Author: Suzanne Candela

Things to Know When Planning for an Addicted Loved One

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It has been said that the only thing harder than being an addict is loving one. It can be particularly difficult for a parent to bring a child into the world, full of hopes and dreams about their future, and then watch them spiral down into addiction. Having someone in your life who struggles with substance abuse is never easy, no matter the circumstances, the relationship, or their age.

Estate planning often involves dealing with difficult situations. Putting off thinking about these decisions is not the solution. By delaying making plans for how best to care for an addicted loved one when you are no longer around, you risk losing an opportunity and control that can further complicate matters. 

How to Best Help Someone Struggling with Substance Abuse

Approximately 17 percent of Americans over the age of 12 had a substance use disorder in 2022, according to the latest National Survey on Drug Use and Health.1 That is equivalent to 48.7 million people, including 29.5 million who have an alcohol use disorder, 27.2 million who have a drug use disorder, and 8 million who had both alcohol and drug use disorders.2 

Despite these grim statistics, the good news is that life after addiction is not just possible—it is the norm. Most people experiencing alcohol and drug addiction recover, survive, and go on to live full, healthy lives. A study from the Centers for Disease Control and the National Institute on Drug Abuse found that three out of four addicts eventually enter recovery.3 

Treatment and recovery services are critical to successful addiction recovery. Financial barriers to these services are one reason why people struggling with substance abuse go untreated.4 Family members of addicts might be in a position to provide them with money and material support but worry that doing so will be counterproductive. 

Estate Planning for Beneficiaries with Substance Abuse Issues

There is not a one-size-fits-all solution for assisting a loved one who is dealing with substance abuse. What most experts agree on, though, is that you cannot force someone to undergo treatment. Family members can encourage recovery, but ultimately, the decision to seek therapy is up to the individual. 

When considering including an addicted loved one in an estate plan, it is useful to remember that estate planning can be uniquely tailored to the needs of each family and individual. Here are some points to keep in mind as you try to fit a drug- or alcohol-dependent person into your plan: 

  • You do not have to disinherit them. While you may have concerns that any money or property you leave to an addict could not only be squandered but also contribute to their self-destruction, there are ways to provide them an inheritance that does not involve giving them direct access to it. 
  • Be cautious when relying on a sibling or relative to care for a family member experiencing addiction, manage an inheritance on their behalf, or help them get treatment. Addiction often takes an emotional toll on a family. A windfall could further heighten emotions, lead to disagreements, and result in an explosive situation that causes discord among family members. And most people agree that maintaining family harmony is important for their estate plan. 
  • If you have an underage child battling addiction, you can name a guardian in your will to manage their financial affairs for them until they come of age. But be aware that once they are legally an adult, the guardianship ends, so this is a short-term solution at best. A better solution would be to have their inheritance held in trust and appoint someone to manage their money and property until they reach an age you specify or a particular trigger event occurs. 

Setting Up a Trust for an Addicted Loved One

A trust does not guarantee that an addicted person will be protected from their own bad decisions, but it can be structured in a way that helps ensure that an inheritance is used to their benefit and not to their detriment.

The Instructions Can Be Tailored to Meet Your Loved One’s Needs Without a Windfall

A trust allows you—the trustmaker—to set the terms for how the beneficiaries may use and have access to trust funds. The terms can be as specific as you want and may include provisions specifically designed to tackle addiction. For example, the trust could include the following types of terms: 

  • The inheritance must be used to pay for treatment.
  • There are incentives to ensure that the beneficiary gets the help they need. 
  • Distributions cannot be made until the beneficiary completes rehab, is able to pass a random drug test, or, in the case of a relapse, maintains sobriety for a period of time. 
  • If the specified incentives are not met by a certain deadline, the trust’s accounts and property will pass to a different beneficiary or a charity. 
  • Trust funds may be used to pay for living expenses, since many addicts have accompanying money problems. A special type of trust can be set up for this purpose if we need to ensure that your loved one maintains access to means-tested government assistance or is able to apply for it in the future. 
  • The trust can last for years or even a lifetime, or terminate upon full rehabilitation, at which point the beneficiary takes control of their inheritance. 

Choose the Trustee Carefully

Selecting a trustee is just as crucial as the provisions of a trust created for a beneficiary who suffers from addiction. The trustee should be somebody who will act in the best interests of the beneficiary while striving to preserve family harmony. When selecting a trustee, consider the following:

  • The trustee you choose to manage the trust on behalf of an addicted loved one can be given complete authority about how to use the funds (a discretionary trust). 
  • The trustmaker can provide some guidance for distributions that address substance abuse concerns, such as requiring the trustee to pay third parties directly for approved expenses rather than giving funds for such expenses directly to the beneficiary. 
  • The trustee could be given direction or permission to be in communication with other family members to coordinate treatment and track recovery, if necessary. 
  • The trustee can be a member of the family or a professional (e.g., an attorney or a trust administration company). If you are concerned about maintaining family harmony, you may want to consider appointing someone other than a family member. It is also possible to have co-trustees. Further, backup trustees should be named in case the original successor trustees are removed or can no longer serve in their role. 

You Are the Only One Who Can Protect Your Loved One

A final consideration about planning for an addicted loved one is what can happen if you fail to plan. 

