Monday, January 31, 2011

Estate Planning FAQ: What is estate planning?

In this series of estate planning FAQ's, we are covering your questions on estate planning. In this article, we answer, “What is estate planning?”

Estate planning can mean many things to different people. Here is the definition from definition of estate planning.

That's not a bad definition, but I believe it is too specific to make estate planning understandable. I want us to take the focus off of specific documents and put it on goals and objectives.

Here is the definition that I like:

Estate planning is about creating arrangements, usually legal, to make what you want to happen in the future happen, no matter what the future holds.

I like that definition because it gets more accurately at what real estate planning is about. Let's match my definition with some examples to make this point.

  1. Assume that you want your kids to go to college. When you start a college fund, like a 529 Plan, that is a form of estate planning. But,
  2. How do you make sure that goal is realized if you get sick, become disabled or die too soon? You might add an insurance plan to supplement the 529 Plan. That's estate planning too.
  3. Now, how do you make sure the insurance money will be spent for your kids how you want, like to provide that education? You might consider establishing a trust for your kids in a Will or revocable trust that provides guidelines to the trustee to make educational opportunities for your children happen. Again, elegant examples of estate planning, or, creating arrangements to make sure what you want to happen does, even in an uncertain future.

Now, you can expand on those examples with more details that make you and your family original and unique. Your unique details provide the first clue that every estate plan is, and should be, different. No family is the same, their goals are unique and their resources unique as well. What one family may do to reach similar goals may be quite different than what you might do.

Another example illustrates this. Let's stay with our college education goal. One family with substantial resources may be considering Ivy League schools in their planning. Another family may focus on State colleges and student loans. Same goal, college education, but different planning due to the different family situations and resources.

When you look at estate planning this way, it takes on an additional meaning:

Estate planning provides the means to control the outcome of future events and circumstances.

We sometimes get to focused on the means of estate planning; Wills, Trusts, Durable Powers of Attorney, etc., and forget that those are just means and tools. What estate planning is really about is you, your family and your resources. That's what makes estate planning so interesting. Each one is different, unique and special.

What do you think? Did this article answer for you the question, “What is estate planning?” Let me know your thoughts.

In our next article, we will start to look at some of the tools that we use in estate planning, like Wills and Durable Powers of Attorney.

Bernie Greenberg

Estate Planning FAQ: Frequently Asked Questions About Estate Planning

Estate Planning FAQ:

Over the next few articles, I will address the most frequently asked questions I get about estate planning; Wills; Trusts and probate.

If you have a question or questions that you would like to see addressed, please send them in to me or post them here.

You can always get our latest news and comments about estate planning at: Our website and we encourage you to check back there often.

So stay tuned for our series on Estate Planning FAQ. In the next article is: What is estate planning?

Bernie Greenberg

Tuesday, January 25, 2011

The Corrected Link to The Wall Street Journal Story On Corrupt Legislation

Is Our Legislative Process Corrupt? Maybe.

I commented below on a story in the January 25th edition of the Wall Street Journal.

Here is the corrected link to the Wall Street Journal story:From

 Investors Weigh In on For-Profit-College Regulation - 

This story alarmed me because it suggests that our legislative process may be corrupt. What this involved is lobbying attempts by some Hedge Fund operators to have Congress crack down on for-profit colleges. At the same time these hedge fund guys were pushing for Congress to act, they were shorting the stock of several of these colleges.

My point is this: there should be complete transparency in our legislative process. I have no problem with these people lobbying for Congressional action. My argument is their doing so without telling Congress that they have shorted or are shorting the stock in these colleges. You see, if Congress does act, their short bet that the stock would go down would be correct and the hedge funds would make millions.

So if you are going to lobby Congress to pass legislation, then at least be honest and up front about why you are there.

What's your opinion?

Bernie Greenberg

Another Reason To Distrust How Laws Are Made

Some new laws have laudable goals, but dubious motives.

Here is an interesting example of that.

Let me know what you think of this story from the Wall Street Journal about who is lobbying for certain laws to be passed: stock market speculators.

A 'Short' Plays Washington

The actual link to this story appears in my entry just above this one. So remember to read the entry just above this one to find the link to the actual WSJ story.

Bernie Greenberg

Thursday, January 20, 2011

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010: Yes, We Do Have A New Tax Bill

We Have a New Tax Law and Called the Above Name!

As I write this, it's January 20, 2011. We got our new tax law back in December of 2010. I am writing this because this week alone, I have met with over 10 people who were not aware that this new tax law existed.

Strange? Perhaps. But tax lawyers like myself do not always remember that people who do not focus on estate taxes do not pay attention to changes in the estate tax laws. Remarkable, but true.

I have written before about some of the details of this new tax law. The estate tax parts of this new law are retroactive to January 1, 2010! I will not repeat those descriptions in this article.

People Are Unaware of the New Tax Law!

