Category: The Wealth Advisor

Picture this: You are standing on a piece of land that has been in your family for generations and has been handed down through a trust. The land is imbued with memories from your childhood, your children, and family gatherings. You want to keep the land in the family for years to come. However, the family trust is set to end soon, and when it does, you and your cousins will each own a share of the property. 

At that point, the land will likely be subdivided, sold off, and developed. You look at old photos of your family on the land and convince yourself that is not what they would have wanted, and it is not what you want either. Other family members want to sell, however, and cash in. 

What can you do, legally, to protect the land while keeping your family members at bay? 

The Descendants Movie Showcases Trustee Challenges

The above scenario is the plot of the 2011 movie The Descendants, starring George Clooney and based on a novel of the same name. 

Although fictional, The Descendants has some basis in fact and reflects a common estate planning challenge that many families face when attempting to hold and manage assets (accounts and property) for multiple generations. 

Clooney plays Matt King, a Hawaii attorney and sole trustee of a family trust established by his great-great-grandparents, a Hawaiian princess and an American banker. The trust’s most valuable asset is a 25,000-acre parcel of pristine coastland on the island of Kauai. The land has been in the family since the 1860s, but the trust is set to end in seven years. 

Matt, one of about 20 beneficiaries of the trust, is not reliant on it for income and does not want to sell the land. However, many of his cousins have squandered their inheritance and need the money. 

Worried that distributing the land to his cousins would be a “trainwreck”—alluding to the likelihood that the co-owning cousins would end up in a complicated and costly partition lawsuit—Matt must decide what to do with the land. 

Right before he is about to sell to a developer, Matt has a change of heart. He decides against selling the family’s “piece of paradise,” which his ancestors would not have wanted developed; he then has seven years to find a way to preserve it and the legacy imbued in it. 

Matt’s decision sets the stage for litigation between him and his cousins, who prefer to sell. 

Some Lessons about Trusts from The Descendants 

The author of The Descendants reportedly drew inspiration from family trusts that were in the news around the time she was writing the novel.¹ To this day, large pieces of land are still held in Hawaii by so-called Ali’i trusts that were set up more than a century ago to hold the assets of Hawaiian royalty. 

The Descendants offers estate planning lessons about issues like a trustee’s power to act unilaterally, the duties that trustees owe to trust beneficiaries, problems associated with co-ownership of valuable undeveloped land, and more. 

• Whenever property must be distributed among multiple family members, like the land held in Matt King’s family trust, the potential for family conflict exists. The “trainwreck” that Matt King envisions centers on the likelihood of his cousins fighting over how to divide their interests in the land when they become co-owners. This situation can put tremendous pressure on a family trustee, especially one who is also a beneficiary, to remain objective in the face of family demands. 
• While it is not specified in the movie how Matt became sole successor trustee, multigenerational trusts need a mechanism for selecting successor trustees who can take over for the initial trustees and those successors who follow them.
• Matt, as the sole trustee, has a legal duty to carry out the trust’s purpose in a way that serves the beneficiaries’ best interests. When he asks his cousins what they view as being in their best interests, almost all of them want to sell. However, just because a beneficiary says they want something or consents to a trustee’s proposed action does not mean they cannot later sue the trustee for a perceived breach of duty if their decision was bad in hindsight. 
• A third-party professional trustee or co-trustee may be better suited than a family member to navigate the types of real-life family inheritance issues depicted in The Descendants. A corporate trustee from a bank or trust company can also provide continuity over multiple generations. 
• The person who sets up a trust and transfers their accounts and property to it should be clear about their intentions so that future heirs do not have to wrestle with the type of decision that Matt agonized over. 

Write a Legacy Script for Your Descendants 

You do not have to be the descendant of Hawaiian royalty to struggle with the sorts of estate planning quandaries that Matt King faces in The Descendants, and it does not have to be a piece of land you are trying to protect. It could be any assets that are placed in a trust and accumulate wealth for successive generations. 

The longer the duration being planned for, the greater the potential challenges. Let us help you write a legacy script that honors your family’s past and secures the financial well-being of your future beneficiaries. 

1. Julia Flynn Siler, ‘The Descendants’ Aims to Lay Down the Law in Hawaii, The Wall Street J. (Nov. 26, 2011), https://www.wsj.com/articles/BL-SEB-68005. ↩︎

An Estate Plan Is Your Script to a Lasting Legacy

“We are all storytellers, and we are the stories we tell,” wrote American psychologist Dan McAdams. Narrative thinking refers to how we view our own role in the story of our lives. It is a more formal way of describing “main character energy” or “main character syndrome,” two terms that originated on social media to describe when someone puts themselves first and takes control of their narrative. 