Without an estate plan, the unknowns can be greater—and more consequential. The court will rely on state law to determine who gets your money and property, how much they will receive, and when they receive it. Your loved one may end up with a lump sum of money and no restrictions. This default plan does not address the underlying addiction problem. And if your loved one is not a family member, they may not receive anything from you at all if you do not put an estate plan in place. 

Discuss Estate Planning Strategies for a Beneficiary Suffering from Addiction 

You might feel torn between a desire to help an addict in your life and ensuring that your hard-earned money is put to its best use after you have passed away. Or maybe you have been your loved one’s rock, helping them stay sober and avoid relapse, and want to continue doing everything you can for them for as long as you can. 

Addiction is often a lifelong struggle. To make a plan that provides addiction assistance for someone you care about, even after you have passed away, contact our estate planning attorneys. 

  1. HHS, SAMHSA Release 2022 National Survey on Drug Use and Health Data, SAMHSA (Nov. 13, 2023), https://www.samhsa.gov/newsroom/press-announcements/20231113/hhs-samhsa-release-2022-nsduh-data. ↩︎
  2. Id. ↩︎
  3. Christopher M. Jones et al., Prevalence and Correlates of Ever Having a Substance Use Problem and Substance Use Recovery Status Among Adults in the United States, 2018, 214 Drug and Alcohol Dependence 108169 (2020), https://www.sciencedirect.com/science/article/abs/pii/S0376871620303343. ↩︎
  4. Barriers to Addiction Treatment: Why Addicts Don’t Seek Help, Am. Addiction Ctrs. (Jan. 30, 2024),  https://americanaddictioncenters.org/rehab-guide/treatment-barriers. ↩︎

From Field to Heirloom: Strategies for Passing Down Sports Memorabilia in Your Estate Plan

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You may have spent decades building up your sports memorabilia collection. Maybe you have some rare cards and autographed pictures that have steadily gained value over the years, and now they are worth a significant amount of money. You go to great lengths to keep these items in mint condition. But are you protecting them in your estate plan?

Memorabilia Is a Multi-Billion Dollar Industry

Every collection starts with a single piece that sparks passion in the collector. For Joel Platt, who has spent seven decades accumulating the world’s largest collection of sports mementos, it all started with a 1933 Babe Ruth baseball card.1 

At his Sports Immortals Museum in Florida, more than one million pieces are on display, including items that once belonged to legends like Muhammad Ali, Jim Thorpe, and Pelé.2 His collection has been appraised at more than $150 million.3 

While wealthy investors like Platt have made collecting, preserving, and displaying sports memorabilia their life’s work, today many more hobbyist collectors are seeing their passion project turn into big business.

Collectible sports items like cards, photos, clothing, and tickets are part of an industry that is valued at more than $26 billion and is expected to top $227 billion by 2032.4 The sports memorabilia industry is becoming comparable to the art market, “replete with appraisers, ratings agencies, authenticators, specialized insurance, leased vaults, and elite security systems,” according to the Robb Report.5

Sale after record-breaking sale have driven the market for historic sports collectibles to new heights. Individual items, including a Michael Jordan game jersey and a Mickey Mantle card, have recently sold for more than $10 million.6 Many more have eclipsed the $1 million mark. 

Ways to Include Sports Collectibles in an Estate Plan

Stories of family members finding a vintage baseball card collection that belonged to their father or grandfather are about as common as stories of somebody’s mom throwing away their cards (which, in almost every version of this story, included a rare Mickey Mantle or Babe Ruth baseball card). 

If you do not include sports memorabilia in your estate plan, your loved ones could end up squabbling over your collection. Some families do not play as nicely as the Ohio family who found a prewar baseball card collection in the attic worth millions and decided to divide it equally. 7

For estate planning purposes, sports memorabilia is considered tangible personal property, just like jewelry, furniture, and other household items. An estate plan can deal with tangible personal property in a few different ways: 

  • Gift all tangible personal property to a single beneficiary or multiple beneficiaries through a will or a trust. 
  • List specific items in a will or trust and who will receive them.
  • Use a memorandum of tangible personal property that lists who will receive certain items. This document is separate from a will or trust but is usually referenced in the client’s will or trust as providing the instructions for what will happen to the client’s tangible personal property. 

Because there is no guarantee that you have a loved one who shares your passion for sports collectibles, you could also plan for your collection in one of the following ways: 

  • Dictate in your estate plan that your successor trustee or executor must sell the collection, invest the money, and have the proceeds distributed to your loved ones at your death. 
  • Gift the collection to a nonfamily member (such as a fellow collector) during your lifetime so you can see them enjoy it, or leave the collection to them in your will or trust. 
  • Donate the collection to charity, either now or as part of your estate when you die.

Whatever approach you take, keep in mind that distributing your collectibles—either while you are alive or after your death—could have tax implications for you, your estate, and the recipient.

What Can Happen If You Do Not Plan for Your Collection

If you do not affirmatively plan for your sports memorabilia collection and discuss your plan with your family, they may find it after your passing and not realize its financial and sentimental worth or be aware of your wishes for how it is distributed. Your loved ones could sit on the items and later find out they are valuable. And if they do not agree on how to divide the collection, they could get into a legal battle about ownership rights. Or they may never discover the value and throw the collection out or give it to charity.

