The Living Trust book

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The Living Trust book, by Henry Abts, III
"The Bible on How to Avoid Probate"
Over 1 million copies sold

The Living Trust book was written by Henry Abts III, founder of The Estate Plan. The Living Trust did not just materialize overnight. The seeds germinated for many years, he was influenced by situations that he encountered through personal experiences as well as a host of situations specific to his clients. Meeting with thousands of clients gave Henry the opportunity to address their technical questions in terms they could understand. When the clients asked for written information to forward to their parents in Florida, or to their children in New York, he began writing his experiences down. As the years passed, many of Henry’s clients, and eventually a publishing agent, asked him to write a book about the Living Trust in layperson’s terms. They felt he had a way of explaining complex concepts in simple and understandable terms. The Living Trust took four years of writing and a year of editing and was first published in June 1989. The book immediately became a nationwide success. It was updated in 1993, 1997, and in 2002, and more than one million copies have been sold.

The Living Trust : The Failproof Way to Pass Along Your Estate to Your Heirs

• The Living Trust makes the old-fashioned will obsolete
• Includes information on the estate tax, the gift, and the generation-skipping tax
• Eliminates estate-devouring probate charges and attorneys' fees
• Guarantees a timely distribution of funds to your heirs
• Assures that no one may contest or overturn your wishes regarding disposition of your estate
• Shows how to protect your business, savings, and retirement from frivolous lawsuits
• Legally valid in all fifty states

A Living Trust is a simple, inexpensive legal alternative that eliminates the costs and delays of probate and ensures that your loved ones will receive their inheritance promptly and exactly as you intended. The Living Trust- the bible on how to avoid probate- will show you how to take full advantage of this critical estate planning tool. The updated edition of The Living Trust includes the latest information on trust formations, tax changes, distribution rules, and more. It also offers:

• Insight into abuses within the probate system
• Advice on how to protect your business, savings, and retirement funds from frivolous lawsuits.
• The effects of the Economic Growth and Tax Reconciliation Act of 2001 on estate tax, gift tax, the generation-skipping tax, and stepped-up evaluation.

Sample and ancillary documents, including estate preservation and tax-saving documents, a living will, and costs of a Living Trust, all updated to reflect the latest tax changes and Living Trust requirements.

You may think your heirs have been well provided for, but did you know that:

• Your loved ones may have to wait more than two years before receiving a penny from your estate- even though you left a legally valid will?
• Costs of probating your will may eat up more than 10 percent of your estate- money your heirs will never receive?
• The specific instructions of your bequest may be contested or changed completely- even though clearly spelled out in your will?
• A will cannot help you in life. If you become incapacitated or your judgment comes into question, it becomes a matter for the courts to decide and is a very public process.

OUR GIFT TO YOU

View a portion of the book by clicking on the links below.

Chapter 1 - Lest We Forget

Chapter 2 - The Agony Of Probate

Appendix A

~ "The Living Trust is unquestionably the layman's most nearly complete source on living trusts...Recommended reading for anyone who wants to maximize his net estate left to heirs, speed asset distribution after death, avoid will challenges, minimize estate costs, and maintain privacy." -Robert Bruss, Esq., and nationally syndicated real estate columnist, Chicago Tribune

Click Below to Get Your Copy Now! 

California Passes New Law SB 1170 & SB 1184

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California lawmakers passed a bill effective January 1, 2013 strengthening senior protection that affects insurance, trust and veterans planners.

The law states that it is “unlawful for any insurance agent who is not licensed as an attorney to deliver to a person who is 65 years of age or older, a living trust or other legal document, other than an insurance contract or other insurance product document, if a purpose of the delivery is to sell an insurance product.”  This law is aimed at the “trust mills” that use this model in order to “sell” a client an annuity after they deliver a trust.

The law also updates the disclosure notification process to a senior (65 or older) if they are coming to their home, veterans advertising rules, and advertising rules for lead generation and notification.

Several of our California attorneys have reviewed the new laws, and have said that with proper notification and procedures that align with the law, and if our advisors and attorneys follow the proper The Estate Plan procedure, we will be compliant with the new requirements.