Since the first of the year, I have met with several people who expressed surprise that a new tax bill had been passed and signed by the President. This has amazed me because of how much my firm has tried to educate our clients and the public about what is going on with estate tax laws.

However, the truth is that most people do not pay attention to these tax law changes. So, what should you do about all this?

First, schedule a meeting to meet with your estate planning attorney and learn how and if these changes apply to you.

Second, if you don't have a Will or estate plan yet, make 2011 your year to get one. You can review all of my earlier articles about why this is the best thing you could do for yourself and your family in 2011.

Third, if you don't want to stay current on what is happening in the tax world, follow our blog here. Come visit here often and check in from time to time. Who knows, it just might be fun and even (gasp) educational.

Let me know if you found this article helpful and if you have any questions. Thank you.

Bernie Greenberg

Why New Tax Laws Mean Reviewing Your Estate Plan

New tax laws mean it's time to review your estate plan. Here's why:

The Congress has passed several new tax laws that affect your estate and estate plan over the past 10 years. Each time, the new law has major adverse impact on your family and your plan.

Additionally, for people unfortunate enough to die during these periods, their families face enormous uncertainty in how their family member's estate must be handled.

The only way for you to know how these changes in the law affect you is to review your plan with your estate planning attorney. Here are recommendations:

  1. Review your plan at least every two years. The meetings could be short and simple, or if the change in the law is major, the meeting will be more in depth.
  2. Don't skip a review.
  3. Don't rely on your interpretation of the news to decide whether or not to have your plan reviewed.
  4. If you don't have a plan, then it's time to meet with an estate planning attorney for your first time.
  5. There are very few people alive who don't need an estate plan, so don't use that to not meet and find out about your situation.
  6. When you schedule your meeting, ask what you should bring and review so you will be prepared for the meeting.
  7. Ask what the charge is for the meeting so there are no surprises.
  8. Not to be repetitious, review your plan, review your plan, review your plan.

Follow these simple steps and stay current on the law and keep your plan current and your family protected.

Was this article helpful? Please comment or leave your questions. Thank you.

Bernie Greenberg

Testing BlogJet

I have installed an interesting application - BlogJet. It's a cool Windows client for my blog (as well as for other tools). Get your copy here:

Let me know what you think if you try it out.

Bernie Greenberg

"Computers are incredibly fast, accurate and stupid; humans are incredibly slow, inaccurate and brilliant; together they are powerful beyond imagination." -- Albert Einstein

Wednesday, January 19, 2011

Serving as Someone's Trustee Can be Hazardous!

As the below article from Trusts and Estates Magazine shows, serving as a Trustee can be hazardous if you are not a professional.

It is common for clients to name family members as a Personal Representative or Trustee. However, before take on the responsibility you need to think carefully about your responsibilities.

The article below should be required reading before you take on the job:

trustee breach fiduciary duty paradee

Clients also need to be careful in their selection of decision makers. Before you make a selection that creates a disaster, make sure you discuss it thoroughly with your estate planning attorney.

Bernie Greenberg

Sunday, January 16, 2011

Top 10 Worst Estate Planning Mistakes

Top 10 Worst Estate Planning Mistakes!

This is just one list of the worst estate planning mistakes. There are dozens of mistakes that people make with their estate planning. This is my list of the 10 worst mistakes I see in my practice.

Don't be fooled by how common or ordinary these mistakes seem. There very ordinariness is what makes them so dangerous to the family.

1. Not Having An Estate Plan:

This mistake should really need no explanation. It is the worst mistake of all because it leaves your family and you completely exposed. You are reliant on the legal system of your State to take care of your property; your spouse and your children. Generally, this is not the preferred way to take care of your loved ones.

2. Thinking You Don't Need An Estate Plan:

This is a common mistake that usually leads to the first mistake. There are several reasons that people believe that estate planning is not necessary. They think they don't have enough property or they don't have family that depends on them.

These factors could be present, however, the truth is that there are very few people who don't need some kind of planning. Even if you have no property ( a rare circumstance) or if you have no family, you would still want to protect yourself from disability.

3. Not Properly Protecting Your Children:

Children and their protection is a primary goal of estate planning. This is crucial if your children are young or disabled. A proper estate plan will allow your kids to be raised by those you trust, in the manner you support and the financial future of your kids to be protected.

4. Not Knowing How to Calculate the Size of Your Estate:

Many people who don't pursue an estate plan fail to do so because they think they don't have a large enough estate. Unfortunately, approximately 96% of all clients don't know how to calculate their estate.

Invariably, people forget something that creates estate value when they tell me how much they are worth. They routinely forget life insurance (See, the next mistake!), pension plans and other assets.

When you do your estate plan, learning how to correctly calculate your estate is one of the initial steps.

5. Not Including Life Insurance When Calculating Your Estate:

As just referred to, many people fail to include their life insurance when considering their estate size. They do this because people remember that life insurance is income tax free. However, it is not estate tax free and if you own or control the insurance policy, it is part of your estate.

