Category: The Wealth Advisor

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. ↩︎

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). ↩︎

Creative Uses for Life Insurance

According to a new study from LIMRA and Life Happens, two nonprofit industry trade associations, a record-high number of American adults—approximately 102 million—either do not have life insurance or do not have enough coverage. 

Misunderstandings about how much life insurance costs and what type to purchase are the largest barriers to purchasing a policy. Even among those with a life insurance policy, there are knowledge gaps about how it can be used to meet their financial and estate planning goals. 

Two Types of Life Insurance for Estate Planning

About half of US adults (52 percent) report having life insurance coverage. Forty-two percent acknowledge a coverage gap, while 37 percent say they intend to purchase coverage in the next year. You may wonder where you fall on the life insurance continuum. 

There are two types of life insurance to consider when engaging in estate planning: 

• Term life insurance pays out a death benefit if you pass away during the policy’s “term,” typically 10 to 30 years. 
• Whole life insurance remains in effect for the entirety of your life and can build cash value over time. 

Several variations exist within these two types of policies, each providing different benefits at different price points. Life insurance policies designed to meet specific purposes, such as those that cover loan balances and final expenses and those that insure two lives (for example, first-to-die and second-to-die policies), are also available. 

Life Insurance Perks You Might Not Know About 

On the surface, life insurance is a straightforward financial product: you pay premiums in exchange for a tax-free cash benefit that the insurance company pays to your loved ones after your death. 

Most people who buy life insurance do so because they have financial dependents. However, life insurance policies can also provide important benefits to the policyholder. From married couples with kids to couples without children, empty nesters, retirees, business owners, and investors, life insurance can provide several perks you may not have thought about. 

Here are some creative ways to fit life insurance into your estate plan: 

• Funding a trust. Maybe you have a child with special needs or another dependent who requires ongoing care or support. You may want to set aside money to help fund a child’s education, first home, or travel. Or, like many modern families, you may have a blended family with you or your spouse having children from previous relationships. You could even have a beloved pet you want to ensure is cared for if you pass away unexpectedly. 

Each of these situations—and many others—can be well-served by naming a revocable or irrevocable trust as the beneficiary of your life insurance policy rather than an individual beneficiary or beneficiaries directly. Funding a trust with life insurance proceeds allows you to set terms on how the money is used and provide for the unique needs of your loved ones. An irrevocable life insurance trust can also avoid probate and may, in some circumstances, reduce estate taxes. 

• Paying taxes and debts. For the most part, your debts do not just disappear when you die. In addition to any outstanding creditor claims and income taxes that may be due upon death, dying can trigger estate and inheritance taxes that, if not planned for, can easily drain your estate. You can purchase life insurance to cover your estate’s tax payments and other debts and eliminate the need to liquidate your accounts or sell illiquid assets (like a business or art collection) to satisfy these claims.
• Equalizing inheritances. The death benefit of a life insurance policy can be used to help equalize the inheritances for multiple heirs when you would like to give each beneficiary equal value but have assets you do not want to liquidate (for example, a family business, family home, or cottage) to truly make things even. For example, if one child wants to keep the family vacation home and the other wants to sell it, you can gift the home to the former and buy a life insurance policy equal to the home’s value to benefit the latter. As another example, if you want to give your family business to a child who works in the business but have no assets or insufficient assets to give your other children, a life insurance policy can give an equalized inheritance to those other children.
• Making philanthropic donations. Nothing says you have to name a loved one as a life insurance policy beneficiary. Your policy, in part or in whole, can be a gift to a charity or a nonprofit organization. However, before structuring a life insurance policy to benefit a charitable cause, check with the organization to ensure all applicable procedures are followed. 
• Paying final expenses. It is not just the cost of living that has gotten more expensive. Funeral and burial expenses are also surging and can easily run $8,000 to $10,000 or more. Further, approximately 6 percent of US adults owe over $1,000 in medical debt, which may still be owed at the time of a person’s death. A specialized type of life insurance policy, or final expense life insurance, can be purchased to cover end-of-life expenses like funeral and medical bills. 