Review of the law and a disclosure notice:

CA Law Changes, Eff. 1-1-2013

SEC. 2.  Section 785.4 is added to the Insurance Code, to read:

785.4.  (a) It shall be unlawful for any insurance agent who is not licensed as an attorney to deliver to a person who is 65 years of age or older, a living trust or other legal document, other than an insurance contract or other insurance product document, if a purpose of the delivery is to sell an insurance product.   (b) It shall be unlawful for any insurance agent who is licensed as an attorney to deliver to a person who is 65 years of age or older, a living trust or other legal document, other than an insurance contract or other insurance product document, unless the insurance agent complies with Section 6175.3 of the Business and Professions Code.

SEC. 4.  Section 789.10 of the Insurance Code is amended to read:

789.10.  (a) This section applies to the sale, offering for sale, or generation of leads for the sale of life insurance, including annuities, to senior insureds or prospective insureds by any person.

(b) A person who meets with a senior in the senior's home is required to deliver a notice in writing to the senior no less than 24 hours and no more than 14 days prior to that individual's initial meeting in the senior's home. If the senior has an existing insurance relationship with an agent and requests a meeting with the agent in the senior's home the same day, a notice shall be delivered to the senior prior to the meeting. The notice shall be a stand-alone document, with the appropriate information inserted and without any attachments. It shall be written in 16-point bold type and include all of the following, but no other, information:

(1) The agent's full name as it appears on his or her California insurance license.    (2) The agent's license number.    (3) The agent's mailing address and telephone number listed on his or her California insurance license.    (4) The following disclosure:    (A) "I am a licensed insurance agent. My purpose for coming to your home is to sell, discuss, and/or deliver one of the following indicate all that apply]:    ( ) Life insurance, including annuities.    ( ) Other insurance products specify]: _________________.    (B) You have the right to have other persons present at the meeting, including family members, financial advisors, or attorneys.    (C) You have the right to end the meeting at any time.    (D) You have the right to contact the Department of Insurance for information, or to file a complaint. The notice shall include the consumer assistance telephone numbers at the  department]    (E) The following individuals will be coming to your home: list all attendees, and insurance license information, if applicable]"

(c) Upon contacting the senior in the senior's home, the person shall, before making any statement other than a greeting, or asking the senior any other questions, state that the purpose of the contact is to talk about insurance, or to gather information for a followup visit to sell insurance, if that is the case, and state all of the following information:    (1) The name and titles of all persons arriving at the senior's home.    (2) The name of the insurer represented by the person, if known.    (d) Each person attending a meeting with a senior shall provide the senior with a business card or other written identification stating the person's name, business address, telephone number, and any insurance license number.    (e) The persons attending a meeting with a senior shall end all discussions and leave the home of the senior immediately after being asked to leave by the senior.    (f) A person may not solicit a sale or order for the sale of an annuity or life insurance policy at the residence of a senior, in person or by telephone, by using any plan, scheme, or ruse that misrepresents the true status or mission of the contact.

CALIFORNIA DISCLOSURE, SB 1170 1-1-2013 (send no earlier than 14 days prior to meeting)

(1) My name as it appears on my insurance license: ______________ (2) My license number: ______________________________________ (3) My mailing address and telephone number listed on my California insurance license:__________________________________ __________________________________________________________ I am a licensed insurance agent. My purpose for coming to your home is to sell, discuss, and/or deliver one of the following indicate all that apply]:    ( ) Life insurance, including annuities.    ( ) Other insurance products [specify]: _______________________ (A) You have the right to have other persons present at the meeting, including family members, financial advisors, or attorneys. (B) You have the right to end the meeting at any time. Should you wish to ask me to leave, I will do so immediately. (C) You have the right to contact the Department of Insurance for information, or to file a complaint. The consumer assistance telephone number at the department is: ________________________ (D) The following individuals will be coming to your home:

__________________________________________________________

__________________________________________________________ The purpose of the contact is to talk about insurance, or to gather information for a follow up visit to sell insurance. (1) The name and titles of all persons arriving at the senior's home_____________________________________________________ (2) Name of the insurer:_____________________________________

Each person attending this meeting shall provide you with a business card or other written identification stating the person's name, business address, telephone number, and any insurance license number.

 

 

Overview of Vermont Estate Tax Laws

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Understanding How Vermont Estate Taxes Affect an Estate
By Julie Garber, About.com Guide

If you live in Vermont, then you live in one of a handful of states that still collect a local death tax. The estates of Vermont residents, as well as the estates of nonresidents who own real estate and/or tangible personal property and/or income-producing property located in Vermont, are subject to a local death tax under the following guidelines.

NOTE: State and local laws change frequently and the following information may not reflect recent changes. For current tax or legal advice, please consult with an accountant or an attorney since the information contained in this article is not tax or legal advice and is not a substitute for tax or legal advice.