Insurance proceeds alone can be significant and if not planned for, can create havoc in your plan.

6. Creating a Will From an Online Form:

Most experts (and I) agree that online or fill-in-the-blank forms are an inappropriate estate planning solution. Why? They don't work, people fill them out incorrectly and they create numerous unintended consequences.

7. Having Just a Will:

A Will, while important, is not an estate plan. The Will is just one component to every estate plan. The plan should also include, at a minimum, Durable Powers of Attorney, Living Wills, and tax and probate analysis.

8. Not Synching Beneficiary Designations With Your Plan:

Many people have benefits from work, insurance policies and IRA's. All your beneficary designations need to be coordinated with your estate plan. Failing to do so will mean the plan will fail.

9. Not Considering Tax Consequences:

Almost everything we do has tax consequences, including our estate planning. Congress has changed our estate tax rules repeatedly over the past several years and more changes are coming.

It is vital to the integrity of your plan to consider how these tax rules work and how changes to those rules impact yourself, your family and your plan.

10. Not Working With an Estate Planning Expert:

Even though I am a fan of the movie, My Cousin Vinnie, the truth is your cousin, uncle, brother, sister or neighbor cannot help you with your estate plan. Unless they are a full time estate planning specialist, you should stay away from their amateur estate planning approaches and ideas.

I can't tell you how many times we have had to re-do or clean up estate planning documents that came from a non-expert source. I recommend to all clients to view their estate plan like their medical care. They would not let their cousin perform surgery on them so don't let that same cousin try and do their estate plan. Like surgery, estate planning is best done by experts.

That's my list of the top 10 worst estate planning mistakes. Do you have your own? What do you think of this list? Please comment on your thoughts and experiences. Thank you.

Bernie Greenberg

Wednesday, January 12, 2011

The New Tax Law: What Does It Mean For You?

Right before the end of the year, Congress passed and the President signed a major new tax law. What does it mean for you?

Our new tax law is far reaching and will affect every aspect of your life. Over the next few days, I'll have several articles for you about different features of this new law.

Before getting into details, let's just list several features of the new law.

1. The Bush era income tax cuts have been extended.

2. The estate tax exemption becomes $5 million retroactive to 1/1/2010.

3. The carry-over basis rules that were in effect for 2010 estates with a 0 estate tax are now optional via election for 2010 estates.

4. The new $5 million estate tax exemption means that old style A-B or Marital Deduction trusts are no longer viable and will create major problems for your family.

5. Unused exemption from the first spouse's death now can be used at the second spouse's death, but require the filings of estate tax returns with the IRS.

That's just a quick introduction to the new law. Many more details will follow.

Bernie Greenberg

Tuesday, January 4, 2011

You've Resolved to Get a Will This Year. That's Great! How to Know the Right Will for You.

You've Resolved to Get a Will This Year. That's Great! How Do You Know the Right Will for You? What do You do Next?

You've made a wonderful New Year's resolution to finally get your Will done this year. It may surprise you to know just how many people each year make the same resolution. In this article, I will cover the information you need to know to get started on this resolution and bring it to completion.

So where do you begin? Well that's actually an easy question to answer. It's the same answer to the question of knowing which Will is right for you. There is no such thing as a Will "out there" that is right for you and your family.

You see, there are dozens of different kinds of Wills. Let's review just several to demonstrate what I mean. There are Wills for:

1. Single people.
2. Single people with minor children.
3. Single people with grown children.
4. Single people with grown children and grandchildren.
5. Single people with dependents not their children.
6. Married couples with the same combinations as listed above for single people.
7. Unmarried couples with all the same combinations.
8. Domestic partners with all the same combinations as above.
9. Same sex partners with the same combinations.
10. Wills for situations that are too numerous to mention.

In other words, every person's Will is (and has to be) different than every other person's Will. This is because everyone is different! This is why internet and fill-in-the-blank documents don't work and are so dangerous. It is impossible to properly tailor those documents so they can work just for you.

If all this is true, then how do you start on this resolution? That's easy. You make an appointment with an estate planning attorney for an initial estate planning assessment. By having this meeting, you will learn what type of Will fits your situation.

You will end up with recommendations of how to proceed with your estate planning. I have written prior articles about how to find such an attorney and the qualifications you should insist on from that person. Please refer to those articles elsewhere here for reference.

The last point I want to emphasize is that your Will is just part of this resolution. I have written prior articles on the proper components of an estate plan. Your Will is just one of several necessary components. You want to make sure that you add Durable Powers of Attorney and a Living Will. Refer to the prior articles here if you want more details on these components or just give me a call.

Congratulations on your resolution and I hope this article helps you bring it to a pleasant conclusion. Completing your Will and other basic documents represents one of the best gifts you can give your family and yourself for the new year.

If you have questions about this article or your estate planning, feel free to give me a call or send me an email or message.

Bernie Greenberg