Life insurance is often considered a cornerstone of estate planning. It provides immediate liquidity for beneficiaries through tax-free lump-sum payments, covering final expenses, replacing lost income, and funding trusts. While essential, life insurance has limitations. Relying solely on it in your Nevada estate plan can leave gaps, creating unforeseen challenges for loved ones.
Effective estate planning requires a holistic approach. Life insurance is just one tool in a broader strategy designed to protect your legacy and provide for your beneficiaries. Anderson, Dorn & Rader Ltd. specializes in creating comprehensive estate plans that integrate life insurance with other critical elements, ensuring that your goals are met and potential risks are mitigated.
Life insurance policies, while flexible, are not without constraints. Terms and exclusions in policies can leave beneficiaries without the expected financial support. For example, term life insurance only provides coverage within a specific timeframe, and employer-provided life insurance often ends when employment ceases. Additionally, exclusions for high-risk activities or incomplete applications can nullify coverage.
Understanding these limitations is critical. Policyholders must regularly review their policies to ensure that coverage aligns with their current needs and life circumstances. Failure to address these risks may result in unintended outcomes, such as delays in payouts or no payout at all.
Integrating life insurance into a comprehensive estate plan is key to maximizing its benefits. While life insurance provides liquidity, it should work in tandem with tools like wills and trusts to avoid probate complications and minimize tax burdens.
A Nevada estate plan that includes life insurance can address various financial needs, from covering estate taxes to equalizing inheritances. For instance, life insurance proceeds can ensure a fair division of assets when property or other investments are difficult to split among heirs. By pairing life insurance with other estate planning tools, families gain financial stability and peace of mind.
Naming beneficiaries on a life insurance policy might seem straightforward, but improper designations can lead to legal challenges. Failure to name primary and contingent beneficiaries may result in the death benefit going to the estate, subjecting it to probate.
Additionally, naming minor children or individuals who lack mental capacity as beneficiaries can complicate the distribution process. Establishing a trust as a beneficiary allows the policyholder to control how the proceeds are managed, ensuring they are used as intended for education, living expenses, or other priorities.
An estate planning attorney can ensure that life insurance aligns with your broader financial goals. Whether it’s funding a trust, paying estate taxes, or supporting a surviving spouse, integrating life insurance into a comprehensive strategy provides clarity and protection.
Anderson, Dorn & Rader Ltd. works closely with clients to evaluate their life insurance policies, identify potential gaps, and create estate plans that address both short-term needs and long-term goals. With professional guidance, you can ensure that your loved ones are financially secure and that your estate reflects your wishes.
Estate planning is about more than purchasing a life insurance policy—it’s about creating a roadmap for the future. Contact Anderson, Dorn & Rader Ltd. today to schedule a consultation. Their experienced team specializes in Nevada estate planning, helping families protect their assets, reduce tax liabilities, and secure their legacy for generations to come.
As a millennial, your contributions to the workforce are significant, and you're driving positive changes in the world. We recognize that your concerns might differ from those of previous generations, and we're here to help you create an estate plan that addresses your unique needs and priorities. In Reno, planning for potential incapacity is essential to ensure your wishes are honored if you cannot manage your affairs. Here are key steps to help you develop a comprehensive estate plan.
If you become incapacitated due to injury, illness, or other reasons, it's crucial to have legally designated someone to act on your behalf. Without this, no one can step in without court intervention, including making medical decisions or managing your finances. If a court must appoint someone, state law often prioritizes immediate family members over significant others or friends.
To avoid this, appoint an agent under a financial power of attorney to handle financial decisions and a medical power of attorney for healthcare decisions. These roles require different skills, and you can choose the same person or different individuals for each role.
Millennials are a dominant force in the workforce, with many jobs offering life insurance and retirement plans. It's crucial to review and complete beneficiary designations accurately. Incorrect designations can lead to probate and distribute assets according to your will or state rules if you lack a will. We can help you choose the right beneficiaries and determine how best to leave assets to fulfill your wishes.
If you're unmarried, your assets will be distributed according to state laws, which typically prioritize family over significant others. Proactive estate planning ensures your wishes are followed.
Millennials are the largest group of pet owners, so it’s important to designate a caregiver for your pets, allocate funds for their care, and consider compensating the caregiver.
Estate planning can be overwhelming, but we're here to help you navigate the process, ensuring you and your loved ones are well-prepared for the future. Reach out to us to schedule your appointment and gain peace of mind knowing your affairs are in order.
Contemplating the future of our loved ones after we're gone can be tough. While acknowledging our mortality isn't easy, proactive estate planning allows us to ensure our wishes are fulfilled, providing a secure future for those we care about. In Reno, effective estate planning ensures your assets and wishes are properly managed and respected.
The initial step in estate planning is identifying your priorities. Your unique circumstances, the needs of your loved ones, and your philanthropic goals will shape these priorities. Clarifying your goals is essential to work with advisors and ensure sufficient resources to meet your wishes. This teamwork also helps avoid conflicts or issues within your estate plan.
Consider the following common estate planning priorities:
Take the following steps to prepare for creating your estate plan:
Creating a comprehensive estate plan in Reno can be one of the most valuable gifts for your loved ones. By clearly defining your priorities and working with experienced professionals, you can ensure your estate plan reflects your wishes and secures your loved ones' future. Contact us to learn more about how we can help you design a plan tailored to your needs.
When you pass away, your debts, including your mortgage, do not simply vanish. If your will or trust leaves your property, which still has a loan against it, to a beneficiary, they will inherit both the real estate and the remaining debt. The beneficiary might have the option to assume the mortgage, allowing them to retain ownership of the house, or they could opt to sell the property and use the proceeds to settle the debt. The specific outcomes depend on the terms of the mortgage and the directives laid out in the estate plan. Planning ahead for the transfer of your real estate assets can significantly simplify the process for your heirs, making it a smoother transition during a challenging time.
In recent years, American housing debt has soared to unprecedented levels. According to the US Census Bureau, the homeownership rate was approximately 66 percent in 2022. By the end of September 2023, the Federal Reserve Bank of New York reported that Americans were carrying $12.14 trillion in mortgage balances. This figure represents a significant portion of US consumer debt, emphasizing the crucial role of real estate in personal finance. The increase in mortgage debt highlights the importance of addressing how these obligations are managed after the homeowner's death.
With housing debt constituting a substantial part of consumer debt, it's not surprising that many Americans pass away while still owing on their mortgages. A survey by CreditCards.com revealed that 37 percent of Americans died with unpaid mortgages. This situation poses potential complications for heirs and underscores the need for comprehensive estate planning.
The inclination to leave a home to one's children is strong among American parents, with a 2023 Charles Schwab survey indicating that more than three-quarters of parents intend to do so. However, the reality of inheriting a home is complex, especially given the current real estate market dynamics. Nearly 70 percent of potential heirs express a preference to sell the inherited property, often due to financial considerations or the rising costs of real estate.
When it comes to estate planning, one of the critical concerns is how to handle mortgages on inherited properties. The process varies significantly depending on the decedent's estate plan, the terms of the mortgage, and state laws.
