The Wall Street Journal offers some interesting insights about different ways families can keep a vacation home or similar special property in the family for generations to come while minimizing taxes. If I can help you pass your vacation home on to the next generation in your family, give me a call at your convenience.
(c) 2012, Stephen M. Johnson, Esq.
CNBC offers this advice to parents whose children want more money. If you need counsel on estate planning or gifting options to your children, give me a call to schedule a convenient appointment.
(c) 2012, Stephen M. Johnson, Esq.
A brief story: In high school trigonometry class, my math teacher used to give us frequent quizzes over basic trigonometry equations and other pre-calculus functions. I vividly recall him pacing up and down the thin aisles of desks (about 20 or 30 students), cradling his hands behind his back, and looking out over the class through his glasses while calling out “take your time,” then “hurry up!” a few seconds later. It was a charming eccentricity if you weren’t knee deep in a math problem, or an annoying interruption if you were racking your brain to remember that math formula you had stayed up late the night before trying to learn.
The changing economic realities, increased life spans, and increasing standards of living are causing many retirees to go on the “hurry-up offense” with retirement planning. There’s a similar phenomenon in estate planning. The tolling of the New Year bells draws closer, you get married and have a child, you get divorced, a relative dies and you receive an inheritance, or you or your spouse get the dreaded grim health news from the doctor. Time to visit your estate planning attorney.
While several “hurry-up offense” estate planning tactics that can be helpful, I recommend confronting these issues when you are healthy and have some time to contemplate how you want your last affairs handled. We all know that it’s best to make big decisions when you’re calm, relaxed, and feeling great. A Will or trust, living will, and durable financial and medical powers of attorney are the estate planning building blocks that every adult needs. Cross an item off your new year’s to do list, or make a new resolution to take care of your estate planning needs this year. Need to do any digital estate planning for your computer, email, Facebook, LinkedIn, online banking, or other valuable electronic information? Have a small business you’re looking to transition, or thinking about family business succession and your kids? We can help with that too. Call or email us any time to set up a convenient appointment and start off 2012 right with the peace of mind that good planning brings.
(c) 2012, Stephen M. Johnson, Esq.
This Daily Mail article highlights a classic case of lawyers (and accountants) getting removed from a case by the judge because of conflicts of interest, in the Clark case, for each being slated for an $8 million bequest from the estate. This is a classic legal ethics question that confronts estate planning attorneys – can the lawyer accept a gift from the estate of the deceased? Short answer is “no.” If a lawyer drafts estate planning documents for family members, the relative is entitled to independent legal counsel if they so choose and the lawyer may not receive more than an intestate share of the estate (e.g. what they would’ve received if the relative had died without a will). A client can theoretically leave gifts to their lawyer or other professional advisors in a will or trust, but those gifts are automatically suspect and best practice is to only be paid your attorney’s fees and not accept gifts from a client’s estate.
If you need legal counsel with year end estate planning or if you’re an attorney who has a conflict of interest and need independent legal counsel to help, give me a call or send me an email. Merry Christmas and see you in the New Year – 2012, here we come!
(c) 2011, Stephen M. Johnson, Esq.
Interesting NY Times article about business owners thinking of selling in the current economy. There’s a wonderful piece of old-fashioned, homespun wisdom quoted: “success is when opportunity and preparation intersect.” Successful business people have to be alert for new and emerging opportunities to capitalize on those venues and maximize their enterprise profitability. Perhaps a few business successes come down to being in the right place in the right time, serendipity, or luck, but most business people (and certainly most lawyers) would say that chance favors the prepared – you have to do your homework, which will often show you openings or opportunities that your competitors don’t see. Or as one early rising quipster put it, the comfort of being awake near dawn is “my competition is still sleeping,” so an edge or lead can be acquired. In this economy, business people and successful individuals must capitalize on every edge or lead they can find or create to distinguish themselves and get ahead.
The article’s advice reminds me of a piece of financial/investment advice I read a couple years ago in The Great Depression Ahead by (gloom and doom) economist Harry S. Dent. If I can help you in the process of selling your business or thinking about the pros and cons of the sale decision, give me a call or email me to set up a convenient appointment. If you are going to sell your business, getting the wheels of the deal in motion before December 31 is ideal for tax purposes.
(c) 2011, Stephen M. Johnson, Esq.
CNBC has this story of a family who benefited greatly from doing basic estate planning, when the unexpected happened and the father and family patriarch died suddenly. Every adult – regardless of age, wealth level, or other factors – needs a will, a living will, and medical and financial durable powers of attorney. To live life without these basic estate planning documents is to play Russian roulette with your future and your family’s.
(c) 2011, Stephen M. Johnson, Esq. All rights reserved.
As the 2010 holiday season descended upon America, Congress passed and President Obama signed an extension of the 2001 Bush tax cuts. The new tax law has many provisions that last until the 2012 election, but most significant for our purposes are the new estate tax and the new gift tax. The federal estate tax is now 35% on any estates over $5 million for a single person or $10 million for a married couple. The new gift tax is 50% of any gift to a person of over $13,000 per year with the lifetime exclusion (the maximum amount you can give to someone other than a spouse during your lifetime) now at $5 million from its prior $1 million threshold. Count on the 2001 Bush tax cut extension to be a big deal for President Obama and his Republican colleagues in 2012, especially with the economic cauldron of high unemployment, exploding deficits, promiscuous and unsustainable spending, a weakening dollar, states teetering on the edge of bankruptcy, and potential inflationary pressures, all boiling to a simmering storm of uncertainty and populist discontent.
Many estate planning attorneys, including many that I have talked with in the Kansas City area, find these new developments very troublesome. Won’t it eliminate our clients? Not many people have $5 or $10 million, the argument goes. Those that do already have relationships with private banks, investment firms, and noted law firms. Does anyone still need a trust? Or do we simply terminate trusts and execute new I-love-you wills that leave everything to the spouse and children? Won’t that kill our revenue streams from trust drafting and asset re-titling? Is it worth it to be an estate planning attorney any more? These are all good questions that need to be answered and I plan to answer soon in much more detail.
For now, let’s focus on what every client needs: (1) a will (2) a living will (3) a durable medical power of attorney and (4) a durable financial power of attorney. Anyone over the age of 18 who doesn’t have these legal instruments in place risks catastrophic consequences a la Terri Schiavo and Nancy Cruzan if they get in a car accident or die leaving student loan debt (or other secured debts, like a home mortgage) for their parents (buying life insurance to pay these debts off may be wise). If you are married or have children, the stakes are even higher – your spouse might have to probate your estate and get the Court to appoint them Guardian and Conservator of your child.
Maybe you’re an individual and figure you’re fine, you don’t drive a Ferrari or have millions of dollars, so you don’t need an estate plan, right? Wrong. An estate plan doesn’t need to be expensive or complicated, but you need one, whether you’re Bill Gates or Bob Jones the college student. Call (913-707-9220) or email me (steve@johnsonlawkc.com) if I can help.
(C) 2011, Stephen M. Johnson
The annual Forbes 400 list of the wealthiest Americans has been released. The top tier of America’s wealth – the billionaire club – has not changed much during the Great Recession, although the wealthy have often seen their fortunes improve with time.
(C) Stephen M. Johnson, 2010. All rights reserved.
Estate Planning, Entrepreneurial, and Entertainment Law
Estate Planning, Entrepreneurial, and Entertainment Law
The KC Estate Planner 