Viewing yourself as the main character in the movie of your life is associated with greater psychological well-being. It can make you feel more competent, autonomous, and effective. One way to take control of your story is to create an estate plan, enabling you to write a script for your legacy. 

An Estate Plan as Your Legacy Script

Storytelling is an art as old as humanity itself. Our brains are designed to think in narratives. We cannot resist a good story that reels us in with intriguing characters and develops into a tension-filled middle and a satisfying ending. From bedtime stories as children to Netflix binges as adults, our predisposition toward narratives is a deep-seated human impulse. 

As natural-born storytellers, we instinctively understand that every story needs certain dramatic ingredients to succeed. Screenwriters typically identify three elements—characters, conflict, and resolution—as key to crafting compelling narratives. 

An estate plan can also be broken down into these storytelling elements to help you visualize your life story and write your legacy script. 

Characters

If you are the main character, or protagonist, in your own movie, then your loved ones are the supporting characters. In estate planning terms, they may be the beneficiaries—those who stand to inherit your money and property. 

On-screen and in an estate plan, supporting characters are just as important as the main character. They add depth to the story and are integral to the main character’s experiences. Without them, the narrative would fall apart. 

When you think of a movie with just one main character, Tom Hanks in Cast Away may come to mind. But even Hanks’s character in Cast Away has flashbacks to his life from before the plane crash that color his experience on the island and motivate him to seek rescue. 

The best characters, whether main or supporting, have fully developed backstories, goals, and needs. We become invested in characters we can relate to as we learn more about their lives and the experiences that shaped them.

As estate planning attorneys, getting to know not only you, the main character in your movie, but also your beneficiaries, the supporting characters in your life who stand to inherit from you, is essential to understanding what motivates you and how we can best plan for your future. 

Conflict

Conflict is the foundation of any good story. It identifies the challenges the characters face, introduces tension, and forces the main character to take actions that move the story toward resolution. 

Conflicts are by their nature unpleasant and uncomfortable, which is what makes them so impactful. They are ultimately what allow viewers to become emotionally invested in a story and force the main character to grow and evolve. A conflict does not have to be bad, but it is hard to tell an engaging story when the characters have no obstacles to overcome. 

No family is conflict-free. There may be an antagonist in your family, such as an individual with a substance abuse disorder who requires special planning considerations. Maybe there is a scandalous backstory, like a child from an earlier, secret marriage who now figures into your estate plan. Or it could be more mundane interfamily squabbles over things like money, favoritism, and resentment that rear their ugly head. 

Applying the narrative element of conflict to estate planning means exploring potential issues in your family story and how they might play out in the future so that we can effectively plan around them. 

Resolution

A story’s payoff comes in the form of the resolution, when the characters overcome obstacles, tie up loose ends, and end the story. The resolution usually takes up very little screen time relative to the time spent fleshing out the characters and conflicts, but it is what everything has been leading up to. 

Writing a strong estate plan, like writing a strong resolution, can be tricky. It involves coming up with an ending that ties the story’s other elements together and is emotionally satisfying. There is nothing wrong with a plot twist—as long as the resolution provides a sense of closure. 

The resolution of the estate planning process is a set of tools, like a will, trust, power of attorney, and medical directive. These documents give you peace of mind that your legacy is secure and your loved ones will be cared for after you are gone, leaving no chance of lingering uncertainty. 

What Is Your Story?

We all have stories to tell. When you add those stories up over the course of a lifetime, you get something that looks much like a movie. 

A recent study found that people who view themselves as a major character in their life story, rather than a minor character, are more likely to pursue goals that are personally meaningful and align with their values.¹ 

If you see yourself as the main character in your life’s movie, the question is, who’s writing the script? 

Your estate plan, like your life story, is unique. We can help you write a plan that resolves family conflicts and provides for the supporting characters in your life. Ultimately, though, it is your story to tell. 

It is not too late to write the perfect ending: get in touch with an estate planning attorney. 

1. Eric W. Dolan, Seeing yourself as a main character boosts psychological well-being, study finds, PsyPost (July 20, 2024), https://www.psypost.org/seeing-yourself-as-a-main-character-boosts-psychological-well-being-study-finds/#google_vignette. ↩︎

Young adults are not known for being the most fiscally responsible people. Yet financial planning is more important than ever for a generation that is struggling with high inflation and debt and has a tendency to prioritize spending over saving. 

If your advice is falling on deaf ears, try putting yourself in your child’s position and seeing the current economic environment through their eyes. Professional guidance can also help break through money management barriers and prepare a young adult for a lifetime of financial success. 