When a property is left to a single beneficiary, whether through a will, trust, or deed, several outcomes are possible. The beneficiary might assume the existing mortgage, pay off the mortgage with other funds, or sell the property and use the proceeds to settle the debt. Some lenders may also allow for the refinancing of the loan under the new owner's name, potentially offering more favorable terms.
In cases where multiple beneficiaries inherit a property, the situation becomes more complex. These beneficiaries must agree on how to manage the inherited mortgage, whether by assuming it jointly, selling the property, or using other funds to pay off the debt. Disagreements can lead to legal challenges, potentially resulting in a court-ordered sale of the property.
For those who die without a will or trust, the probate process determines the distribution of their assets, including real estate. The executor of the estate is responsible for managing the deceased's debts and assets, which may involve using estate funds to maintain mortgage payments until the property can be sold or transferred.
Estate planning goes beyond merely distributing assets; it's about ensuring that your legacy is passed on according to your wishes without imposing undue burdens on your loved ones. For homeowners, this means considering the implications of mortgage debt and making arrangements to ease the financial strain on heirs.
An effective estate plan addresses all aspects of your assets, including your home and any outstanding mortgage. It might include setting aside funds to cover mortgage payments, instructions for the sale of the property, or provisions for refinancing the mortgage to benefit your heirs.
Given the complexities of estate law and the intricacies of mortgages, seeking advice from an estate planning attorney is advisable. They can provide tailored guidance that aligns with your goals and ensures your estate is handled smoothly.
As American housing debt continues to climb, the importance of incorporating real estate into your estate planning cannot be overstated. Understanding how your mortgage debt will be managed after your passing is crucial to ensuring your heirs can navigate their inheritance without undue stress. Through careful planning and professional advice, you can secure your legacy and provide for your loved ones even after you're gone.
If you have significant wealth, you may be exposed to future estate tax burdens that must be acted on before the Tax Cuts and Jobs Act reduces the estate tax exemption in 2026. Developing and implementing the right estate planning and tax strategies takes time. You may need to prepare regardless of whether the estate tax continues at its current level or if it is cut in half. This means strategizing to minimize your estate tax liability now.
Meet the Andersons, a well-off family living in a state with a high cost of living. Robert Anderson, the father, is a successful entrepreneur who built a thriving business over the years. His wife, Sarah, is a high salary earner, and together they have accumulated a substantial estate of $8 million each, for a total of $16 million. Their estate is primarily composed of their business assets, valuable artwork, life insurance, a family residence, a vacation home, and other lucrative investments. They have two adult children, James and Emily, both actively involved in the family business.
With the generous federal estate tax exemption set at $10 million adjusted for inflation per individual in 2017, steadily increasing to $13.61 million in 2024, the Andersons have felt relatively secure about avoiding estate taxes. Their primary concern has been preserving the family legacy and ensuring a smooth transition of their assets (business, accounts, and property) to the next generation. They had taken some initial estate planning steps, such as creating a living trust, discussing the use of a family limited partnership, and exploring gifting strategies to transfer the assets to their children gradually.
If the estate tax exemption drops to $5 million adjusted for inflation, the Andersons may face several estate tax issues that require professional advice and assistance before the end of 2025. The Andersons need to find other ways to protect their money and property.
The family business represents a significant portion of the Andersons’ estate, and the sunsetting of the higher exemption amount could have profound implications for its continued viability. Robert and Sarah need to develop a comprehensive business valuation and succession plan now to minimize the total estate tax burden and ensure a smooth ownership transition to James and Emily later.
Given the potential changes in the estate tax landscape, the Andersons need to revisit the valuation of their financial accounts, retirement and life insurance investments, personal property, real estate, and artwork to ensure accurate assessments. Then they need to determine which items will affect the estate tax calculation and any remaining exemption they have left from prior legacy planning. Depending on their assets’ values, these items can easily put them over the potentially soon-to-be lower estate tax exemption, exposing them to a 40 percent tax rate.
With the uncertainty surrounding the estate tax exemption, the Andersons may want to consider accelerated lifetime gifting strategies to reduce their taxable estate while the higher exemption is in place. The Internal Revenue Service declared in 2019 that individuals who take advantage of the increased gift tax exclusion from 2018 to 2025 will not be negatively impacted after 2025 if the exclusion amount drops.1 Gifting up to $13.61 million in 2024 has a zero tax liability. But gifting over $6.4 million in 2026 may have major consequences.
The Andersons may want to use life insurance to ensure that their loved ones are provided for at their passing. They may want to consider creating an irrevocable life insurance trust to own the life insurance policy and be the recipient of the death benefit. This removes the value of the policy from the Andersons’ estate and protects the death benefit for their chosen beneficiaries.
The significant portfolios of high-net-worth and ultra-high-net-worth families may require advanced tax planning techniques, including an AB trust, to optimize each spouse’s estate tax exemption and potentially minimize their estate tax liability. At the client’s death, an amount equal to the current estate tax exemption amount is placed in one trust, which uses the exemption, and the remainder is placed in a second trust for the surviving spouse’s benefit, which qualifies for the unlimited marital deduction. This results in no estate tax being owed at the death of the first spouse.
Spouses are able to give an unlimited amount of money and property to each other without having to worry about estate or gift tax. Because of this, some clients may not have an estate tax issue at the first spouse’s death because everything (or a substantial portion) went to the surviving spouse. Because they are utilizing the unlimited marital deduction, the deceased spouse’s exemption is not needed. However, even if this is the case, it may be advisable to file an estate tax return at the first spouse’s death to document how much of that deceased spouse’s exemption is being used, if any, and that the remainder is going to the surviving spouse. This will allow the surviving spouse to add the deceased spouse’s unused exclusion (DSUE) to the surviving spouse’s own exemption amount and apply that combined amount against their own estate at the time of death.
If the Andersons are philanthropically inclined, another great option would be to engage in charitable giving through the use of a charitable remainder trust. Setting up this type of trust can be time-consuming—sometimes the process is fairly straightforward but often highly complex, requiring advanced planning and consideration.
If your situation is similar to the Andersons, expert guidance is necessary to address estate tax issues and help you evaluate the impact of the potential sunsetting of the higher estate tax exemption amount on your estate. Contact us to learn more about strategies to protect, preserve, and pass down valuable property.
1 Estate and Gift Tax Facts, IRS.gov, https://www.irs.gov/newsroom/estate-and-gift-tax-faqs# (last updated Dec. 5, 2023).
When it comes to estate planning and legacy planning, most individuals focus on passing down their assets to their children and heirs. However, for those seeking to establish a legacy that will endure for generations, the concept of a dynasty trust becomes particularly intriguing.
A dynasty trust, an integral part of estate planning, is an irrevocable trust that offers similar tax advantages and asset protection as other trust types, but with a remarkable distinction—it can span multiple generations. Often referred to as perpetual trusts, dynasty trusts are meticulously designed to last indefinitely, as long as the trust's assets remain intact. Given the long-term nature of a dynasty trust, it is imperative to establish it with utmost care and attention to detail. Once the trust is in place, its rules generally cannot be altered, underscoring the importance of getting everything right from the beginning.