When is an estate subject to the Vermont estate tax?

If the decedent was a resident of Vermont at the time of death, the estate may be subject to the Vermont estate tax if the federal gross estate exceeds $2,750,000 on the date of death or if the estate is required to file a federal estate tax return, IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.

For nonresidents of Vermont, an estate may be subject to the Vermont estate tax if it includes Vermont sitused property (real estate, tangible personal property, and/or income-producing property sitused in Vermont) and the federal gross estate exceeds $2,750,000 on the date of death or if the estate is required to file a federal estate tax return.

Note: The Vermont estate tax exemption was increased to $2,750,000 on January 1, 2011. Prior to this date, the exemption was as follows:

2006 - 2010 = $2,000,000
2004 - 2005 = $1,500,000
2002 - 2003 = $1,000,000
2001 - 2002 = $675,000

What Vermont estate tax forms must be filed?

The personal representative or other fiduciary representing an estate that is subject to the Vermont estate tax must complete and file the Vermont Estate Tax Return, Form E-1.

Additional documents that must be filed with the Vermont Department of Taxes when a Vermont Estate Tax Return is required to filed are as follows:

If no federal estate tax is due and no federal estate tax return (IRS Form 706) is required to be filed, nonetheless the estate representative must complete and file a pro forma IRS Form 706, including all exhibits and appraisals, with the Vermont Estate Tax Return.

When federal estate tax is due and all assets are located in Vermont, the first page of IRS Form 706 must be included with the Vermont estate tax return.

When federal estate tax is due and some assets are located outside of Vermont, IRS Form 706 must be attached to the Vermont Estate Tax Return, but excluding exhibits and appraisals.

A duplicate of the Estate Tax Closing Letter issued by the IRS must be filed with the Vermont Department of Taxes.

Are transfers to a surviving spouse taxable?

Outright transfers to a surviving spouse are not taxable.

For married couples who have used AB Trust planning to reduce their federal estate tax bill, a Vermont death tax may be due on the B Trust after the first spouse's death due to the gap of $2,500,000 between the Vermont exemption of $2,750,000 and the 2013 federal exemption of $5,250,000. While some states allow a married decedent's estate to make an election to treat a trust of which the surviving spouse is the sole beneficiary as "qualified terminable interest property" ("QTIP" for short) for purposes of calculating the local estate tax, Vermont law does not specifically allow for this. However, one commentator on Vermont estate taxes has stated that "representatives of the Vermont Department of Taxes have stated informally that Vermont will recognize whole or partial QTIP elections for properly drafted trusts as long as the election is, or would be, binding for both federal and Vermont estate tax purposes." (See Planning for the Vermont Estate Tax for more about this issue.) Thus, married Vermont residents should consult with a Vermont estate planning attorney to determine if they can incorporate ABC Trust planning into their estate plans.

When are the Vermont estate tax return and tax payment due?

The Vermont Estate Tax Return, Form E-1, must be filed, and any estate tax due must be paid, within 9 months of the decedent's date of death. An extension of time to file the Vermont Estate Tax Return does not extend the time to pay, so an estimate of the estate tax to be due must be paid with the extension of time request. Where are the Vermont estate tax return filed and tax payment made?

Mail all required forms and any payment due to:

Vermont Department of Taxes
133 State Street
Montpelier, VT 05633-1401

What is the Vermont estate tax rate and how is the tax calculated?

Computing the Vermont estate tax is a convoluted process. According to Vermont estate planning attorney Richard W. Kozlowski, the Vermont estate tax is based on "a complicated and slightly regressive tax system, with marginal tax brackets that begin at 35% (for the first dollars in excess of $2.75 million) and then decrease to 9.6% for estates in excess of $3.4 million, and then rise again to a max rate of 16% for estates in the $10+ million range." (See ESTATE TAXATION - FEDERAL & VERMONT on Mr. Kozlowski's website for his overview of Vermont estate taxes.)

Page 4 of the current Vermont Estate Tax Return, Form E-1, contains "Computation Schedules" for calculating the Vermont estate tax bill for residents and nonresidents.

Where can I find additional information about Vermont estate taxes?

For more information about Vermont estate taxes, refer to the Vermont Department of Taxation's website: Vermont Estate Tax.

You may also call the Vermont Department of Taxation at (802) 828-6820.