How to Fit Life Insurance into Your Estate Plan

Life insurance, like estate planning, is for everyone. No matter your stage of life or circumstances, adding life insurance to your estate plan can give you and your loved ones flexibility to deal with expected and unexpected expenses in the future. 

If you are one of the more than 100 million Americans facing a life insurance coverage gap, we can help you and your trusted advisors craft a plan to bridge that gap with policy advice that fits your needs, situation, and budget. Schedule a meeting with our attorneys to discuss how life insurance can strengthen your estate plan. 

The proceeds from your life insurance policy can benefit your loved ones in many ways, from paying off your outstanding debts to providing supplemental income for your spouse and children to covering funeral and burial expenses. 

Life insurance policy payouts average $168,000. As the policyholder, you can—and should—name beneficiaries of the policy. Generally, however, when a policyholder passes, the named beneficiaries receive their share of the death benefit outright and in a lump sum without stipulations or conditions.

You likely purchased life insurance to protect those who depend on you. To make the most of your policy, consider who you name as a beneficiary and how the death benefit distribution method fits into your overall estate plan.  

Who Can Be Named as a Beneficiary

A life insurance policy can name a single individual, two or more people, the trustee of a trust, a charity, or your estate as a beneficiary. 

You must name both “primary” and “contingent” beneficiaries. The primary beneficiary is the first to receive death benefits from the policy. A contingent beneficiary serves as a backup if the primary beneficiary cannot be located or is dead. If none of the primary or contingent beneficiaries can be found, the death benefit is generally paid to the policyholder’s estate. However, this is not always the case; it is important to review your life insurance policy’s terms to ensure you understand what will happen when you pass away. 

When filling out beneficiary designation forms, you should name beneficiaries as clearly as possible by including their full legal names and Social Security numbers (if necessary). Some forms request phone numbers and addresses as well. While this information is usually optional, it is always a good idea to be as complete as possible. In addition, your beneficiary designation forms should be periodically checked and kept up-to-date to reflect life changes, such as the birth of a child, marriage, or divorce. 

Although you—the policyholder—name beneficiaries, the beneficiaries choose how they collect the death benefit payout if there is more than one way the insurance company will distribute death benefits. Most insurers allow for lump-sum, installment, specific income, or annuity payouts. One benefit of designating beneficiaries is that this money passes outside of probate (the court-supervised process of settling your affairs at your death). 

Surviving Spouse and Child Beneficiaries

If you are married and have kids, you will likely name your spouse and children as policy beneficiaries. The death benefit you leave them can be a significant financial change. It could help pay off a mortgage, assist the children with college expenses, or fill the cash flow gap resulting from the loss of your contribution to household income. Naming a spouse or children as beneficiaries of a life insurance policy comes with a few potential catches, though. 

Spouse   

Naming your spouse as a life insurance beneficiary is an obvious choice. The policy proceeds can be used to pay off debts you owe individually or as a couple. 

Because the money passes outside of probate, your creditors likely will not have access to the death benefit. However, the death benefit is fair game to your spouse’s creditors once the money is paid out to them. 

While using a life insurance death benefit to pay off debt may ultimately be in your spouse’s best interest, you should make sure that you purchase enough insurance to adequately cover your debts—and their debts—if this is your intention. 

Adult Children

Unlike your spouse, as it relates to certain debts, your children likely will not be personally responsible for your debts after you die, at least not directly. But they may have to pay your creditors from the accounts and property you leave behind at your death through the probate or trust administration process. A life insurance policy can help ensure that other accounts and property (for example, your family home, bank accounts, and investment accounts) go to your loved ones, not debt obligations. 

Also, keep in mind that once your adult children receive a life insurance payout, their own creditors can access the money. While paying off debt could benefit them, you might prefer that the money be utilized for something else, like schooling or living expenses. 

Minor Children

Insurance companies are not permitted to pay life insurance benefits directly to minor children because they cannot legally own or receive accounts or property in their name until they reach the age of majority. A guardian or conservator might have to be appointed to manage the funds until the child comes of age. This entails added court costs, and the proceedings could hold up the payment depending on your state. Once your child reaches the age of majority, they will likely receive the balance of their share of the insurance proceeds outright in a lump sum.