Setting up a dynasty trust follows a process akin to that of any other trust. The grantor, who serves as the trust's creator, transfers funds and assets into the trust during their lifetime or, in the case of a testamentary dynasty trust, after their death. Once the trust is funded, it becomes irrevocable, and the rules established by the grantor become fixed. Modifying these rules is only possible under specific state laws that govern trust modifications.
When establishing a dynasty trust, thoughtful consideration must be given to selecting the most suitable trustee. It is common practice to appoint an independent trustee, such as a bank or trust company, to administer the trust throughout its existence. Although a beneficiary can serve as a trustee, this approach may give rise to potential issues concerning taxes and creditor protection. A beneficiary-controlled trust can have significant implications for income and estate taxes, depending on the extent of the beneficiary's powers. It can also impact the level of asset protection provided to the beneficiary and expose family wealth to the risk of misappropriation. On the other hand, a corporate trustee, such as the dynasty trust itself, possesses indefinite legal life and can ensure uninterrupted administration across generations. Corporate trustees typically charge an annual fee based on the value of assets held in the trust.
While trusts are generally beneficial for individuals across various financial backgrounds, there are exceptions, and the dynasty trust is one of them. Establishing a dynasty trust does not necessitate grand dynastic aspirations akin to illustrious families like the Medici or the House of Windsor. However, it is most commonly utilized by families with substantial wealth. While there are no legal requirements regarding the minimum amount of funds needed to establish a dynasty trust, from a practical perspective, it is typically suitable for those with sufficient wealth and assets capable of sustaining multiple generations, taking into account the financial needs and responsibilities of the beneficiaries. Grantors who are concerned about future generations beyond their children often opt for dynasty trusts as part of their estate and legacy planning. Additionally, dynasty trusts can prove invaluable for families that own a family business and desire to maintain its continuity within the family lineage.
Statistics reveal that many family businesses fail to survive beyond the second or third generation, but a dynasty trust can significantly enhance the chances of success. By placing shares of the business into the trust, the grantor can provide for multiple generations of beneficiaries while ensuring the seamless continuation of business operations through professional trustee management. The trustee assumes responsibility for managing the business affairs and maintaining continuity, while the beneficiaries reap financial benefits. Furthermore, the grantor can include specific terms within the trust to guarantee competent business management, such as mandating the trustee to establish an advisory council functioning as a board of directors.
In the realm of estate planning and legacy planning, one of the notable advantages of establishing a dynasty trust is the potential for significant tax benefits. By leveraging the federal estate tax exemption amount (which currently stands at $12.06 million per individual in 2022, or twice that amount for couples) to fund a dynasty trust, you can effectively transfer money and property directly to your grandchildren while avoiding gift or generation-skipping transfer (GST) taxes. To achieve this, you would place accounts and property into the trust and file a gift tax return to allocate appropriate tax exemptions to the trust or pay a portion of the wealth transfer tax. This strategic approach ensures that these assets are not included in your taxable estate, nor in the taxable estates of your beneficiaries, provided that the trust is fully exempt from GST tax.
Furthermore, utilizing trust funds to cover a beneficiary's living expenses or investing in a home for their benefit can also help reduce their taxable estate. Additionally, when a dynasty trust is properly drafted, accounts and property left to your loved ones within the trust can enjoy protection from creditors and divorce courts. In contrast, gifting money outright may not offer these same protective benefits.
It is worth noting that dynasty trusts are not available in every state due to the rule against perpetuities, a common law principle that restricts the duration of controlled property interests, including those established within trusts. This rule, which was not specifically created for trusts, aims to prevent individuals from exerting control over property ownership for an extended period after their demise through legal instruments like deeds and trusts. However, many states have modified or even eliminated this rule, as its interpretation can be complex. With the guidance of an experienced estate planning attorney, you may be able to establish a trust in a state where you do not reside, taking advantage of more favorable laws.
If you are considering the establishment of a dynasty trust, our firm can connect you with a skilled estate planning attorney who can guide you through the process. During your consultation, crucial factors such as selecting a trustee and beneficiaries, implementing tax and creditor protection strategies, understanding state laws pertaining to perpetual trusts, and aligning the dynasty trust with your comprehensive estate plan will be thoroughly discussed. Taking this initial step will enable you to secure your legacy and ensure the preservation of your wealth for future generations. To embark on this journey, please reach out to us, and we will be delighted to assist you.
We extend our warmest congratulations on your new home purchase. Whether this is your first time buying a home or an upgrade/downsize, acquiring a new home is a significant event that brings about change in your life. Properly prepare for the worst by protecting your newest accomplishment. Here are three essential tips to keep in mind now that you have the keys to your new home, including important considerations for estate planning.
1. Make Sure to Update Your Address
After moving into your new home, it is crucial to update your address with the relevant authorities. Start with visiting your local United States Postal Office to obtain a form for change of address. Alternatively, you can update your address online. This step will help the postal service forward your mail to your new address.
It is also a crucial step in protecting your property to update your address with the Internal Revenue Service (IRS) by filling out Form 8822. This will ensure that you receive all important tax notices and refunds. Additionally, make sure to update your address with your local state tax agency.
2. Ensure Consistency Between Your Home Title and Estate Plan
One aspect of new homeownership that often goes overlooked is the need to align your home title with your estate planning objectives. After purchasing your new home, review the deed to confirm how the property is titled. Next, review your estate planning documents to ensure the property has been titled correctly to achieve your estate planning goals.
For instance, if your previous plan included a specific provision for the distribution of your old property, you will need to update this provision to reflect the current status. Similarly, if you have a trust-based estate plan to avoid probate, you will need to confirm that your new property is titled in the name of the trust and not in your individual name. Ensuring consistency between your home title and estate plan will help protect your assets and ensure your wishes are carried out effectively.
3. Review Your Life Insurance Policy and Beneficiary Designations
If you have a mortgage payment to make on your new home, it's likely you'll have a large monthly expense to pay off each month. To safeguard your loved ones, it is important to review your life insurance coverage. Ensure you have adequate life insurance coverage to address the mortgage payment in the event of your passing, particularly if you have a surviving spouse or children who are likely to remain in the home. Even if they decide not to reside in the property, life insurance can offer valuable resources during a potentially emotionally difficult period. Even if they choose not to stay in the home, life insurance can provide valuable assets during what can be an emotionally challenging time.
It's also a good idea to review your beneficiary designations. Life changes can happen quickly, and this may be overlooked. If your designations don't match up with the rest of your estate plan, you might inadvertently disinherit a family member or have the money go directly to an individual without any guidance.
Finally, with your new home comes the need for homeowner's insurance. Contact your insurance agent to confirm that you are receiving all eligible discounts. Many insurance providers offer package discounts when you combine services. By already having car insurance with the same company as your homeowner's insurance, you may qualify for a lower rate compared to purchasing each policy separately. Additionally, homeowners often receive discounts that renters do not.
