After the untimely death of Princess Diana in 1997, she left an estate worth approximately £13m in stocks, shares, jewelry and cash to her two sons. Since then the trustees, which include her sister, have made wise investments and grown the estate to about £20m. Now that Prince William is set to turn 30 years old next month, the will execution includes allowing him access to his mother's money.
Diana's will stipulated that her trust was to be divided equally between her two boys when they turned 25. However, the details of her estate were changed in a court order by the trustees and increased the age at which they could ask for the money to 30.
]]> The trustees and executors also used their discretion to provide the boys limited access to her estate up and until they turned 30. For example, they were given the accrued interest as income. In addition, provisions were made to allow the boys discretion on how to divide the capital between them.Changes to her will also included the use of her wardrobe, pictures, name and trademark. The trustees guaranteed that Diana's intellectual property rights could only be used for charity or for the benefit of her sons.
The boys were also left a few million pounds by their great grandmother, Queen Elizabeth the Queen Mother.
Source: dailymail.co.uk, "Prince William in line for £10m payout from Diana's estate as he turns 30," Chris Hanlon, May 13, 2012
]]>There they found resources for planning ahead and enjoying the last days of your life. That includes learning to cope with your illness and being calm and peaceful knowing that your remaining family members will be taken care of. They began planning and locating important papers including bank account information, insurance policies, their living wills and powers of attorney.
]]> They learned the importance of having all their information in one central location which would make the process easier for the remaining spouse and ensure their wishes are carried out. When dealing with the grief and heartache of a death in the family, it is so important to know what to expect when it comes to settlements, funeral arrangements, estate planning and probate procedures. It is a kindness for the remaining family members because it takes a load off of them. Otherwise, the process can be difficult and overwhelming.With everything in order, the couple was able to enjoy a few precious months in Florida, a place they always loved to vacation. They found comfort and acceptance through being prepared with the situation knowing everything was going to be okay.
Source: bgdailynews.com, "Death is one of the most important things in life," Alyssa Harvey, May 6, 2012
]]>The new law specifically states how an annulment or divorce will affect life insurance policies, employee benefit plans, IRAs, payable on death, or POD, accounts, securities and annuities. This is particularly necessary in instances when a former spouse maintains interests in assets after divorce like life insurance, and needs to secure his or her obligation to pay child or spousal support. After July 1, assets held for the benefit of a former partner or spouse will only be maintained if court ordered.
]]> However, the problem arises because any assets that are not court ordered require the assets owner to disclaim the beneficiary after the final divorce judgment. Occasionally, this does not happen before the former spouse dies.When planning or changing your estate plan, will or trust, it is critical to consult an attorney who is familiar with all the new changes to the laws and the many exceptions associated with them. Your remaining heirs and beneficiaries will appreciate that you planned for your continued obligation to them even after you are gone.
Source: palmbeachpost.com, "Gov. Scott signs 4 new bills into law," Dara Kam, April 24, 2012
]]>Probate assets are those assets that the decedent owned individually. Bank accounts, investments and life insurance policies in the decedent's name only are administered. Bank accounts and real estate owned jointly by the decedent and their remaining spouse are not traditionally considered in probate matters.
The advantage to establishing a will is that the decedent can identify who they want to receive the probate assets and who they want to administer and oversee the process. An executor of a will is called a personal representative in Florida. Without a will, the state will distribute one's remaining assets per Florida laws of priority heirs.
]]> A typical probate process takes about six to 12 months and there are many people involved including the clerk of court, a circuit court judge, the personal representative and their attorney, creditors, and the IRS. The attorney representing the personal representative does not represent any of the decedent's beneficiaries. They advise the personal representative on their legal rights and duties, and assist with the administration of the probate. Any provision stipulated in a will that a certain attorney or firm be hired is not binding. A personal representative can hire any attorney of their choosing.If a decedent has less than $75,000 in assets and their debts are paid, an alternative to formal procedures is called a summary administration.
Source: The Florida Bar, "Probate in Florida," April 25, 2012
]]>For new Florida residents who already have their estate plans including wills, living wills, trusts, durable powers of attorney, healthcare surrogates and pour-over wills in order, it's vital that you have them reviewed to ensure your documents and desires comply with Florida statutes. For example, real estate is governed by probate rules based on state laws where the property is located. If you live in another state and winter in Florida, your home here will have its own probate and cannot be combined with your home state's probate rules.