From a legal standpoint, not having an estate plan means that the court actually decides the fate of your sports memorabilia—and everything else you own. But an estate plan that is not sufficiently detailed could result in items slipping through the planning cracks. For example: 

  • Your will may address tangible personal property generally but fail to account for sports memorabilia specifically. In this scenario, your collectibles might get lumped in with other items like clothing, books, and pictures and be left up for grabs among several beneficiaries. 
  • These items may have to go through the probate process, and a court may have to use state law to determine who gets them, how much they get, and when they will get them.

You can exercise greater control over who gets your money and property (including your sports memorabilia collection) with estate planning tools such as a last will and testament or a revocable living trust with a pour-over will that deals with leftover or forgotten accounts or property. 

A better option for addressing your sports memorabilia collection is to explicitly state in your estate plan what should happen to it.

Take Steps to Protect Your Treasured Collection

Here are some other steps you should take to protect your collection now and in the future: 

  • Make a detailed inventory of all important sports memorabilia and regularly update it.
  • Consider getting the items appraised and authenticated. 
  • Inform your loved ones about where you keep your collection. If any part of your collection is stored in a safe, a safe deposit box, or a storage unit, make sure a trusted loved one will have access to the items after your death.
  • Inform your loved ones about how and where items can be sold in case they do not want to keep them. 
  • Make sure you have enough insurance or that the items are specifically insured to protect them in case of damage or loss.
  • Create an estate plan that spells out who is to receive your memorabilia and other tangible personal property upon your death. 

With the sports memorabilia market at an all-time high, this might be an ideal time to make plans for passing down your collection. Reach out to our estate planning attorneys to learn more. 

  1. Ana Veciana-Suarez, Joel Platt and His Dream Collection, Intelligent Collector, https://intelligentcollector.com/joel-platt-and-his-dream-collection (last visited June 27, 2024).  ↩︎
  2. Id. ↩︎
  3. Id. ↩︎
  4. Sports Memorabilia Collectibles Market Size, Statistics, Growth Trend Analysis and Forecast Report, 2022 – 2032, Market Decipher, https://www.marketdecipher.com/report/sports-collectibles-market (last updated June 27, 2024) ↩︎
  5. Christina Binkley, How Sports Memorabilia Exploded into a Booming Billion-Dollar Business, Robb Report (July 30, 2023), https://robbreport.com/shelter/art-collectibles/sports-memorabilia-raking-in-millions-at-auction-1234865811.  ↩︎
  6. The Most Expensive Sports Memorabilia and Collectibles in History, ESPN (Sept. 15, 2022), https://www.espn.com/mlb/story/_/id/34465725/most-expensive-sports-memorabilia-collectibles-history.  ↩︎
  7. Paul Casella, Family’s Baseball Card Discovery Could Lead to Millions, MLB.com, https://www.mlb.com/news/familys-baseball-card-discovery-could-lead-to-millions/c-34843838 (last visited June 27, 2024).  ↩︎

Proper Planning for a Client’s Sports Memorabilia Collection

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It is a scenario we have all dreamed about: discovering a hidden treasure trove tucked away in the dusty corners of an attic. 

But it was not gold coins or heirloom jewelry that an Ohio man found in a box that had belonged to his grandfather. It was a collection of vintage baseball cards for legends like Ty Cobb, Honus Wagner, and Cy Young that experts valued at $2 to $3 million.1 

The card owner’s heirs agreed to sell most of the cards at auction and divide the money equally, avoiding a potentially messy legal battle over ownership rights. Things could have gone much differently, though, and they often do when valuable personal property is not accounted for in a client’s estate plan. 

Sports Memorabilia Is a Multi-Billion Dollar Industry

Stories about a father or an uncle grumbling that their mom threw away their baseball card collection that would now be worth millions are something of a trope. But they might actually be true. 

The sports memorabilia market has never been bigger. Collectors’ items like cards, photos, clothing, and tickets, once the domain of hobbyists, are now part of an industry that is valued at more than $26 billion and is expected to top $227 billion by 2032.2 

Sale after record-breaking sale have driven the market for historic sports collectibles to new heights. Individual items, including a Michael Jordan game jersey and a Mickey Mantle card, have recently sold for more than $10 million.3 Many more have eclipsed the $1 million mark. 

According to the Robb Report, the sports memorabilia industry is becoming comparable to the art market, “replete with appraisers, ratings agencies, authenticators, specialized insurance, leased vaults, and elite security systems.”4

Amid the growing interest in, and increased value of, sports memorabilia, a Manhattan man sued his mom for not handing over two baseball cards he claims could fetch $25,000 apiece.5  She contends that her son actually gave her the cards because she was a fan and that according to her will, her grandchildren will be receiving them.6 

How to Handle Valuable Sports Items in an Estate Plan

Assuming that a client-collector’s mom has not disposed of their cherished sports collectibles as many moms do when cleaning out their grown children’s left-behind childhood memories, they will need to be “disposed of”—that is, distributed or transferred, legally speaking—in the client-collector’s estate plan. 

Sports memorabilia is considered tangible personal property, just like jewelry, furniture, and other household items, for estate planning purposes. An estate plan can deal with tangible personal property in a few different ways: 

  • Gift all tangible personal property to a single beneficiary or multiple beneficiaries through a will or a trust. 
  • List specific items in a will or trust and who will receive them.
  • Use a memorandum of tangible personal property that lists who will receive certain items. This document is separate from a will or trust but is usually referenced in the client’s will or trust as providing the instructions for what will happen to the client’s tangible personal property.
  • Donate the collection to charity. 