We understand that buying a new home is a significant milestone, and we are here to assist you. If you need help aligning your new purchase with your estate planning goals, contact us today. We can ensure that your new home and estate planning are aligned to achieve your objectives, including the important aspect of estate planning for homeowners.
Every child is a precious gift, and as parents or grandparents, we strive to plan for their future, anticipating their needs and aspirations. However, families with special needs children or grandchildren face additional responsibilities in ensuring their loved one's future is secure, fulfilling, and supported. To ensure a flourishing future for your special needs child or grandchild, estate planning measures focused on their unique circumstances are essential. We recommend the following steps:
When it comes to estate planning, creating a Special or Supplemental Needs Trust (SNT) for your special needs child or grandchild should be a top priority. An SNT is a specialized trust designed to set aside funds and assets for the benefit of a beneficiary who may qualify for public assistance due to their disabilities. It can be established as a standalone trust or added to your existing trust.
It's important to note that government programs providing aid to disabled individuals have strict criteria regarding the amount of money and property a person can own while receiving benefits. Structuring any inheritance your special needs beneficiary may receive in a way that doesn't disqualify them from obtaining government benefits is crucial. Even if they are not currently receiving government benefits, considering the possibility of future needs is essential. To ensure all opportunities are available, it is vital that the trust is meticulously drafted by a lawyer well-versed in the eligibility requirements for government benefits.
An SNT not only provides financial security but also allows you to appoint a care manager or advisory committee. The care manager serves as an advocate for your special needs beneficiary, overseeing their well-being periodically or daily, depending on their level of care requirements. An advisory committee, comprising family members, friends, and professionals, can provide guidance to the trustee on the beneficiary's needs and the best use of the funds.
Additionally, the SNT can include a statement of intent, outlining the trust's purpose and how the funds should be utilized. This section acts as a safety net in case changes in the law make the beneficiary ineligible for government benefits. It allows for modifications to ensure your original intentions are met, even in the face of unforeseen circumstances.
In addition to establishing an SNT, putting your instructions in writing is crucial to ensure your wishes are carried out as intended. Consider creating a letter or memorandum of intent that provides guidance to your trustee on managing the trust after your passing. Although not legally binding, this document offers valuable insights into your true intentions. You can include details on how the funds should be used in accordance with government rules, specific goals you would like the beneficiary to achieve, and the standard of living you envision for them.
Supporting a special needs child or grandchild can be financially demanding, and it's important to consider how to sustain their care once you pass away. Life insurance can be a valuable tool in ensuring there will be sufficient funds for the trustee to use for their benefit. By designating the SNT as the beneficiary, you can provide a lump sum payment that is not subject to the same tax liabilities as retirement accounts.
The SECURE Act has brought changes to how beneficiaries can receive distributions from inherited IRAs, potentially impacting the financial support available to your special needs beneficiary. However, the Act also recognizes "eligible designated beneficiaries," including individuals with disabilities, who can still receive distributions over their life expectancies. Congress has established rules that allow the life expectancy of disabled beneficiaries to be used for certain types of trusts. If you have a substantial retirement account, it is crucial to discuss your distribution options to maximize benefits for all your beneficiaries.
We understand that securing a bright future for your special needs child or grandchild is of utmost importance to you. Our priority is to work with you in developing a comprehensive plan that will guarantee continued care and well-being for your loved ones. Please do not hesitate to reach out to us to schedule an appointment so that we can begin this process together.
When Elvis Presley, the King of Rock and Roll, passed away in 1977, he left behind a complicated legacy, just like his famous dance moves. His estate, including the iconic Graceland, eventually ended up in the hands of his only child, Lisa Marie Presley. However, the future of Elvis's legacy and the fate of his estate face challenges ahead. These challenges involve Lisa Marie's personal financial issues, a significant age gap among her children, and even a legal dispute initiated by her mother, Priscilla Presley. The unfolding of this captivating saga will determine the course of Elvis's rockin' legacy.
From Elvis to Lisa Marie: Inheritance and Financial Legacy
Lisa Marie, born in 1968 to the legendary rock and roll icon Elvis Presley and his wife Priscilla Presley, had to face the tragic loss of her father at a young age. Sadly, Elvis passed away at forty-two due to a heart attack. Fast forward to January 2023, and Lisa Marie herself succumbed to heart problems at the age of fifty-four.
Despite Elvis's untimely departure, his legacy has continued to thrive, with his estate earning an impressive $400 million in the previous year alone. The value of the estate skyrocketed to over $1 billion, thanks in part to the 2022 Elvis biopic movie. This created a substantial financial legacy for Lisa Marie to inherit.
The Elvis Presley Trust
When Elvis Presley passed away, his estate was placed in a trust with Lisa Marie, his grandmother, and his father as beneficiaries. According to the trust, Lisa Marie's inheritance was held in trust until she turned twenty-five in February 1993. After that, the trust dissolved automatically, and Lisa Marie inherited $100 million, including Graceland, her childhood home.
Today, Graceland stands as a museum and popular tourist attraction, generating over $10 million annually. To manage Graceland and the rest of Elvis's estate, which includes Elvis Presley Enterprises, Inc. (EPE), Lisa Marie established the Elvis Presley Trust. Until 2005, Lisa Marie served as the owner and chairperson of EPE's board, but she later sold 85 percent of its assets.
Graceland and the Living Trust
Graceland, the iconic mansion that was once Elvis Presley's residence, has become a symbol of his legacy and a beloved tourist destination. After Lisa Marie inherited it, she made it clear that Graceland would always remain within the family.
Lisa Marie's children, Riley Keough, Harper Lockwood, and Finley Lockwood, are set to inherit her fortune and properties through a living trust. However, Lisa Marie's son, Benjamin Keough, tragically passed away in 2020.
Considering that it's unclear whether Lisa Marie had a separate will in place, the living trust, an estate planning document, will play a significant role in determining the distribution of her assets. Through the living trust, individuals can transfer ownership of accounts and property to a separate entity, the trust, which they control while alive. The trust also names a successor trustee to manage the accounts and property after their passing.
Priscilla Presley's Trust Challenge
A challenge to Lisa Marie's living trust has emerged from an unexpected source—her own mother, Priscilla Presley. The legal dispute revolves around a 2016 amendment to the trust, which removed Priscilla and a former business manager as trustees and replaced them with Lisa Marie's daughter, Riley Keough, and her late son, Benjamin Keough.
Navigating the Challenges: Estate Planning and Protecting Your Legacy
Priscilla's claim challenges the validity of the living trust amendment, citing violations of legal requirements. She highlights the lack of proper notification, absence of witnesses or notarization, and even a misspelling of her name in the document. Adding to her concerns, Priscilla alleges that her daughter's signature appears suspiciously different from her usual signature. Consequently, she has sought the court's intervention to invalidate the amendment that removed her as the trustee.
