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.

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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.

 

Dynasty Trusts: A Great Estate Planning Tool

The WSJ has this useful perspective on dynasty trusts and inheriting in trust. Dynasty trusts enable families to take care of future generations and ensure their philanthropic and business legacy while protecting hard-earned wealth from creditors, divorcing spouses, and other potential money drains. My firm counsels Kansas and Missouri clients to use Missouri dynasty trusts to help achieve their estate planning goals.

My law firmJohnson 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 planningelder lawasset protectionbusiness 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.

 

 

Protecting Your Hard Work from Lawsuits: 21st Century Professional Asset Protection

The WSJ has this helpful article surveying different asset protection options with an eye towards insulating your hard earning wealth from lawsuits. We’ve discussed the basics of asset protection in this post, Asset Protection 101. Another asset protection motive is to protect your wealth from divorcing spouses – either yours or your children’s or grandchildren’s. A well drafted prenuptial agreement can help. As can holding the assets in a corporation, LLC, or irrevocable trust, outside of your direct control or ownership. The key with asset protection, as the WSJ article emphasizes, is to move some (not all) of your assets into a protective structure before creditors loom on the horizon. Like sharks circling on the trail of blood in the water, once creditors are in the picture, asset protection becomes much harder.

My law firmJohnson Law KC LLC, is experienced counseling families and small business owners on using various asset protection tools. If I can help you or your family with your asset protection 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.

Estate Planning in 2014

Some recent online highlights from the estate planning literature. Steve Akers of Bessemer Trust offers this helpful summary of the Fall 2013 ACTEC meeting. Here’s his take on Heckerling 2014. And Wealth Counsel recently sponsored a Heckerling Nuggets 2014 webcast – slides here. The ABA’s report of Heckerling 2014 is here – part 1 and part 2.

My firm has experience working with individuals and families throughout the business and estate planning processes. I’ve enjoyed working with clients ranging from single young professionals who want to plan for the future to business owners with complex trusts and tens of millions in assets. If my law firm can help you or your family with your estate planningelder lawasset protectionbusiness law needs, or digital estate planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment. I want to make business and estate planning simple and straightforward to serve your legal needs and help protect you and your business from lurking liabilities.

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

Protecting Your Business and Assets

The Kansas City Business Journal has this helpful article with strategies for protecting your business and assets if a divorce or other unpleasantness arises in your life.

While divorce or creditor lawsuits are never welcome developments in someone’s game plan, the best offense is a good defense. My firm has experience working with individuals and families throughout the business and estate planning processes. I’ve enjoyed working with clients ranging from single young professionals who want to plan for the future to business owners with complex trusts and tens of millions in assets. If my law firm can help you or your family with your estate planningelder lawasset protectionbusiness law needs, or digital estate planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment. I want to make business and estate planning simple and straightforward to serve your legal needs and help protect you and your business from lurking liabilities.

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

 

Need an estate plan?

CNBC has this helpful article reminding readers that every adult (regardless of wealth or marital status) needs an estate plan. A basic estate plan includes 4 documents: (1) a will, (2) a living will, (3) a medical durable power of attorney, and (4) a financial durable power of attorney. 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. 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 firm has experience working with individuals and families throughout the business and estate planning processes. I’ve enjoyed working with clients ranging from single young professionals who want to plan for the future to business owners with complex trusts and tens of millions in assets. If my law firm can help you or your family with your estate planningelder lawasset protectionbusiness law needs, or digital estate planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment. I want to make estate planning simple and straightforward to serve your legal needs and help protect you and your family’s legacy.

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

Estate Planning Like a Billionaire

Bloomberg has this fascinating article exploring grantor retained annuity trusts (GRATs) and grantor retained income trusts (GRITs) and how they are used by very wealthy business owners to pass assets to the family without incurring estate or gift taxes. (Longtime readers may recall our discussion of Mitt Romney’s large scale estate planning for his family’s estimated $750 million fortune.) Many estate planning attorneys and accountants make a sport of devising creative methods to help clients save money and pass their wealth on to future generations. The ideas aren’t illegal or unethical, they simply utilize gaps in the IRS Code that Congress and/or the Treasury haven’t solved that yield big savings to clients when multiplied by millions of shares in a given company. Estate planners are careful when practicing on the cutting edge of tax law to gauge how much risk the client is willing to take on (e.g. whether the IRS will void a transaction and send the client a tax bill), how much money is at stake, and how reliable/tested a technique is. While the estate planning techniques discussed in the Bloomberg article have been blessed by various authorities (the IRS, the Tax Court, or others), many advanced trust or tax techniques are in a legal grey area – we know X is illegal and we know Y is OK, but what about something between X and Y?