Because a sports memorabilia collection can also have sentimental, nonpecuniary value to a client, it could fall into the category of estate items that the client may want left to nonfamily beneficiaries, such as a friend who is also into collecting baseball cards. 

Instead of distributing sports collectibles to family members who might not be interested in them—but would not mind inheriting their cash value—another option is to sell the collection and distribute the proceeds to those named in the client’s will or trust alongside other assets as part of the client’s estate. 

Memorabilia can also be gifted during a client’s lifetime so they can see the items enjoyed while they are alive. However, depending on the value of the item, this could trigger a gift tax and would count against their lifetime estate and gift tax exclusion. 

What Can Happen If There Is No Plan for Sports Memorabilia

Due to insufficient planning, a client’s family could end up finding binders and boxes full of sports memorabilia after the client’s death. They may not be sure what the items are worth, what they meant to the client, or what to do with them. 

With or without an estate plan, sports memorabilia can slip through the planning cracks. Consider these potential scenarios for a sports memorabilia collection that is not specifically planned for: 

  • A will could address tangible personal property generally but fail to account for sports memorabilia specifically, so it would get lumped in with other items like clothing, books, and pictures—and could be left up for grabs among several beneficiaries. 
  • If no mention is made of the sports memorabilia in the estate plan, the client’s family may see the items as worthless and either donate or throw them away.
  • When a client does not have a will, their assets—both tangible and intangible—are subject to probate. In this scenario, the probate court distributes a client’s assets in accordance with state succession laws. The law will determine who gets what, how much, and when they will receive it.

Counseling Your Clients on Their Sports Memorabilia Collection

Fans love sports for the drama. To avoid any drama over a client’s memorabilia, however, you should advise them to protect their collection now and in the future by taking the following steps: 

  • Make a detailed inventory of all important sports memorabilia and regularly update it.
  • Consider getting the items appraised and authenticated and potentially insured.
  • Inform their loved ones about where they keep their collection. If any part of the collection is stored in a safe, a safe deposit box, or a storage unit, the client should make sure a trusted loved one will have access to the items after the client’s death.
  • Inform their loved ones about how and where items can be sold in case their loved ones do not want to keep them.
  • Ensure that they have enough insurance to protect the items in case of damage or loss.
  • Understand the tax implications of selling, gifting, and inheriting valuable items. 
  • Create an estate plan that spells out who will receive their memorabilia and other tangible personal property. 

To discuss sports memorabilia estate planning strategies in more detail, please reach out to schedule a meeting.

  1. Ohio Man Finds Batch of Vintage Baseball Cards in Late Grandfather’s Attic, May Be Worth $3 Million, Mass Live (July 10, 2012), https://www.masslive.com/news/2012/07/ohio_man_finds_batch_of_vintag.html.  ↩︎
  2. Sports Memorabilia Collectibles Market Size, Statistics, Growth Trend Analysis and Forecast Report, 2022 – 2032, Market Decipher, https://www.marketdecipher.com/report/sports-collectibles-market (last visited June 27, 2024). ↩︎
  3. The Most Expensive Sports Memorabilia and Collectibles in History, ESPN (Sept. 15, 2022), https://www.espn.com/mlb/story/_/id/34465725/most-expensive-sports-memorabilia-collectibles-history.  ↩︎
  4. Christina Binkley, How Sports Memorabilia Exploded into a Booming Billion-Dollar Business, Robb Report (July 30, 2023), https://robbreport.com/shelter/art-collectibles/sports-memorabilia-raking-in-millions-at-auction-1234865811.  ↩︎
  5. Kathianne Boniello, Man Sues His Mom over Pricey Baseball Cards, N.Y. Post (Jan. 15, 2022), https://nypost.com/2022/01/15/man-sues-his-mom-over-pricey-baseball-cards.  ↩︎
  6. Id. ↩︎

Counseling Clients About Their Vacation Homes 

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Residential real estate is the largest asset class in the United States. Beyond its primary function of providing shelter, housing provides a store of wealth and increases individual economic growth. A residence—particularly a vacation property—can also have sentimental value to a family. 

Second homes are traditionally associated with wealthy Americans, but research shows that vacation homes are no longer just a luxury for the rich. This means that more of your clients than you think may benefit from a discussion regarding planning for multiple homes. The finances and feelings tied up in a vacation home can present unique estate planning challenges when a client is making plans to pass the home to the next generation. Family dynamics, ownership structure, taxes, and more need to be considered in the transition.

Vacation Homes: A Source of Wealth—but Not Just for the Wealthy

Andrew Carnegie famously said that 90 percent of millionaires got their wealth from investing in real estate. Those who are already millionaires are increasingly investing in second homes. Having more than one home is now the norm for wealthy Americans. But it is not only wealthy Americans buying second homes. 

According to a recent survey, 4 out of 10 Americans now own vacation homes.1 The National Association of Home Builders puts the national stock of second homes at 7.15 million, accounting for around 5 percent of all housing.2 

Investing in a vacation home can be surprisingly affordable. Most survey respondents reported paying less than $200,000. And the return on investment can be impressive.

Vacation Home Estate Planning Strategies

While real estate often accounts for a large share of a client’s net worth, their second home may also be where family gatherings take place. Estate planning becomes more challenging in situations where a treasured family asset changes hands. This can be doubly true when the “treasure” is both tangible and intangible. 