Refer to Vermont estate planning attorney Richard W. Kozlowski's article, ESTATE TAXATION - FEDERAL & VERMONT, for an overview of the Vermont estate tax laws.

Does Vermont collect an inheritance tax?

Does Vermont collect a local inheritance tax, which is a tax assessed against the share received by each individual beneficiary of an estate as opposed to an estate tax, which is assessed against the entire estate? The answer to this question is No, Vermont does not collect a local inheritance tax.

Overview of Maryland Estate Tax Laws

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Understanding How Maryland Estate Taxes Affect an Estate
By Julie Garber, About.com Guide

If you live in Maryland, then you live in one of a handful of states that still collect a state estate tax. In addition, Maryland is one of six states that collects a state inheritance tax (New Jersey is the only other state that collects both an estate tax and an inheritance tax.)

The estates of Maryland residents, as well as the estates of nonresidents who own real estate, tangible personal property, and/or one or more business entities located in Maryland, are subject to a state estate tax under the following guidelines.

NOTE: State laws change frequently and the following information may not reflect recent changes. For current tax or legal advice, please consult with an accountant or an attorney since the information contained in this article is not tax or legal advice and is not a substitute for tax or legal advice.

When is an estate subject to the Maryland estate tax?

For Maryland residents, an estate may be subject to the Maryland estate tax if the federal gross estate, plus adjusted taxable gifts, plus property for which a Maryland qualified terminal interest property (QTIP) election was previously made on a Maryland estate tax return filed for the estate of the decedent's predeceased spouse, equals or exceeds $1,000,000.

For nonresidents of Maryland, an estate may be subject to the Maryland estate tax if it includes real estate or tangible personal property having a taxable situs within the state of Maryland and the value of the federal gross estate equals or exceeds $1,000,000 under the criteria set forth above.

What Maryland estate tax forms must be filed?

The estate representative of an estate that is subject to the Maryland estate tax must first complete a federal estate tax return, IRS Form 706, for the year of the decedent's death, even if the estate is not required to file a federal estate tax return. Once the federal return is completed, the estate representative can prepare the Maryland Estate Tax Return, Form MET-1.

Are transfers to a surviving spouse taxable?

Outright transfers to a surviving spouse are not taxable.

For married couples who have used AB Trust planning to reduce their federal estate tax bill, a Maryland estate tax may be due on the B Trust as a result of a gap between the Maryland exemption and the federal exemption. In 2013, that gap is $4,250,000. Nonetheless, a married decedent's estate can make a Maryland-only election to treat a trust of which the surviving spouse is the sole beneficiary as "qualified terminable interest property" ("QTIP Trust" for short) for purposes of calculating the Maryland estate tax. Thus, since there is a gap between the Maryland estate tax exemption and the federal exemption and a state-only QTIP election is allowed, married Maryland residents can defer payment of both Maryland and federal death taxes until after the death of the surviving spouse using ABC Trust planning.

When are the Maryland estate tax return and tax payment due?

The Maryland estate tax return must be filed, and any estate tax due must be paid, within nine months after the decedent's date of death.

An automatic six-month extension of time to file the Maryland estate tax return and related forms may be requested on Form MET-1E (or up to one year if the person required to file the return is located outside of the U.S.); however, this will not extend the time to pay the tax, and interest will accrue during the extension period. In addition, a penalty of up to 10% will be assessed if the estate tax bill is not paid by the estate tax return due date.

Where are the Maryland estate tax return filed and tax payment made?

For Maryland residents, the Maryland Estate Tax Return, Form MET-1, should be filed with the Register of Wills of the county where the decedent's probate estate is being administered or, if no probate estate is required, then in the county where the decedent resided at the time of death.

For nonresidents, file the Maryland Estate Tax Return, Form MET-1, with the Register of Wills of the county where the nonresident owned real estate or tangible personal property.

For links to all 24 Maryland Register of Wills websites, refer to the Office of the Register of Wills website.

Mail the estate tax payment directly to the Comptroller of Maryland on or before the due date of the Maryland estate tax return at the following address:

Comptroller of Maryland Estate Tax Section
P.O. Box 828
Annapolis, MD 21404-0828

What is the Maryland estate tax rate?

