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Charitable planning in Florida

George Michael’s Charity Continues

George Michael’s Charity Continues. One of George Michael’s sisters, 55-year-old Melanie Panayiotou, was found dead on Christmas Day, exactly three years after her brother died at his home in Goring-on-Thames, Oxfordshire at aged 53.

London’s Metropolitan Police said in a statement that emergency services were called to a home in north London, due to “reports of the sudden death of a woman, aged in her 50s.”

The Wealth Advisor’s recent article, entitled “George Michael’s sister Melanie donated her share of $128m inheritance to charity before her death on Christmas,” said that George had left most of his $128 million fortune to Melanie and his other sister, Yioda.

Sources say that the former’s share will be donated to charity. George was active in LGBT causes after coming out as gay in 1998 and was also very involved in numerous HIV/AIDS charities.

George began his philanthropy in 1984, when his fame started to grow. He joined together with other British and Irish pop stars to form ‘Band Aid’ to raise money for famine relief in Ethiopia. Michael also donated the proceeds from his 1991 single “Don’t Let the Sun Go Down on Me” to 10 different charities for children, AIDS and education. He was also a patron of the Elton John AIDS Foundation.

In 2003, George joined other celebrities to support a campaign to help raise $26.3 million for terminally ill children run by the Rainbow Trust Children’s Charity. He also famously gave $20,000 to a ‘Deal or No Deal’ contestant for IVF treatment and $33,000 to a debt-ridden woman crying in a café.

After his death, numerous charities revealed he had privately supported them for years.

“George’s family share his caring spirit,” the source told the Sun, speaking about Melanie’s donation of her inheritance. “Knowing that some good is going to come out of this double-tragedy has provided a small amount of comfort.”

Melanie, who was a hairdresser, traveled around the world with her brother George during the peak of his music career and was said to be devastated over his death.

While her cause of death has not yet been revealed, Melanie is expected to be buried at the Highgate Cemetery next to her brother. Their mother was also buried in the same location.

Reference: Wealth Advisor (Jan. 7, 2020) “George Michael’s sister Melanie donated her share of $128m inheritance to charity before her death on Christmas”

Read more about George Michael’s Charitable gifts: 

After George Michael’s Death, Stories Emerge Of His Quiet Generosity

George Michael’s secret charity work still surprises years after his untimely death

We also help when you want to leave some or all of your inheritance to charity, check out our web page:

Charitable Giving in Jacksonville, Florida

 

 

Five Estate Planning Mistakes to Avoid

While it’s true that no estate is completely bulletproof, there are mistakes that people make that are big enough to walk through, while others are more like a slow drip, draining retirement finances in a slow but steady process. There are mistakes that can be easily avoided, reports Comstock Magazine in the article “Five Mistakes to Avoid When Planning Your Estate.”

  1. Misunderstanding Estate Law. Some people are so thrown by the idea of an estate plan, that they can’t get past the word “estate.” You don’t need a mansion to have an estate. The term is actually used to refer to any and all property that a person owns. Even modest people need a plan to help beneficiaries avoid unnecessary costs and stress. Talk with an estate planning attorney to learn what your needs are, from a will to trusts. Make sure that this is the attorney’s key practice area. A real estate or personal injury attorney won’t have the same knowledge and experience.
  2. Getting Bad Advice. It takes a team to create a strong estate plan. That means an estate planning attorney, a financial advisor and an accountant. Be wary of firms that focus entirely on selling trusts. There’s definitely a role for trusts in estate plans, but there are many other tools that are needed. Buying an insurance policy or an annuity is not an estate plan.
  3. Naming Yourself as a Sole Trustee. Naming yourself as a sole trustee puts you and your estate in a precarious position. What if you develop Alzheimer’s or are injured in an accident? A trusted individual, a family member, a longstanding friend or even a professional trustee, needs to be named to protect your interests, if you should become incapacitated.
  4. Losing Track of Assets. Without a complete list of all assets, it’s nearly impossible for someone to know what you own and who your heirs may be. Some assets, including retirement funds, life insurance policies, or investment accounts, have named beneficiaries. Those people will inherit these assets, regardless of what is in your will. If your heirs can’t find the assets, they may be lost. If you don’t update your beneficiaries, they may go to unintended heirs—like ex-spouses.
  5. Deciding on Options Without Being Fully Informed. When it comes to estate planning, the natural tendency is to go with what we think is the right thing. However, unless you are an estate planning attorney, chances are you don’t know what the right thing is. For tax reasons, for instance, it may make sense to transfer assets, while you are still living. However, that might also be a terrible idea, if you choose the wrong person to hold your assets or don’t put them in the right kind of trust.

