The study found that patients with spiritual support were two to three times more likely to receive aggressive end-of-life treatment when compared to those who received little to no spiritual support. About 11 percent of the latter chose to pursue aggressive treatments such as such as cardiopulmonary resuscitation and ventilators.
]]> The study did corroborate previous data in showing that spiritual support from doctors, nurses and chaplains led to a 77 percent decrease in aggressive interventions .
Part of the reason for the distinction in where spiritual support is coming from is that a patient’s medical team has a better idea of where the illness is heading than those without medical knowledge, and this affects the way the patient makes his or her decisions. For this reason, the researchers said that the study points to the need for greater collaboration between religious communities and medical teams.
Having a game plan in place regarding end-of-life care is an important aspect of estate planning. Advance health care directives can not only help people appoint an individual to make medical decisions for them if they become incompetent, but also allow them to express their wishes regarding specific courses of care.
Source: Source: Reuters, “Religious support tied to intensive end-of-life care,” Genevra Pittman, May 7, 2013.
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That is because a provision in President Obama’s 2014 budget calls for a decrease in the 2018 estate, gift and generation skipping transfer exemption amounts. The budget proposes to lower the estate and GST tax exemption to $3.5 million, and to $1 million for gift tax. These amounts would not be indexed for inflation. In addition, all three tax rates would rise, with a top rate of 45 percent.
]]> So what exactly was meant by all the talk about a permanent estate and gift tax exemption? In the tax world, permanent doesn’t mean what it does in everyday understanding, since Congress can always change aspects of the law. Permanent only means there is no expiration date specified.
The bottom line? If the proposal gains support and is passed, there is likely to be another rush to give away assets so that folks’ estates stay below or as close as possible to the exemption amounts.
In our next post, we’ll take a look at some potential changes to watch out for in terms of family inheritance planning, especially with respect to trusts and individual retirement accounts.
Source: Source: New York Times, “Estate Planning Remains a Moving Target Under the New Tax Law,” Paul Sullivan, April 26, 2013.
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Currently, an appraiser can legally discount the value of business assets given to family member, if the assets represent a minority share in the business. President Obama’s proposals, up until now, have called for limiting or cutting out such discounts for family members. Commentators say that could be because the administration is already preparing to issue regulations to do it, so that it is coming soon.
]]> President Obama’s proposed budget would also require Grantor Retained Annuity Trusts to have a minimum term of 10 years, which means that those who set up such trusts to avoid taxes on future appreciation on assets take a larger risk that they will die during the GRAT term and face estate tax on the entire value of the assets placed in trust.
So-called “dynasty trusts” could have the chair kicked out from under them, as President Obama’s budget proposal would have the generation skipping transfer exemption expire after 90 years, after which point the assets would be subject to taxation.
The budget proposal would require most heirs of individual retirement accounts to empty those accounts within five years, which would prevent them from stretching their withdrawals across their life expectancy and paying income tax only on distributions. This proposal has already prompted many to consider moving their wealth concentrating in IRAs into trusts to help their families follow the rules correctly and avoid penalties.
Each of these proposals is intended to generate money and help solve the ongoing budget crisis. Unfortunately, it is also forcing people to plan ahead and continue changing their estate planning strategies.
Source: Source: Wall Street Journal, “Estate Planning: New Hazards,” Kelly Greene, April 26, 2013.
]]>Most people will probably not need to write a separate written plan for their digital accounts for bank or brokerage accounts, as their will likely takes care of these assets. The important thing is to ensure the executor knows how to obtain the list of online financial accounts. Non-financial digital assets, however, are the place to focus on these instructions.
]]> One suggestion is to create a to-do list detailing how all your other digital assets should be handled at your death. This list should address things like whether you want any accounts deactivated when you die, or whether any action should be taken with respect ot specific assets such as online photos, mp3 recordings, kindle books, and so on.This document, when complete, should be given to your digital executor.
Before writing these instructions out, it is important to review the terms of service on your digital accounts, particularly social media accounts like Facebook, since these agreements take precedence over state law. Some accounts, like Youtube, require a death certificate and a copy of a document demonstrating the person attempting to access the account has power of attorney over the account. Each user agreement is different.