According to the Maryland Comptroller's website, there is no Maryland estate tax rate table. Instead, the Maryland estate tax tax is calculated using the maximum allowable credit for state death taxes under §2011 of the Internal Revenue Code, as computed for Maryland purposes, less any Maryland inheritance tax paid to the Register of Wills. For decedents dying after December 31, 2005, the tax cannot exceed 16% of the amount by which the decedent’s taxable estate exceeds $1,000,000. If the Maryland inheritance tax is equal to or exceeds the federal credit for state death taxes, no Maryland estate tax is due.

For an explanation and tips on how to calculate the Maryland estate tax, refer to following information listed on the Comptroller of Maryland's website: Maryland Estate Tax Calculation Method.

Where can I find additional information about Maryland estate taxes?

For more information about Maryland estate taxes, refer to the Comptroller of Maryland's website: Maryland Estate and Inheritance Tax.

Call the Maryland Comptroller's Office with your Maryland estate tax questions at 410-260-7850 from Central Maryland or 1-800 MD TAXES from elsewhere, Monday - Friday, 8:00 a.m. - 5:00 p.m. EDT.

You can also e-mail your Maryland estate tax questions as well as fiduciary tax questions to taxhelp@comp.state.md.us. How have the Maryland estate tax laws changed over the past few years?

On May 22, 2012, Maryland Governor Martin O'Malley signed the "Family Farm Preservation Act" into law. This legislation, which was passed by unanimous votes in both the House and Senate, reduces the Maryland estate tax rate assessed against Maryland farms valued over $5 million from 16% down to 5% when the property passes to someone who agrees to continue to use it for agricultural purposes. If the property is then taken out of agricultural use within 10 years of the owner's death, the estate tax will be recaptured. The law went into effect on July 1, 2012 and applies to deaths occurring after December 31, 2011.

 

After The Fiscal Cliff

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Fiscal CliffWhat has Changed in the Estate and Gift Tax Laws? By Geri McHam

Congress passed the American Taxpayer Relief Act of 2012’’ (“ATRA”) that made the federal estate tax exemption permanent on January 1, 2013.  In a last minute move before we went over the “fiscal cliff”, in an 11th hour tax law passed by the Senate on New Year’s Eve, and by the House of Representatives one day later, mostly what Congress did was to make permanent the system that has been in effect for the past two years.  I am just thankful that we now have permanence that has been missing for the last 12 years.

What’s most important to us as planners is how the “fiscal cliff” deal changes will affect our clients’ existing estate plans and whether any changes are necessary.

Most estate planning documents deal with non-tax issues, including the very valuable benefit of structuring assets to avoid the probate process at death and to provide creditor protection for beneficiaries.  The Power of Attorney, Conservator, and healthcare documents are all extremely important and necessary.  These documents are critical to avoid unnecessary court oversight and expense, delay, and intrusion.

What are the provisions of the ATRA that will affect my estate planning practice or clients?

Top gift, estate and GST tax rates are set at 40%. ATRA 2012 establishes the top gift, estate, and GST tax rates at 40% for gifts made and decedents dying in 2013 and thereafter. This top rate is higher than the 2012 rate of 35%, but lower than the 55% rate that would have come into effect on January 1 in the absence of legislation. This top rate will apply to transfers exceeding the exemption amounts.

Exemption amount:  Permanently set at $5,000,000 per client, indexed for an inflation adjustment beginning 2012 ($5.12 million in 2012).   The estate tax exclusion amount for deaths in 2013 will be $5.25 million.

Gift Tax Rate:  The estate and gift taxes will remain unified, so the $5 million exemption also applies for gift tax purposes, and will follow the estate tax rate.  The rate was permanently set to 40% of the amount over the exemption.  In addition, the annual gift exclusion amount was raised to $14,000 per person this year.

Generation Skipping Tax Rate:  The generation skipping tax exemption follows the estate tax rate.  The rate was permanently set to 40% of the amount over the exemption.

Portability made permanent:  Further, the deal continues the estate tax portability provisions that allow a surviving spouse to take advantage of his or her deceased spouse’s unused exemption amount. This provision allows a surviving spouse to avoid complicated estate planning by recognizing that gifts between spouses are typically tax free and allowing the exemption to be portable between both spouses.  In order to utilize this, a 706 tax return MUST be filed within 9 months, so in my opinion, portability is less than optimal in many cases.