Lisa Marie's Financial Struggles
Recent legal documents indicate that Lisa Marie faced financial challenges before her passing, despite inheriting $100 million at the age of twenty-five. She held approximately $95,000 in cash and possessed various assets such as bonds and stocks valued at $715,000. Although she earned over $100,000 per month from EPE, she also carried a $1 million tax debt and incurred monthly expenses of $92,000. Furthermore, her ex-husband, Michael Lockwood, reopened a lawsuit seeking $4,600 per month in child support.
By 2016, Lisa Marie's $100 million trust had significantly dwindled to just $14,000 in cash. Her former manager, Barry Siegel, faced allegations of mismanaging her finances, which resulted in a decline of her wealth. Court records reveal that Lisa Marie was burdened with a $16.67 million debt at that time. However, in 2019, Siegel countered the claims and asserted that the sale of her 85 percent stake in EPE helped resolve over $20 million in debts.
Potential Legal Challenges for the Lisa Marie Presley Estate
The legal ambiguity surrounding Lisa Marie's estate gives rise to numerous potential legal issues that will likely require judicial resolution. One such challenge is Priscilla's claim against the living trust amendment. If her challenge is successful, the amendment would be considered void, making Priscilla the successor trustee responsible for managing the trust's assets and funds instead of Lisa Marie's daughter, Riley. This matter would necessitate court intervention for resolution.
Creditor Claims
Although it remains uncertain whether Lisa Marie had outstanding debts, if she did, creditors could make claims against her estate. The estate would need to determine whether to accept or reject these claims. Rejecting them could lead to legal disputes. Creditors hold priority over beneficiaries, which means that Lisa Marie's accounts and property, including Graceland, might need to be sold to satisfy any outstanding debts. Additionally, even after the debts are settled, the estate may still be subject to estate taxes, which could further complicate matters if creditors decide to initiate lawsuits.
Her Daughters' Inheritance
Assuming the estate possesses sufficient funds to settle debts without selling Graceland, Lisa Marie's three daughters, Riley, Harper, and Finley, are poised to inherit the mansion and any remaining property or funds. However, the upkeep and tax costs associated with Graceland surpass $500,000 annually. It remains uncertain whether the daughters would collectively agree to bear these expenses and preserve the Elvis legacy within the family.
The daughters have the option to sell Graceland, but this decision could ignite internal conflicts if even one daughter wishes to pursue a sale. Additionally, crucial details regarding the ages of the daughters and their inheritances remain unknown. Did Lisa Marie establish a trust to hold her twin daughters' inheritances until they reach a specific age, as her father did for her? Or does the trustee possess discretionary power over the funds? Moreover, depending on the outcome of the trust challenge, will the trustee ultimately be Riley or Priscilla?
Furthermore, the question of whether Lisa Marie distributed her estate equally among her daughters remains unclear, as there is no legal requirement for equal distribution.
Control What You Can with an Estate Plan
The sudden and tragic passing of Lisa Marie Presley serves as a reminder that death can come unexpectedly. However, through estate planning, we can exert some control over our legacy.
Crafting a comprehensive estate plan can help alleviate some of the uncertainty and provide peace of mind to both ourselves and our loved ones. If you're ready to start planning for the future, please reach out to our office to schedule a consultation.
Back in 1987, Congress recognized March as Women's History Month to celebrate the incredible contributions of women in American history across various fields. From building a strong and prosperous nation to being the backbone of their families, women have been unstoppable. Yet, in the midst of caring for others, women often neglect their own financial and estate planning. It's high time for women to prioritize themselves by crafting a solid plan that caters to their future needs, which may differ from those of their male counterparts and dependents.
Longer life expectancies. According to Social Security Administration data, in 2021, women had an average life expectancy of 79.5 years compared to 74.2 years for men. As a result, it is important for women to create an estate plan that accounts for additional years of living expenses during retirement, healthcare costs, and possibly long-term care costs. As women age, there may be a greater possibility that they could become incapacitated and need someone to act on their behalf to make financial and healthcare decisions. Documents such as financial and healthcare powers of attorney and living wills authorize a person they trust to make decisions or take action for them if they are not able to act for themselves. Some women may not only own their own assets but also inherit wealth from both their parents and a spouse who dies before them, and if so, they need a financial and estate plan to optimally preserve and transfer this wealth. Because women may outlive their spouses, they also may be responsible for administering their spouse’s estate or become the sole surviving trustee of a joint trust. These duties may be difficult for a woman who is experiencing health issues that often occur at an advanced age, and this possibility should be addressed in their estate planning. For example, a woman concerned that she will be unable to handle administering her trust at an advanced age can name a co-trustee or successor trustee to administer it if she is no longer able to do so.
Lower earnings. According to U.S. Census Bureau data, women continue to earn less than men, and the pay gap widens as they age. In addition, because some women have shorter employment histories due to time off to raise children or care for aging parents, they may have less saved for retirement. As a result, it is important for them to take steps to protect their money and property from lawsuits or creditors’ claims. For example, a woman could transfer her money and property to an irrevocable trust. Because she is no longer the legal owner of the property, a creditor cannot reach it to satisfy claims against her so long as the trust is properly drafted to include appropriate distribution standards and administrative and other provisions. The woman may be a discretionary beneficiary of the trust, and the trustee may distribute the funds she needs for living expenses. Additionally, because they have less money and property during their retirement, women need to have a solid plan in place to make sure that they are able to financially provide for their loved ones upon their death and that unnecessary costs and expenses are minimized to the extent possible.
Care for loved ones. Many women are caregivers for minor children, adult children with special needs, or aging parents. As a result, they are often concerned about who will care for their loved ones if they are no longer able to do so. If a spouse or sibling is not available to provide care, they need to make sure that another family member or trusted individual can be the caregiver (sometimes called a guardian of the person) for their loved one. The same individual—or someone else—can serve as the guardian of the loved one’s estate (sometimes called a conservator or guardian of the estate) to manage the inheritance for their benefit. In the case of a child with special needs, if no family member is able to take on the responsibility of their care, a group home or assisted living facility may be the best choice. A special needs trust may need to be established to ensure that funds are available for the child’s care but do not decrease the amount of government benefits they are eligible to receive.
You have accomplished a lot in your life! Celebrate your accomplishments and contributions during Women’s History Month by contacting us to set up an appointment to create an estate plan that provides for your own future needs and those of the people you love. You deserve the peace of mind that comes with knowing your future is secure.
In October 2022, singer and songwriter Jerry Lee Lewis passed away. He left behind a rock legacy, a big family, and an estate valued in the multi-millions.
We often follow the lives of celebrities and dream of having their lavish lifestyles. Even so, famous folks experience many similar estate planning challenges just like the rest of us. This includes implementing the optimal tax strategy, as well as distributing assets to loved ones when deceased.
Lewis’s passing has prompted many to look back fondly at his music career. Aside from that though, it begs the question: what will shake out with his sizable estate? Let’s play “what if” in the following estate planning scenarios and see which lessons can be learned for celebrities and regular folks alike:
Jerry Lee Lewis lived a long life, passing at the old age of 87. Like other rock icons of the last century (Elvis, Johnny Cash), Lewis’s lifestyle put hard miles on him. Even though he engaged in substance abuse and experienced health problems, he outlived other leading rockers and was deemed “the last man standing from the dawn of rock and roll” by New York Magazine.