As a final step of your digital estate plan, consider whether you would like to post any final messages on your social media accounts. This is an individual preference, but can be part of your overall plan.
Source: Source: Next Avenue, “5 Steps to Creating Your Digital Estate Plan,” Catey Hill, April 12, 2013.
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The first step in planning for these assets is to make a list of the assets themselves and how to access them. This includes online passwords and account numbers. This inventory should be updated at least one a year, or whenever your password changes or you open a new account.
]]> This information should be stored in a safe place, such as a safety deposit box at a bank. They can also be given to one’s spouse or to one’s “digital executor.”
The latter term refers to a person designated to ensure that your requests regarding your digital assets are carried out upon your death. This person should be named in your will, and given the information necessary to access the accounts. The digital executor can be given power of attorney over the digital assets, since this may be necessary to access the accounts themselves. Those who’ve set up Google’s Inactive Account Manager or similar programs should let their digital executor know about this.
In our next post, we’ll talk about the importance of writing out clear instructions for what should happen with the digital assets themselves upon your death.
Source: Source: Next Avenue, “5 Steps to Creating Your Digital Estate Plan,” Catey Hill, April 12, 2013.
]]>The man was a Holocaust survivor who came to the United States from Poland. He made his fortune in real estate. Although he was married for a period of time, he was divorced at the time of his death and has no known children. No other family members have yet been identified.
Currently, local officials have started to sell his belongings, including his house, furniture and jewelry. Part of his estate will be used to initiate a search to determine whether he created a will at some point in his life. Another portion of the estate will be used to look for any living relatives he may have, as some have speculated that he may have relatives still in Poland or other areas in Europe. If authorities are unable to identify a will or any living relatives, the value of the man's estate will be transferred to the state.
Source: Star Tribune, "Holocaust survivor left $40 million, but no heirs," Julie Satow, April 27, 2013.
]]>Choosing the right person for this job is important, for a number of reasons. While most people choose a family member, this may not be the best approach for everybody. Though a family member may have an intimate knowledge of your wishes, they may not have the right personality, skills and knowledge it takes to act as your executor.
]]> For one thing, a family member may not be objective enough to deal with the dynamics that arise after your death. Family members, as is well known, sometimes polarize after the death of a loved one. An executor needs to be able to navigate family relationships in a way that will honor family members while carrying out his or her duties in a professional way.In addition, while an executor or executrix doesn't need to have any professional experience in the area of estate administration, financial planning or another related discipline, it is important that they know enough to know when they need to delegate duties out to the appropriate professionals.
In addition, there is the possibility that the executor could face liability for mismanagement of the estate due to lack of understanding or expertise. This can be a real headache for the executor.
Each family has unique circumstances and needs, and there is no hard and fast rule about who should act as your executor. It is important, however, to think carefully before selecting the person you are closest to. Perhaps that person may not suited to the task after all?
Those who have questions about these and other estate planning questions should work closely with their estate planning attorney to ensure they select the best executor possible, given their unique situation.
Source: Money Management, "Don't misjudge executor liabilities, says Equity Trustees," April 9, 2013
]]>The first suggestion is to create an estate plan file, and place copies of all your estate planning documents in the file. The estate plan should address any legacy gifts you wish to make. These documents include your will, health care directive or medical power of attorney, any living trust, guardianship decisions, real estate and financial records, any organ donation wishes, and information pertaining to digital assets. The executor should be clearly identified, and copies of all documents should be provided to him or her, as well as heirs and family members.
]]> Another suggestion is to add the executor as a co-signer on your financial accounts. This allows them to access bank and investment accounts to immediately pay for funeral and other expenses. That money will also be available during probate.Renting a safe deposit box is suggested, as this will keep your estate planning documents safe in the event your home is destroyed. Name your primary executor as a co-signer for the safe deposit box, so that he or she has immediate access to its contents. He or she should also have a copy of the key.
Funeral requests are sometimes placed in one's will, but not always. Wherever they are addressed, it is important that enough details are specified so that loved one's know your wishes. In addition, it is important to identify wishes pertaining to your grave location.
Finally, it is important to remember to update your estate plan regularly. Estate planning is not a one-time event or a task, but a commitment to a process.