Tuition Costs Have Never Been Higher

Eighty-three percent of Generation Z (those born between 1997 and 2010) say that a college education today is “very important” or “fairly important.”¹ But a growing number of zoomers are choosing to skip college and enter the job market due in large part to affordability concerns.² 

College costs have been trending upward for the last two decades and currently average nearly $110,000 for four years at an in-state public institution and $234,512 for four years at a private university.³

High school seniors who pursue higher education should make sure they understand what they are signing up for when they take out student loans. Private student loan interest rates are primarily based on creditworthiness, so it is important to establish a good credit score before applying. 

Student loan debt is notoriously difficult to discharge, and loan rates are typically fixed for the life of the loan. However, there are ways to manage student debts, such as interest rate discounts for automatic payment withdrawals, paying extra principal, and enrolling in federal programs such as the new Saving on a Valuable Education (SAVE) plan. 

Paychecks Are Not Going As Far

While more recent high school graduates are opting not to attend college and instead enter the workforce, this choice can present its own financial challenges. 

On paper, Gen Z workers are earning more than some in the older generations, but much of this comes from freelancing and rideshare jobs.⁴ 

Historically high inflation is eating into Gen Z’s earnings. Zoomers have been disproportionately impacted by rising prices and are spending more on essentials than preceding generations. 

Gen Z is contending with 32 percent inflation in the past decade. Compared with young people 10 years ago, Gen Z is paying 31 percent more for housing, twice as much for car insurance, and 46 percent more for health insurance.⁵ This can cause them to feel like they are starting further behind financially than their parents and grandparents were at their age and cannot afford the American Dream.⁶ 

Inflation deserves a large part of the blame for why Gen Z is living on a financial cliff. However, members of Gen Z may share some of the blame. Today’s young people have a much “softer” approach to investing and personal finance than previous generations. This approach is more about personal growth and mental well-being in the here and now than it is about saving for an uncertain future. 

Three in four Gen Zers say the current economy makes them hesitate to set long-term financial goals.⁷ Then again, this could be a “chicken-and-egg” scenario. 

Credit Cards Are Not the Answer to Inflation

In response to higher inflation and its corollary, less discretionary income, Gen Z is racking up credit card debt at an unprecedented rate. 

Eighty-four percent of Gen Zers are using credit cards, research from TransUnion shows. ⁸And roughly one in seven have maxed out their cards—more than any other generation.⁹ These trends are particularly worrisome because credit card interest is at an all-time high of around 22 percent. 

However, there are smart ways to use cards to build credit and earn rewards for an upcoming trip or purchase. Having a balance available in an emergency can also serve as a temporary self-funded loan. But in order to take advantage of these benefits, young adults need to understand the consequences of using a credit card. 

More Ways to Invest Than Ever

Younger investors are less confident that they can achieve above-average returns solely with stocks and bonds. Thus, instead of engaging in traditional investment strategies, Gen Z shows a greater preference for alternative investments such as crypto, private equity, direct investments in companies, socially responsible investing, and automated or robo-advisor investing.¹⁰

When looking to invest, it is important that young adults have a good strategy in place. A long-term investment strategy that relies on buying and holding specific assets is one of the best hedges against inflation.¹¹ Passive investing almost always beats active investing, even among money managers.¹²

Give Your Teen the Gift of Financial Literacy

The “real world” is often the crucible in which money lessons are learned the hard way. That does not mean a young adult should go off to college or enter the workforce without a basic financial education. Help your soon-to-be high school graduate establish—and meet—their financial goals by scheduling a consultation with an advisor. 

