2015 Heckerling Musings

Steve Akers (Bessemer Trust, of Dallas, Texas) has these illuminating 2015 Heckering Musings on current estate planning trends.

My law firmJohnson Law KC LLC, is experienced counseling clients from all stages and walks of life on every aspect of estate planning. We can help you answer all your estate planning and asset protection questions with confidence and friendly expertise. If we can serve you or your family with your trust or estate planning questions, please call (913.707.9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2015, Stephen M. Johnson, Esq.

 

Private Museums?

Happy New Year from The KC Estate Planner! The NYT has this interesting article about a growing trend of private museums (legally structured as tax exempt organisations or nonprofits), so the art donors get tax write-offs for donating art, but with very limited hours (or by appointment only), so these museums can be effectively private museums for the benefit and enjoyment of the art donors, their family, and friends (but not the general public or the community). What do you think? Are private art museums a good idea or bad idea? Does this tactic abuse the IRS Code’s design? Should this tactic be curtailed or encouraged? Should a nonprofit or tax exempt organisation be allowed to do this? Should an art donor who does this get a tax deduction?

My law firmJohnson Law KC LLC, is experienced counseling clients from all stages and walks of life on every aspect of estate planning. We can help you answer all your estate planning and charitable donation questions with confidence and friendly expertise. If we can serve you or your family with your trust or estate planning questions, please call (913.707.9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2015, Stephen M. Johnson, Esq.

 

 

Save Like a Millionaire

Happy holidays from our office to yours! The WSJ has this interesting article about a recent study of how many wealthy, upper middle class, and middle class Americans respective portfolios are structure and the implications for their financial security and independence.

  • The wealthiest 1% have less than 10% of their net worth invested in their home. Most of them hold large amounts of wealth in businesses (they’re often the owners, partners, or an entrepreneur) and real estate investments. Still more money is held in stock portfolios, mutual funds, or trusts (which could in turn hold assets in a  variety of forms). Depending on the investment structure, some or most of these folks’ assets will be highly illiquid.
  • The upper middle class have substantial assets in IRAs and retirement plans, which are good from a saving and tax perspective, but often highly illiquid.
  • The middle class have most of their money in the family home, usually a mortgage (or two), some retirement savings, and more modest cash reserves or stock portfolios.

My law firmJohnson Law KC LLC, is experienced counseling clients from all stages and walks of life on every aspect of estate planning. We can help you answer these questions with confidence and friendly expertise. If we can serve you or your family with your trust or estate planning questions, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2014, Stephen M. Johnson, Esq.

Switching Trustees

Barrons has this interesting article with helpful insights about switching trustees, an increasingly common occurrence given the rise of dynasty trusts (lasting for generations) and shifting relationships among family members (for individual trustees) and banks and trust company (for corporate trustees).

My law firmJohnson Law KC LLC, is experienced counseling clients from all stages and walks of life on every aspect of estate planning, including switching trustees  and trustee selection. We can help you answer these questions with confidence and friendly expertise. If we can serve you or your family with your trust or estate planning questions, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2014, Stephen M. Johnson, Esq.

 

 

Estate Planning for College Students and Young Professionals

Forbes’ Deborah Jacobs has this interesting article about the basic estate planning documents every adult needs – even college students and young professionals. The Forbes article recommends every adult should have medical and financial durable powers of attorney signed and in force. As an attorney, I agree and would add that you also need a will and a living will. If you’re married, you and your spouse should each have these documents. If you’re a wealthy person or have complex financial holdings, you may need a trust or more sophisticated documents. If you travel domestically or abroad, you also need estate planning documents in place – even if you’re not wealthy or don’t have extensive business interests. (I often insist clients execute basic estate planning documents before traveling internationally or for long periods of time for business. Otherwise, you’re risking the financial and medical well being or yourself, your family, and/or your business.) Not having estate planning documents in place is gambling with you and your family’s future. If you’re a more seasoned person, it would be “criminally negligent” (in C.S. Lewis’ words) not to have a will or other estate planning documents in place (The World’s Last Night). My firm crafts tailored estate planning documents for you that are affordable, reliable, include cutting-edge provisions standard (like asset protection, probate avoidance, elder law, and digital estate planning), and work smoothly whether you’re in the U.S. or abroad.

My law firmJohnson Law KC LLC, is experienced counseling clients from all stages and walks of life on every aspect of estate planning. We can help you answer these questions with confidence and friendly expertise. If we can serve you or your family with your charitable giving questions, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2014, Stephen M. Johnson, Esq.

To Ex Pat or Not to Pat? Surrender Your Passport?

There is a growing trend among Americans to renounce their citizenship, move abroad, and take another country’s citizenship. Most Americans doing this are wealthy, acting in part to avoid high tax bills. But some are average, ordinary Americans who find themselves in tricky situations where being an American citizen may not be wise or prudent. Of course, being an ex pat doesn’t require giving up your citizenship – one can move to London or Paris or another place for months or years while remaining an American citizen. While I enjoy traveling to London, Paris, and other European locales, like many other folks, I’m a proud American citizen and patriot, so I would only recommend a client surrounding their passport and giving up American citizenship in very limited cases.