Source: Huffington Post, "9 Ways To Make Things Easier For Your Survivors," Scott Taylor Smith, April 20, 2013
]]>One of the measures included in the president's budget proposal is a lifetime cap on savings in individual retirement accounts and other tax-deferred savings vehicles, including 401(k) plans and profit-sharing plans. The cap, which would be set at $3.4 million, has been a somewhat controversial suggestion, with some financial planners pointing out that the majority of Americans have less than $100,000 in savings, and that setting a cap will have the effect of curbing the growth of retirement plans.
]]> The reasoning behind the proposal is that a worker's total account balance would be limited to the amount a 62-year-oldneeds to buy an annuity generating an annual payment of $205,000. Those whose savings are around the $3.4 million mark may be wondering what they can do to address the issue in various circumstances that could arise.Experts looking at the issue have said pointed out a couple possible strategies. One involves advising one's children to fund Roth IRA accounts early in life until they reach the cap. This would give their investments more time to grow beyond the cap.
A second suggestion is to set up a Roth IRA trust and empty out inherited accounts within five years of the IRA owner's death. The IRA could be emptied into the trust, and hairs could be required to take withdrawals over a longer period of time so that they avoid a one-time windfall.
These or any other strategies designed to deal with less than ideal legal requirements should, of course, be discussed thoroughly with one's estate planning attorney, to ensure one's goals are achieved.
Source: AdvisorOne, "IRA Cap Gives Rise to New Funding Strategies," John Sullivan, April 17, 2013
]]>Last month, a Georgia Court of Appeals reversed a decision in a long-time battle between Gary Rollins, Randall Rollins and four children who are beneficiaries of the Rollins family fortune. The ruling means the case will head back to court.
]]> At stake in the case is several billion dollars. The dispute concerns the way in which Gary W. Rollins handles his children's trusts. The suit began in August 2010 when Glen Rollins and several siblings sued their father, Gary, and uncle, Randall, for the way they had been managing several family trusts. Two days after the suit was filed, Gary Rollins' wife of almost 45 years, Ruth, filed for divorce.The suit specifically concerned a trust that had been established for the benefits of the siblings, and dealt with how they were to be paid under the plan, known as the Rollins Perpetual Management Trust. Following the filing of the suit, Glen Rollins was fired from his executive positions with the family business, Rollins Inc., the parent company of Orkin, Inc. and other pest control services.
Disputes like this, which involve deep divisions within the family, can be difficult to deal with, and it pays to have an experienced attorney when seeking resolution in such cases.
Source: Atlanta Business Chronicle, "Rollins family's trust dispute heads back to court," Jacques Couret, April 1, 2013
]]>Because these trusts allow the grantor to pay income taxes on the appreciated value of the trust assets, instead of the trust itself paying those taxes, grantors can transfer more wealth to their beneficiaries and get more assets out of their estate.
]]> However, the current proposal would require that gift tax be paid whenever any distribution from an intentionally defective grantor trust is made and that any value remaining at the grantor's death be included in the estate for purposes of estate tax. The proposal would basically eliminate the purpose of forming such a trust.A third type of trust that could be affected is the generation-skipping transfer tax-exempt dynasty trust. These trusts, which are irrevocable, allow grantors to pass on wealth to future generations without getting hit by the generation-skipping transfer tax. Although some states place limitations on the duration of these trusts, the tax savings can be great.
The Obama administration's current proposal, though, would impose transfer taxes after a dynasty trust has been in existence for 90 years. This wouldn't totally take away the incentive to form these trusts, but would do away with current rules allow such trusts to go on indefinitely.
The bottom line with all this is that, if the current proposal goes forward, people will need to reevaluate their estate plans if they are using any of these strategies-or any of the others that could be affected. The best way to keep on the ball is to work with an experienced attorney who is keeping up on this area of law.
Source: Lifehealthpro, "Budget proposal targets estate planning tools," Robert Bloink & William H. Byrnes," April 8, 2013
]]>One estate planning tool that could take a hit is the grantor retained annuity trust (GRAT). These trusts allow grantors to transfer assets out of their estate and to retain an income interest received as an annuity payment. Trust assets are distributed to beneficiaries at the end of the trust term. These trusts are usually set up over a short period of time and funded with assets that are likely to appreciate in value, allowing the grantor to minimize transfer taxes while passing wealth on to beneficiaries.