Estate planning is still a highly personal process that depends upon every person’s unique experience. Your family situation is different than anyone else’s. An experienced estate planning attorney will be able to create a plan and help you to avoid the big, most commonly made mistakes.

Reference: Comstock Magazine (Dec. 2019) “Five Mistakes to Avoid When Planning Your Estate”

You may also be interested in reading:  Some Common Estate Planning Mistakes To Avoid

And: Estate Planning Considerations for Out-of- State Property

Also check out our previous Blog at : Common Asset Protection Mistakes in Titling Real Property

 

Business Owners Should Start End-Game Planning Now

Most parents understand that the ultimate goal of child-rearing is to help a child become an independent adult. For the business owner, this means building a business that would continue after they have retired or passed away. However, when it comes to estate planning, says the article “Why Business Owners Should Think About Estate Planning Sooner Than Later,” from Forbes, many business owners think only about their personal assets and their children. Business Owners Should Start End-Game Planning Now!

For a successful business owner who wants to see their business continue long after they have moved on to the next chapter in their lives, the best time to start succession planning is now.

Succession and estate planning should not be something you wait to do until the end of your life. Most people make this mistake. They don’t want to think about their own mortality or what will happen after they’ve died. Very rarely do people realize the value of estate planning and succession planning when they are engaged in a start-up or when their companies are just getting solid footing. They are too busy with the day-to-day concerns of running a business than they are with developing a succession plan.

However, any estate planning attorney who has been practicing for more than a few years knows that this is a big mistake. Securing assets and business planning sooner, not later, is a far better way to go.

Business continuity is the first concern for entrepreneurs. It’s not an easy topic. It’s far better to have this addressed when the owner is well and the business is flourishing. Therefore, the business owner is making decisions and not others, who may be emotionally invested but not knowledgeable about the business.

A living trust and will can put in place certain parameters that a trustee can carry out. This should include naming the individuals who are trusted to make decisions. Having those names and decisions made will minimize the amount of arguing between recipients of assets. Let them be mad at you for your choices, rather than squabbling between each other.

Create a business succession plan that designates successor trustees who will be in charge of managing the business, in the event of the owner’s incapacity or death. A power of attorney document is used to nominate a fiduciary agent to act on your behalf if you should become incapacitated, but a trust should be considered to provide for a smoother transition of the business to successor trustees.

By transferring a business to a trust, the inconvenience and costs of probate may be avoided and assets will be passed along to chosen beneficiaries. Timely planning also preserves business assets, since they can take advantage of advanced tax planning strategies.

Estate and succession planning is usually not top-of-mind for young business owners, but it is essential planning. Talk with an experienced estate planning attorney to get yourself and your business ahead of the game.

Reference: Forbes

Also read these related articles:

Managing the Trickiest Parts of a Family Business

Estate planning for business owners: What happens to your business when you leave?

And check out our Previous Blog:   Why Should I Pair my Business Succession and Estate Planning?

Life Insurance Is a Good Estate Planning Tool but Needs to Be Done Carefully

With proper planning and the help of a seasoned estate planning or probate attorney, insurance money can pay expenses, like estate tax and avoid the need to liquidate other assets, says FEDweek’s recent article entitled “Errors to Avoid in Using Life Insurance for Estate Planning.”

As an example, let’s say that Reggie passes away and leaves a large estate to his daughter Veronica. There’s a big estate tax that’s due. However, the majority of Reggie’s assets are tied up in real estate and an IRA. In light of this, Veronica might not want to proceed directly into a forced sale of the real estate. However, if she taps the inherited IRA to raise cash, she’ll be required to pay income tax on the withdrawal and forfeit a very worthwhile opportunity for extended tax deferral.