Some life insurance policies allow a custodian to be assigned to a minor child beneficiary without probate court involvement. A custodian manages the money on behalf of the minor child until they come of age, at which point the money is turned over to them, again, usually in a lump sum.

Charity 

Your legacy and estate plan might extend beyond your family and include a charity or nonprofit organization. 

You could purchase a new life insurance policy to make a charitable gift, change the beneficiary designation of an existing policy to a charitable organization, transfer policy ownership to a charity, or give the gift of policy dividends to a charity. Each option can provide tax benefits that leave more money in your estate. 

Creating a Trust for a Loved One

By creating a trust as the beneficiary of the life insurance policy, you can protect the proceeds from creditors and exert more control over how the death benefit is spent. 

For example, a life insurance trust can be used to do any of the following: 

• Leave money to minor beneficiaries
• Retain means-tested government assistance eligibility for a disabled loved one
• Keep a young adult from spending the funds all at once or for nonapproved purposes, such as personal expenses instead of their college education 
• Prevent commingling the insurance proceeds into marital property if your spouse remarries or your adult child gets divorced 

Life insurance proceeds held in trust add assurances that a death benefit will be spent in accordance with your wishes. Trust funds are exempt from probate and may reduce estate taxes, depending on the type of trust used. 

Life Insurance and Your Estate Plan

Purchasing life insurance is one of the best ways to provide financial security for your loved ones after you are gone. But if you are not careful and thoughtful about naming beneficiaries, they may not receive the protection you hoped for. 

To make the most of life insurance in your estate plan, schedule a meeting with our attorneys to review your plan. 

About 90 million Americans depend on life insurance for financial protection and retirement security. An almost equal number say that they either do not have any life insurance or need more life insurance. More than one-third say they plan to purchase coverage in the next year. 

With very few exceptions, life insurance can benefit everyone. Owning life insurance is necessary, especially if you have dependents. But while you might understand that buying life insurance is a good move, you may be unsure whether you have enough, how to determine the ideal amount for you and your family, and where life insurance fits into your overall financial and estate plans. 

Life Insurance Statistics and Trends

According to the 2024 Life Insurance Barometer Study from LIMRA and Life Happens, two nonprofit industry trade associations, about half of US adults report having life insurance. The study found that more than 100 million Americans are living with a life insurance gap—the highest number in the study’s 14-year history. This gap is higher among women than men and highest among Americans earning less than $50,000. 

For the last five decades, the percentage of American adults with life insurance has steadily declined, from over 80 percent in 1975 to just 52 percent in 2023, says Guardian Life. Coverage amounts are also declining, even as the cost of living continues to rise. 

Top Reasons to Buy Life Insurance

Most people buy life insurance to provide tax-free income replacement to their family in case they suddenly pass away.

Insurance experts recommend buying life insurance with a death benefit equal to at least 10 times your salary. For example, if you earn $50,000 per year, you would want to buy a minimum of $500,000 in coverage. 

A $500,000 policy might sound like a lot of coverage, but this amount does not exist in a vacuum. It must be considered alongside factors like family size, debt levels, and financial goals—all of which can change and require additional coverage. 

You may also need more coverage if you are using life insurance for a purpose other than (or in addition to) leaving money to your loved ones. 

Other reasons to buy life insurance beyond income replacement include the following: 

• Using the cash value to pay off a loan, protect existing assets, or build an emergency fund
• Making charitable contributions
• Funding buy-sell agreements for a business
• Providing flexibility to your estate plan
• Covering specific expenses, such as a child’s education, wedding, or travel, with a life insurance trust

How to Purchase the Right Policy and Amount

Most insurers offer coverage limits ranging from $100,000 to several million dollars per policy. Insurers often cap individual policies at $5 million to $10 million, although you can have more than one policy. There are many reasons why you might want to have multiple policies. 

From term life and whole life to variable life and group life to nontraditional policies like indexed life and supplemental life, you should focus on the policies that make sense for your needs and goals. However, this may not be as simple as it sounds. 

