- Monday, 02 April 2012 21:09
Beneficiaries of a large trust are unable to move the trust to a different trust company because the agreement they signed with the current trustee requires all 94 beneficiaries to consent to the change of trustee. The beneficiaries are displeased because the bank has had poor investment returns. The beneficiaries have sued the bank.
Several lessons can be learned:
1. Trust documents should allow for the removal of a trustee by a majority of the beneficiaries.
2. If the trust allows for separate shares for each beneficiary, that beneficiary should be permitted to select his own corporate trustee.
3. In Ohio, poor investment performance is not grounds for removing a trustee in a lawsuit which makes lessons 1 and 2 more important.
- Monday, 02 April 2012 21:08
Jon and Eileen Gallo (yes, of those Gallos) offer advice on raising financially responsible children. Seven characteristics shared by parents include:
- Being optimistic about changing money behaviors
- Valuing financial savvy and financial intelligence
- Thinking about the meaning of money in their lives
- Educating their children financially.
- Recognizing that their money deeds have a strong impact on their kids.
- Feeling that children should hear “no” and “enough” in terms of money education
- Wanting children to work for a sense of satisfaction as opposed to money.
For more, check out their book, “Silver Spoon Kids”
which is indispensable to upper income families.
- Monday, 19 March 2012 20:48
USA Today wrote about the complexity of planning for blended families with a dizzying number of familial situations. What the article did not mention is that a trust could be used to address all of the concerns of the individuals. Simply, a trust can be used to retain assets for a second spouse while ensuring that assets are ultimately distributed to children from a prior marriage. Similarly, trusts can be more flexible in making differing allocations among beneficiaries.
Interesting statistic form the article. Of people who live past 85, one half will experience Alzheimer’s disease.
- Friday, 16 March 2012 20:47
When declining to serve as guardian of a friend’s child, it is best to answer in terms of the increased family size of the restrictions placed by current housing. Do not follow the example in an old Carol Burnett Show skit where a couple decided to act obnoxious and asocial with atrocious dinner manners so they would not be asked. The other couple asked eventually because “you act just like we do.”
- Wednesday, 14 March 2012 20:45
This bears repeating. 2012 is great year to make a large gift due to the $5 million unified credit. It is unlikely that the credit will ever be larger and it is possible that it will be much smaller if the scheduled reduction to $1 million remains intact.
- Monday, 12 March 2012 20:45
The WSJ ran a squeamish article about the organ donation process. The best advice seems to be to foresake checking a box on the driver’s license and allow family members decide if and when to donate organs. Family members will be in a position to ensure that proper brain death procedures have been followed and that anesthesia has been administered.
- Monday, 05 March 2012 20:44
In trying to maximize lifetime Social Security benefits, it is best to delay taking distributions as long as possible. However, if ill health is a factor, grab them as soon as possible.
- Saturday, 03 March 2012 21:28
When estate taxes do not apply to most people, the hot topic in estate planning apparently becomes accessing post-mortem digital data. I have revised my wills to authorize executors to access on-line accounts. A corollary is to have a note with the will which lists the passwords and desired disposition of the account and data.
nb. The recommended language in the article is the type of drafting that people pejoratively refer to as “legalese.”
- Wednesday, 29 February 2012 20:42
Even with the current estate tax environment, trusts are still necessary. My reasons for recommending them are to protect youthful heirs and to simplify the administration process. The forthcoming decrease of the estate tax exemption amount to $1 million is a third reason.
- Tuesday, 28 February 2012 20:41
Paul Daugherty of the Cincinnati Enquirer allowed me to write his blog today. I consider it the Moby Dick of blog posts (in terms of length, not quality).
- Tuesday, 28 February 2012 20:40
Collections are difficult to plan for because their value can be mostly emotional. People should decide the value of their collection, decide whether it should be kept intact, and choose which family member(s) should receive it or whether it should sold or donated. None of this applies to Beanie Babies, which should be thrown away.
- Friday, 24 February 2012 20:36
The prior post about a possible law requiring that inherited IRAs must be distributed within 5 years of date of death is now moot because lobbyists have urged Senate Dems to remove the provision from a highway funding bill. Skipping the question of why an IRA payout provision is in a highway funding bill, apparently everything has a price, except integrity and strong leadership are priceless.
- Tuesday, 21 February 2012 20:36
The Senate has proposed mandating that withdrawals from inherited IRAs be made within 5 years of the death of the IRA owner. The purpose of the legislation is to accelerate income tax revenues. I agree with this proposal. IRAs receive preferential income tax treatment because they are intended for retirement. They were not created to distribute wealth from generation to generation in an income tax advantageous manner.
- Wednesday, 15 February 2012 20:35
In what is becoming a common story, questions arise as to what happens to an individual’s virtual data after his death. Some states are passing laws to authorize executors to access the on-line data of a decedent. In the meantime, wills should authorize the executor to access data including passwords.
- Monday, 13 February 2012 20:34
Clients can overlook providing for their pets upon their deaths. Pet trusts are a viable means of ensuring the post-mortem care of pets. Ohio has a statute which provides for the creation of pet trusts. Kentucky does not have a specific statute but the objective of providing care for pets can be accomplished via other means.
- Wednesday, 08 February 2012 20:32
A few tips about dealing with the personal items of parents. Having seen families fight over furniture and jewelry, I agree with “go slow” and “be diplomatic.” I would also add “remember it is just stuff” and “your relationship with your siblings is more important than any item.”
- Friday, 03 February 2012 20:31
This is a bit tawdry. A man who is being sued in a wrongful death case previously created a trust to benefit his 2 minor children. He has now adopted his 42 year old girlfriend so she can be a beneficiary of 1/3 of the trust. Assuming they remain a couple, she may use the trust assets to support herself and him even if he is forced to pay a large damage award in the lawsuit. My trust documents are designed to prevent this because they provide that an adoptee must be younger than 18 to be considered a beneficiary.
- Monday, 30 January 2012 20:29
Because powers of attorney are so powerful, and eyed suspiciously by financial institutions, it is better to have an attorney prepare one than use a standard off the shelf form.
- Thursday, 26 January 2012 20:27
I typically see a funeral bill of $10,000 for my clients. Here are a few quick tips to reduce funeral costs – shop around, remember that the funeral home exists to make money, and that a reasonable casket can be purchased for $400 – $600.