1. Tara P. Nicola, Majority of Gen Z Consider College Education Important, Gallup (Sept. 14, 2023), https://news.gallup.com/opinion/gallup/509906/majority-gen-consider-college-education-important.aspx.  ↩︎
2. Steven Schwartz, The College-to-Corporate Pipeline Is Facing Extinction. Here’s Why, FastCompany (July 10, 2024), https://www.fastcompany.com/91150442/genz-college-internet-economy.  ↩︎
3. Melanie Hanson, Average Cost of College & Tuition, Educ. Data Initiative (May 28, 2024), https://educationdata.org/average-cost-of-college.  ↩︎
4. Adam Palasciano, Does Gen X Make More at Work Than Millennials or Gen Z Do?, Yahoo!Finance (Feb. 25, 2024), https://finance.yahoo.com/news/does-gen-x-more-millennials-210036258.html.  ↩︎
5. John L. Dorman, Gen Zers Pay More for Housing Than Millennials Did—Why It Matters, Bus. Insider (June 23, 2024), https://www.businessinsider.com/gen-z-millennials-housing-costs-insurance-debt-election-trump-biden-2024-6.  ↩︎
6. Bailey Schulz & Kathleen Wong, “They Can’t Buy into That American Dream”: How Younger Workers Are Redefining Success, USA Today (Oct. 17, 2023), https://www.usatoday.com/story/money/2023/09/26/gen-z-millennials-face-unique-financial-challenges/70910672007.  ↩︎
7.  Intuit, Prosperity Index Study (Jan. 2023), https://www.intuit.com/blog/wp-content/uploads/2023/01/Intuit-Prosperity-Index-Report_US_Jan-2023.pdf.  ↩︎
8. Gen Z Consumers Are Using Credit More, and Differently, Than Their Millennial Counterparts at the Beginning of Their Credit Journeys, TransUnion (May 8, 2024), https://newsroom.transunion.com/gen-z-using-credit-differently.  ↩︎
9. Matt Egan, 1 in 7 Gen Z Credit Card Users Are “Maxed Out,” CNN (May 17, 2024), https://www.cnn.com/2024/05/17/business/gen-z-credit-card-users/index.html. ↩︎
10. Will the “Great Wealth Transfer” Transform the Markets?, Merrill,  https://www.ml.com/articles/great-wealth-transfer-impact.html (last visited Aug. 27, 2024). ↩︎
11. E. Napoletano, Best Investments to Beat Inflation, Forbes (July 30, 2024), https://www.forbes.com/advisor/investing/best-investments-to-beat-inflation.  ↩︎
12. Active vs. Passive Investing: What’s the Difference?, Investopedia (Sept. 6, 2023), https://www.investopedia.com/news/active-vs-passive-investing.  ↩︎

As our client—and as a parent—you know that having a comprehensive estate plan ensures that your children will be taken care of if something happens to you. But what if something happens to your child? Should they have a will, too? And if they do not, what happens then? 

These are some of the questions a parent might ask themselves and their child when broaching the topic of estate planning. While it might not be the most comfortable conversation, getting your child to step out of their comfort zone and encouraging them to think about their legacy can help their transition to adulthood. 

Motivations for a Young Person to Get a Will

When your child turns 18, they are legally an adult and can make a will. Although this is one of the less glamorous aspects of being an adult, it can foster a sense of independence and control over one’s actions and decisions.

The percentage of people who have an estate plan is low across all age groups. Oddly enough, however, the percentage of young adults with a will increased from 16 percent in 2020 to 24 percent in 2024, according to research from Caring.com.¹ Among the 18- to 34-year-old cohort, these were the top motivators for getting a will²: 

• Media coverage (34 percent)
• Family expansion (34 percent)
• Home purchase (28 percent)
• Current events (26 percent)
• Upcoming travel (22 percent)

Most Young Adults Own Some Traditional and Digital Assets

It should be stressed that, even if your child does not own much, they still probably have things of value, such as a bank account, pet, vehicle, or personal possessions (collectibles, art, jewelry, heirlooms, or memorabilia). They could also have an inheritance they are already in possession of or that you are managing for them through a family trust. 

While you probably have a good sense of the monetary and tangible accounts and property your children own, their online, digital assets may be less known to you but just as real to them as traditional assets—and in some cases, just as valuable. Digital assets are worth real-world money and include the following types of assets: 

• Bitcoin and other cryptocurrencies
• Nonfungible tokens (NFTs)
• Funds in PayPal, Venmo, and other payment apps
• Money owed to them from selling products through an online store such as Amazon or Etsy
• Rewards program points
• Monetized content channels that produce ad revenue
• Website domain names
• Copyrighted digital works
• Online wagering and sports betting account funds

It is worth noting that a young adult may also have other digital assets that are valuable from a more sentimental perspective, like extensive photo or video libraries stored in a digital cloud. 

Explain to your child where the estate in estate planning comes from. An estate consists of everything a person owns when they die. A young person may think they do not have enough money and property to warrant a will, but in terms of the law, a person can have an estate even if they die with $1 to their name. 

And if your young adult child owns anything of any value—even if it is just sentimental value—and cares about what happens to it, they should think about creating a will. 

Why Everyone Needs a Will

Parents who want to encourage their child to create a will can start by talking to them about the first step—taking inventory and making a list of all of their items and accounts. Next, you can raise the question of what would happen to these things if they were to pass away. 

When discussing the importance of a will, you should stress what occurs when somebody dies without a will: 

• Without a will, everything a young adult owns will likely have to go through probate court and eventually pass to their parents according to state statute. Some children may be fine with this, but others may prefer that a sibling, stepparent, stepsibling, significant other, friend, or somebody else receives their belongings. 
• A charitably minded young person might also be interested in making a gift to a cause they are passionate about.
• Even if a child has only one specific item they want to leave to someone at their passing or only one person they want to receive all of their assets, this could be enough to warrant a will.