The reasons for buying life insurance—and the corresponding coverage amounts needed—can change over time. Here are some situations that could prompt you to reconsider your life insurance coverage: 

• You recently started a family, and your employer-provided group life insurance is no longer enough 
• Your family has grown, and your life insurance policy should grow accordingly
• You have taken on a significant amount of debt 
• You purchased term life insurance earlier and now want the benefits of whole life insurance later in life 
• You have retired and no longer have your employer-provided life insurance policy
• Your income increased
• Your stay-at-home spouse is uninsured 

Talk to an Attorney about Life Insurance and Estate Planning

The reasons for buying life insurance are as varied as the available policy types. If you are among the more than 100 million Americans facing a life insurance coverage gap, an attorney, working with a financial planner and insurance agent, can ensure you purchase the right policy and maintain the right amount of coverage. 

Your life insurance policies and estate plan should be revisited every three to five years. Even if you have enough insurance, we often see policyholders making mistakes such as naming their estate as the beneficiary, not updating beneficiary designations, not naming contingent beneficiaries, and naming minor children or special needs beneficiaries without setting up a custodian or trust. 

It can be a mistake to silo your financial planning, retirement planning, wealth management, and estate planning. By viewing them as parts of a whole, overarching plan that serves the same overall goals, you and your family will be better prepared for the future. 

Please meet with our attorneys today to start planning for your future. 

Gloria Vanderbilt: No Trust Fund Kids for Her

We are at the precipice of what is being called “The Greatest Wealth Transfer in History,” as baby boomers are set to pass down $84 trillion to younger generations.¹ Every parent wants to see their children succeed. But some may wonder whether an inheritance will help promote or hinder the future success of their children. Famous mom Gloria Vanderbilt was staunchly against trust funds for her kids. And at least one of them applauds her decision. 

Vanderbilt Heiress Makes Good on “No Trust Fund” Promise

Before she passed away in 2019, Gloria Vanderbilt, heiress to the Vanderbilt fortune (or at least what remained of it) that was created by her great-great-grandfather, railroad and shipping tycoon Cornelius Vanderbilt, made it clear to her three children that they should not expect a trust fund from her. 

Gloria was herself the beneficiary of a trust fund worth an estimated $2.5–$5 million in 1925, or around $35–$70 million today, and had a reported net worth of around $200 million when she passed away. 

But unlike her father, Reginald Vanderbilt, who squandered most of the family fortune, Gloria made more money than she inherited during her career as a fashion designer, actress, model, and artist, building a denim business that was worth an estimated $100 million. 

In a 1985 interview with the New York Times, Gloria said, “I’m not knocking inherited money, but the money I’ve made has a reality to me that inherited money doesn’t have.”² 

Decades later her son, CNN news anchor Anderson Cooper, echoed his mother’s stance on inherited wealth when he called it a “curse” and an “initiative sucker” and questioned whether he would have been so motivated if he felt like there was a “pot of gold waiting for [him].”³ 

“We believe in working,” he told radio host Howard Stern when Stern argued that leaving your children an inheritance is a loving gesture.⁴

Like his mother, Cooper did just fine on his own. Although he ended up receiving $1.5 million from Gloria’s estate, his net worth prior to his inheritance was thought to be more than $100 million—hardly the mark of a trust fund kid. 

The Case for and against Leaving Your Kids an Inheritance

It is becoming something of a trend among the super-rich to not leave their fortunes to their kids. Mick Jagger recently revealed that he will be leaving his $500 million fortune to charity rather than to his eight children, joining the ranks of mega-wealthy celebs and business people like Warren Buffet, Mark Zuckerberg, and Bill Gates who have made similar vows. 

Others, including famous foodie Guy Fieri, actor Jackie Chan, and composer Andrew Lloyd Webber, want their kids to work for their inheritances. Fieri’s recipe for his children’s success?  The children are not allowed to take over his dining empire until they achieve postgraduate degrees. 

