During the time that Mary owned all of the rights to Reeves' intellectual property and managed his ongoing royalties, she was earning around $400,000 each year. She ultimately remarried and remained with her second husband, Terry Davis, for 30 years.
Mary passed in 1999 after suffering from dementia and other ailments toward the end of her life. Her will left Terry Davis approximately $100,000 cash, along with some property.
]]> Interestingly, Terry Davis has been contesting her will for the past 12 years in the hopes of gaining a larger share of her estate.However, the other beneficiaries of her estate, Jim Reeves' niece and nephew, are disputing Davis' claims. They claim that during the end of her life, Mary suffered abuse or neglect at the hands of her former husband, and was also dealing with a diminished mental capacity due to her dementia. Accordingly, they argue that Davis should not stand to gain anything more than what was provided for in their aunt's validly executed will.
Unfortunately, this case has been drawn out extensively because Terry Davis is now representing himself, after having fired six attorneys. Certainly, the beneficiaries of the estate would like to have some finality to their loved one's wishes, and are hoping for a decision to be made regarding the will contest.
Now, more than 10 years after her death, a probate court will finally decide whether Mary's will should remain intact, or whether her second husband's will contest has merit.
Source: The Tennessean, "Jim Reeves royalties fight focuses on treatment of singer's widow," Anita Wadhwani, Jan. 25, 2012
]]>The rules regarding inheritance and designated beneficiaries are quite complex and will depend upon each individual's circumstances and the types of assets that are to be passed on. For example, the rules differ regarding retirement accounts held in the form of a 401(k) versus those assets held through an IRA.
]]> The following are some considerations that should be taken into account when designating beneficiaries for retirement accounts:An experienced estate planning attorney in Florida can help you to designate beneficiaries on all of your accounts so that your wishes are carried out upon your passing.
Source: CBS News, "Who'll benefit from your IRA? Not who you think," Ray Martin, Jan. 23, 2012
]]>Parks said in her will, all of her belongings would go to a charitable institute that promoted self and community betterment particularly among African Americans, called the Rosa and Raymond Parks Institute for Self-Development. She appointed a retired Detroit judge and her friend Elaine Steele to oversee her wishes, and also names Steele a beneficiary to receive 90 percent of her royalties. A lawsuit ensued with the other beneficiaries, her nieces and nephews, contesting that Parks allocated a larger portion of the royalties to Steel because of undue influence she had on Parks.
]]> When wills are contested it is often a result of the beneficiaries, or people who think they should have been beneficiaries, believing that the benefactor was not mentally competent when the will was made or someone excessively influenced the person to allocate their assets unfairly.In the case of Parks, here case was ended up working through the courts until finally arriving at the Michigan Supreme Court. Lower courts granted some more rights to the nieces and nephews, and then completely reversed the original designation of the will, forfeiting all the property and royalties from Steele because of a probate judge's battle with one of Steele's attorneys.
The Supreme Court ultimately reversed the decision of the appeals court, restoring the original designation of Rosa Park's will. A lesson from this lengthy legal battle might be that preparing a will earlier on in life can prevent contested wills, because they are less likely to be fought on the grounds of mental illness or undue influence.
Source: Forbes, "Rosa Parks' Final Wishes, Ignored for Years, Are Finally Restored," Danielle and Andy Mayoras, Jan. 6, 2012
]]>So why are people not willing to take this relatively easy estate planning step? Some people simply just do not see the importance, while others make it into a much bigger problem than it actually has to be.
For example, many young parents do not think that their own death is imminent, so they do not consider that a will is necessary to protect their children. Even if they would like to have a will in place, sometimes simply naming an appropriate guardian can be a stumbling block to actually creating a will, leaving them and their children without a guardian, and without a will.
However, anyone with minor children should seriously consider naming a guardian and executing a will. Even though it is most likely that your children will be adults before you pass on, or that even if you did die your spouse would be still alive, this is such an important decision that should not be ignored.