If Reggie plans ahead, he could purchase insurance on his own life. The proceeds could be used to pay the estate tax bill. As a result, Veronica can retain the real estate, while taking only minimum required distributions (RMDs) from the inherited IRA.

If the insurance policy is owned by Veronica or by a trust, the proceeds probably won’t be included in Reggie’s estate and won’t increase her estate taxes.

Along these same lines, here are some common life insurance errors to avoid:

Designating your estate as beneficiary. When you make this move, it puts the insurance policy proceeds into your estate, exposing it to estate tax and your creditors. Your executor will also have to deal with more paperwork, if your estate is the beneficiary. Instead, name the appropriate people or charities.

Designating just a single beneficiary. You should name at least two “backup” beneficiaries. This will decrease any confusion, if the primary beneficiary predeceases you.

Throwing the copy of your life insurance policy in the “file and forget” drawer. You should review your policies at least once every few years. If the beneficiary is an ex-spouse or someone who’s passed away, make the appropriate changes and get a confirmation from the insurance company in writing.

Failing to carry adequate insurance. If you have a youngster, it undoubtedly requires hundreds of thousands of dollars to pay all her expenses, such as college bills, in the event of your untimely death.

Talk to a qualified and experienced estate planning attorney about the particulars of your situation.

Reference: FEDweek (Dec. 12, 2019) “Errors to Avoid in Using Life Insurance for Estate Planning”

How to Avoid Taxation on Life Insurance Proceeds

Read one of our previous blogs about How Life Insurance can Help your Estate Plan

 

What Should I Know About Joint Tenancy?

Investopedia’s recent article, “Joint Tenancy: Benefits and Pitfalls,” explains that it’s a common practice for couples and business partners to take title to each other’s bank accounts, brokerage accounts, real estate and/or personal property, as joint tenants with rights of survivorship (JTWROS).

Joint tenancy (JTWROS) is a type of account or title, where the asset is owned by at least two people and all tenants have an equal right to the account’s assets.

They all also have survivorship rights, in the event of the death of another tenant. Therefore, when one partner or spouse dies, the other receives full title to the asset. Let’s take a closer look at JTWROS.

When a person passes away, his will is examined by the probate court. The court will decide whether the will is valid and binding and determines if there are any outstanding liabilities and assets of the deceased. After addressing any debts, any remaining assets are distributed to the heirs, according to the instructions in the will. However, if a person dies without a will, the probate court will divide the assets pursuant to state intestacy law.

Because joint tenancy with right of survivorship automatically transfers ownership to the surviving spouse or business partner at the death of the first partner, there is no probate for this asset. When a married couple or two business partners own an asset that is titled JTRWOS, both are responsible for it, so both enjoy its positive attributes and share liabilities equally. However, neither party can incur a debt on the property without indebting themselves.

When the surviving spouse or business partner assumes control over the asset titled JTWROS at the death of the co-tenant, she can sell it, or give it away.

The alternative to JTWROS is a tenancy in common. With that form of ownership, each owner may own half of the asset, or a percentage or fractional ownership can be established. Each party can also legally sell his share, without the other party’s consent. Second, the asset will pass to heirs.

Both JTWROS and tenancy in common have some nice benefits. However, before you set up either, every party should assess their situations, to determine whether one option is better than the other.

Learn more about joint tenancy.

Reference: Investopedia (May 28, 2019) “Joint Tenancy: Benefits and Pitfalls”

What Does an Executor Actually Do?

Investopedia’s recent article, “The Executor’s Checklist: 7 Tasks Before They Die,” reminds us that being executor of an estate means significant responsibility. It can be a daunting task, if you’re unprepared. Here are some simple steps to take while the testator is still alive to make the executor’s job easier.