A will also allows someone to name an executor to settle their affairs. The executor distributes a person’s money and property—both digital and nondigital—based on the instructions in the person’s will and can be granted power and control over their online accounts. This power allows the executor to do things like deactivate social media, email, and gaming accounts; access and pay online bills; and transfer and share digital content and account access. 

If the person does not name an executor in a will, the court will choose one for them. Unfortunately, the chosen executor may not be their first choice. 

Debt is another point to consider. Young adults aged 18 to 23 have an average debt balance of nearly $10,000.³ Tell your child that debts are part of an estate every bit as much as their money and property are. Debt that cannot be paid off from what they leave behind will likely disappear and will not transfer to you or other family members. But acknowledging what happens to our debt when we die can be part of the estate planning discussion. 

A Will Is a Big Step into Adulthood

When a child turns 18, they may be eager to show off their new adult status. Creating a will is one of the things that only a legal adult can do. While it may not rank high on their priority list, they can benefit from knowing what a will is, how it works, and why it is important. 

Talking about wills entails broaching the topic of death, which could discourage your child from taking the next step. But when they are ready to take it, they should have a foundational understanding to build on and a trusted advisor they can turn to for advice. If you would like to meet with us and your soon-to-be adult child to discuss the importance of an estate plan, please give us a call.

1. 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey (last visited Aug. 27, 2024). ↩︎
2. Id. ↩︎
3. Megan DeMatteo, The Average American Has $90,460 in Debt—Here’s How Much Debt Americans Have at Every Age, CNBC (Nov. 14, 2023), https://www.cnbc.com/select/average-american-debt-by-age.  ↩︎

High School Seniors Can Use a Starter Estate Plan

The long, carefree days of summer are nearing an end. If you have a high school senior at home, childhood is also coming to an end for them as they prepare to graduate, turn 18, and enter the “real world.” 

You have done everything you can to prepare your child mentally, emotionally, and financially for what comes next. But are they—and you—legally prepared for their official start of adulthood? 

Soon, your child will be able to vote, get married, and sign a mortgage. They will also be emancipated from your parental authority. This means that, without signed legal documents, you could find yourself helpless to intervene in an emergency or other situation where your adult child requires aid. 

Adventures in Adulting 

Parents never stop being parents. No matter how old our kids are, we feel compelled to nurture and protect them. However, our ability to do so is severely limited once our kids turn 18.

It is debatable whether an 18-year-old is truly an adult. Scientists who study the brain say the transition to adulthood is cognitively much more nuanced and, for some, brain development is not complete until people reach their late 20s or early 30s. 

Brain research helps explain why many young people engage in risky behavior well beyond the time they reach the age of legal adulthood. The transition out of adolescence is fraught with potential health risks. 

The point here is not to scare you but rather to prepare you and your soon-to-be adult child with the resources to meet unexpected possibilities head-on. 

Although you may recognize the dangers that await your child in the adult world, you may be unaware that if something happens to them and they have not signed certain estate planning documents and cannot communicate their wishes, you will likely have to petition the court before you can obtain information about them and make decisions for them. And that takes time you might not have. 

It does not have to be something bad, like an accident, that triggers the need for a trusted decision-maker. Maybe your child plans to enter the military, attend an out-of-state university, or travel abroad after they graduate. Whatever their plans are, they should have a basic estate plan when they turn 18. 

The 18-Year-Old’s Estate Plan Starter Pack 

While an 18-year-old may not need a full estate plan, they should at least prepare a few forms that address the new reality of their legal independence and the fact that a parent no longer has the right to manage their affairs. 

Powers of Attorney

A power of attorney (POA) document authorizes someone else to act on your behalf concerning the circumstances laid out in that document. Depending on state law, POAs can take effect immediately, at a future date, or upon a specific condition being met (e.g., incapacity due to injury or illness). The latter is known as a springing power of attorney. 

A POA can be broad in scope or limited only to those actions and types of decisions outlined in the document. Also, states have different rules governing POAs, and more than one form may be required if your child is changing their residence to a different state than you.

• A medical power of attorney allows an adult child to designate another person to make medical decisions for them. For example, it could allow you to step in and direct your child’s care in a medical emergency. 
• A financial power of attorney grants a designated person the authority to conduct financial and legal matters, such as paying bills, filing taxes, and managing banking and investment accounts, on another’s behalf. 

Advance Directive/Living Will

Young people tend to feel invincible. But contemplating mortality, and planning for it, is a part of growing up. 

One way to plan for a health crisis is with an advance directive or living will, which is a set of instructions that a person uses to outline their healthcare wishes if they suffer a debilitating injury or illness and are unable to communicate. It will specify end-of-life medical treatment preferences such as whether they want a feeding tube, artificial hydration, or a breathing machine to keep them alive. 

