Category Archives: Estate Planning

Digital Estate Planning

Posted on by under Digital Estate Planning, Elder Law, Estate Planning, Financial Powers of Attorney, Illiquid Assets, Kansas, Living Wills, Medical Powers of Attorney, Missouri, Retirement, Small Business, Trusts, Wills

In our digital age of laptops, smartphones, social media and digital photos and video, digital estate planning is a necessity. (You’re reading a digital asset written on a MacBook Pro.) What if a family member or business colleague needs access to your email and other digital assets when you’re alive but unavailable or incapacitated? What about after your death? This BBC article includes a good summary of the concerns and need for digital estate planning. My law firm, Johnson Law KC LLC, includes digital estate planning provisions in all powers of attorney, wills, and trusts – standard and at no extra charge – because we know how much our clients value their digital assets and want to preserve them for future generations.

If my law firm can help you or your family with your estate planning (digital and/or traditional), asset protection, elder law, or business needs, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, complimentary consultation. My firm relishes the opportunity to serve each client with reliable, friendly experience at an affordable cost.

(c) 2013, Stephen M. Johnson, Esq.

Protecting Estates

Posted on by under Digital Estate Planning, Dynasty Trusts, Elder Law, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Illiquid Assets, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

The LA Times has this interesting obit of Roger Richman, a California attorney who represented various celebrities’ estates and campaigned for state laws to protect (or tastefully restrict) the use of a deceased celebrity’s image or likeness. This issue involves state and federal law: state law governs estates (probate) and tort (appropriating or misappropriating someone’s name, image, or likeness), while federal trademark law may also come into play. Richman’s work led to beneficial laws for estates of celebrities or other well-known or influential people.

If my law firm, Johnson Law KC LLC, can help you or your family, or a loved one’s estate with your legal needs – estate planning, elder law, asset protection, small business law, or probate – give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, complimentary consultation. I have extensive experience working with individuals, families, small businesses, and nonprofits on legal issues large and small – from drafting a basic estate plan for a young couple or young professional client with minimal assets to counseling affluent families with millions of dollars of complex business and real estate holdings.

(c) 2013, Stephen M. Johnson, Esq.

Trusts on trial

Posted on by under Business Succession Planning, Business Transitions, Digital Estate Planning, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Small Business, Special Needs Trusts, Trust protector, Trusts, Wills

Trust litigation is a growing trend in the estate planning and financial world. A beneficiary may think she’s entitled to more money, accountings, or information that the trustee has given her. A trustee may make a controversial investment or distribution decision that the beneficiary doesn’t agree with and believes violates the trustee’s fiduciary duties. A grantor may not be happy with how the trustee is doing things. On the international trust litigation front, Bloomberg has this article about a recent decision by the New South Wales Supreme Court where a daughter and heir to a large fortune lost her bid to keep the trust dispute in private arbitration, so the trust (all $4 billion of it) is going to trial.

Trusts have traditionally been private law matters, set up by individuals or families for the benefit of family members and friends. Everyone involved hopes that a trust never goes to court or trial, but if the trust does get dragged into court, the parties need good counsel from experienced estate and trust litigation attorneys. Because trusts often involve sensitive family financial matters, details of closely held business operations, complex family dynamics and relationships, and may hinge on state trust or fiduciary duty law, trust litigation is best handled by estate planning attorneys, not general practice trial lawyers. If my firm, Johnson Law KC LLC, can help you or your family in the estate planning process, or in estate or trust litigation, call (913-707-9220) or email me (steve@johnsonlawkc.com) for a complementary consultation.

(c) 2013, Stephen M. Johnson, Esq.

Professional Accountability

Posted on by under Business Succession Planning, Business Transitions, Elder Law, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Retirement, Roth IRA, Small Business, Trusts, Wills

The Daily Mail (UK) has this article about the circumstances surrounding the execution of Hughette Clark’s will. Hughette Clark was the reclusive daughter and heir of a wealthy U.S. Senator. (Ms. Clark died at 104 in 2011, having spent about the last 20 years of her life in a hospital room in New York, cut off from her family and friends (by her lawyer and accountant), while her large estates in various states sat unused for decades. Ms. Clark left an estimated fortune of $307 million.) According to papers filed in the New York probate court, where her will is being contested, she was “incoherent and barely able to hold the pen” while signing the documents. To make matters worse, her lawyer, accountant, and the hospital were conspiring to enrich themselves at her expense. Both her lawyer and accountant were to inherit large sums of money from her (her family being cut out entirely) and they apparently took the signed will with them to the local bar to celebrate their good fortune after convincing her to sign the document.