My law firmJohnson Law KC LLC, is experienced counseling clients from all stages and walks of life on every aspect of estate planning. We can help you answer these questions with confidence and friendly expertise. If we can serve you or your family with your charitable giving questions, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2014, Stephen M. Johnson, Esq.

Rewriting Charitable Giving Models?

CNBC has this article about how the Ice Bucket Challenge may be re-writing the rules of charitable giving. One interesting element is the democratization of charitable giving – instead of a few wealthy donors giving hundreds of thousands or millions or dollars, the focus may now be shifting to many “average Joe” (or Jane) donors giving smaller amounts of money, a sort of democratized crowd funding.

My law firmJohnson Law KC LLC, is experienced counseling clients on all aspects of estate planning, asset protection, and helping to structure charitable giving. We can help you answer these questions with confidence and friendly expertise. If we can serve you or your family with your charitable giving questions, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2014, Stephen M. Johnson, Esq.

 

 

Testamentary Capacity and Family Businesses

Bessemer Trust provides this fascinating brief study of the testamentary capacity and other issues arising from the recent sale of the LA Clippers basketball team by the Sterling Family Trust to former Microsoft CEO Steve Ballmer for a cool $2 billion, following the publication of Mr Sterling’s racist comments and ensuing fine and lifetime ban from the NBA. As people begin to live longer (a good thing), we will see higher stakes contests in and out of court to prove someone did (or didn’t) have testamentary capacity – they could (or couldn’t) have validly signed a will, trust, living will, or power of attorney. Look for some high profile cases to emerge as highly contentious court battles – think celebrity or billionaire divorce trials. And look for creative attorneys to design provisions that hold up better in court or keep these matters out of court using improved negotiations and family dynamic consultations.

My law firmJohnson Law KC LLC, is experienced counseling clients on all aspects of estate planning, asset protection, and helping to structure charitable giving. We can help you answer these questions with confidence and friendly expertise. If we can serve you or your family with your charitable giving questions, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2014, Stephen M. Johnson, Esq.

 

Digital Estate Planning

From Ars Technica comes this post about Delaware’s recent adoption of the Fiduciary Access to Digital Assets and Digital Accounts Act, an adaptation of the Uniform Fiduciary Access to Digital Assets Act. On digital estate planning, as with corporate and trust law, Delaware looks poised to be the pioneering state of America. While the Act’s critics points to some concerns, this new digital estate planning law appears to at least be a step in the right direction. Let’s hope that Kansas and Missouri act soon to adopt similar laws to protect people’s digital assets. Non-Delaware residents with Delaware trusts, corporations, or LLCs could potentially use the Act for their benefit. For more on digital estate planning, see these earlier KC Estate Planner blog posts.

My law firmJohnson Law KC LLC, is experienced counseling clients on all aspects of digital and traditional estate planning and asset protection, and can help you answer these questions and more with confidence and friendly expertise. If we can serve you or your family with these sensitive matters, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a free, convenient consultation.

(c) 2014, Stephen M. Johnson, Esq.

 

 

How Not to Do Estate Planning

Acclaimed actor Philip Seymour Hoffman tragically died in February 2014, leaving behind an estimated estate of some $35 million. But, as these articles show, in his zeal to ensure his children were not “trust fund kids,” he made some bad legal decisions that will cost his family a lot in extra (and unnecessary) taxes. First, Mr Hoffman didn’t marry his longtime partner. Since he wasn’t married to her when he died, she’s not eligible to claim the marital deduction, which would help defer estate taxes. One of the tax benefits to marriage is the ability to give your spouse unlimited gifts during your lifetime. (If you’re not married and give more than $14,000 to your partner or anyone else in one year, the gift tax applies – about $14 million in this case.) And spouses can also get portability (use the first spouse to die’s unused estate tax exemption). But you have to be married for either of those benefits.

Second, Mr Hoffman left a large estate outright to his partner, not in trust for her, or in trust for her and for his children. Inheriting in trust (rather than outright) can provide asset protection (against lawsuits, divorcing spouses, etc), greater accountability and financial stewardship (if a trustee is a spendthrift and violates their fiduciary duties, they can be removed and sued and some or all of the lost money recovered), and is a vehicle for greater intergenerational wealth transfer and philanthropy than giving someone a check or cash outright.

We don’t like to speak ill of the deceased, or second guess other attorneys or advisor’s advice to clients. And it’s possible that Mr Hoffman’s attorney, accountant, or other estate planning and financial advisors advised him to execute documents with different provisions and he refused or never got around to it. But on the surface, this unfortunately looks like a textbook case of how not to do estate planning.

Don’t make these same mistakes yourself – save your family from paying extra taxes by doing smart estate planning. Your will, living will, durable medical and financial powers of attorney should be updated every few years (at least). Have you gotten married (or divorced) or had children recently? Are your children now adults? Do you have grandchildren? Do your documents include elder law provisions? Digital estate planning provisions? Do your documents name trustworthy guardians or conservators to care for you if the need arises, or a good trustee to hold the inheritance for your minor children or grandchildren? Who will take care of your pets after your death or incapacity? My law firmJohnson Law KC LLC, is experienced counseling clients on all aspects of estate planning and asset protection, and can help you answer these questions and more with confidence and friendly expertise. If we can serve you or your family with these sensitive matters, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a convenient appointment.

(c) 2014, Stephen M. Johnson, Esq.