Regardless of your age it is crucial to anticipate the fact that you may someday become physically or mentally unable to make financial or medical choices. When you begin your estate planning make sure you ask yourself the following questions:
]]>Powers of attorney can be activated at the moment you sign the document or upon the moment you become incompetent. The latter usually requires a medical opinion. Make sure you name at least two possible agents, in case the first one cannot carry out their duties for any reason.
Living trusts are also called revocable trusts. They are often used in conjunction with the durable power of attorney. That way, along with authorizing the movement of assets in and out of your trust, that person can also file taxes, apply for Social Security benefits and pick up your mail on your behalf.
Source: forbes.com, "Mike Wallace Death Underlines Need To Prepare Financially for Risk of Dementia," Deborah L. Jacobs, April 8, 2012
]]>On the other hand, if each partner has their own lawyer, you have more freedom to address your wishes without having to compromise with your spouse. Those with blended families often find having separate wills, trusts and estate plans more beneficial. Many hours have been dedicated to deciding if each child should get the same amount of money, or what percentage the remaining spouse will get depending on who dies first.
]]> To help you decide if you should have separate estate planners, consider the following questions:Source: Forbes, "Estate Planning For Couples: Should It Be A Solo Or A Duet?" L. Paul Hood, Jr., April 10, 2012
]]>Parks' intellectual property rights and possessions were bequeathed to the parties outside of her will and trust. While attorneys say a settlement agreement already protects Parks' property, the nieces and nephews want additional insurance. They challenged the civic leader's will and trust after her death in 2005, saying the caretaker and judge manipulated her to bequeath the items to them and cut relatives out of the estate.
]]> The two turned over their executorships to two probate lawyers who hired an auction house to collect and put Parks' belongings up for sale. The estimated worth of her estate is $8 to $10 million. No buyers have come forward. According to a legal agreement signed in 2007, the caregiver and judge are slated to receive 80 percent of the proceeds of the sale and royalties from licensing Parks' name. The probate court put the caregiver and judge back in charge of the estate two months ago, only after the state's Supreme Court ordered it to do so.Florida probate court often appoints trustees to handle trusts under dispute or litigation when no administrator has been named in the estate holder's will or trust.
Source: Detroit Free Press, "Rosa Parks' relatives ask judge to protect property claim," David Ashenfelter, March 21, 2012
]]>The new bill cuts the government's contributions to the retirement plans of police officers enrolled in defined contributions plans by 6 percent. The optional retirement program contributions for college and university employees will drop 2.3 percent. One legislator who voted against the bill was concerned that the bill would cause employees in his county sheriff's department to lose their retirement benefits altogether.
]]> Many county sheriff deputies have not seen a pay increase in more than four years. Legislators also made a change in the public employee pension plan last year when they required state workers to supply 3 percent of their income to their own plans. Between the pay freezes, the required individual contributions and a cut in the state's retirement benefits, building a nest egg is getting a bit more difficult for some public employees.Whether you or your company participates in a traditional pension fund, private investment plans or optional retirement programs, they cannot be contained by your living trust or will. After-tax assets like your bank accounts and real estate are the assets covered by your estate plan. Your pre-tax assets like your IRA, 401(k) or pension plan should be managed by you, or your durable general power of attorney, not the trustee of your living will.
Source: Tampa Bay Times, "More changes to retirement plans of some state workers could be coming," Steve Bousquet, March 30, 2012
]]>When it comes to end-of-life decisions, each person has a different set of circumstances, unique needs and wishes that the forms may or may not prompt you to consider. On the other hand, you don't absolutely need a will. With no direction from you, probate court will take care of your assets and debts then distribute the remaining assets to any beneficiaries. Even if you have a will that designates your personal representative (executor) and indentifies exactly where you want your assets to go, you still may not get your way.
]]> Only if your will is properly composed with the disposition of all your probate assets and the naming of your personal representative will your document override Florida's probate law. If you die without a valid will, or the document fails in any way, the probate courts will decide who shall receive your assets and name your executor. Our state probate has a very specific definition and hierarchy when it comes to naming descendants.Don't take chances when it comes to your last words and wishes. You wouldn't want to leave your heirs in a conundrum with no say in your family heirlooms and estate.
