Estate Planning Lawyer

How to Address the Business Side of a Second Marriage

before your wedding celebration, consider these steps

A second (or third) marriage comes with certain legal and financial issues that are best dealt with before you walk down the aisle.

26201363701_de6af9d0ed_oA new marriage feels like a fresh start and a chance to move forward in life.  However, before your wedding celebration, consider these steps recommended in Nasdaq’srecent article, “Getting Remarried? 5 Financial Steps to Take Before Tying the Knot (Again).”

Create a consolidated net worth statement. One fundamental mistake many couples make is failing to look at their combined net worth, until they start talking about how they will pay for their wedding or another big-ticket item. Those who remarry frequently have more complex financial responsibilities, such as child support, liquid and illiquid investment assets, as well as estate planning and tax-planning strategies. The best course is to be upfront from the start to avoid damaging your relationship in the long run. Take time to review your individual financial situations, including liabilities, before you create a consolidated statement of net worth.

Sign a pre or postnuptial agreement. This can be uncomfortable but can be valuable for both parties, if there’s a divorce. A pre or postnuptial agreement is particularly important,  since it's the only way to legally claim specific assets within a marriage. In addition, a prenuptial agreement may ensure that any children within the marriage are financially protected, in the event one spouse dies. It’s also important to remember, even if you're recently married and don't have a formal prenuptial agreement, state law will often have one for you.

Think about all of your kids. Some spouses who were married previously may bring children into their new relationship. This creates many financial issues. Determine as a couple how you’ll financially address major expenses, like health care, child care, and tuition. When you've decided, discuss your plan of action with an attorney to be sure you're considering all potential options and their long-term implications.

Update your beneficiary designations. This is a common error. Assuming you want to name your new spouse as a beneficiary, you should review all your accounts and update the documents.

Review and update your estate plan. This step often gets forgotten in the rush of planning the ceremony, reception and honeymoon. You’ll both need to meet with an experienced estate planning attorney to review your individual wills from the past and prepare new wills, powers of attorney and health care directives to reflect your new status.

Reference: Nasdaq(April 20, 2018) “Getting Remarried? 5 Financial Steps to Take Before Tying the Knot (Again)”

What If I Don’t Want to Give My Spouse Everything in my Estate?

There is no legal requirement that spouses must leave all of their assets to each other when they die

This is question often goes unasked, but the harsh truth is, not everyone wants to leave their spouse with all of their worldly goods.

Irish-handsThere is no legal requirement that spouses must leave all of their assets to each other when they die, as discussed in a recent article from nj.com, “Do I have to leave any money to my spouse? Or can I give it all away?” However, there are laws in some states, including Florida, about what the surviving spouse is entitled to.

Depending on state law, the surviving spouse may be entitled to an "elective share" of the deceased spouse's estate, even if the surviving spouse is disinherited under the deceased spouse's will.  In Florida, the elective share is 50%.

The surviving spouse usually can’t claim an elective share, if the spouses were living separate and apart in different residences, or had stopped living together as a married couple, or had a valid prenuptial or post-nuptial agreement that waived the elective share. In Florida, the elective share is equal to one-half of the "augmented estate.”

The augmented estate is the deceased spouse's estate, less funeral and estate administration expenses and enforceable claims. Certain transfers of property for less than fair market value made by the deceased spouse are added back to this amount. The surviving spouse's assets are then deducted from the elective share.

A notice of elective share must be filed within six months of the appointment of an executor in the county where the appointment was made. That’s a pretty short time.

Because of the relatively short time in which to file the elective share notice, an experienced estate planning attorney should be engaged immediately after the deceased spouse's death, to see if the surviving spouse is entitled to an elective share.

In this situation, the responsibility is on the surviving spouse to file an elective share notice. In some states, like Florida, if the surviving spouse fails to file an elective share action within six months from the time of probate, they lose the right to that share.

Reference: nj.com(April 25, 2018)“Do I have to leave any money to my spouse? Or can I give it all away?”

Selecting an Executor: Not Always Easy

If there are no family members or friends with the necessary skills, your best option may be…

Don’t delay finalizing your estate plan, because determining who to name as you executor is difficult. Here’s some help to figure out how to make this important decision.

Th (2)If there are no family members or friends with the necessary skills, your best option may be to name your attorney as the third-party executor of your will. A useful article from nj.com, “Who should be executor of your will?”explains how this works.

An executor is a person you name in your will or who is appointed by the court and is given the legal responsibility to address a deceased person's remaining financial obligations. An executor is responsible for paying debts and creditors, filing tax returns, paying taxes, and distributing the estate's assets, pursuant to the deceased person's wishes as stated in the will.

The individual named as an executor in a will can refuse to accept this task. A person who originally accepted the role as executor may resign at any point in time. Therefore, it’s a good idea to name alternative executors. If you don’t, a judge will appoint a replacement executor, if your original selection says no for any reason.

