer assets in order to fund it. Or they decide whom to name as beneficiaries of their IRA, 401(k), bank and brokerage accounts – and then don’t fill out the paperwork to make the change.

A recent case involved Allen Kagan, a Minnesota pharmacist who had a $415,000 life insurance policy through his employer. Allen died of a sudden heart attack, and was survived by his new wife Arlene and three children from a previous marriage. [Read more…]

Be careful if you donate to charity for a specific purpose

Bernard and Jeanne Adler donated $50,000 to an animal shelter in their hometown of Princeton, N.J. The gift was to finance a new structure for large dogs and older cats (whose prospects for adoption are limited), and the structure was to be named for the Adlers.

Before construction began, however, the shelter merged with another organization. After the merger, the new organization announced plans to build a smaller structure in another town, without specific facilities for large dogs and older cats and without naming anything for the Adlers.

The Adlers went to court and demanded that the shelter return their $50,000 gift. [Read more…]

The danger of waiting too long to do estate planning

Some people never get around to writing a will or planning their estate until the last minute, when they have grown old and have a serious illness.

Other people write a simple will when they’re young, but never review or update it until something happens that makes them think that death is imminent.

While any estate planning is better than none, the vast majority of mistakes and problems occur when people procrastinate planning their estate and then try to do it in a hurry.

If you wait until the last minute, it might be very difficult to locate all the documents you need to properly execute an estate plan. And you might not have sufficient time to take advantage of all the techniques that are available to save taxes and properly take care of your heirs. [Read more…]

What you need to know about the new ‘trusteed IRAs’

If you don’t need all the money in an IRA after you retire, there can be big tax advantages in carefully leaving it to your children or other heirs. If it’s done right, the heirs can take out only the minimum required distribution each year, and the assets in the IRA can continue to grow tax-deferred for decades – and in some cases, for generations to come.

The problem with this planning technique is that it requires your heirs to be patient money managers. In the real world, many heirs withdraw the funds from an inherited IRA quickly, which destroys the tax advantages.

The traditional solution is to leave your IRA to a trust, in which a trustee can decide how to invest the IRA, when to make withdrawals from the IRA, and what distributions to make to your heirs. [Read more…]

Long-term low interest rates are wreaking havoc on many trusts

For decades, it was very common for trusts to be set up like this: “The trust income will go to the first beneficiary, and when the first beneficiary dies, the trust assets will go to a second beneficiary.”

Here are some common examples:

  • A couple sets up a trust with the income going to a child, and when the child dies, the assets go to their grandchildren.
  • A wife’s will creates a trust that pays income to her second husband, and when he dies, the assets go to her children by her first marriage.
  • A man sets up a trust where the income goes to his wife, and when she dies, the assets go to a charity.

That’s all well and good when interest rates are healthy. But over the last few years, interest rates have plunged to historic lows, and stayed there.

[Read more…]

Have life insurance you don’t need? Consider donating to charity

If you have a whole-life or universal-life insurance policy that you don’t need, you might want to consider donating it to charity rather than cashing it in.

There are two ways to make such a donation, each of which has its advantages:

(1) Name the charity as the policy’s beneficiary. The key advantage to this method is that you retain control of the policy. Thus, you can always change your mind if you decide that your heirs need the money or if your feelings about the charity change. You’ll also get an estate tax deduction when the charity receives the money. [Read more…]

Trust could force beneficiaries to arbitrate rather than go to court

Andrew Reitz set up a trust to benefit his sons, with an independent trustee. The trust document said that if there was a dispute between his sons and the trustee, it would be decided by a private arbitrator rather than a court.

When John Reitz, one of the sons, became unhappy with the trustee, he sued to have the trustee removed. The trustee argued that the suit should be thrown out of court, and decided by an arbitrator.

The dispute over who should decide the dispute went all the way to the Texas Supreme Court.

That court said the issue should go to an arbitrator. The judges ruled that (1) the trust should be handled according to Andrew’s clear intentions, and (2) it would be unfair to let John receive all the benefits of the trust, but ignore the one part of the trust he didn’t like. [Read more…]

Divorced couples need to update beneficiary designations

One of the most important things people can do after a divorce is to update their beneficiary designations, and indicate who should get the assets in various accounts if they should unexpectedly pass away.

Most married people name their spouse as the beneficiary of their accounts, but in the stress following a divorce, they often forget to update these designations.

And even when people make an effort, they might not remember every account. Pensions, 401(k) plans, life insurance policies, brokerage accounts, bank accounts, and more may all have listed beneficiaries.

Remember that if you die, who gets the money in these accounts usually depends on who is the listed beneficiary – not who is named in your will. Even if your will says that “everything” will go to a new spouse or a child or other relative, the will doesn’t govern a separate account such as a 401(k) or an insurance policy. [Read more…]

Estate planning is still important even if you’re not super-wealthy

A year ago, Congress dramatically raised the federal estate tax exemption, which for 2013 was $5.25 million (or $10.5 million for a married couple). And that caused some people to mistakenly believe that they no longer need to think about estate planning if their assets are less than $5 or $10 million.

However, nothing could be further from the truth. And people who don’t keep their estate plan up-to-date are making a big mistake that could still be very costly to them and their families.

There are a multitude of reasons for this, but here are just a few:

Protecting your heirs. Many of the techniques that people have used in the past to avoid estate taxes – such as trusts – have lots of other purposes in addition to saving taxes. [Read more…]

Using IRA funds for ‘alternative’ investments can be dangerous

IRAs can be an important part of estate planning, especially for savvy investors and business owners. But be careful – mixing your IRA and your business interests too closely can cause big tax problems.

The IRS can “revoke” an IRA, and deny you all its tax benefits, if you use the funds for certain improper purposes. This rule applies not only to you, but also to actions by your family members and any business or trust that is controlled by you or your family.

What can’t you do? You can’t buy, sell, or lease property to or from an IRA; you can’t borrow money from an IRA or lend money to it; and you can’t make personal use of IRA property. [Read more…]

If you’re donating property, don’t scrimp on an appraisal

If you’re donating assets to a charity, don’t scrimp when it comes to an appraisal and don’t try to file the tax forms yourself. That’s the lesson of a recent case from the U.S. Tax Court.

The case involved Joe Mohamed, an extremely successful real estate investor in Sacramento, California. Joe donated real estate he valued at $18.5 million to a charitable trust. Because Joe was a qualified appraiser, he valued the properties himself. He also filled out the relevant tax form himself to claim a deduction for the donation.

But the IRS denied any deduction for the real estate, claiming that Joe made mistakes on the form. And the Tax Court reluctantly agreed that the IRS was right. [Read more…]

Stepchildren present challenges in estate planning

If you or someone you know has an older estate plan that doesn’t carefully take into consideration the role of stepchildren, it’s a good idea to have it reviewed. If you have stepchildren – or if your children have stepchildren – it’s critical to make clear whether they’re included in your plans.

Take the case of Bill and Pat Clairmont. This North Dakota couple had a daughter, Cindy; a son-in-law, Greg; and several grandchildren including a grandson named Matthew. In 1996, they decided to set up a trust to benefit Matthew. Greg, their son-in-law, wrote the trust document.

Under the trust, Matthew would start receiving the trust funds when he turned 40. If he died before then, the trust funds would go to his brothers and sisters.

That all sounds fine … but sometimes things don’t go exactly as planned. [Read more…]