A recent article in the New York Post about brothers battling over a painting from their uncle’s estate serves as a reminder of the importance of designating a destination for your personal property, either through a will or by gifting while you are still alive.

The brotherly brouhaha came about after noted Manhattan interior designer David Barrett died and left his two nephews – Richard and Alan Barrett -- “equal shares” in his $5.6 million estate.   The estate included a $45,000 piece of art that the brothers flipped a coin over to determine who would take home the painting. 

Richard lost the coin flip – and then flipped out, filing a lawsuit to get ownership of the painting, which held up payment to the two estate executors and his brother. 

The lesson here is obvious:  simply splitting an estate without detailed bequests can, and often does, lead to estate litigation. 

The better solution is also a simple one:  take a complete inventory of your personal property, and then designate a recipient for each asset. 

Make these designations via a valid will, or even give them away while you are still living so there is no question as to who you intend to inherit your prized possessions.  

You can also leave a written memo identifying which items should go to which recipients, just make sure your will makes reference to the memo to make sure it works.

Alternatively, consider taking pictures of each item of personal property and writing the name of designees to receive each item on the back of the image.  Again, reference the images in your will.

And remember, if you are a parent, your children may be what you value most. You can protect them by putting in place a comprehensive Kids Protection Plan to provide for their long-term and short-term care and by establishing a trust to fund their care if you are no longer available to provide for them.  While you don’t “own” your children, of course, you do owe them the duty of ensuring their care is handled well if anything happens to you.

If you would like more information about a Kids Protection Plan, providing for your prized personal possessions or creating or updating your estate plan, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

Estate planning is not a “set it and forget it” kind of thing. Your life changes, your assets change, the laws change -- and if your plan doesn’t change, your family gets caught holding the bag. The people you love most end up bearing the brunt of your failure to act.

Conducting a proper review of your estate plan will help identify the potential need to update your plan because of:

Life transitions:  Have any babies been born, loved ones died, people gotten divorced or married?   If so, you need to revisit your plan.

Changes in the law:  Changes in federal and state tax laws may require updates to your healthcare and financial powers of attorney. State regulations can also be revised to open up new wealth planning strategies that should be a part of your estate plan.

Changes in assets:  Has your net worth gone up or down?  Have you invested in any new assets, such as businesses,  opened new bank accounts, retirement accounts, insurance policies, real estate or anything similar?  If so, your plan needs to be revisited.  And the spreadsheet of assets you have for your family (you DO have one, right?) needs updating.

Funding of assets and beneficiary designations:  One of the most common mistakes people make is not properly completing the transfer of assets into a trust within their estate plan.  Another common error is having beneficiary designations that are inconsistent with the distribution language in the estate plan.  We recommend a review of those matters at least annually.

If you do not review your plan and update it regularly, your family will have to deal with the consequences.

If you would like more information about creating or updating your estate plan, call our office today to schedule a time for us to sit down and talk. 

Oscar-winning actor Philip Seymour Hoffman’s will has been filed for probate and provides a cautionary tale when it comes to estate planning mistakes. 

Here are four things he could have done to correct them:

Create a Revocable Living Trust.  Hoffman was a public figure who valued his privacy.  Yet by creating a will instead of a revocable living trust, he let the world in on his private life.  We all know that his son will inherit everything at 30 and we’ll also know the total size of his estate when it’s inventoried and filed with the Court, as it must be.  A will is public record, so every detail is available to anyone interested enough to look it up.  A revocable living trust would have allowed him to keep his private wishes private.

Update your plan.  Hoffman created his will in 2004 and never updated it, so his two youngest daughters are not mentioned or provided for in the will.  His estate has been valued at $35 million, and his executor is his long-time companion who is also the mother of their three children.  After born children are provided for by law, but Hoffman lost out on the opportunity to specifically direct their interests.

Cover your assets.  While Hoffman did create a trust for his son Cooper, naming Cooper’s mother as sole trustee, that trust will dissolve once Cooper turns 30.  And all assets distribute to Cooper outright at that time. Instead, Hoffman could have created a Lifetime Asset Protection Trust that would have kept Cooper’s inheritance safe from divorce, creditors, lawsuits and bankruptcy forever PLUS provided incentive to Cooper to grow the assets of the trust rather than squander them. 

Use tax-saving strategies in your estate plan.  Since Hoffman was not married to his long-time companion, there will be a monster sized estate tax bill to pay, both state and federal.  The use of other tax-advantaged estate planning strategies like an Irrevocable Life Insurance Trust (ILIT) would have preserved assets and resulted in more money to Hoffman’s family and less to the US Government.

To put the proper protections in place for your family, contact our office to schedule a time for us to sit down and talk.  We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article. 

With just over 50,000 residents, La Crosse is a lot like other small American towns – but there is one thing that makes La Crosse stand out:  96% of La Crosse residents who have died have had an advance medical directive in place.  Nationally, the percentage of Americans with an advance directive stands at about 30%. 

Actually, there are two things that make La Crosse stand out:  the town also has lower healthcare costs than any other place in the U.S.  And these two things – a high incidence of residents with advance directives and low healthcare costs -- are inextricably linked.

According to a recent NPR story, all this came about because of one man:  Dr. Bud Hammes, Medical Humanities Director at Gundersen Hospital in La Crosse.  Dr.Hammes often found himself sitting with families of terminally ill patients, trying to figure out what to do next.  He said the conversations were excruciating: “Did mom ever say anything to you?” “Do you know what dad wants?”  He said that the moral distress of the families was tangible. 

Dr. Hammes knew that this could be avoided, since most patients were usually sick for years.  So he started training nurses to ask patients if they wanted to sign an advance directive and over the years planning for death has become a way of life in La Crosse.

And the lower healthcare costs?  Dr. Hammes said that the reduction in spending was an accident, a byproduct of letting people make their own choices.  He said that when you let patients choose and direct their care, they often make a much less expensive choice. 

You can listen to the entire NPR story here:

NPR: Living Wills are the Talk of The Town in La Crosse, Wis.

Making end of life plans is one of the most comforting things you can do for your loved ones.  To put the proper protections in place for your family, contact our office to schedule a time for us to sit down and talk.  We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.