  1. Be sure to Have the Location of the Will and Other Estate Planning Documents. This is a no-brainer. You make the executor’s job easier, if the testator keeps the original will, deeds, partnership documents, insurance policies, or other important papers in an agreed-upon spot, with copies at a backup location.
  2. Retitled Accounts Where Appropriate. If the testator has a spouse, mostly like they want assets to flow directly through to the widow(er), so make accounts as joint and make sure that properties and titles are in both names.
  3. Make a List of the Testator’s Preferences. Another way to make things easy on the family is to include funeral preferences, which need to be in writing and signed by the testator.
  4. Draft a Possessions List and Their Recipients. A big issue that is often overlooked is distributing personal possessions that have little financial value but great sentimental value. Along with the testator, an executor can create a list for the dispersal of personal items, as well as a system of distribution. The testator can include their reasoning for who got what gift. Sharing the list with those involved may also eliminate some hurt feelings. An organized dispersal can make an executor’s job easier and help with issues of fairness.
  5. Create an Annual Accounting Sheet and Updating Schedule. If the testator keeps track of the estate electronically on an annual basis, the executor will have a good idea of assets when it’s required. This e-document will also decrease the time spent searching for that jewelry the testator gave to a granddaughter or tracking down the funds that were supposedly in a now-empty investment account.
  6. Create a Sealed Online Accounts Document. An executor should also have a record of the testator’s online presence to deactivate accounts. This document simplifies work for the executor.
  7. Meet the Relevant Professionals. Executors should be familiar with the accountant, estate planning attorney and other professionals the testator uses. They may have further advice specific to the testator’s situation.

Preparation will greatly decease the odds of any complications, when carrying out your duties as an executor. Take these actions while the testator is still alive to help make certain that the executor carries out the testator’s wishes.

The role of an executor carries substantial responsibility.

Reference: Investopedia (July 11, 2019) “The Executor’s Checklist: 7 Tasks Before They Die”

Blended Families Need More Thoughtful Estate Plans

Estate planning for blended families is like playing chess in three dimensions: even those who are very good at chess can struggle with so many moving parts in so many dimensions. Preparing an estate plan requires careful consideration of family dynamics, and those are multiplied in blended families. This is another reason why estate plans need to be tailored for each family’s circumstances, as described in the article “Blended families have unique considerations in estate planning” from The News Enterprise.

The last will and testament is often considered the key document in an estate plan. But while the will is very important, it has certain limitations and a few commonly used estate planning strategies can result in unpleasant endings, if this is the only document used.

Spouses often leave everything to each other as the primary beneficiary on death, with all of their children as contingent beneficiaries. This is based on the assumption that the second spouse will remain in the family home, then will distribute any proceeds equally between the children, if and when they move or die. However, the will can be changed at any time before death, as long as the person making the will has mental capacity. If when the first spouse dies, the relationship with the surviving children is not strong, it is possible that the surviving spouse may have their will changed.

If stepchildren don’t have a strong connection with the surviving spouse, which occurs frequently when the second marriage occurs after the children are adults, things can go wrong. Their mutual grief at the passing of the first spouse does not always draw stepchildren and stepparents together. Often, it divides them.

The couple may also select different successor beneficiaries. The husband may name his wife first, then only his children in his will, while the wife may name her husband and then her children in her will. This creates a “survival race.” The surviving spouse receives the property and the children of the spouse who passed won’t know when or if they will receive any assets.

Some couples plan on using trusts for property distribution upon death. This can be more successful, if planned properly. It can also be just as bad as a will.

Trust provisions can be categorized according to the level of control the surviving spouse has after the death of the first spouse. A trust can be structured to lock down half of the trust assets on the death of the first spouse. The surviving spouse remains as a beneficiary but does not have the ability to change the ultimate distribution of the decedent’s portion. This allows the survivor the financial support they need, giving flexibility for the survivor to change their beneficiaries for their remaining share.

Not all blended families actually “blend,” but for those who do, a candid discussion with all, possibly in the office of the estate planning attorney, to plan for the future, is one way to ensure that the family remains a family, when both parents are gone.

Learn more about blended family planning.