]]> Now, however, lawmakers are proposing to require a minimum trust term of 10 years, which would increase the possibility that the grantor will die during the trust term, requiring the trust assets to be included in his or her estate. The proposal would also get rid of the ability of grantors to form GRATs that "zero out." Such a change would require that some gift tax be paid when any such trust is created.Another estate planning tool that could be targeted is the intentionally defective grantor trust. These trusts are useful in that the can allow grantors to exclude the value of trust assets from their estate. In our next post, we'll take a look at how the current proposal could affect these trusts, as well as another type of trust in use.
Source: Lifehealthpro, "Budget proposal targets estate planning tools," Robert Bloink & William H. Byrnes," April 8, 2013
]]>The reason: despite the millions of dollars worth of art, Simpson's family lacks money for a burial. Merton Simpson Jr. the art collector's son has even sent an email to his father's friends asking for contributions for a funeral, including instructions for wiring money through a PayPal account.
]]> How did Simpson's estate get to into this position? Not surprisingly, because of a dispute over Mr. Simpson's care and his enormous art collection. Now that he has passed, accusations of mismanagement and exploitation have peaked. In the middle of the fray are Mr. Simpson's friends, family and staff members, all claiming to be interested in carrying out his real wishes.Part of the dispute involves a will contest that will require a probate court to determine the validity of an April 7, 2011 will, which professed to supplant any previous wills, including one Simpson signed in 2007. Those two wills name different executors.
Such disputes, as this case shows very will, can be time consuming and very costly for an estate. This is the reason that it is so important to address the possibilities of legal disputes as best as possible in the estate planning process.
Source: New York Times, "Art Worth Millions, Yet No Cash for Burial," Patricia Cohen & Peter Lattman, March 25, 2013
]]>One of the challenges in trust and estate administration is managing federal and state tax law compliance. Focus is often placed upon federal law compliance, but state income taxation issues should not be forgotten.
]]> Some states do not tax income related to trusts, but those that do have a variety of rules and criteria for which trusts are subject to tax. Attorneys and CPAs working with those engaged in estate planning should be aware of the rules.Some states have no income tax at all; some base their tax on where the person creating the trust lived at the time the trust was created or the time it became irrevocable; still others base it on where the trust is being administered, where a trustee lives, or where a beneficiary lives.
One difficulty that can arise in this area is when a trustee changes residency to a different state. This could, in some situations, trigger state income tax on the trust in the new state. When this isn't caught for years, unpaid taxes, interest and penalties will follow. Laws change over time, and it can be difficult to keep track of what it going on currently.
The best defense against surprise situations is for trustees to arrange for periodic reviews of the trust in connection with state income tax laws, and to develop a system for tracking state requirements and other factors that could potentially trigger state income taxes.
Source: Wall Street Journal, "Trust, But Verify Your Estate Tax Planning," Roger Russell, March 21, 2012
]]>Whether generosity or naiveté is the motivating factor among those who do this isn't clear. What is clear is that these trust fund "progressives" are a sign that not everybody who receives the kind of wealth that could make their life much easier are willing to go down that road.
]]> The challenges of managing wealth as a trust fund child can be burdensome. A group called Resource Generation even brings together young inheritors so that they can speak openly about the challenges of wealth. The members of this group range in age from 18 to 35 and have inherited between $500,000 and $100,000 million of wealth.The group, prudently, encourages its members to look not only at the needs of the world and the kinds of social change they want to contribute to furthering, but also at their lives and how to realistically plan to take care of themselves and their future children. That said, the group does place a strong emphasis on members being agents of change with respect to wealth inequality.
In many cases, trust fund progressives still have limitations on accessing their received wealth. Most trusts contain provisions that prevent an inheritor from taking out too much money too quickly. Depending on how the trust is written, the trustee overseeing the trust may have broad discretion to refuse the beneficiary's requests. And if the beneficiary lies about the purpose of the money, they have little recourse.
It is all very interesting, and a reminder of the importance of understanding what kinds of limitations and qualifications should be placed on trust distributions for beneficiaries.
Source: New York Times, "Among Young Inheritors, an Urge to Redistribute," Paul Sullivan, March, 26, 2013
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