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 firm, Johnson 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.

Steve Akers, of Bessemer Trust, has these notes on the ACETC Summer 2014 meeting. As always, many nuggets of estate planning wisdom. Mr Akers’ notes include reflections on interacting with younger (e.g. millennial) clients and professionals (pp. 1-9), how divorce factors into the estate planning process (pp. 10-15), estate planning for blended families (pp. 16-20), handling elderly clients with diminished capacity (pp. 21-25), elder law planning (pp. 25-30), income tax planning (pp. 30-37), and leveraging life insurance to pay estate taxes (pp. 38-46).

My law firm, Johnson Law KC LLC, has experience working with individuals and families to solve their business and estate planning needs. I enjoy working with a variety of clients – ranging from single young professionals with minimal assets to multimillionaire business owners with complex trusts. If my law firm can help you or your family with your estate planning, elder law, asset protection, business law needs, or digital estate planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment.

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

Mssrs. Selsor and Gust of Polsinelli’s St. Louis office offer this insightful article in the Missouri Bar Journal. Missouri trust law follows the Uniform Trust Code (V.A.M.S. 456.001 et seq.), having adopted the UTC in 2005 (followed Kansas’ pioneering 2003 adoption – K.S.A. 58a-101 et seq.). Missouri trust law is often utilized by Kansas City area residents as Missouri allows dynasty trusts (trusts that last perpetually, often for many generations or centuries – V.A.M.S. 456.025) while Kansas doesn’t (Kansas has the rule against perpetuities, which limits trusts to 90 years after the death of the last surviving descendant of the settlor or grantor who made the trust – K.S.A. 59-3401 et seq.). Selsor and Gust explore various trustee issues, including how to vary trustee removal under the trust from the Missouri default rules, no fault removal (V.A.M.S. 456.7-706.2(4); K.S.A. 58a-706), and when is trustee removal justified. UMKC Law Prof Francis Hanna’s Missouri Trust Code and Law Manual (Vol. 4C in West’s Missouri Practice Series) is an annually updated, helpful guide to Missouri trust law puzzles for attorneys. Kansas attorneys have the KBA Probate and Trust Administration Handbook, a helpful resource, but no comparable article (as of yet) surveying recent Kansas trustee removal trends and techniques. And we would refer attorneys or others working with trusts to Loring & Round’s A Trustee’s Handbook, and the Bogert’s Trusts and Trustees and Scott & Ascher on Trusts treatises.

Trusts involve (with apologies to Charles Dickens’ classic novel A Tale of Two Cities (1859)), a tale of three roles (and potential tension) points: (1) the grantor or settlor (who sets up the trust), (2) the trustee (who holds legal title to the assets and administers the trust), and (3) the beneficiary (who gets trust distributions). As Dickens might muse to the lamenting recently removed trustee, “it was the best of times, it was the worst of times.” My law firm uses this chart to help clients visualize the 3 roles.

My law firm, Johnson Law KC LLC, has experience working with individuals and families to serve their business and estate planning. I enjoy working with a variety of clients – ranging from single young professionals with minimal assets to multimillionaire business owners with complex trusts. My firm has strong relationships with local and national trust companies to help administer all types and ranges of trusts. If my law firm can help you or your family with your estate planning, elder law, asset protection, business law needs, or digital estate planning, including advising on trustee removal or other fiduciary litigation, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment.

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

Forbes has a series of articles profiling America’s wealthiest families and offering some useful lessons and insights for the rest of us. The Daily Mail (UK) has this story about Forbes’ series. Forbes profiles Bill Marriott of the Marriott hotel family. And the Waltons, who own WalMart. And the cautionary tale of the Strohs family, who went from having a large brewery fortune ($9 billion) until they tried to expand nationally without the necessary budget and lost it all. Forbes offers this gallery with photos and other vital stats on these American families and businesses. This interesting article profiles the women among America’s wealthiest families. And Andrew Carnegie, who built a fortune and gave it away to build libraries and promote literary in towns and cities from sea to shining sea. Abigail Johnson (no relation), of Fidelity Investments, talks about the values her father instilled in her after founding the investment behemoth.

My law firm, Johnson Law KC LLC, has experience working with individuals and families to serve their business and estate planning. I enjoy working with a variety of clients – ranging from single young professionals with minimal assets to multimillionaire business owners with complex trusts. My firm has strong relationships with local and national trust companies to help administer all types and ranges of trusts. If my law firm can help you or your family with your estate planning, elder law, asset protection, business law needs, or digital estate planning, including advising on trustee removal or other fiduciary litigation, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment.

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

I enjoyed listening to Wealth Counsel’s complimentary Heckerling Nuggets 2014 webcast recently – slides here. My law firm, Johnson Law KC LLC, is experienced counseling families and small business owners on estate planning, business law, and nonprofit needs. If I can help you or your family with your estate planning, business, or nonprofit needs, call (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient, free consultation. You owe it to yourself and your family to protect your hard work.

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