The first step in formulating an estate planning strategy for a vacation home is to determine the client’s goals. The following questions can help guide your discussion: 

  • Are they ready to pass the vacation home to their loved ones now, while they are alive, or are they planning to transfer it when they die? Their preference may depend on how much time they still spend at the property and whether they think their loved ones are ready to take on the responsibility and expense of managing it. 
  • What is their preferred method for transferring the vacation home? Some options include selling it to a loved one, gifting it to them, passing it down through their will, using a transfer-on-death deed, or placing the home in a trust. Each of these methods comes with different tax savings and liabilities. 
  • Who will have an interest in the property? The more family members who have a right to use the home, the more detailed the planning should be. Without a structure that addresses issues like who is responsible for paying for upkeep, taxes, and insurance, and without defining property usage rules, co-ownership rights and responsibilities could become unclear, leading to conflicts. 
  • Do they want to set any limits on what can be done with the vacation home? The client, for example, should consider whether the vacation home can be used as a rental, if family members have the right to sell the vacation home or their interest in it to people outside the family, and conditions for one family member buying out another’s interest. 

Once you define your client’s goals for the vacation property, you can help them come up with appropriate planning strategies. During your discussion, address the following additional considerations: 

  • If the property is mortgaged, they may need permission from the lender to transfer it.
  • A trust can allow the client to maintain control by enabling the client to set rules about how the property is to be used and maintained. They can also transfer money into the trust to pay for ongoing expenses. The trust can be designed so that the client retains the right to use the vacation home until death, at which point it passes to their loved ones. 
  • Clients can also establish a life estate that allows the vacation home to be transferred at their death while allowing them to continue using it until they die. 
  • A business entity such as a limited liability company (LLC) or family limited partnership (FLP) could be created to own the home and potentially provide some asset protection.
  • Clients need to consult with a tax professional to ensure that federal gift, estate, and generation-skipping transfer taxes; income and capital gain taxes; state-level estate and inheritance taxes; and state and local property taxes applicable to transferring and owning the property are properly considered in the vacation home succession plan. 
  • Vacation homes in another state or country pose additional estate planning challenges and will likely necessitate local counsel or advisors. 
  • If there are children who are not interested in owning the vacation home, the client may want to consider how they will equalize their children’s inheritances if treating everyone equally is an estate planning priority. 

Connect with Our Family of Estate Planning Advisors

It might seem like a simple decision to keep a vacation home in the family. But estate planning is rarely straightforward. Deciding how to handle a property that has served as a past gathering place—and hopefully a future one—can prove to be especially complicated. 

Whether a vacation home has been in a client’s family for generations or just a few years, it needs to be thoughtfully addressed in their estate plan. For advice on counseling clients about vacation home legacy strategies, reach out to our estate planning attorneys.

  1. Andrew Lisa, 40% of People Have Vacation Homes: Where You Can Find One for Your Budget, GoBankingRates (June 16, 2023), https://www.gobankingrates.com/investing/real-estate/where-to-find-vacation-home-in-your-budget. ↩︎
  2. Na Zhao, The Nation’s Stock of Second Homes, Nat’l Ass’n of Home Builders (May 13, 2022), https://eyeonhousing.org/2022/05/the-nations-stock-of-second-homes. ↩︎

Sun, Sand, and Succession: Estate Planning Tips for Your Vacation Property

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A vacation property can be one of the most valuable things you can pass down to your loved ones, from both a sentimental and financial standpoint. 

However, mixing money and family can be tricky. Without a well-thought-out strategy for the ownership transition, hard feelings and disputes could arise, and the vacation home could be used in ways you did not intend. 

Beyond family dynamics and legacy objectives, transferring a vacation property to the next generation also has legal and tax implications that need to be addressed in an estate plan. 

Vacation Homes Are a Store of Memories—and Wealth

It is that time of year when you and your loved ones may be preparing to spend time on the beach or in the mountains at the family vacation home. Around 5 percent of all housing units in the United States are second homes. There was a more than 16 percent surge in new vacation home purchases during the pandemic.1 From humble cabins and beach cottages to luxurious mountain estates and lake houses, vacation homes are owned by an estimated 4 out of 10 Americans.2 

Many second homes are dual-purpose, serving as a family gathering spot as well as a revenue source. Sites like Airbnb and VRBO have made it easier to rent out property. In 2023, the US short-term rental market, comprising more than 785,000 individual hosts, 2.5 million available listings, and 207 million nights stayed, generated approximately $64 billion in revenue.3

Vacation Home Estate Planning Considerations

As you clean up your vacation home and prepare to welcome your children, grandchildren, and other family members for another season of memory-making moments, estate planning may be a distant thought—if it is even on your mind at all. 

But ensuring that the home remains a place for the family to gather for generations to come requires addressing it in your estate plan now, while you still own and control it. Here are some points to consider as you balance finances, feelings, and fairness in your vacation home estate plan: 

  • Are you still spending time at the vacation home? This can affect whether you pass the home to your loved ones now or after you die. It is not an all-or-nothing proposition, though. You could establish what is called a life estate that allows you to transfer the vacation home at death but continue using it during your lifetime. 
  • Who is interested in the property? There might be interest among all your children in keeping the property, only one child who is genuinely interested in owning and using it, or nobody interested in it at all. 
  • Do you want to set limits on what can be done with the property? Think about whether the vacation home can be used as a rental, if family members should have the right to sell the vacation home or their interest in it to people outside the family, the conditions for one family member buying out another’s interest, and other limits on what can and cannot be done there. 
  • How compatible are your loved ones? If everybody gets along and has similar income levels, you might not be concerned about their ability to equitably divide ownership rights and responsibilities. But disagreements could still arise over things like who is responsible for paying for upkeep, taxes, and insurance, and who can use the property—and when. And the more family members there are who have a right to use the home, the greater the potential for conflict. 