These tools are commonly confused with a DNR (do not resuscitate) order. DNR orders are not typically included within an estate plan but are instead executed within specific medical facilities like hospitals or assisted living facilities. 

Advance directives are not legally recognized in all states, but where they are, they can provide helpful guidance to the person acting under a medical power of attorney.

Health Insurance Portability and Accountability Act Waiver 

As either a separate document or included in a medical power of attorney, a Health Insurance Portability and Accountability Act (HIPAA) waiver grants named individuals access to the adult child’s protected health information. You will likely need a HIPAA waiver even if your child is still covered under your health insurance. 

Talk to Your Teen about Estate Planning

At some point, a parent and teenager should sit down and talk about the legal rights and responsibilities of adulthood. Stress to your teen that, without documents like financial and medical powers of attorney, state law will choose a decision-maker for them, most likely a parent, in the event they are unable to manage their own affairs. If they want a different person making decisions for them, they must name them in legal documents. Also, let them know that preparing legal documents in advance will help them avoid the lengthy and public process of having someone appointed as their decision-maker. 

Ready to talk to your teen about estate planning? We are happy to join the conversation and offer professional guidance. 

The term last will dates back more than a millennium to English common law, in which a person expressed what they “willed” to have happen to their property. The use of what we now know as a will dates back even further, to ancient Romans, who, under the Code of Justinian, recognized documents that transferred possessions from deceased male citizens to their heirs. 

While some of the specific uses and terminology related to wills have changed over the years, this estate planning tool retains its core purpose of transferring a person’s assets (money and property) to others after their death. Wills have stood the test of time—and for good reason: they are fundamental to controlling your assets and legacy. 

What a Will Does—and Does Not Do

The simplicity, flexibility, and clear instructions that a will provides for the disposition of assets explains why this tool is as relevant today as it was thousands of years ago. 

If anything, as our lives and social networks have become more complex and the things we own have grown more numerous, the need to plan for death has been magnified. Throughout all the changes, however, the humble will has remained a cornerstone of estate planning. 

Here is what a will allows you, as the creator of the will (or testator), to do: 

• Name the individuals (or entities, like charities) you want to receive your assets upon your death 
• Name an individual (the executor or personal representative) to be in charge of accounting for all your assets and liabilities and filing all necessary paperwork with the probate court
• Appoint a guardian to care for your minor children when you die, and name somebody to care for your pets after you pass. 

Wills do have some limitations, so you should also understand what a will does not do in an estate plan: 

• A will only governs assets held individually in your name without a beneficiary designation at the time of your passing. 
• A will cannot dispose of the entire interest of assets that are owned jointly, especially those including rights of survivorship (i.e., with a spouse or child) or governed by beneficiary designations or other contracts. Named beneficiaries on life insurance and retirement plans, for example, take precedence over the terms of a will, as do payable-on-death (POD) and transfer-on-death (TOD) designations on bank accounts. 
• A will does not control who makes financial and medical decisions for you if you are alive but unable to make them yourself due to illness, injury, or age-related decline. 

It is also important to note that wills only take effect at the time of your death. You cannot use them to transfer assets during your lifetime as you can with certain types of trusts. However, you can use will-based trusts, known as testamentary trusts, that the executor sets up according to the instructions in your will if you want your assets held for a beneficiary for a period of time or indefinitely. 

Why a Will Might Be the Right Answer for You

If most of what you own will be distributed according to a beneficiary designation, POD or TOD designation, or by operation of law due to joint ownership, you may look at a will as a safety net in case some assets have to go through probate. If you have modest accounts or property, you may be okay with your loved one receiving their inheritance outright. You may think that putting too many restrictions will eat into the inheritance being left behind. It is important to remember that you are relying on the designations to distribute your assets, so the designations need to be up-to-date. Take caution when planning to transfer assets at death by beneficiary designation, however, when your intended beneficiaries are minor children, financially irresponsible adult beneficiaries, or beneficiaries with special needs.

You may also be interested in a will because they are easy to understand and quick to implement. A will is a set of instructions for what will happen at your death. Because you retain ownership of your assets even after the will is signed, there is no additional paperwork needed to implement your plan (with the possible exception of updating beneficiary designations if changes need to be made).

Lastly, depending on your goals and circumstances, probate may not be so bad. If you believe that there will be fighting among family members, going through probate allows a third party (the judge) to oversee the proceedings and make sure that everyone is on their best behavior. If you are worried that your family will be too lazy to manage things on their own, probate can provide the required structure, timelines, and oversight to ensure that all the required tasks are completed on time.