You likely have heard his greatest hit, “Great Balls of Fire”, but Lewis had a variety of other hits that earned him four Grammy wins. Lewis was inducted into both the Rock & Roll Hall of Fame and Country Music Hall of Fame. His music career spanned for an astounding seven decades, and he produced over forty albums.
At his death, Lewis left behind his seventh wife, Judith Coglan Lewis, and four of the six surviving children from his marriages. In the years preceding his death, a feud ensued between Lewis and his daughter, Phoebe, and her husband, Ezekiel Loftin. Lewis sued the Phoebe and her husband in 2017 for taking advantage of his financial status. Charges were later dropped.
Lewis had his fair share of financial missteps, filing for bankruptcy in 1988. The filing included more than $3 million in debts. This came from over $2 million in IRS dues, unpaid medical bills, and tens of thousands in attorney fees. Still, his net worth at the time of his death was estimated to be in the range of $10 million and $15.4 million.
As professional estate planning attorneys, we evaluate the life and legacy of Jerry Lee Lewis through the perspective of our field of expertise. While his tumultuous and fast-paced lifestyle may not align with our personal experiences, we recognize the valuable insight it provides in regards to common estate planning issues. In this discourse, we will address several issues related to Lewis's estate that are particularly noteworthy.
Based on what we know about Lewis’s relationship with his daughter, Phoebe, it is likely that he will remove her from any consideration to receive a portion of his assets. Mississippi law permits individuals to disinherit beneficiaries under a legitimate basis. However, it is worth noting that Phoebe has established her own career in the music industry and has done quite well for herself, potentially rendering any inheritance unnecessary.
The distribution of assets for his remaining children is yet to be determined. While most parents opt for equal distribution of assets among their children, the unique circumstances of the Lewis family dynamic require analysis of what is equal versus what is fair.
We can take lessons away from the Lewis family and apply them to our own situation. Each child has financial needs unique to their lives. While some are able to obtain financial freedom, others may struggle. A family’s financial picture can change for better or for worse between the birth of children as well. For instance, a younger child might enjoy a slightly more affluent lifestyle than the older siblings, simply because their parents have worked their way to a better career milestone and are making more money now than they were. This is why dividing assets equally within an estate plan is not always the fairest method for all parties.
Will He Transfer Assets to His Surviving Spouse?
Lewis was married a staggering seven times, and each came with their own controversies. His seventh wife was by his bedside upon his death. Will he distribute assets to her?
In the case that Lewis did not have a will in place, intestate law would take effect. This would automatically make his spouse the primary beneficiary. It’s not a far off scenario – about two thirds of American adults fail to compose a will. Rock icons can fall into this category if they fail to do some basic estate planning before death.
In the case that Lewis did have a will, he still could have left his entire estate, or a portion, to the surviving wife. If he just left a portion, those assets could be given to her as a lump sum, or distributed over time under the management of the estate’s trustee.
Lewis also would have had options deciding the type of trust set up. The pros and cons of these different types are as follows:
Even though death and taxes are certain in life, estate taxes may not fall into this category. It all depends on the breadth of the estate at Lewis’s death, and the amount of the lifetime exemption used.
The lifetime gift and estate tax exemption denotes the maximum amount of wealth that an individual can pass on to their heirs without incurring estate taxes. Such transfers can take place either as gifts throughout a person's lifetime or at the time of their death.
In 2022, the federal lifetime gift and estate tax exemption threshold was $12.06 million, rising to $12.92 million in 2023. Based on the conservative estimate of Lewis's net worth, the value of his estate is lower than the 2022 lifetime exemption limit. Therefore, in the absence of any previous use of his exemption during his lifetime, he may not require workarounds for estate taxes if his spouse does not posses substantial personal assets. It is worth noting that for couples, the exemption amount doubles to $25.84 million in 2023.
Mississippi does not impose an estate tax, so Lewis's estate does not need to worry about such a tax being levied. However, if Lewis had passed away in a state that imposes an estate tax, or if he had owned property in such a state, then his estate might have been subject to an additional tax due to his death. The exemption amount and tax rate for each state's estate tax are determined by that state.
In the case that Lewis's spouse does possesses assets and wealth that surpass the individual gift and estate tax exemption limit, it may behoove her to ask for the deceased spousal unused exclusion (DSUE) amount. The DSUE provision, aimed at helping the surviving spouse, allows the unused exemption amount of the deceased spouse to be transferred to the surviving spouse in case the former did not use up the entire exemption amount. In simpler terms, Lewis's wife would be eligible to receive a DSUE amount of $2.06 million, calculated based on the 2022 exemption of $12.06 million and Lewis's estimated estate value of $10 million.
Based on the 2022 exemption of $12.06 million and an estimated estate value of $10 million, Lewis's wife would be eligible for a DSUE amount of $2.06 million.
It is impossible to know for sure how Jerry Lee Lewis chose to allocate his wealth. His wife and children may be as uninformed as the general public, and there could be unexpected elements in his estate plan that have yet to surface.
The Lewis family requested that instead of sending flowers for his funeral, contributions be made in his name to either the Arthritis Foundation or MusiCares. It raises the question whether Lewis may have chosen to allocate a significant portion of his estate to these or other charitable organizations instead of his family.
Only time will tell how it’ll play out. We may not even get the full story if he left his estate to charity, since it’s common for charity information to stay private.
Ironing out an estate plan is not exclusive to rock-and-roll icons. Regardless of the complexities of your estate, it is essential to develop a plan for the distribution of your assets, settling your debts, and ensuring that your wealth goes to the individuals and causes that matter to you. Contact Anderson, Dorn & Rader’s office today to arrange a consultation with our team of estate planning attorneys and begin planning for the future.
Death is a delicate subject, but can be made simpler with proper planning. In the best case scenario, all paperwork and assets associated with a passing loved one is prepared with the utmost detail prior to death, allowing friends and relatives to fondly remember the deceased and take time to grieve.
Anderson, Dorn & Rader, and the estate planning business as a whole, aims to simplify the legal processes surrounding death so legacies can be transferred to surviving loved ones in a fair, stress-free manner. To accomplish this, savvy individuals will often take measures to ensure they don’t burden their surviving relatives with undue complications like the probate process.
Several tools are available through qualified attorneys to keep your property and monetary assets out of probate. Among these, establishing co-ownership of bank accounts and home titles, as well as lining up beneficiaries on investment and insurance accounts are great to start with. But a revocable living trust is one of the most favored comprehensive options that an individual can set up to avoid probate. Let’s check it out:
A trust is a fiduciary arrangement that grants a third party, or trustee, the legal permission to hold and manage assets on behalf of a beneficiary or beneficiaries. A living trust is enacted while an individual is still alive, rather than upon death. Arrangements can be made to grant you oversight duties on your own living trust until you become incapable of soundly managing your assets, or pass away. Upon your incapacitation or passing, the successor trustee assumes responsibility over the assets in the trust and manages them on behalf of all involved beneficiaries.