]]> In making the decision as to who should be the guardian of your children, it is not necessary to overanalyze the situation. A designated guardian can be changed at any time, and as circumstances require it. It is a relatively simple change, and should not be something that should stand in the way of protecting one's children in the case of an unexpected death.Source: Forbes, "A Common Sense Approach to Estate Planning," Nancy Anderson, Jan. 19, 2012
]]>Some of these issues are quite complex, and should be considered when making estate planning decisions in order to have the best possible outcome from a financial perspective, and to ensure that the individual's wishes are carried out.
The following are some issues that may need to be addressed for proper estate planning depending on the situation.
• Beneficiaries. In relatively simple and small estates, naming a beneficiary on all accounts, and designating beneficiaries of personal property can be sufficient to bypass probate so that the assets can pass freely at the time of death. Oftentimes people forget to update designated beneficiaries. This should be done at regular intervals, and whenever a life-changing event has occurred, such as a death or a marriage.
]]>These are only some of the basic issues that may arise when discussing estate planning, and it is not meant to be exhaustive. It is important to remember that estate planning is an organic, ongoing necessity. This means that decisions can be changed, at least until the point of death.
Source: Forbes, "A Common Sense Approach to Estate Planning," Nancy Anderson, Jan. 19, 2012
]]>In our previous post, we discussed the importance of estate planning for young people. Young people may be especially in need of estate planning with respect to the administration of their social media accounts, such as Facebook and Twitter.
Facebook has instituted a type of memorial for deceased members. This feature allows the deceased member's profile to be accessed by friends and family members in order to share their memories. Private information is removed, but friends and family are able to continue to leave posts.
]]> In addition, a Facebook app also addresses the issue of deceased members by allowing an individual to record a message before the person's death. This must be verified by three Facebook friends or "representatives."The question of what happens to social media accounts after a person dies was largely unregulated in the past. Until recently, there has been no official legal authority to terminate such accounts. One Senator hopes to enact legislation that will deal with probate issues surrounding a deceased individual's social media accounts. According to the terms of the proposed legislation, a personal representative would have the legal authority to control, continue or terminate a social networking account, blog, email or message service after one's passing.
With specific legislation regarding the authority of a trusted representative over Internet accounts, it will be clear what is appropriate and what is not. Whether this proposed legislation will be enacted into law remains to be seen. In the meantime, proper estate planning for young people or any Florida resident, should take into consideration how social media accounts will be dealt with.
Source: The Lincoln Journal Star, "Senators deal with what happens when Facebook users die," JoAnne Young, Jan. 18, 2012
]]>The primary goal of estate planning is to cut down on administrations costs and stress when dividing up assets after someone passes. In fact, when a single person has very few assets to account for, the cost to create an estate plan would probably be minimal, which is all the more reason for people as young as 18 to seriously consider getting their financial affairs squared away.
]]> It's also a good idea for young people to establish proper power of attorney in an estate plan, so time in court can be avoided in the event that a loved one needs to gain that authority. Young, unmarried adults probably assume that their parents can handle their affairs should they pass on. Parents must still go through painful court proceedings if they do not already have power of attorney.Though trusts can cost more upfront to create, those with a small amount of assets may still consider this to be a viable option. Setting up a trust can save time and money down the road.
Certainly, the unexpected passing of a young person is always tough. Yet the aftermath of such a difficult event can be made less stressful for family and loved ones if the proper steps are taken. Every adult, no matter how youthful, should seek out the proper advice in order to plan their estate.
Source: Green Bay Press Gazette, "Everyone needs estate planning," Carissa Giebel, Dec. 27, 2011
]]>The first is declining sales and mounting financial problems, a one-two punch that has Foppiano Vineyards against the ropes.
]]> The second problem is that the two people who are largely in control of the vineyard and its finances, the brother and sister duo of Louis M. Foppiano and Susan Valera, cannot get along and their infighting is draining money and attention away from the vineyard's problems. Their feud is a good reason why you need to be careful when engaging in estate planning; sometimes, you do not know people the way you think you do.To sum up years of litigation and accusations, Susan Valera has accused her brother of mismanaging the family trust, which contains tens of millions of dollars. She said he used it as collateral to take out loans, which he then used to pay himself instead of making promised improvements to the family business.