These big picture estate planning issues for a vacation home can inform specific strategies such as the following about how to pass the property down: 

  • Selling the home to a family member
  • Gifting the home to family during your lifetime 
  • Passing down the home to loved ones through the probate process via your will 
  • Transferring the property outside of probate, either while you are alive or after your death, with a trust or a transfer-on-death or pay-on-death deed (if your state recognizes them) 
  • Creating a limited liability company (LLC) or family limited partnership (FLP) to own the vacation home

Each of these strategies has a different set of pros and cons that you should further discuss with an estate planning lawyer. 

Talk to a Lawyer About How Best to Keep a Vacation Home in the Family

Family can be complicated. Adding a treasured family vacation home to the mix only adds to the complications. 

We recommend talking to your loved ones about the vacation property. Once you get answers to questions like who wants the vacation home, how much they might use it, and if they can take on ownership responsibilities, reach out to us to create a strategy that aligns with your personal circumstances and objectives.

  1. Theresa Landicho, 17 Second Home Statistics Every Investor Should Know in 2024, Fit Small Bus. (Feb. 13, 2024), https://fitsmallbusiness.com/second-home-statistics. ↩︎
  2. Andrew Lisa, 40% of People Have Vacation Homes: Where You Can Find One for Your Budget, GoBankingRates (June 16, 2023), https://www.gobankingrates.com/investing/real-estate/where-to-find-vacation-home-in-your-budget. ↩︎
  3. 2023 Short-Term Rental Statistics You Need to Know, AirDNA (Jan. 28, 2024), https://www.airdna.co/blog/2023-short-term-rental-statistics-key-numbers-to-know. ↩︎

Summer Estate Essentials: Planning Your Legacy Under the Sun

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Ballots to Beneficiaries: How Potential Presidential Policies Could Shape the Future of Your Estate Plan

Ready or not, we are entering another presidential election season. 

If you are like most Americans, the economy is top of mind when it comes to evaluating the candidates. But even if you do not intend to vote, the tax policies of the next administration could have a major impact on your personal wealth and estate planning strategies. 

Tax Legislation Is on the Horizon

In the area of tax policy, the 2024 election is set to leave its mark. 

The Tax Cuts and Jobs Act of 2017 (TCJA) is expiring at the end of 2025, and with its expiration will come the undoing of its individual and other tax provisions, including lower personal income tax rates, higher standard deductions, increased estate tax exemptions, and the expensing of business investments. 

Many tax experts have said that major new tax legislation to replace the TCJA is all but assured from the incoming Congress. What the candidates promise on the campaign trail over the next few months could go a long way toward setting tax policy priorities.

Evaluating the Candidates Through an Estate Planning Lens

There is historical precedent for tax policy changes following a candidate’s promises made during campaign season. 

John F. Kennedy promised to lower income taxes in 1960, paving the way for lower individual and corporate tax rates in the Revenue Act of 1964. In 1980, Ronald Reagan hinted at what would become the Economic Recovery Act of 1981, which lowered estate and capital gains taxes. And in 2016, Donald Trump foreshadowed tax policies of the TCJA in speeches and debates. 

Candidates are unlikely to use the term estate planning, but they frequently use the language of tax policy to discuss issues that affect a person’s estate value and the inheritance they leave behind. Here are some key policy terms to pay attention to from an estate planning perspective:

  • Capital gains tax: A tax on the profit earned from selling an asset (such as stocks or real estate)
  • Estate tax: A tax on the transfer of property upon one’s death
  • Gift tax: A tax on the transfer of property from one individual to another during their lifetime without receiving full value in return
  • Income tax: A tax on the income of an individual or entity
  • Tax credit: An amount that taxpayers can subtract from their total tax liability
  • Tax deduction: A reduction in taxable income, potentially decreasing or eliminating tax liability
  • Tax exemption: A monetary exclusion that reduces the amount of taxable income
  • Trust income tax: A tax on the income generated by a trust

What the 2024 Candidates Are Saying About Estate-Planning Related Taxes1

The publicly stated views of the 2024 candidates reveal clear contrasts in their visions for America’s economic future. Here is what the candidates have said about estate, wealth, and capital gains taxes. 

President Joe Biden

President Biden would reportedly tax long-term capital gains and qualified dividends at ordinary income tax rates for taxable income over $1 million and tax unrealized capital gains at death for amounts exceeding a $5 million exemption ($10 million for joint filers).2 He has also proposed a minimum effective tax of 20 percent on unrealized capital gains from assets such as stocks, bonds, and privately held companies; higher top individual income tax and corporate income tax rates; and tighter estate tax rules to reduce inherited wealth accumulation.3

Former President Donald Trump

Former president Donald Trump has said he plans to make permanent the 2017 individual tax cuts that he enacted during his term under the TCJA.4 He also wants to make the expiring estate tax cuts from the TCJA permanent.5 The unified gift and estate tax exclusion amount is set to expire on December 31, 2025, and revert to pre-TCJA levels that are expected to be around half of what they are in 2024 ($13.61 million per individual/ $27.22 million per married couple).