Source: The Oregonian, "Fill-in-the-blank wills can be a little skimpy," Brent Hunsberger, March 10, 2012
]]>Retirement plans are called different things depending on which business sector your company services. 401(k) plans are for the private sector, 403(b) plans are for non-profit entities and 457(b) plans are offered by state, federal or municipal governments. Different companies have caps on the percentage of your income you can invest and that percentage has different tax implications. If you're lucky, your employer will contribute matching funds to your retirement plan.
]]> If you work for a small business that does not offer a retirement plan or are self-employed, it's a very good idea to create your own retirement fund, trust or estate plan. Set aside a certain amount out of each paycheck through automatic deposit with your bank or credit union. Contributions to retirement plans are made on a pretax basis and not counted as income when you file your taxes each year.Start early to plan for your golden years so you can continue to live the lifestyle you want. If you haven't started contributing to your retirement, you're not alone. Only about 14 percent of Americans say they feel comfortable that they will have enough money to live on during their retirement. Investigate other ways to protect you and your family members from tax burdens, healthcare costs and probate loggerheads.
Source: brankrate.com, "Fundamentals of retirement plans," Barbara Whelehan, March 12, 2012
]]>The recent 81-year-old Powerball winner took nearly four weeks to establish a trust before coming forward to claim her lump sum prize of $210 million. Prompted to go to the store with her son who was craving some dessert, the woman purchased a ticket during their errand. Just two hours later, she discovered her ticket was the winner. That night, she put the ticket in her bible and slept with the book. The very next morning she called an attorney to establish the Rainbow Sherbet Trust, named after the inspiration for the trip to the store.
]]> Establishing the trust was her first priority to protect her family and her wishes. A trust is simply a legal asset holding entity. (A will is the written legal document with asset distribution instructions used after you pass on.) Oftentimes the goal of creating a trust is to protect your assets from creditors and tax collection, so you and you your beneficiaries can utilize the trust as you intended. A trust can be used during your life or after you die.When creating a will or trust as a senior citizen, it's important to include long-term health care needs, power of attorney, and establishing guardianships and conservatorships. If your health deteriorates and you have long-term residential care needs, a trust can help minimize the financial impact on your loved ones.
Source: WHDH.com, "$336.4M Powerball winner is 81-yr-old woman," March 6, 2012
]]>In a recent survey, more than nine million U.S. households reported receiving an inheritance of at least $100,000. These recipients could stand to benefit from a primer on what to do when a loved one's estate plan lists you as a substantial beneficiary.
]]> Take time to think: There's no rule that says you have to spend an inheritance right away. Put the money aside, and think carefully about how you want to use it. Most experts suggest waiting until you have finished grieving the loss of your loved one and until the excitement of the windfall has subsided. It is better not to let your emotional side make rash decisions.Take stock of your obligations: It is a rare scenario when a beneficiary gets to keep all of the money they inherited. Often, they will owe estate or income taxes. Sometimes, there are also debts that need to be paid off. Account for these obligations before you make a plan on how to use your money.
Invest, but be careful: The money you inherit will last longer if you can make it grow. Most experts recommending setting aside a portion of your inheritance for low-risk, moderate growth investments. Be wary of "sure bet" investment opportunities presented to you by relatives or acquaintances looking for a share of your cash. Unless you are a business expert already, discuss every investment opportunity with your financial advisor.
Revise your estate plan: Whatever estate plan you already had in place will likely need to change if you inherit a significant amount of money. You will for sure need to update your will. You may also want to consider creating a trust so that some of your new-found wealth can be passed down to the next generation.
Whatever you decide to do, make sure you get professional advice before you make any major decisions.
Source: The Wall Street Journal, "Too Rich, Too Soon," Jessica Silver-Greenberg, Feb. 25, 2012.
]]>Houston's will reportedly left the bulk of her estate to her 18 year-old daughter, Bobbi Kristina Brown. Although the size of the singer's estate has not yet been disclosed, it is expected to be quite substantial.
Experts are hoping that Houston had the foresight to put her daughter's share of the estate into a trust.