Louis, however, says his sister approved of using the trust as collateral and that the recession is what undid his plans to revitalize the family brand, not financial mismanagement. He also claims his sister is using her trustee rights to inspect books and accounting records to intimidate and harass him.
The point here is that anyone in Cape Coral who is making estate plans should think very carefully about whom they name as a guardian, as a trustee or as a beneficiary. People's characters can sometimes change when money is involved.
Source: Wine Spectator, "Foppiano Vineyards Caught in Sibling Legal Battle," Mitch Frank, Tim Fish and Augustus Weed, Dec. 20, 2011
]]>The anchor says that his mother was given the documents when she worked for King in the late 1950s and they are rightfully his family's property. Now the man is asking a court to throw out the lawsuit because the items were given to his family by King, a family friend. Because King didn't have a will, his estate often struggles with what his last wishes were.
]]> Even with all the expert guidance that Martin Luther King Jr. had, he never made a will, which would have given his family direction on how to divide his belongings, and who he wished to leave some historic items to. Unfortunately, his unexpected assassination left his estate unplanned.Many people often think that they don't need to worry about estate planning because they are still young. However, it is always wise to plan for the unexpected to ensure your business is taken care of if you were to die at a young age.
Now, decades later, King's children are still trying to sort out matters of his estate. This proves the importance of having a will and doing thorough estate planning. Although the task may seem daunting to many, it is an essential step in securing the future of your family and making sure your wishes are granted after you die.
Source: WXIA, "TV anchor wants King estate lawsuit dismissed," Michael King, Dec. 6, 2011
]]>2. Be wary of liquidating the account. If you keep the money in an IRA, it will continue to grow tax-free. If you take it out, you will lose a substantial amount to taxes. In one hypothetical example, if you inherited an IRA at age 35, it could triple, quadruple or quintuple in value by the time you retire. If you take the inherited amount as a cash payout, you could lose 40 percent of the present value to taxes.
]]> 3. Be sure you know the rules on Roth IRAs. Roth IRAs do not have minimum distributions, but if you inherit one, you have to withdraw an amount specified by the IRS. Otherwise, there is a 50 percent penalty.4. Make certain you meet deadlines. If the decedent was over 70 1/2, and needed to start taking withdrawals, but hadn't taken that year's withdrawal, the heir must make the withdrawal by December 31st or pay a 50 percent penalty on what should have been withdrawn. Take the money, don't pay it in penalties!
5. Don't delay on the paperwork. It may not seem like it needs to be rushed, but if you fail to take your distribution because of a delay in paperwork, you will owe that 50 percent penalty.
6. Make proper life expectancy calculations. Be sure the custodian is planning minimum withdrawals based on your life expectancy, not the decedent's life expectancy. And remember to adjust your life expectancy each year.
7. Be sure your 1099 says Code 4. The designation of Code 4 means that the distribution is on account of death. No tax is due on these required withdrawals.
Source: Family Value "Pitfalls of Inherited IRAs," Kelly Greene, Dec. 10, 2011
]]>Just to show how unpredictable the rules can be, the Internal Revenue Service recently issued a private letter ruling that allowed a teenaged girl who had inherited an IRA from her father to undo a lump-sum distribution taken by her mother and transfer the money into an inherited IRA. The private letter rulings do not create a precedent, but nonetheless they are often used for guidance. The fact that the rules are so byzantine reemphasizes the importance of consulting an experienced Florida estate planning attorney concerning the inheritance of IRAs.
]]> Here is some advice on how to make the inheritance of an IRA go smoothly:1. Make sure you move and retitle the account properly. Only an IRA inherited from a husband or wife can be rolled over into one's own IRA. Otherwise, it is necessary to retitle the IRA account to make clear that you are the beneficiary and the original owner has died. If the money in an IRA is being moved to a new IRA custodian, then the money must move from trustee to trustee, not to you. If a check is written to you, it will be considered a "total distribution" by the Internal Revenue Service, and the money will be entirely subject to tax. At that point the IRA is essentially eliminated.
In the next post, we will continue with advice on inheriting IRAs.
Source: Family Value "Pitfalls of Inherited IRAs," Kelly Greene, Dec. 10, 2011
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