Robert F. Kennedy Jr.

The only major tax policy that RFK Jr. has announced, according to the Tax Foundation, is exempting Bitcoin from capital gains taxes when the cryptocurrency is converted to or from US dollars.6 He has also expressed a desire to make tax code changes to discourage corporate ownership of single-family homes.7

Chase Oliver

Although the Libertarian Party’s candidate, Chase Oliver, has addressed many issues during his campaign, such as immigration, student loans, and closing regulatory loopholes that reward businesses with close relationships with government officials,8 he has not spoken on too many issues that would impact estate planning. However, the Libertarian Party has traditionally been in favor of limited government, the repeal of the income tax, and the abolishment of the Internal Revenue Service.9

Jill Stein

The Jill Stein 2024 platform calls for raising taxes on the richest Americans. This includes applying the Social Security payroll tax to capital gains and dividends, as well as increasing the estate tax.10

Cornel West

West’s platform is focused on economic justice but light on economic policy details. His campaign site says that the candidate would impose a wealth tax on all billionaire holdings and transactions and close all tax loopholes for the oligarchy.11

Future-Proofing Your Estate Plan

Changes to the law are one of the primary reasons to revisit your estate plan. We will be following this year’s election closely so we can keep you informed about policy changes that will help you make proactive adjustments to your plan, such as using estate planning tools to lock in the “bonus” estate tax exemption and manage possible capital gains exposure. 

We cannot predict election outcomes, but we can create an estate plan that protects your estate, your legacy, and your heirs through political shifts. To learn more, please contact us. 

  1. These are potential presidential candidates as identified by CNN. See 2024 Presidential Candidates, CNN Politics, https://www.cnn.com/interactive/2024/politics/presidential-candidates-dg (last visited July 2, 2024). ↩︎
  2. Garrett Watson et al., Details and Analysis of President Biden’s Fiscal Year 2024 Budget Proposal, Tax Found. (Mar. 23, 2023), https://taxfoundation.org/research/all/federal/biden-budget-tax-proposals-analysis. ↩︎
  3. Garrett Watson & Erica York, Proposed Minimum Tax on Billionaire Capital Gains Takes Tax Code in Wrong Direction, Tax Found. (Mar. 30, 2022), https://taxfoundation.org/blog/biden-billionaire-tax-unrealized-capital-gains ↩︎
  4. Tracking 2024 Presidential Tax Plans: Where Do the Candidates Stand on Taxes?, Tax. Found. https://taxfoundation.org/research/federal-tax/2024-tax-plans/#Candidates (last visited June 27, 2024). ↩︎
  5. Id. ↩︎
  6. Id. ↩︎
  7. Jing Pan, “Robbing Americans of the Ability to Own Homes:” RFK Jr. Has Promised Wall Street Reforms. Here’s His Plan, Yahoo!Finance (May 30, 2024), https://finance.yahoo.com/news/robbing-americans-ability-own-homes-101400283.html. ↩︎
  8. Platform: What Chase Stands For, Chase Oliver, https://www.votechaseoliver.com/platform (last visited July 1, 2024). ↩︎
  9. Platform, Libertarian: The Party of Principle, https://www.lp.org/platform/ (last visited July 1, 2024). ↩︎
  10. Platform: People’s Economy, Jill Stein 2024, https://www.jillstein2024.com/platform (last visited June 27, 2024). ↩︎
  11. Policy Pillars for a Movement Rooted in Truth, Justice, & Love: Economic Justice, Cornel West 2024, https://www.cornelwest2024.com/platform (last visited June 27, 2024). ↩︎

Heat Up Your Clients’ Estate Plans: Hot Tips and Cool Strategies

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Ballots to Beneficiaries: How Potential Presidential Policies Could Shape the Future of Estate Planning

The 2024 presidential election is only a few months away. As campaign ads ramp up and we enter debate season, the candidates will sound off on their respective positions about a wide range of topics, from the economy, immigration, and education to national security, the environment, and the state of democracy. 

It is probably wise to avoid talking politics with your clients in the current polarizing climate. But you should be paying attention to the presidential front-runners and their stances on estate planning-related issues so you can advise your clients accordingly when the next federal government takes shape. 

Evaluating the Candidates Through an Estate Planning Lens

Leading up to the 2024 election, surveys consistently show that inflation, jobs, and the economy are the most important issues among voters.1 

However, there is significant variance in the way individuals view the economy and the economic issues that are most important to their own financial situation. Presidential candidates are unlikely to use the term estate planning, but they frequently use the language of tax policy to discuss issues that affect a person’s estate value and the inheritance they leave behind. 