]]> Benefits of a TrustTrusts have a number of advantages. Most notably, they allow beneficiaries of an estate to receive payments over time. A will, on the other hand, can only provide for one-time lump sum payments. Trusts can also help minimize estate tax liabilities.
At the very least, individuals should consider making revocable living trusts an integral part of their estate plan. Revocable living trusts, or RLTs, give trust creators a measure of control over how their assets will be handled after they die. In addition, the trust assets - if properly managed - will continue to grow over time, ensuring that wealth can be passed down from generation to generation.
RLTs also provide high net worth individuals with needed privacy. Unlike wills, trusts usually avoid the public disclosure inherent in the probate process.
Most experts recommend that individuals create several different trusts funded by the estate's assets. It is also often a good idea to purchase life insurance and use the proceeds to fund a trust.
When it comes to estate planning, every person's needs are unique. Talk to a Florida estate planning attorney who can help you understand your options.
Source: Investment News, "Whitney Houston: Estate Planning Lesson in a Sad, Untimely Death," Liz Skinner, Feb. 19, 2012.
]]>Estate plans are important because they let you control what happens to your assets after you die. Without one, the state gets to make that decision for you.
However, many people put off estate planning because it seems like a daunting task. They want to make a plan, but they don't know where to start. The reality, though, is that the estate planning process isn't nearly as confusing as it sounds. Most people can make a workable plan by keeping a few simple principles in mind:
]]> Who gets your money, and how should it be spent? The first step to any estate plan is to decide who should receive your money, property and other assets when you die. However, you will also need to decide if you want those assets to be used in a certain way. (For example, are you giving money to your grandchildren with the intent that they use it to pay for college?) If so, you will need to state that in the will, and you may need to set up a trust as well.Strive to minimize tax liabilities: Both income and estate taxes will come into play. If your estate is large enough to trigger tax liability, work with your estate planning lawyer to find ways to minimize what you owe. For example, you could give your taxable assets to charity and give your tax-exempt assets to your other beneficiaries.
Consider life insurance: Life insurance proceeds pass to your beneficiaries tax-free. So, if you estimate that your beneficiaries will owe $100,000 in estate and income taxes, you may want to consider purchasing a $100,000 life insurance policy to make up that gap.
Get help: Making your estate plan by yourself is risky; little mistakes can mean big problems down the road. In addition to consulting with an estate planning attorney, you may also want to consider talking with a tax professional and a financial advisor. It is always better to be proactive on the front end than to take a risk that your estate plan will not be carried out after you pass.
Source: San Francisco Chronicle, "5 Estate Planning Tips," Denise Appleby, Feb. 7, 2012.
]]>When Reeves died in 1964, he left the vast majority of his estate - including the proceeds from the use of his music - to his wife. At last report, the estate was generating more than $400,000 in income each year.
Reeves' widow, Mary Reeves Davis, died last year, leaving the future of Reeves' legacy in question.
]]> New Husband Wants a Bigger Slice of the PieAfter Jim Reeves died, his wife married a man named Terry Davis. They were married for 30 years before Reeves Davis died in 1999.
In her will, Reeves Davis left the bulk of her estate to Jim Reeves' niece and nephew. She left her husband just one lump-sum payment of $100,000.
Terry Davis challenged the will, arguing that he was entitled to a larger share of his late wife's estate. The niece and nephew disagreed, arguing that the will should be upheld and that Jim Reeves' legacy should stay with his family.
Davis brought a lawsuit against the estate. After 12 years of delays, the trial commenced in a South Carolina probate court late last month. Davis will be representing himself - he fired six lawyers before the trial started.
Mary Reeves Davis's mental wellness is expected to be a key issue in the trial. She was allegedly suffering from dementia when she and Davis made deals to sell Jim Reeves' memorabilia and royalty rights. Social workers who visited her home during that time found that she was living in troubling and unsanitary conditions.
It remains to be seen how the court will resolve this dispute. There is, however, a valuable lesson that all of us can take away - preparing an estate plan early, while you are still mentally healthy, can go a long way toward preventing conflict after you pass.
Source: The State, "Lawsuit Over Estate of Jim Reeves' Widow Under Way," Jan. 24, 2012.
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