Research suggests there is wisdom to avoiding the silver spoon scenario. The Williams Group wealth consultancy, for example, found that 70 percent of wealthy families lose their wealth by the second generation, and 90 percent lose it by the third generation.⁵ A survey by U.S. Trust found that only 42 percent of high-net-worth individuals have a high degree of confidence that the next generation is financially responsible enough to handle an inheritance.⁶ 

The Vanderbilts present a compelling case study—and counterpoint—to the narrative of heirs wasting the family fortune. Despite receiving a trust from her profligate father with enough funds to live comfortably, Gloria’s inheritance did not dull her desire to achieve independent success. Cooper also had a strong work ethic. He went to Yale, interned at the CIA, and became one of the most recognizable faces in the media. 

It could be that Gloria, like every mother, knew her child best and knew he would succeed on his own. Perhaps equally as important was the good example she set for her children.

One of the main reasons why family fortunes are squandered is because those who create the initial wealth do not pass on detailed instructions or restrictions regarding how heirs should spend it. Attitudes towards wealth, like wealth itself, are often inherited. Kids need to learn good foundational money habits to be financially successful. And estate planning tools like trusts that specify how and when the money can be used offer an enforcement mechanism. 

Having a trust fund or substantial inheritance does not guarantee that heirs will be successful in life. Conversely, not leaving an inheritance could be a strong motivator for loved ones to find their own path forward.

What is good for one kid may not be necessarily good for every kid. While some make the most of their inheritance with no strings attached, others benefit from safeguards and incentives. 

Another option you have as a parent is to gift money to your children now, when it might benefit them more and you can keep an eye on how they spend it. For 2024, you can give gifts of up to $18,000 per recipient to as many people as you want without having to pay any taxes on the gifts. Also, gifts over $18,000 per recipient will not necessarily result in a gift tax but will instead chip away at your lifetime gift tax exclusion amount of $13.61 million. These threshold amounts double for couples. 

Intergenerational wealth-building and estate planning go hand in hand. For help crafting a plan that puts your heirs in the best position to succeed, reach out to our attorneys and schedule a meeting. 

Aretha Franklin: Too Much Estate Planning

Too little estate planning can put your heirs in a bind and tie up your estate in time-consuming and costly probate litigation. But as the legal saga of Aretha Franklin’s estate shows, too much estate planning—in particular, planning that introduces uncertainty about your final wishes—can also be problematic. 

After her death, there are lessons to learn from the Queen of Soul about how to R-E-S-P-E-C-T your legacy—and your heirs—with a well-thought-out, professionally prepared estate plan. 

Four Sons, Two Wills, and One High-Stakes Court Drama

Aretha Franklin, one of the most influential and successful singers in American history, passed away at her Detroit, Michigan home in 2018 at the age of 76. Her passing marked the end of a storied musical career—and the beginning of a five-year court battle among her children over her last will and testament.  

Initially, it appeared as though Franklin died intestate—that is, without a will—which would have left the court to decide how her personal property, real estate, music and copyrights, and other money and property would be divided among her four sons. But the surprise discovery of not one but two wills raised legal questions about how Franklin wanted her money and property distributed. 

One will from 2014 was found under couch cushions and written in a spiral notebook. The other, dated 2010, was in a locked cabinet. Both were handwritten and had detailed lists of her accounts and property and named who should get what, but neither was prepared by a lawyer or listed witnesses. Further complicating matters, the two wills contained key differences about how the estate should be divided up, and Franklin’s sons disagreed about which version should control the estate. 

Over the next five years, the sons would face off in court over these tangled legal questions. The case became combative, and a rift reportedly developed in the family. A jury finally put the saga to rest when it determined that the 2014 document found in the late singer’s couch represented her true final wishes. 

Takeaways from Franklin’s Will Dispute

Estate planning is about cementing your legacy as you envision it and making sure that your heirs have minimal burdens when they inherit your money and property. 