Use of the A/B/Bypass Trust:  Some of the discussion since passing this legislation has focused on the use of A/B trust structure, and whether planning is better without the credit shelter trust.  I still am in favor of estate planning with an A/B/C trust, especially to preserve a decedent’s share in case of a remarriage of the survivor spouse, and also to allow the flexibility of state estate tax planning.  As long as the trust is flexible enough to allow the options of funding the various sub-trusts to the survivor spouse, which ours does, you still have the benefit of planning that gives the most flexibility to the survivor.  We will review the provisions in our trust as a precaution

Upside to IRA Planning in ATRA

Hidden in the law — along with the typical year-end riders attached to a last minute piece of legislation, including tax breaks for NASCAR and the alternative fuel industry — were a couple of tangible impacts to the retirement world, though one may offer just short-term benefits. First, it looks as though folks hoping to roll over their regular 401(k)s to Roth 401(k)s may get an opportunity for a long-term tax break — lord knows you’re going to need one, as your taxes really are going to go up.  A new provision in the package will allow 401(k), 403(b) and 457(b) participants to make the leap to a Roth 401(k) without waiting for the traditional qualifying events (retirement, reaching age 59 1/2 or changing jobs).  Why? Because doing so immediately sends that tax deferral — which you’ll have to pay up front — to Washington, rather than waiting until your far-off retirement day, and Washington wants your taxes. It’s a huge opportunity for regular folks to make that Roth conversion – provided they have the financial wherewithal to pay those taxes much sooner than later.

Potential future legislation. It is important to note that there may be a push for additional revenue-raising legislation as political debates continue. The current administration has expressed its desire to limit the advantages of GRATs, grantor trusts, GST-exempt dynasty trusts, and transfers in family entities that qualify for valuation discounts. Clients who might consider employing those techniques may wish to do so sooner rather than later.

Our History

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OUR HISTORY

In the beginning…

This company began as a corporation called The Estate Plan founded by Henry Abts, III. He came up with the idea to help others out of his own personal suffering through the unforeseen process of probate that his mother had to bear. It was such a traumatic experience that he figured there had to be an alternative, something that he and others could do to avoid it. During this time he was pursuing a career in financial and personal estate planning and discovered the Living Trust was the key to avoiding probate. The beginning of The Estate Plan thus was created, a business model that had two objectives; educate the public about alternatives to probate; and second, supply clients with the solution of a proper estate planning program. It then grew into creating a set of living trust documents designed to cover the majority of circumstances in the general public but with the ability to tailor to each person’s individual needs. These documents could be used by attorneys very easily in their practice by assessing the client’s needs and applying them to the ready-made living trust. It was a win-win with the attorneys providing a quality trust and Henry peace of mind that the people are being served well.

The Living Trust book was created

After he met with more than a thousand clients from coast to coast he decided to write a book. The Living Trust book was created in 1989 and has since sold over 1 million copies and is considered the “bible of the industry.” The Estate Plan was now the only nationwide Living Trust Company whose trust documents were valid in all 50 states and has produced over 60,000 trusts.

The Institute for Estate Preservation was formed

Approximately 10 years ago Henry decided he wanted to train those who used the Living Trust documents (attorneys) not only to create a consistency and understanding of the documents throughout the company but in his high quality standards and ethics.  What he created is still being practiced today, The Institute for Estate Preservation in both basic and advanced levels. These institutes are typically viewed as just another training institute by those who’ve never attended; however, they are quite the contrary. There is rarely someone who attends that says it was not helpful or that they did not learn something new. Both The Estate Plan staff and Henry himself taught at the Institutes, he was always very passionate about his idea of reaching out to everyone who would listen.

Transitioning into the digital age

Unfortunately, in July of 2010 Henry passed away in his sleep at his home in Incline Village, Lake Tahoe. Although Henry was in his 80′s he was still very passionate about “Taking the Message to All Who Will Listen” his infamous quote amongst his community. He left this for us to carry forward which we are excited to not only carry forward but expand in new and better ways.

We are now in a digital age where it’s essentially “out with the old and in with the new.” What used to work is now obsolete regarding so many aspects in this industry. We are working diligently to transition by first, creating this robust website which hosts a wealth of estate planning information, knowledge, tools and tips and second, re-writing our current proprietary software into a cloud solution allowing our estate planning back office document model to be accessible online as well as including all new features to satisfy the end user in a way never thought possible. We are certain with both in place; we will be well beyond all of our competitors and will have created an entirely new way of doing business in this industry.

 

Read This Column Before You Die

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The fear of death follows from the fear of life. A man who lives fully is prepared to die at any time. - Mark Twain

It can be both comforting and horrifying to think that our time on earth is a nano-blink of an eye, a sliver of time that passes slowly when tax forms are being prepared and quickly when the sun is shining.