Most executors typically perform their duties without payment, but they are entitled to some renumeration. The reason that most executors don't ask for compensation, is because most executors are close family members and perform their duties out of respect for their deceased loved one. The amount an executor gets paid, is usually set by state law and what a probate court decides is reasonable under the circumstances.

For larger estates, it may be wise to select a professional, such as an attorney, who is familiar with the duties and obligations of serving as an executor. This can be extremely useful, when the deceased was the owner of a business and the estate may be complicated.

Executors will frequently engage attorneys to assist them. For example, in New Jersey, an attorney may serve and get paid as an executor and may be paid an additional fee for legal work performed by that attorney.

New Jersey law says that executors can receive 5% on the first $200,000 of the trust principal, 3.5% on the excess over $200,000 up to $1 million, and 2% on the excess over $1 million.

The executor is also entitled to receive six percent on all income received by the executor. While family members often waive their rights to take statutory commissions, they are within their rights to do so.

Reference: nj.com(April 16, 2018) “Who should be executor of your will?”

Are You Sure You’re Ready for Retirement?

Use this checklist to be certain that you and your finances are properly prepared for retirement.

Use this checklist to be certain that you and your finances are properly prepared for retirement.

MP900442389According to The Center for Retirement Research at Boston College, 20% of Americans are wrong about when they’ll be able to retire. That also means that 80% have it right—which group do you belong to? To make sure you are in the right group, take a look at this checklist from The Street, “8 Essential Steps to Achieve Retirement Success.”

Determine and Test Your Retirement Budget. Do a dry run of your future retirement lifestyle for six months before your intended retirement date. This will help you get a better understanding of how you can follow your retirement budget.

Get Rid of Debt and Downsize. If you begin your retirement with large amounts of debt, it can be trouble. Before you stop working, pay off any high interest debt to avoid having to make these payments in retirement. Consider where you’ll live in retirement and the money you can save by downsizing.

Look through Your Portfolio. You should balance growing investments, preserving capital and generating income. This prioritization will change over time, but your portfolio should be able to handle both your current and future financial needs.

Talk About Social Security with Your Spouse. To get the biggest payout of your Social Security benefits, you need to have a strategy in place. Your monthly benefit will differ significantly, based on the age you start receiving benefits. This will also impact the amount your surviving spouse may receive. Speak with your spouse about who will file for benefits and when. Don't be afraid to get a professional opinion, if this is overwhelming.

Review Your Estate Plan. Before you start your retirement, make sure that you have drafted your will and powers of attorney (POA). Talk to an experienced estate planning attorney.

Talk to Your Kids. If your adult children are still depending on you financially, begin a dialog to make them more independent. Even though it will be tough, it’s critical that they understand how your estate plan will affect them in the future.

Let Go of the Emotions. There can be mixed feelings about retirement. Therefore, it is very important   that you and your spouse talk about how you’ll spend your free time and prepare for the changes in your routines.  You should also agree on the other aspects of preparing for retirement, like determining your budget and lifestyle choices.

Remember the big picture. Planning for retirement is a complicated process, bringing together legal, financial and family matters. You have to address the details, but keep your eyes on the prize: an enjoyable, stress-free retirement. Review the checklist periodically to see how you are doing.

Reference: The Street (April 12, 2018) “8 Essential Steps to Achieve Retirement Success”

Tom Benson Excludes Daughter and Grandchildren from his Will

The last will of multi-millionaire Tom Benson, who owned several professional sports teams and other businesses, did not include his daughter and her children

Before he died, the owner of the New Orleans Saints and Pelicans gave millions of dollars of property to his daughter and her children, but they were not included in his last will and testament.

Tom-BensonThe last will of multi-millionaire Tom Benson, who owned several professional sports teams and other businesses, did not include his daughter and her children, according to an article from KPVI,“Though excluded from his will, Tom Benson's daughter and grandchildren received much from family patriarch.”

Following Benson's death, court records indicate that his third wife Gayle became the sole beneficiary of an estate controlling New Orleans' NFL and NBA franchises, as well as the Dixie Brewing Co. There were other valuable businesses or properties in the estate: three car dealerships, the site of Benson Tower and Champions Square, a $3.6 million Uptown mansion, a racing stable and a parking lot used by fans attending Saints or Pelicans games.

As the will reads, daughter Renee Benson, granddaughter Rita LeBlanc, and grandson Ryan LeBlanc received nothing further. They were parties in a complex, two-year court battle that began in 2015 after a falling out with Benson. The three were left with control of three car dealerships, bank branches and a hunting ranch in and around San Antonio.

Louisiana law allows relatives up to five years to decide whether they want to challenge the validity of a will. The allegations are typically that the deceased was either mentally incapacitated or subject to undue influence in making the will.

 However, the estate planning attorney who helped Benson prepare his will, Paul Cordes Jr., said he’s confident the document would survive a challenge. Benson’s will was drafted only a few weeks after a New Orleans judge found Benson was mentally fit enough to handle his own affairs, which Renee and her children had denied in a lawsuit filed in 2015.

Although Gayle is the sole beneficiary of her late husband's estate, Saints and Pelicans President Dennis Lauscha is the administrator. All of Benson's property was placed in a trust, the governing terms of which haven't been made public.