In law school, the first day of estate planning class with Prof. Martin Dickinson, he told us a story about a family business in a small town where a father gave his wife and each of his 4 children a 20% stake in the family business (worth about $5,000 each at the time, the annual gift tax exemption) in 1953. 60 years later, that family business is called Wal Mart and each 20% stake is worth $20 billion. So $100 billion was transferred without estate or gift tax liability. Sam Walton relates the story in his autobiography Made in America and credits his fraternity brother and banker, R. Crosby Kemper Jr., of UMB Bank with helping him develop the business. Here’s Bloomberg’s visual of some of the tricks of the estate planning world.

Inheriting in trust is better than inheriting money in your individual name, as it protects your inheritance from lawsuits, creditors, and divorcing spouses, among other unpleasant life surprises. Inheriting in trust using a discretionary trust provides asset protection. Asset protection uses a separate entity (e.g. a trust or LLC) to hold an asset and protect it from your creditors, divorcing spouses, spendthrift kids, or others. Asset protection trusts are not allowed under Kansas law (see K.S.A. 33-101), but Kansas and Missouri residents can use a Missouri trust to protect assets for generations. Missouri (unlike Kansas) welcomes dynasty trusts – irrevocable trusts designed to pass wealth across families for generations – and allows them to last indefinitely. For clients who anticipate inheriting over $400,000, we recommend a Missouri inheritor’s trust. An inheritor’s trust allows you to protect the assets and keep them off your balance sheet for tax purposes (so you don’t have to worry about estate, gift, or generation-skipping taxes) while having the assets available for your use and enjoyment.

My firm has experience working with individuals and families to serve their business, estate planning, and nonprofit/charitable/philanthropic needs. 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 planningelder lawasset protectionbusiness law needs, or digital estate planning, including a Walton GRAT, a GRIT, or other sophisticated trust planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment.

IRS CIRCULAR 230 Disclosure: Unless expressly stated otherwise, any U.S. federal tax advice contained in this blog post or links is not intended or written by Johnson Law KC LLC to be used to avoid IRS or other tax penalties, and any tax advice cannot be used to avoid penalties that may be imposed by the IRS.

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

The Family Bank

CNBC has this interesting article highlighting a trend where wealthy family members give large amounts of cash or other items to family members (children, grandchildren, extended family, etc). While gifts can be a great tool in the estate planning repertoire, they can also create tax issues for gifts over $14,000/year (see this post with advice about gift giving for couples and singles), dependency issues (“These good intentions may be creating generations that are disabled when it comes to financial responsibility” and see The Millionaire Next Door (1998) (recommending not giving children homes in neighborhoods beyond their budget)), and other problems. Instead of giving family members cash, consider paying tuition for college classes, investing in a relative’s small business venture (assuming a well-developed business plan exists), offering to match their IRA/Roth IRA contribution (to promote good savings and retirement planning habits), hiring them to work in your family business (create a job and help them learn the value of hard work and diligence), or making them a trust beneficiary (trusts can include “strings” about beneficiary ages, completion of education, not being addicted to drugs or alcohol/living a risky lifestyle). The biblical book of Proverbs, part of the Wisdom literature of Judaism and Christianity, has much to say about money and wise stewardship, including “lazy hands make a man poor, but diligent hands bring wealth” (Proverbs 10.4), “all hard work brings a profit, but mere talk leads only to poverty” (Proverbs 14.23), “the plans of the diligent lead to profit as surely as haste leads to poverty” (Proverbs 21.5), “the borrower is servant to the lender” (Proverbs 22.7), and “a generous man will himself be blessed, for he shares his food with the poor” (Proverbs 22.9).

My firm has experience working with individuals and families to serve their business, estate planning, and nonprofit/charitable/philanthropic 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 planningelder lawasset protectionbusiness law needs, or digital estate planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment.

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

Good Estate Planning – How to Prevent Disputes

The WSJ has this helpful article with tips on how to prevent estate disputes. Among their tips:

(1) talk with your family,

(2) write a memorandum,

(3) unequal treatment after death means family discord,

(4) hire a professional executor, and

(5) share your values.

In my practice, I’ve seen each of these techniques work well for individuals or families doing estate planning. I’ve also worked on numerous estate and/or trust litigation cases where major disputes arose because people didn’t communicate (and the only winners in estate or trust litigation are the lawyers who get paid by the hour to go to court). Kansas and Missouri law both include provisions for incorporating a written memorandum into your will or trust (a/k/a a separate personal property list) – see K.S.A. 59-623 and V.A.M.S. 474.333 – and I encourage all my clients to make a written memorandum at their convenience to supplement their will’s instructions to their executor and/or their trust’s directions to their trustee.

My firm has experience working with individuals and families throughout the business and estate planning processes. I’ve enjoyed working with clients ranging from single young professionals who want to plan for the future to business owners with complex trusts and tens of millions in assets. If my law firm can help you or your family with your estate planningelder lawasset protectionbusiness law needs, or digital estate planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment.

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