The Probate process involves transferring ownership of all monetary assets and property that haven’t been assigned to beneficiaries, or don’t contain a pay-on-death or transfer-on-death designation upon your passing. Often times with probate, the court gets involved, and the long-winded process to account for the assets ensues.
With a trust, your assets are ready to be transferred to your beneficiaries upon your death, if they haven’t already been transferred to the trust while you’re still alive. This puts probate out of the question, as your assets are all accounted for and can be distributed in a timely manner.
Even better, trusts can incorporate pretty much any category of asset: from real estate, to stock holdings, to bank accounts, to family heirlooms. This keeps your legacy from being administered through the probate court, ensuring everything you worked for ends up in the hands of the individuals you deem as successors. Not only does this eliminate costly court costs, but it keeps your records out of the public’s eye and enables beneficiaries to remember the deceased and carry on the good fortune of the trust without running into road blocks.
The language and investment surrounding the establishment of a trust can be daunting, often prompting individuals to delay the process or put it off entirely. But to plan without a doubt where your assets will end up, and with whom, it’s vital to create a trust. It’s peace of mind for both you and your loved ones when you pass.
Planning the details around your death is sometimes a difficult topic to breach, but can be made simpler with the help of your family and knowledgeable attorneys like Anderson Dorn & Rader. While you are ultimately at the helm when it comes to important decisions, our estate planning group truly cares about maximizing the legacy you will leave to your loved ones. For any questions about how to start the trust formation process, please give us a call or fill out our contact form. We look forward to bringing you and your family peace of mind.
With roughly 40 percent of U.S. adults suffering from a mental illness, it’s time to remove the stigma surrounding the topic. With greater awareness, there is greater opportunity to ensure that those affected by mental illness receive the help or treatment that they need, not just now, but in the future as well. Estate planning for someone with a mental illness will give you peace of mind that your loved one will be well taken care of in any unforeseen event.
The odds that you or somebody in your family is living with a mental health condition are 2 in 5. Rather than dismiss these issues because they are uncomfortable, we recommend being proactive about these challenges so that you’re prepared for whatever life brings your way. The best way to do this is with the help of an incapacity and estate planning attorney who will be able to draft a trust that covers all your bases.
Nearly 50 Million Americans Suffer from Mental Illness
Saying that America is dealing with a mental health crisis is not an exaggeration. According to the National Alliance on Mental Illness, approximately 40 percent of US adults experience mental illness, which is an increase of 20 percent from the year 2020. Additionally, 1 in 20 who experience serious mental illness, and 17 percent of American youth experience a mental health disorder.
The mental health crisis has worsened during the coronavirus pandemic. Loneliness and isolation are fueling increases in anxiety, depression, and thoughts of suicide and self-harm, reports Mental Health America. More people are seeking mental health screening and treatment, but around 23 percent of Americans with mental illness are still not receiving the services they need.
Improvement starts with acknowledging that there is a problem. Talking to a healthcare professional about mental health struggles and treatment options leads to better outcomes. One improved outcome can be creating an estate plan that takes into account your own, or a family member’s, mental health.
Your Mental Health and Your Estate Plan
Every estate plan should be tailored to the individual’s needs and their unique family dynamics. A number of estate planning documents are available to address concerns about your mental health. Chief among such concerns is the possibility that, at some point, you may be unable to manage your own affairs. To prepare for that contingency, consider having the following documents in place:
Importantly, for these documents to have legal authority, you must have mental capacity when you sign them. To ensure capacity, you may want to obtain a professional opinion from a licensed mental health provider stating that you are of sound mind and understand the meaning and effect of the documents you are signing. Alleging lack of capacity is a common basis for contesting an estate plan.
In addition, if you are entrusting somebody with power of attorney authority, and that person has their own mental health concerns, you should discuss the issue with your family as well as your estate planning lawyer.
Your Beneficiaries’ Mental Health
Having beneficiaries who suffer from mental illness presents a different estate planning challenge. You must pass your legacy to them in a way that serves their best interests. Discretionary trusts and supplemental needs trusts are two ways you can look out for a mentally ill loved one even after you are gone.
There is a significant difference between suffering from a severe mental illness, such as bipolar disorder or schizophrenia, and a more minor issue such as anxiety or depression. Some people’s mental health issues can come and go over the course of their lifetime. Others’ illnesses are prolonged or recurrent. In some cases, a person may be genetically predisposed to mental illness that has not yet manifested. Proper proactive estate planning can protect you and your loved ones from whatever type of mental disorder may be of concern to you.
These are some of the factors to consider when making estate planning decisions based on mental illness in your family. Every individual and every family is unique. Your estate plan should reflect what you know now and be updated to reflect changes in your life and the lives of your family members. Contact us to learn how mental health considerations can fit into your estate plan.
Estate planning is a sensitive subject and it can be even more sensitive when the issue of mental health is involved. If you need to set up an estate plan, or revise an existing estate plan, around mental health concerns, we are here to help. Please contact our office to set up an appointment with an estate planning attorney.
Estate plans are more than your monetary net worth. Categories of your estate can include real estate, pets, possessions and all other property you own. Some people forget how priceless personal property, such as family heirlooms and keepsakes, can be to those you leave behind.
It is important to work out what will happen to these valuable items after your death by creating an estate plan.
Heirlooms have been passed down to family members for generations. These items can vary in monetary value, but the memories attached to them are copious, giving them an emotional and sentimental value that shouldn’t be discarded or auctioned after your passing.
Keepsakes are slightly different from heirlooms because they apply to specific items you owned during your life. These items can be anything from cutlery sets, furniture, or jewelry that you left behind for your family. While these valuable items only have been passed down once, they have nostalgia your family wouldn’t want to lose.
Family members can have different values associated with certain heirlooms and keepsakes. It can be crucial to talk with each family member about their feelings and expectations towards certain items in advance. This common knowledge will help your family avoid unnecessary fighting for heirlooms or keepsakes after your death.
It is a good idea to decide if you need to have your family heirlooms or keepsakes appraised. By doing this, you provide your heirs with the necessary documentation to understand the value of each object passed down to them. Plus, you might realize you want to get some of these items insured due to their worth. Handling this before you pass will make it easier for your heirs to go through the mourning process and avoid unnecessary externalities.
There is no proper way to distribute these valuable and irreplaceable items after your death. Of course, these valuables could end up lost or undervalued if they end up in the wrong hands when there is no plan in place for family heirlooms and keepsakes.
Here are some ways to distribute these precious items to your heirs.
Some people prefer to equally distribute heirlooms and keepsakes to their heirs by focusing on each items' monetary value. An estates planning attorney can offer you guidance when understanding the liquidity of each family heirloom and keepsake.
It is important to note more than two of your heirs may desire the same heirloom or keepsake. You can resolve this dilemma before you pass by creating a personal property memorandum. This document is a chance for you to explicitly state your wishes and avoid any conflict that may come after your death.