Death is something we all try not to think about, yet it is our ultimate goal, the ending of every book, if life were an autobiography. We mostly shrug it off because, after all, we can’t avoid it.

But we can make the most of the inevitable. How? By planning ahead, not only for the sake of our families, but for ourselves. We’ve written before about the importance of making financial goals, but life goals are also essential. And, as with financial goals, you can’t meet them if you don’t have them.

The ultimate plan

Whether you’re getting on in age, have a terminal illness or are young and healthy, no one knows what will happen tomorrow, so prepare today. But what should your ultimate plan entail?

Make a "bucket list." The co-author of the book, "100 Things to Do Before You Die," died in an accident when he was 47. According to his writing partner, he had completed about half of his "to do" list when he died. Because he had a list and was determined to achieve his goals, he did many things he never would have done otherwise.

However, his co-author also noted that he traveled alone, so he could move through his list quicker. Sadly, the author missed an important point - it really isn’t about the list. Your list should be a guide to living life to the fullest. If you’re going through a list just to cross something off, why bother?

Whether you’re planning to go skydiving and want to visit the seven wonders of the world, like Jack Nicholson and Morgan Freeman did in "The Bucket List," or you have more modest goals, like learning a foreign language or cooking a gourmet meal, keep in mind that it’s important to savor the moment - and shouldn’t you be savoring the moment with a loved one or friend?

When you make out your bucket list, be certain that everything on it is something you can accomplish. Although you never know until you try, dating Angelina Jolie or winning an Olympic gold medal are about as realistic for most of us as winning the lottery. While it is important to believe in yourself, you need to know your limitations.

It’s also important to give your list some thought. Many of us don’t really know what we want. Sitting and planning out your life - and beyond - is not something you should do one day during your lunch break. Take your time and really think about what you want to do. Then develop a plan for achieving everything on your list.

Update your financial goals. Ideally, you could plan for retirement first and then plan for the next phase when you’re retired. But, since no one knows when the next phase will begin, you need to plan for it now.

What do you want to happen after you’re gone? Is there a charity you would like to help? Do you want to fund your grandchildren’s college education? Think beyond your retirement and write out your goals.

Plan your estate

Estate planning is not just for the very wealthy. It’s true that current law allows an exemption of assets worth up to $5 million from federal estate taxes, but in Massachusetts any estate with a value greater than $1 million is subject to estate taxes.

If you reside in Massachusetts and your estate exceeds $1 million in value, including the value of your home, your investment portfolio, your life insurance benefits and other assets, it will be subject to state taxation at a rate of up to 16 percent.

However, because Massachusetts has no gift tax, gifts can be made during your lifetime to reduce your taxable estate. It’s been said that death and taxes are the only certainties, but with careful planning, sometimes one of the two can be avoided.

Of course, there’s more to estate planning that reducing taxes. It’s also important to have a will, which determines how your property will be divided after your death. Without this essential legal document, your property may not be divided according to your intentions. Most likely, it will also become tied up in Probate Court and it may take years before your survivors have access to your assets.

Make certain you seek the assistance of an attorney with experience making out wills. Having a will that is not legally valid can be worse than having no will at all because it may be disputed. Also, be certain to update your will periodically.

Keep in mind that retirement accounts and life insurance policies are not covered by your will, as you designate beneficiaries when you sign a contract for these assets. Make certain that you have designated individuals you truly want to be your beneficiaries and you have not unintentionally excluded anyone, such as a child born after you initially designated your beneficiaries. Plan your legacy assets. Most people consider their financial assets in planning their estate. You also have accumulated many other assets during your lifetime. Some of the best assets are the memories of special events or family gatherings. Many of these are recorded photographically and able to be passed on to heirs.

However, the asset value of the wisdom garnered, the valuable experiences received, the life lessons learned, the appreciation of others that have helped you along the way are all assets available for sharing.

Similar to a will that administers your financial assets, you can prepare a separate letter, memoranda or formal ethical will to pass on to your family and others.

Get organized

Your death will likely be difficult on your family. You can ease the burden by planning your funeral and letting your wishes be known. Do you have a cemetery plot? Have you picked out a casket? Is there a charity to which you would like contributions sent?

If you take care of every detail, your children and your spouse won’t have to. Clean out your attic and your closet and get rid of unwanted items. Give away anything you won’t use. Go through your photos and organize them. Determine if you need to change their medium to an electronic format.