Here are some policy terms to pay attention to from an estate planning perspective: 

  • capital gains tax
  • estate tax
  • gift tax
  • income tax
  • tax credit
  • tax deduction
  • tax exemption
  • trust income tax 

Where the 2024 Candidates Stand on Taxes2

Campaign promises set the tone for a potential presidential administration and what a candidate will prioritize if they take office. Here are the publicly stated estate, wealth, and capital gains policies of the 2024 candidates: 

President Joe Biden

If reelected to a second term, President Biden would reportedly tax long-term capital gains and qualified dividends at ordinary income tax rates for taxable income over $1 million and tax unrealized capital gains at death for amounts exceeding a $5 million exemption ($10 million for joint filers).3 

President Biden also proposes a minimum effective tax of 20 percent on unrealized capital gains from assets such as stocks, bonds, and privately held companies; higher top individual income tax and corporate income tax rates; and tighter estate tax rules to reduce wealth accumulation through inheritance.4 

Former President Donald Trump

Former president Donald Trump has said he plans to make permanent the 2017 individual tax cuts that he enacted during his term under the Tax Cuts and Jobs Act (TCJA).5 He also wants to make the expiring estate tax cuts from the TCJA permanent.6 

The unified gift and estate tax exclusion amount is set to expire on December 31, 2025, and revert to pre-TCJA levels that are expected to be around half of what they are in 2024 ($13.61 million per individual/ $27.22 million per married couple). 

Robert F. Kennedy Jr. 

The only major tax policy that RFK Jr. has announced, according to the Tax Foundation, is exempting Bitcoin from capital gains taxes when the cryptocurrency is converted to or from US dollars.7 He has also expressed a desire to make tax code changes to discourage corporate ownership of single-family homes.8 

Chase Oliver

Although the Libertarian Party’s candidate, Chase Oliver, has addressed many issues during his campaign, such as immigration, student loans, and closing regulatory loopholes that reward businesses with close relationships with government officials,9 he has not spoken on too many issues that would impact estate planning. However, the Libertarian Party has traditionally been in favor of limited government, the repeal of the income tax, and the abolishment of the Internal Revenue Service.10

Jill Stein

The Jill Stein 2024 platform calls for raising taxes on the richest Americans. This includes applying the Social Security payroll tax to capital gains and dividends, as well as increasing the estate tax. 11

Cornel West

West’s platform is heavy on economic justice but light on economic policy details. His campaign site says that the candidate would impose a wealth tax on all billionaire holdings and transactions and close all tax loopholes for the “oligarchy.”12

Planning for Tax Law Changes

Whether your clients intend to vote or not, they will be impacted by the next president’s policies on issues related to taxes and estate planning.

Prognostications about election outcomes are challenging, but the candidates present clear contrasts in their visions for America’s economic future. And with nearly $5 trillion of individual and other tax provisions passed in 2017 expiring at the end of 2025—including lower personal income tax rates, higher standard deductions, increased estate tax exemptions, and the expensing of business investment—it is probable that major tax legislation will be a priority for the incoming administration.13 

While you might prefer to wait until after the election to offer any concrete estate planning advice to clients, you can begin discussions now about strategies to lock in the “bonus” estate tax exemption and manage potential capital gains exposure.

To discuss specific estate planning strategies for your clients based on their age, wealth levels, estate sizes, and legacy goals, please reach out to schedule a meeting. 

  1. Kirby Phares, Inflation and the Economy Consistently Rank as Top Issues Among Likely Voters​​—and Here’s Our New Way to Ask Issue Importance, Data for Progress (Mar. 6, 2024), https://www.dataforprogress.org/blog/2024/3/6/inflation-and-the-economy-consistently-rank-as-top-issues-among-likely-voters-and-heres-our-new-way-to-ask-issue-importance. ↩︎
  2. These are potential presidential candidates as identified by CNN. See 2024 Presidential Candidates, CNN Politics, https://www.cnn.com/interactive/2024/politics/presidential-candidates-dg (last visited July 2, 2024). ↩︎
  3. Garrett Watson et al., Details and Analysis of President Biden’s Fiscal Year 2024 Budget Proposal, Tax Found. (Mar. 23, 2023), https://taxfoundation.org/research/all/federal/biden-budget-tax-proposals-analysis. ↩︎
  4. Garrett Watson & Erica York, Proposed Minimum Tax on Billionaire Capital Gains Takes Tax Code in Wrong Direction, Tax Found. (Mar. 30, 2022), https://taxfoundation.org/blog/biden-billionaire-tax-unrealized-capital-gains. ↩︎
  5. Tracking 2024 Presidential Tax Plans: Where Do the Candidates Stand on Taxes?, Tax. Found. https://taxfoundation.org/research/federal-tax/2024-tax-plans/#Candidates (last visited June 27, 2024). ↩︎
  6. Id. ↩︎
  7. Id. ↩︎
  8. Jing Pan, “Robbing Americans of the Ability to Own Homes:” RFK Jr. Has Promised Wall Street Reforms. Here’s His Plan, Yahoo!Finance (May 30, 2024), https://finance.yahoo.com/news/robbing-americans-ability-own-homes-101400283.html. ↩︎
  9. Platform: What Chase Stands For, Chase Oliver, https://www.votechaseoliver.com/platform (last visited July 1, 2024). ↩︎
  10. Platform, Libertarian: The Party of Principle, https://www.lp.org/platform/ (last visited July 1, 2024). ↩︎
  11. Platform: People’s Economy, Jill Stein 2024, https://www.jillstein2024.com/platform (last visited June 27, 2024). ↩︎
  12. Policy Pillars for a Movement Rooted in Truth, Justice, & Love: Economic Justice, Cornel West 2024, https://www.cornelwest2024.com/platform (last visited June 27, 2024). ↩︎
  13. Andrew Lautz, The New Cost for 2025 Tax Cut Extensions—$5 Trillion, Bipartisan Pol’y Ctr. (May 13, 2024), https://bipartisanpolicy.org/blog/the-new-cost-for-2025-tax-cut-extensions-5-trillion. ↩︎