One benefit to this type of inheritance planning is that a property personal memorandum is referred to as your last will and identifies who is to receive said property. Also, you don't need to execute a new will or amend your trust if you decide to make modifications to which heirs receive these family heirlooms and keepsakes.
You may prefer to gift special items to your heirs before passing away. Doing this could be a consideration if you find enjoyment in seeing how your family reacts to receiving their heirloom or keepsake.
Of course, you don't want to forget the gift tax you may incur after giving any items to your heirs while alive. Furthermore, you may want to consider if you should factor them into what share of your estate your heirs receive after your death depending on their value.
Anderson Dorn and Rader’s attorneys have the expertise and knowledge to help you create an estate plan that considers all your assets. Family heirlooms and keepsakes are just one piece of the puzzle. Define all your wishes for what your heirs receive with an estate plan to help avoid conflict between your heirs later on.
Our law firm has been helping families plan for both their financial wealth and their treasured wealth for many years. We believe that traditional estate planning has been failing American families. Traditional “bare bones” estate plans have only focused on distributing financial wealth and have done little to secure the future families intend when planning for future generations.
We have seen many families lose financial assets after the first generation through traditional estate planning means. The loss of family legacies and history is even more devastating.
There is a better alternative! Legacy Wealth Planning helps you examine not only your financial and non-financial goals and concerns but it also focuses on the values and legacy you wish to leave behind. With a customized Legacy Wealth Plan, you can minimize the emotional impact on your family, retain valuable assets and ensure that your legacy lives on through those you love and your future generations.
In our estate and legacy planning meetings, we take a deeper look at the real-life issues facing families today…
Take a moment to stop and think about what you really want to pass down to future generations. The odds are good that it is not just tangible assets, but the intangible ideals, philosophies, and beliefs that make up your legacy that you hope to pass down. Legacy planning can help you do just that. Legacy planning is not something that takes the place of your existing estate plan. Instead, legacy planning takes over where your estate plan leaves off and focuses on things that are typically overlooked in traditional estate planning.
A traditional estate plan focuses on protecting, growing, and eventually distributing the tangible assets you acquire over the course of your lifetime. While traditional estate planning remains necessary, it does have its limitations. For example, your traditional estate plan can help you plan for the end of your life by creating a roadmap for distributing your material wealth after you are gone; however, there is no place in that plan to focus on the values, morals, faith, and beliefs that have guided you throughout your lifetime and helped you reach the material success you have achieved. As you undoubtedly know, those core values, investing philosophies, religious beliefs, and guiding principles are far more valuable to your beneficiaries than tangible assets are, which is why legacy planning is so important.
Legacy planning does not require a separate plan nor does it require you to abandon your current estate plan. Instead, legacy planning is accomplished by taking a holistic approach to your comprehensive plan that weaves your legacy into your existing plan. Think of it as creating a bigger, better, more inclusive version of your current estate plan. By doing so, the hope is that future generations will honor your legacy by adopting the same values and beliefs that guided you throughout your lifetime.
Legacy planning begins by asking the question “What is the legacy you wish to leave behind?” How can your legacy shape your children, grandchildren, and even great-grandchildren? What are the principles, values, philosophies, and beliefs you wish to impart on future generations? For some people, their faith comes first. Others place a great deal of importance on education, family values, or philanthropy. Maybe you have an investing philosophy that has worked extremely well for you that you wish to pass on to loved ones. Your legacy is yours to create and pass down by incorporating modern and innovative legacy planning tools and strategies into your overall estate plan.
Because the legacy you wish to pass on is highly unique and personal, the legacy plan you create will also be unlike any other legacy plan. There are, however, some common tools and strategies used to interweave your legacy plan into your estate plan. For example, if you have a strong belief in the importance of education, you might establish a trust that can only be used to pay for tuition or expenses related to higher education. If philanthropy is part of your daily life, you could create a family foundation that will carry on your charitable work after you are gone. Drafting a Letter of Instructions that discusses your values, philosophies, and beliefs is also a straightforward and simple way to incorporate legacy planning in your estate plan.
Your legacy plan reflects what truly matters to you and what you hope to pass down to future generations. The legacy planning attorneys at Anderson, Dorn & Rader, Ltd. are committed to ensuring that your legacy shines through in your comprehensive estate plan. If you are ready to get started with your Reno, Nevada legacy plan, contact us today by using our online contact form or by calling (775) 823-9455.
There is a more complete form of estate planning called legacy planning that you may want to consider. Your legacy plan could contain some financial elements, but you can also include some things that money cannot buy that are very valuable as well. Let’s look at some of the components that could be included in your legacy plan.
We are going to primarily focus on possibilities that have nothing to do with money, but we should discuss the value of wealth preservation for high net worth individuals. There is a federal estate tax that can seriously impact your legacy, because it carries a 40 percent maximum rate.
The reason why this tax is only relevant for people that have accumulated a significant store of wealth is because there is an estate tax exclusion or credit that is relatively high. At the time of this writing late in 2019, the exclusion is $11.4 million. We are mentioning the date because there are typically adjustments at the beginning of every year to account for inflation.
There are a number of different ways to arrange for tax efficient asset transfers if your estate is going to be subject to taxation. The ideal course of action will depend upon the circumstances, but this being stated, there is a commonly utilized type of trust that can optimize your legacy.
This vehicle is the generation-skipping trust. As the name indicates, you would name your grandchildren as the beneficiaries rather than your children. Throughout the life of your children, they would be able to benefit from assets that are contained within the trust and receive distributions from the earnings.
After their passing, your grandchildren would inherit the assets. Yes, the direct transfers would be subject to the estate tax, but one round of taxation would be avoided.
The heirlooms that you have in your possession could simply be sold by your trustee or executor after your passing, and the proceeds could be distributed to the inheritors. This being stated, the objects that have been in your family for generations have value that exceeds mere dollars and cents.
You could inventory all of the heirlooms that you have acquired over the years and examine your inheritance list. Ultimately, you can get the right meaningful item or items into the hands of each respective family member. In fact, you can start doing this with some items while you are still alive.
When you are devising your legacy plan, you may want to consider the inclusion of your personal memoirs. It can be rewarding and cathartic to reminisce and share your memories in writing so that your loved ones can gain a better understanding of your formative experiences.
An explanation of the family history that you remember could be contained within your memoirs, or you could choose to have a document that is strictly devoted to your lineage. Many people start to get interested in their family tree at some point in time, and you can be of great assistance if you share what you know about your family’s roots.
There is another document that has nothing to do with money that can be a powerful addition to your legacy plan. Ethical wills stem from the Judaic tradition, and they go back to biblical times. With an ethical will, you record your moral and spiritual values so that your loved ones will be able to gain access to valuable guidance during challenging times.
We have shared a little bit of food for thought here, and there are some other legacy planning possibilities that we will look at in a future post. This blog has a lot of information, and we go the extra mile to provide help in another way.
Our firm offers free Webinars, and there are a number of sessions being held in the near future. To get all the details, visit our Webinar schedule page.