Express Your Will with Help from an Estate Planning Attorney

When you sit down to create a will, you are participating in a legal tradition that dates back millennia. Failure to express your will and final wishes in a legal document may leave your loved ones without the future you intended for them. To help create a plan that brings your legacy into greater focus, please reach out and schedule a meeting. 

The majority of Americans do not have a will, and the number of US households with a will has been in steady decline.¹ 

At the outset, it is important to dispel a recurring myth about estate planning: It is not just for the wealthy—or older adults, married couples, or any other single category of individual. Estate planning is beneficial for everyone. But this is just one of the many misconceptions people have about wills and estate plans; there are also misunderstandings about how wills function and what planning purposes they can be used for. 

Myth #1: Wills can be used to avoid probate.

If you are like most Americans, you probably value your personal autonomy and want to minimize state involvement in your personal affairs—both in life and in death. 

When someone dies without a will (known as dying intestate), the courts and state law determine who receives the deceased person’s home, retirement savings, personal property, and other assets. This is done through a process called probate. 

Even if you pass away with a will, your estate must go through probate, although the process will not be nearly as heavy-handed as it would be for somebody who dies intestate. Your will lays out your wishes about what happens to your money and property instead of relying on your state’s law.

Probate is not necessarily bad in every jurisdiction. It costs money and can delay distributions to your loved ones. Still, it also helps to ensure that your estate is administered accurately and legally with the added oversight of the court.

That said, there are benefits to avoiding probate, and estate planning attorneys can recommend tools for doing so, such as trusts and beneficiary designations on financial accounts. 

Myth #2: You cannot use a will for tax planning.

The certainty of death and taxes, as famously noted by Benjamin Franklin, is not quite as certain as the taxes you might owe at the time of your death. 

Estate taxes, sometimes called death taxes, are applied to assets (your money and property) that you leave to others when you pass on, but the threshold net worth value when these taxes kick in is very high. In 2024, you will not owe federal estate and lifetime gift taxes until your taxable estate is over $13.61 million, and that exemption amount doubles for married couples. 

Separate from, and in addition to, the estate tax is the generation-skipping transfer (GST) tax, which applies to asset transfers to recipients—typically grandchildren—who are two or more generations younger than you. In 2024, the GST tax exemption is also $13.61 million, or $28.22 million per couple. 

However, the federal estate, gift, and GST tax exemption amount is set to decrease sharply at the start of 2026 and revert to pre-2017 levels that are around half of what they are now. This anticipated decrease in the exemption amount might justify employing advanced estate planning strategies now, ahead of the 2026 sunset. 

Before the current era of super-high exemptions, trusts were frequently used in estate planning to reduce or eliminate estate, gift, and GST taxes. These strategies are still generally available today, but wills can also be used for tax planning purposes. 

Trusts can be created by an individual during their lifetime, in a revocable living trust, or upon their death, under the terms of their will. The latter—known as testamentary trusts—can be structured in various ways that may be utilized for estate and GST tax planning, particularly by married couples. Some examples of tax-planning will-based trust structures are as follows: 

• A qualified terminable interest property (QTIP) trust is a type of trust established for the benefit of the surviving spouse. Assets transferred into a QTIP trust qualify for the unlimited marital deduction, mitigating estate taxes due upon the first spouse’s death. However, this may only defer estate taxes owed until the second spouse passes away.
  
• A decedent can leave their entire estate (or a large part) to their spouse. The surviving spouse can then disclaim, or say “no, thank you” to some or all of their inheritance from their spouse. This disclaimed portion goes into a bypass trust (which can go by many different names, such as credit shelter trust or family trust), which can benefit the surviving spouse (and can also benefit others, such as dependents) during their lifetime but will not be included in the surviving spouse’s estate at death. This trust may be created to use the willmaker’s lifetime exclusion amount at their death instead of the unlimited marital deduction.
  
• A trust can be established at your death that skips over your living children and directly benefits your grandchildren to avoid a double estate tax (once when passing to the next generation and again when passing to the generation after them). But because the GST tax exemption is separate from the lifetime estate and gift tax exemption, you can engage in advanced will-based planning to reduce or potentially eliminate the GST tax, allowing more money to flow to younger generations. 

Including tax-saving trusts in the provisions of a will can be quite complicated in practice, but will-based estate plans have a place in tax planning for every demographic. 

Myth #3: Creating a will is cheaper than creating a trust.

Creating a basic will might be cheaper than creating a basic trust, but it is not an apples-to-apples comparison. 

It ultimately comes down to how complex your plan is. Trusts tend to be more complex than wills and, therefore, are typically more expensive to prepare. However, trusts and wills can often contain similar provisions that require a comparable amount of time to properly research and draft properly. 

In addition to upfront costs, administration costs need to be factored in. Wills are subject to probate and can, therefore, be more expensive to administer. However, trusts may have ongoing costs such as managing investments, filing taxes, and accounting that simple wills likely do not have. 