Aretha Franklin’s legacy, at least from a musical standpoint, cannot be questioned. But her failure to put her personal finances in order before her death led to a messy legal situation that could have been easily avoided with the following basic estate planning strategies: 

• Let loved ones know where documents are stored. A will must be presented to the court and verified before it takes effect. If it cannot be found, it is effectively useless. You need to make sure that your loved ones know where your will is stored, along with your additional estate plan documents like trusts, powers of attorney, and life insurance policies. Keep them some place secure, such as a bank safe deposit box, a fireproof safe, a filing cabinet, or an encrypted online cloud. Anyone needing access to the documents should also have access codes. Document copies can be given to your estate planning attorney, the local probate court, a trusted friend or family member, or the executor as a fail-safe.
• Keep just one version of estate planning documents. Only one will is admissible to probate. As it did in Franklin’s case, the most recent version of a will or other estate planning document typically prevails in court over an older one. If you update your will or create new documents, destroy the older version to prevent confusion. 
• Avoid handwritten wills. Unless you find yourself on your deathbed without a will, desperately scrawling one out at the last minute, there is not really a good reason to use a handwritten will, known as a holographic will. Although holographic wills are considered legally valid in many states, there are some states that do not allow them at all, and in the states that do allow them, they must meet certain criteria. In some states, for example, the material issues (what you have and to whom you want to leave what you have) must be in your own handwriting and signed and dated by you. Working with an attorney is a much better way to ensure that the document is legally prepared and executed. 
• Do not send mixed messages. Having more than one will is an estate planning blunder that is easily avoided. But you will also need to make sure that your wishes are properly reflected in the beneficiary designations on your retirement accounts and in the way you have created jointly owned accounts and property.   

Estate Planning Is a Lifelong Process

An estate plan is not something you complete once and then leave in a cabinet (or under couch cushions). It needs to be revisited and updated throughout your life as things change. The earlier you start estate planning, and the more vigilant you are about revising it, the better. Ignoring it or waiting until the last minute to make revisions could have unintended consequences that your heirs are left to deal with. 

To complete or review your estate plan, please reach out to schedule a meeting with our attorneys.  

Lucille Ball: Dangers of Being the First to Die

Lucille Ball was the queen of television comedy to an older generation of Americans. Today, more than 70 years after I Love Lucy premiered, reruns still air on late-night networks, making it the longest-broadcasted TV show of all time and endearing Ball to a new generation of fans. 

Rankings of the best I Love Lucy episodes can be found across the web. There are also real-life lessons to learn from Ball, including from a lesser-known episode involving her daughter and her widower’s second wife that provides important estate planning lessons about remarriage. 

How Some of Lucille Ball’s Prized Possessions Ended Up at Auction

Ball had two children with her first husband, actor Desi Arnaz: Lucie Arnaz and Desi Arnaz Jr. The beneficiaries of the Lucille Ball Estate, estimated at $40 million when she died in 1989, were her two children and her second husband, Gary Morton. ⁷

But it is what Lucy’s daughter Lucie did not end up inheriting that sparked a fierce legal battle between her and Susie McAllister, whom Gary Morton later married after Lucy’s death. 

Morton died in 1999, and in 2010, more than 10 years after Morton’s death, McAllister consigned several items to Heritage Auction Galleries, including love letters between Ball and Morton, photos of the couple, a Rolls Royce, and some of Ball’s personal items like an address book, backgammon boards, and lifetime achievement awards. ⁸

When Lucie learned about the auction, she demanded some of the items be returned, threatening legal action against McAllister to stop the sale. According to a countersuit filed by McAllister against Lucie seeking a judge’s ruling to let the auction proceed, Ball left the personal effects in question to Lucie in her estate plan—but Lucie never claimed them from the estate. They then passed to Morton and eventually to McAllister from her late husband. 

The judge ultimately ruled in favor of Lucie and said that the auction could be stopped if she posted a $250,000 bond, but Lucie unfortunately could not afford it. Not all was lost, though, as her legal team reached an agreement with the auction house to have the lifetime achievement awards returned. The other items were auctioned off. ⁹

Estate Planning Lessons from the Ball Auction Debacle 

An attorney representing Lucie had strong words about the auction, saying it was insulting to Ball’s legacy and contravened her “express desire that these items were to belong to her daughter after her death.”¹⁰

One of the stranger and unexplained aspects of the Lucille Ball auction saga is why Lucie would have forfeited the items that ended up being offered for sale. While McAllister contends they were never collected, both women agreed that Ball left them to her daughter in her will. 