Reference: The News Enterprise (November 4, 2019) “Blended families have unique considerations in estate planning”

A Good Estate Plan Equals Peace of Mind

The problems aren’t always evident when the first parent passes. Often, it’s when the second parent becomes gravely ill, that lapses in estate planning become evident. For one family, everyone thought estate plans were all in place after their father died. When their mother suffered a stroke, the adult children learned that they had no access to her financial accounts or her health care directives. No one had thought to update the estate plan.

However, when one parent passes, the family needs to take action. That’s the lesson from the article “Avoid heartache and anxiety with estate planning” from Post Independent. In this case, the family never thought to modify or add anyone’s name to the financial accounts, power of attorney documents, medical power of attorney documents, or HIPAA consent forms. What often happens in these cases, is that family members start bickering about who was supposed to do what.

For those who have not taken the time to learn about estate planning, planning for end-of-life legal, financial and medical matters, the quarrels may be inevitable.

Estate planning is not just for wealthy families. If your aging loved one own property, stocks, bonds or any other assets, they need to have a will, advance directives, powers of attorney and possibly some trusts. Take the time to understand these documents now, before an urgent crisis occurs.

There are few formal courses that teach people about these matters, unless they go to law school. Nearly half of Americans age 55 and over don’t have a will, according to an article appearing in Forbes. Fewer than 20% of these people have health care directives and the proper types of powers of attorney in place.

When it comes to preparing for these matters, the laws are very specific about who can participate in health care and financial conversations and decisions.

Here are some of the documents needed for an estate plan:

  • Last Will and Testament
  • General, Limited and/or Durable Power of Attorney
  • Health Care Power of Attorney
  • Living Will
  • Advance Care Directive
  • HIPAA Consent Form

Preplanning will greatly assist family members and loved ones, so they know what medical and financial efforts you or your parents would want. Having the documents in order will also provide the family with the legal means of carrying out these wishes.

The legal documents won’t solve all problems. Your brother-in-law will still be a pain in the neck and your oldest sister may still make unrealistic demands. However, having these documents in place, will make the best of a bad situation.

Speak with an estate planning attorney to ensure that your estate plan, or your parent’s estate plan, is properly prepared. If someone has moved to another state, their estate plan needs to be updated to align with their new state’s laws.

Don’t leave your children guessing on what you want.

Reference: Post Independent (November 3, 2019) “Avoid heartache and anxiety with estate planning”

Do I Need a Beneficiary for my Checking Account?

When you open up most investment accounts, you’ll be asked to designate a beneficiary. This is an individual who you name to benefit from the account when you pass away. Does this include checking accounts?

Investopedia’s recent article asks “Do Checking Accounts Have Beneficiaries?” The article explains that unlike other accounts, banks don’t require checking account holders to name beneficiaries. However, even though they’re not needed, you should consider naming beneficiaries for your bank accounts, if you want to protect your assets.

Banks usually offer their customers payable-on-death (POD) accounts. This type of account directs the bank to transfer the customer’s money to the beneficiary. The money in a POD bank account usually becomes part of a person’s estate when they die but is not included in probate, when the account holder dies.

To claim the money, the beneficiary just has to present herself at the bank, prove her identity and show a certified copy of the account holder’s death certificate.

You should note that if you are married and have a checking account converted into a POD-account and live in a community property state, your spouse automatically will be entitled to half the money they contributed during the marriage—despite the fact that another beneficiary is named after the account holder passes away. Spouses in non-community property states have a right to dispute the distribution of the funds in probate court.

If you don’t have the option of a POD account, you could name a joint account holder on your checking account. This could be a spouse or a child. You can simply have your bank add another name on the account. Be sure to take that person with you, because they’ll have to sign all their paperwork.

An advantage of having a joint account holder is that there’s no need to name a beneficiary, because that person’s name is already on the account. He or she will have access and complete control over the balance. However, a big disadvantage is that you have to share the account with that person, who may be financially irresponsible and leave you in a bind.

Remember, even though you may name a beneficiary or name a joint account holder, you should still draft a will. Speak with a qualified estate planning attorney to make sure about all your affairs, even if your accounts already have beneficiaries.

Beneficiary designations are part of good overall estate planning.

Reference: Investopedia (August 4, 2019) “Do Checking Accounts Have Beneficiaries?”

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