Rather than focusing on a set price, you should orient a plan around your specific circumstances and needs. Estate planning is not an area where it pays to cut corners, whether by using online planning tools or trying to make an overly simplistic plan when a more detailed plan is required. 

You also need to consider the costs of nothaving an estate plan—or having a plan that falls short of your planning goals. To discuss those goals and how we can help you meet them, please reach out and schedule a consultation. 

1. Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited Jul. 31, 2024). ↩︎

Which Will Would You Choose?

If you or your loved ones have not yet created a will, you are not alone. In fact, according to a recent survey, not having created a will puts you among the majority of Americans. 

Like many Americans, you may wait for a major life event to occur before putting your final wishes into a formal estate plan, but this is not advisable. Estate planning should be done early, often, and with attorney assistance to ensure it serves its purpose and stands up to scrutiny. 

Why Fewer Americans Are Making a Will 

Caring.com’s 2024 Wills and Estate Planning Study found that only 32 percent of Americans currently have a will—a 6 percent decline compared to 2023 and the first drop since 2020.¹ 

What is holding people back from making a will? The top reasons cited were 

• procrastination (43 percent),
• a belief that they are too poor or do not have enough assets (40 percent),
• unsure how (16 percent), and
• costs too much (16 percent).²

For starters, anyone age 18 or older should have a will. Without one, the state decides what happens to your money, property, possessions, and minor children after your death. You lose the ability to decide things like who is responsible for winding down your affairs, who receives the things you own, and who cares for your children. 

Making a will is best handled by working with an experienced estate planning attorney. A simple will does not cost as much as you might think, especially when you consider the potential costs of not having one. 

Types of Wills

In some cases, your will can be typewritten, handwritten, or stated verbally to others. However, the laws in your state dictate the legal requirements for a will, including the types of wills that are recognized. 

A will that does not meet the formal requirements of the state you live in can be deemed invalid by the court, effectively leading to a scenario where you die intestate (i.e., without a will). If that happens, state law—not your intentions—could dictate what happens to your assets and your family should you die. Different types of wills include the following:

• A formal will is the most common type of will and is recognized in every state. In most states, it must be typewritten and signed by you (the testator) and two or three witnesses. Some states require notarization. This is usually the type of will that experienced attorneys recommend, as it is the most widely accepted.
• A holographic will is written and signed in your own writing and may not require witnesses for it to be legally valid. Not all states recognize holographic wills, and in states that do recognize them, the requirements to create a valid holographic vary. 
• A nuncupative will is stated orally, usually in a recording or to a witness. Most states do not recognize oral wills as valid. Those that do typically have narrow criteria for who can use them, such as members of the armed forces actively engaged in combat. 

Potential Issues with Oral and Handwritten Wills

Even if your state allows for handwritten or oral wills, they can pose problems. Often, the decision to use these types of wills occurs because somebody has put off creating a will until the last minute, and an emergency forces their hand. That is why they are sometimes called “deathbed wills.” 

Handwritten and oral wills, particularly if they were created last minute and not reviewed by an attorney, are more prone to mistakes and ambiguities that can cause confusion and make them harder—or impossible—to enforce. This is another reason you should not procrastinate when creating your will. 

When considering what can happen when you are not proactive about creating a will, the estate of Aretha Franklin offers a cautionary tale. When she passed away, the Queen of Soul left a handwritten will. Although her home state of Michigan recognizes them, scribbles, hard-to-read sections, and contradictory passages in her will forced her heirs into a protracted legal dispute to determine her true intentions. 

Research shows that up to 3 percent of all wills in the United States are contested in court.³ A contested will can not only undermine your original intentions but also potentially turn your loved ones against one another and lead to them spending their inheritance on legal fees. 

Professional Planning for Life’s Biggest Decisions

Whether you have not yet made a will, are in the beginning planning stages, have a handwritten or oral will that you want to convert to a formal will, or need to revise a will due to life changes, our estate planning attorneys are here to make sure everything is done correctly. 

While estate planning is for everyone, every plan is different. For an estate plan that meets your long-term goals and provides peace of mind in the present, please reach out and schedule a meeting. 

1. Rachel Lustbader, 2024 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited Jul. 31, 2024). ↩︎
2. Id. ↩︎
3. Margaret Ryznar & Angelique Devaux, Au Revoir, Will Contests: Comparative Lessons For Preventing Will Contests, 14 Nev. L. J. 1 (Jan. 15, 2014), https://scholars.law.unlv.edu/cgi/viewcontent.cgi?article=1525&context=nlj. ↩︎

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).  ↩︎

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. ↩︎