When Gayle passes away—she’s now 71—it is likely that there will be trust rules that will direct the line of succession. Gayle has no children of her own. But we won’t know what those rules are unless very specific circumstances occur. Sounds like Benson did some good estate planning.

Reference: KPVI (March 19, 2018) “Though excluded from his will, Tom Benson's daughter and grandchildren received much from family patriarch”

Insurance Agent Ordered to Give Back $1 Million from Client Policies

An administrative law judge said that Blanche Berenzweig should return the $1 million she collected from a deceased client’s estate.

An administrative law judge said that Blanche Berenzweig should return the $1 million she collected from a deceased client’s estate. The heirs of a reclusive man have objected to the will, claiming that she pressured their uncle.

Claire-anderson-60670This fall, a trial will be held to determine who LeRoy Ern’s real heirs are, as ordered by Milwaukee County Circuit Judge Marshall Murray. With an estate worth $1.6 million, the reclusive man, who died at 92 of advanced dementia, left his entire estate to a retired insurance agent. His will was drafted by an attorney that shared an office with the insurance agent.

The Milwaukee Journal Sentinel article, “Insurance agent should give up $1 million received from client's policies, judge recommends,” reports that 11 of Ern's 12 nieces and nephews objected to the will that was drafted in 2009. They said Berenzweig improperly pressured their reclusive uncle.

Ern also gave her power of attorney over his financial and health affairs, if he became incapacitated.

Rachel Pings, an administrative law judge, wrote a proposed order that was filed in the Circuit Court probate case. She says Berenzweig put herself in a position to entirely manage his money and exploited Ern's trust and isolation by knowingly being named as the beneficiary of his annuities, when she had no insurable interest in his life.

"She profited illegally by more than $1 million," Pings wrote.

The order now goes to state Insurance Commissioner who will decide whether to uphold the recommendations that Berenzweig return the annuity proceeds, permanently revoke her insurance license and fine her $3,000. The annuity proceeds are frozen.

Pings' decision says the fact that Berenzweig served as Ern's agent, beneficiary, and power of attorney posed obvious conflicts.

Ern was never close to his nieces and nephews. The relationships grew more distant as his siblings died. He met Berenzweig in 1993, when she helped him purchase an annuity. They became reacquainted in 2008, when Ern was having a problem with that policy.

A friendship developed, and Berenzweig said she vehemently objected to Ern making her the beneficiary of the annuities and the estate but that her client was insistent.

Pings noted in her opinion that insurance regulators consider Berenzweig "an unethical insurance agent who took advantage of her position of trust with a lonely old man, so she could benefit from his sizable estate when he died."

Berenzweig’s attorney argues that she did not violate any laws or rules, but that some of the problems she is facing could have been avoided. The entire will, which named Berenzweig the sole beneficiary, is being challenged.

Reference: The Milwaukee Journal Sentinel (March 12, 2018) “Insurance agent should give up $1 million received from client's policies, judge recommends”

Does Your Estate Plan Match Your Life Right Now?

If you love your family, you’ll keep them in mind when considering whether to make an appointment to update your estate

Remember to update your estate plan, especially if your life includes events like new kids, a new marriage or the death of a loved one.

Bigstock-Extended-Family-Outside-Modern-13915094If you love your family, you’ll keep them in mind when considering whether to make an appointment to update your estate, as you go through the inevitable changes of life. Not doing so can create financial and emotional burdens. That’s probably not how you want to be remembered.

According to a recent Newsday article, “Make sure your estate plan keeps up with life changes, experts say,” estate planning may seem overwhelming and depressing because it deals with issues of aging.  Some people believe that estate planning is just for the very rich.

That’s not right. Estate planning is for everybody. Make a plan to do it now, in order to avoid consequential fumbles.

Let’s look at what you need to do.

Estate planning is a set of legal documents that state who will receive your assets and property when you pass away.  It also specifies who you want to make medical decisions, and who should make financial decisions, if you are unable to do so yourself.

This should make everything easier for your heirs at this stressful time, when they most need it.

Remember that estate planning isn’t a one-and-done proposition. It’s wonderful that you finally got your will finished and signed, and you have your medical directives in place along with a designated individual to have your authority via power of attorney.

However, that’s not the end of it. Your estate planning documents must keep pace with change.

It’s critical that you update the contingent (secondary) beneficiaries on life insurance policies after the first spouse dies.

The birth or adoption of a child and divorce are similarly important life events that will require you to review and update your estate planning documents.

Don’t assume that establishing joint tenancy (sharing ownership in personal property, like your family home) or joint ownership over financial accounts is enough to protect your assets.

Finally, be certain to work with an experienced estate planning attorney who has the insights and legal knowledge to create a plan that aligns with your goals. An online will has the potential to create more problems than it solves. You might save some money, only to cost your heirs thousands of dollars to undo the damage.

Reference: Newsday (March 4, 2018) “Make sure your estate plan keeps up with life changes, experts say”

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