Assuming this is true, it means that Lucie made a mistake by not claiming the property she was gifted. Typically, unclaimed inheritances pass to the next beneficiary in line—presumably in this case Gary Morton.

However, in leaving the unclaimed heirlooms to McAllister, Morton may also have erred. It is plausible he did not know that Ball wanted Lucie to inherit the personal effects. But he probably should have known that they were better off with his stepdaughter than with McAllister, to whom they could not possibly have had any sentimental value. Put yourself in McAllister’s position: she lived with reminders of the couple’s life together for more than ten years out of respect for them and finally parted with the items as she remodeled her house and sought a fresh start. 

The entire situation between McAllister and Lucie might have been avoided if Morton had asked himself why McAllister would want the old love letters, photos, and awards. So the second lesson that can be learned from this legal drama is that if you inherit property from a previous spouse and later remarry, you need to think carefully about who should inherit it. 

Fitting the Small Details into the Big Picture of Your Estate Plan

Whether you are on the giving or the receiving end of an estate plan, we have your needs covered. 

If you were named as an estate beneficiary and are not sure how to claim the accounts or property gifted to you or need to take action to protect your beneficiary rights, our estate administration attorneys can help. We can also assist with the often complicated estate planning decisions that come with remarriage and blended families. 

Thoughtful, proactive action is the key to successful estate planning. To discuss your estate plan goals and concerns, schedule a meeting with our attorneys. 

1. Jennifer Wines, How Might the Great Wealth Transfer Change Society?, Kiplinger (Dec. 5, 2023), https://www.kiplinger.com/retirement/how-might-the-great-wealth-transfer-change-society.
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2. Antoinette Bueno, Why Gloria Vanderbilt Did Not Leave an Inheritance for Son Anderson Cooper, ET (June 18, 2019), https://www.etonline.com/why-gloria-vanderbilt-did-not-leave-an-inheritance-for-son-anderson-cooper-127225.
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3. Michelle Singeltary, Gloria Vanderbilt Reportedly Did Not Leave Her Heirs Much Money. Maybe You Should Follow Her Lead., Wash. Post (June 24, 2019), https://www.washingtonpost.com/business/2019/06/24/gloria-vanderbilt-is-reportedly-not-leaving-her-heirs-much-money-maybe-you-shouldnt-either.
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4.  Id.
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5.  ​​See ​​Rhymer Rigby, Disinheriting Your Children Might Be for Their Own Good, Fin. Times (Oct. 14, 2019), https://www.ft.com/content/eb4a390a-d926-11e9-9c26-419d783e10e8. ↩︎
6. U.S. Trust, U.S. Trust Insights on Wealth and Worth: The Generational Collide 14 (2017), https://www.truevaluemetrics.org/DBpdfs/ImpactInvesting/UST-BoA-Wealth-Worth-Overview-Broch-2017.pdf.
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7. Neetha K, Lucille Ball: Life, Death & Money: What Was “I Love Lucy” Star’s Net Worth at the Time of Her Death?, Meaww (Jan. 9, 2021),  https://meaww.com/lucille-ball-life-death-money-i-love-lucy-star-net-worth-at-death-reelz-documentary-estate-heirs-war.
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8. Lucille Ball Memorabilia from the Estate of Gary Morton—Including Love Letters, Rolls Royce, Awards and Artwork—at Auction in Beverly Hills, Heritage Auctions (July 6, 2010), https://news.cision.com/heritage-auctions/r/lucille-ball-memorabilia-from-the-estate-of-gary-morton—including-love-letters–rolls-royce–awards-and-artwork—at-auction-in-beverly-hills,g502294.
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9. Jason Pham, Here’s Where Lucille Ball’s Kids Are Now & How Much They Inherited after Their Mom’s Death, Yahoo! Fin. (Mar. 7, 2022), https://finance.yahoo.com/news/where-lucille-ball-kids-now-133309434.html.
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10. Catherine Saunders-Watson, Heirs Spar over Upcoming Auction of Lucille Ball Items, LiveAuctioneers (July 15, 2010), https://www.liveauctioneers.com/news/top-news/crime-and-litigation/heirs-spar-over-auction-of-lucille-ball-items.
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