In Kansas and Missouri, lawyers are required to attend legal ethics courses as part of the continuing education requirements. If you don’t attend continuing education, you can’t keep your law license. For attorneys, there are at least 2 glaring ethical violations here: (1) you never allow an incapacitated client to sign a legal document (you always talk with the client first to be sure they know who they are, what they own, and who they want to give it to) and (2) you rarely, if ever, accept any gift in a will from a client. Kansas law says an interested witness (e.g. a lawyer who’s receiving a gift from his client) can’t inherit more than he would be entitled to if the client died without a will. Missouri law has similar provisions. Accepting a gift in a will from a deceased client raises serious ethical issues. Unfortunately, Ms. Clark’s lawyer and accountant did her a great disservice by not acting professionally and by not watching out for her best interests.

At my firm, Johnson Law KC LLC, we work hard to serve every client’s needs with integrity and clarity. If I can help you or a loved one with estate planning, asset protection, elder law, or small business needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, free consultation.

(c) 2013, Stephen M. Johnson, Esq.

Bad Estate Planning: Celebrity Edition

Posted on by under BDITs, Business Succession Planning, Business Transitions, Dynasty Trusts, Elder Law, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Probate, Retirement, Small Business, Trusts, Wills

According to this Daily Mail (UK) article, James Gandolfini’s will (following “The Sopranos” star’s recent death in Rome from a heart attack) distributes his $70 million estate so that massive estate taxes (about $30 million) are likely to be owed. One estate planning attorney remarked on the will that ‘It’s a nightmare from a tax standpoint,’ and the will’s segregation of assets was a ‘big mistake’ and the will itself ‘a disaster.’ To be fair, Mr. Gandolfini’s will hasn’t been published yet and it’s not clear whether he had trusts or other entities that held assets. But it sounds like his estate plan may not have been well done, not complex enough for his level of wealth or portfolio structure.

We can learn from the bad estate planning of celebrities and tragic deaths that happen far too early is the importance of good planning. If my law firm, Johnson Law KC LLC, can help you or your family with your estate planning, elder law, asset protection, small business, or probate needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient consultation.

(c) 2013, Stephen M. Johnson, Esq.

 

Going Private

Posted on by under Business Succession Planning, Business Transitions, Estate Planning, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Kansas, LLCs, Missouri, Small Business, Trusts, Wills

The KC Star has this interesting article about the founders of Silpada Designs buying their company back from Avon. The founders started the jewelry company with $50 and built it into a fashion empire (with $230 million in annual revenue), selling it to Avon a few years ago. Avon has been struggling recently financially, so the founders were able to buy back Silpada for $85 million – quite a deal. Tom Kelly, Silpada’s CEO, explained the going private decision: the “business model is right and the fact that the founders are coming back on board will immediately give positive emotional traction on our revenue and profits.”

Going private is the business counterpart to an IPO – instead of seeking more capital from investors in the equity or bond markets, the founders buy back their company. Business executives can have many reasons for going private – they got bored of retirement, a new venture didn’t go well, changes are needed that require private, closely-held ownership (like Michael Dell’s $24.4 billion bid to go private with Dell), or some other reason.
If my law firm, Johnson Law KC LLC, can help you or your family with your small business, family farm, or estate planning needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, free consultation. My firm is passionate about serving your business and personal legal needs.
(c) 2013, Stephen M. Johnson, Esq.

Offshore Banking

Posted on by under BDITs, Business Succession Planning, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, IRA, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, Retirement, Roth IRA, Small Business, Trusts, Wills

Costco’s member magazine has this interesting discussion about offshore bank accounts in its July 2013 issue. (I also recommend this interview with noted author Tom Wolfe, which explores his life and writing.)  They ask various members whether offshore bank accounts are ethical, should be legal, or should be taxed differently than American bank accounts. We know that many celebrities and politicians have offshore bank accounts – see this blog post for more details.

Ethical questions about offshore banking center on whether the account owner is paying a “fair” level of tax on the account. Complicating matters is that the IRS Code treats Americans’ investments abroad differently from other countries – the IRS collects tax on an American’s accounts or investments anywhere in the world, while many other countries only collect tax on accounts their citizens hold domestically (e.g. a Briton who holds an account in London and an account in New York would only pay British taxes on the London account).

Offshore banking may be unavoidable, even inevitable, for many professionals and business owners. If you have a factory or business colleagues or partners overseas or offices around the globe, you may have to use offshore banking accounts. And many companies, mutual funds, IRAs, and other investment vehicles have extensive overseas holdings, which can be a good thing to diversify accounts, invest in emerging markets, and collaborate with business partners around the world.

What do you think? Should offshore accounts and banking and tax havens be allowed or outlawed? Are they ethical? If so, when? Should they be taxed differently than American accounts or investments?

If my law firm, Johnson Law KC LLC, can help you or your family with your estate planning or asset protection needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, free consultation.

(c) 2013, Stephen M. Johnson, Esq.

British or American English?