People often tell me that they do not want to be a burden to their children. It can be painful for your family to have to deal with these issues; dealing with them yourself will make it easier on them.

Also, be certain to choose an executor for your will. Talk to your executor and make certain that he or she has a true understanding of your wishes and will carry them out to the last detail. Many times writing a letter of instruction to your executor or trustee is helpful for those matters not easily handled by the formal document.

You may not care what happens after you die, but keep in mind that your decisions today will have an eternal impact and could affect how you are remembered.

Seek balance

Death and taxes may be inevitable, but the more time you spend preparing for either, the better the outcome is likely to be. If you were to die tomorrow, that would be tragic. The tragedy would be compounded, though, if your family had to deal with matters without knowing your wishes. Regardless, in the process of planning for the future, don’t forget to live for today. Carrying out your bucket list is more important - and more fun - than preparing it.

Ask yourself what you are doing today that you would change. Is your career fulfilling? Do you have a secret ambition, like writing a book or taking a special trip? Act on your passions and interests today, before it is too late. Plan for the future, but enjoy life today. Carpe diem!

Darrell J. Canby

Planning Matters: Even estates of rich and famous crash and burn

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If you are like most people, you have done no estate planning. If that is the case, you are in good (bad) company.

You would think lawyers -- trained legal professionals -- would have completed their own estate plan. Alas, lawyers are no different than anybody else and often fail to plan. One of the most famous and respected lawyers of all time, Abraham Lincoln, died without a will. I also have known a number of attorneys who died without even having the simplest of wills.

More often problems arise when lawyers, who are not estate planning specialists, attempt to do their own estate plans. These lawyers often believe they are qualified to prepare estate plans for themselves and their clients. I regularly review wills and trusts, powers of attorney and other estate planning documents that are drafted by lawyers who are not estate planning specialists.

These plans usually have unintended results.

There are health care powers of attorney that do not to have living will provisions, mental health care powers, Health Insurance Portability and Accountability Act access and releases or signed patient advocate acceptances.

It is not uncommon for trusts to have faulty tax provisions. I have seen wills, which are death instruments; contain health care powers, which can only be used during a lifetime.

I often see financial powers of attorney that do not allow for the gifting of assets to the family instead of spending it all down on nursing home care. Unfortunately, many times I only see the estate planning documents after the maker's incapacity or death when there is little that can be done to remedy the situation.

What do Pablo Picasso, Howard Hughes and Sonny Bono all have in common? None of them had a will.

Often the rich and famous do no planning or poor planning. However, with estates whose amounts end in lots of zeros, the unintended consequences have much more of a financial impact.

The rich and famous make the same mistakes as everybody else, only worse. The failure to plan or failure to plan properly has resulted in many their estates to be eaten up administration expenses, taxes and litigation costs.

One of the more well-known estates that had unintended results is the estate of Elvis Presley, the King of Rock 'n' Roll. Considering his stature in the entertainment world, Elvis left a relatively modest $10.2 million estate.

However, the settlement costs of his estate totaled nearly $7.4 million leaving only about $2.8 million to his heirs. About 73% of his estate was eaten up by the settlement costs.

The super-rich also are not immune from doing poor planning. Conrad Hilton of the Hilton Hotel chain left an estate of nearly $200 million. More than half of that was consumed in settlement costs.

Author and filmmaker Michael Crichton, best known as the author of "Jurassic Park" and creator of the TV series "ER," died unexpectedly when his wife was pregnant. He had not provided for his unborn child in his estate plan. This resulted in substantial legal fees for his widow in her quest to obtain a share of his estate for their child.

Andy Warhol on the other hand, did proper estate planning. This resulted in only a fraction of his estate being eaten up in settlement costs. Although his estate settlement costs were nearly as much as Elvis' at a reported $6.9 million, because his estate was nearly $300 million, only 2.3% of his estate was consumed by the settlement costs.

Because it looks like many celebrities' estate settlement costs have left their legacy as "not so rich and famous," don't take your cue from them.

Do proper planning with a legal specialist in estate planning. You wouldn't go to an oncologist to treat your diabetes any more than you should have a divorce or criminal lawyer prepare your estate plan.

The estate planning professional who prepares your estate plan should have a working knowledge of not only estate planning, but also federal and state tax laws and elder law. Without a working knowledge of all three of these areas, your estate plan could be missing some critical elements. So go forth and do proper estate planning today.

Matthew M. Wallace