Posted on by under Business Succession Planning, Dynasty Trusts, Elder Law, Estate Planning, Estate Tax, Family Business, Financial Powers of Attorney, Kansas, Living Wills, Medical Powers of Attorney, Missouri, Probate, Retirement, Roth IRA, Small Business, Trusts, Wills

British or American English? Tea or coffee? Whether you’re a fan of the Brits (as I am) or not, check out this interesting article  in Wealth Management about the differences between English and American per stripes. Many lawyers will recall this discussion from their law school days studying estates and trusts. “Per stirpes” is a Latin term that means “by the stocks” and refers to who inherits your estate if you die without a will (intestate). Most wills include the term “per stirpes” or “taking by rights of representation” in their definitions section (although those terms aren’t always used in the Kansas or Missouri probate code). This article is a good reminder to attorneys and clients alike: be sure your estate planning and other legal documents say what you want them to say. Using Latin or French or other “legalese” is dangerous if you’re not certain what the terms mean, and if your attorney can’t explain a document to you in plain English, (1) tell him or her to rewrite it or (2) hire an attorney who’s more knowledgeable.

Some lawyers use big words and convoluted sentences in documents because they rely on old forms (from the 1970s or 80s or even older). My law firm, Johnson Law KC LLC, has a personal service, client-centered approach – I personally craft and review every document for a client to make sure it’s readable and that my client understands what it says and does. You get the best of both worlds – big firm expertise with small firm personal attention. I often review and revise my firm’s documents based on the latest developments in the law, business, and taxes, with an eye towards improving readability and organization. I invite you to experience the difference. If I can serve your legal needs, call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, free consultation. On a personal note, thanks for being a part of this conversation for 100 posts and counting – I look forward to sharing many more posts and conversations.

(c) 2013, Stephen M. Johnson, Esq.

What Windsor Means for Estate Planning

Posted on by under Estate Planning, Estate Tax, Family Business, Kansas, Missouri, Trusts, Wills

This morning (26 June 2013) the U.S. Supreme Court decided Windsor v. United States, 1 of 2 pending gay marriage cases, involving whether the (federal) Defense of Marriage Act was constitutional. (They also decided the other case, Perry v. Hollingsworth, kicking the case back to the California court on procedural grounds, which isn’t relevant to our discussion.) Based on a combination of federalism and equal protection grounds, Justice Kennedy wrote the 5-4 decision for the bitterly divided Court. Many will spill much ink analyzing the legal reasoning, politics, and historic importance of Windsor and Perry. But putting aside politics, what does Windsor mean for estate planning?

  • Windsor’s holding (a federal blessing of state-authorized same sex marriages) means that Edith Windsor and other gay men or lesbian women who live in states that permit same sex marriage will be able to claim at least some federal benefits that married couples are entitled to receive. For Windsor, a New York resident, she gets an IRS refund of the roughly $363,000 she paid in estate taxes upon her wife’s (Spyer’s) death. Windsor sued the IRS as Executor of Spyer’s Estate for the refund.
  • Windsor explicitly says it doesn’t authorize same sex marriage across the nation. Under Windsor, for the U.S. government to recognize a valid same sex marriage, the local state has to recognize it. How the President and Congress will react (via executive orders and/or Congressional acts) remains to be seen.
  • Windsor’s logic appears to allow a duly married same sex couple (again, under state law) to use martial deductions and other estate planning and IRS tax tools, just as a duly married heterosexual couple would.
  • Under Windsor, attorneys or advisors counseling same sex couples on their estate planning or financial needs would be well advised to counsel them to (1) move to a state that allows same sex marriage and (2) get married.

What do you think Windsor means for estate planning? (again, no politics please)

While the Court’s opinion doesn’t expressly address the tax and estate planning implications of its holdings, these 4 issues are crucial for estate planning professionals and their clients to know about. If my law firm, Johnson Law KC LLC, can serve you or your family’s estate planning or other legal needs, please call (913-707-9220) or email (steve@johnsonlawkc.com) for a convenient, free consultation.

(c) 2013, Stephen M. Johnson, Esq.

 

Tax-free Retirement?

Posted on by under Elder Law, Estate Planning, Estate Tax, Family Business, Financial Powers of Attorney, Illiquid Assets, Income Tax, IRA, Kansas, Living Wills, Medical Powers of Attorney, Missouri, Retirement, Roth IRA, Trusts, Wills

CNBC has this helpful article about how to plan for a tax-free retirement with lots of good tips and portfolio ideas. Many retirees can expect lower income tax bills than those of us still working (and earning more income), but the article wisely points out the wild card – the Congress/tax wild card.

Thoughts? What are your ideas for planning a tax-free retirement?

If my law firm, Johnson Law KC LLC, can help you or your family on your estate planning or other legal needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient and free consultation.

(c) 2013, Stephen M. Johnson, Esq.