Estate Planning

Gentlemen, Start Your Engines...

Last week, I hurriedly helped my 7-year-old boy finish his first Pinewood Derby car for CubScouts. I had known that the race was coming up for months, and I even had the materials I needed to help him get it done but kept putting it off as so often dads do.

So, as you might have guessed, minutes before the "weigh-in" I was drilling out portions of the wood, screwing in lead weights and trying to get it as close to the regulation weight as possible without going over. Because of the hurried, last minute adjustments, I wasn't able to spend as much time on the wheel alignment and weight balancing/allocation aspects of designing a good car as I should have. Instead, a majority of the time that my son and I spent on the car was to make it look good.

Before beginning the race, I tried to prepare my son for the potential disappointment he would face on the race track. I explained that it might not be the fastest car, but it will definitely look good. Only after the race began did I realize how important that preparation was. Even though he expected that his car wouldn't necessarily win, I think he was still fairly disappointed with how it performed. I could see his face getting red and watched him look at his friends shaking his head in disbelief, shrugging his shoulders as if saying, "I don't know what's wrong with the car." I didn't feel much like a Superdad at that moment. But I did learn a couple of lessons:

Well, You Can't Have Them!

 Asset protection is an area of the law that is often closely associated with estate planning, although they are certainly not the same thing. Estate planning has a very different goal in mind than asset protection planning. Estate planning is the process of arranging your assets in a way that if you become disabled or you pass away, your wealth will be used and distributed according to your wishes.

Asset protection planning, on the other hand, is the process of arranging your assets in a way that if sometime down the road someone sues you, your assets will be protected to the greatest extent possible from a court order forcing you to turn them over to the plaintiff (the person or company who is suing you).

Although certain asset protection planning strategies can be very complicated and risky, there are other strategies that anyone can employ to ensure that a least a portion of their estate is "judgement-proof."

Quick! Shred the Documents!

How long should you keep those tax statements? What about those cell phone bills, retirement account statements, old receipts? Have you noticed that the mounds of paper in your home office keep getting taller?

I've been asked more than once this week what my recommendations are with regard to keeping old paperwork like this around. And although I'm really not sure that there is a right answer for everyone, I did come across an article this week (thanks for the tip, Steve) by the Consumer Reports website that addresses this topic in an excellent manner. The article breaks it down to the following categories:

1. Documents to keep for a year or less (e.g., credit card statements, pay check stubs).

2. Documents to hold onto for a limited time (e.g., receipts and instruction books for major electronics).

3. Documents to keep for at least 7 years (e.g., federal and state tax returns).

4. Documents to never throw away (e.g., estate planning documents).

Man Murders Mother-in-law, Inherits Her Estate

 Brandon Palladino, a 23 year-old man from New York murdered his mother-in-law when she discovered him stealing jewelry from her to support his heroin addiction. Although he'll be going to jail for about 25 years, when he gets out, he'll be getting approximately $250,000 (plus 25 years of interest on that money) from his mother-in-law's estate. Shocking? Yes. Wrong? In my opinion, yes. Legal? Yes, again.

What Does the Proposed Estate Tax Bill Mean for You?

 You've probably heard about the bill being hotly debated in Congress right now that would reinstate the federal estate tax (from it's current status of repeal) at a 35% rate on estates larger than $5 million ($10 million for married couples). Current reports are indicating that this bill will most likely pass. (Get more information about the bill here.)

What does this mean for you?

If the bill passes, and you and your spouse have an estate (real property, bank accounts, retirement accounts, life insurance, business interests, stocks, bonds, cars, boats, ATVs, etc.) that is less than $10 million, you will likely pay no estate tax if you die in 2011 and beyond (unless Congress decides to change things again). For married couples with estates larger than $10 million, you will be taxed at a 35% rate on everything over that number at the death of the second of you to die. This is good news for many of you.

If this bill does not pass, and you and your spouse have an estate larger than $1 million, you will be taxed at a 55% rate on everything over $1 million. Once you factor in the proceeds of life insurance and retirement accounts, most of you will probably find that your family will be facing a federal estate tax bill upon your death.

What is going to happen in the end? Your guess is as good as mine. If the bill passes, there are a number of my clients who will be very relieved as a result of the estate tax break that it represents.

Tightropes, Snowstorms, and You

 I'm probably more attuned to this sort of thing than most people as a result of my profession, but last week a family here in Utah suffered a devastating blow when the mother of three boys was killed in a snowstorm car accident.

Unfortunately, those three boys had lost their father to cancer just a few months earlier. When the father died, the mother was left alone to care for her three boys (12, 14, and 16 years old) and undoubtedly was doing the best she could under the circumstances. In fact, the reason she was out in the snowstorm over Thanksgiving weekend was to provide for her family as an in-home health care nurse.

While the extended family of these three boys will be pulling together to do what they can to help, there exists quite a bit of uncertainty as to where the boys will go, and how the family will be able to help support the extra expense that will undoubtedly come as a result of taking these boys in.

Taking the “Bah, Humbug!” Out Of Holiday Gifts

One of the most exciting things about Christmas is giving gifts. There’s something thrilling about finding the “perfect” gift and watching in smiling, nervous anticipation as the recipient eagerly tears the ribbon and paper off the specially-chosen present. Christmas magic is the look in their eyes when they receive the gift they almost didn’t dare to hope for.

There just isn’t anything unpleasant about giving gifts, is there? Actually, there sometimes is. Now, before you accuse anyone of being Ebenezer Scrooge, please keep reading. Gift-giving seems like a pretty straightforward concept. You pick out a gift, wrap it in colorful paper and a giant bow, and give it to the person you meant to give it to. And when you’re giving items like plaid pajamas or scented lotions, it really is just that simple.

But, if you’re considering giving your loved ones (or maybe a favorite charity) things like real estate, stocks, substantial cash gifts, or family heirlooms (like wedding rings or photo albums), you could unknowingly and unnecessarily create all kinds of family problems and waste huge amounts of money if you don’t give the gifts in the right way.

How to Take Some Regret Out of Thanksgiving Dinner

I look forward to this holiday every year. Inevitably, when our family gets together, we share stories. Often, these stories remind us of our connections to one another and why families matter. I think back upon Thanksgiving dinners at my Grandma Platt's home in St. Johns, Arizona, and remember the stories that my uncle Charlie would tell about his ornery horses and the funny personalities that these animals so often would develop. I remember in particular a story that my dad's brother told us about a shark attack that he was somehow involved in off the coast of South Africa. But as time has passed, these stories have become quite fuzzy in my mind, to the point that I'm certain I wouldn't be able to share them without getting a lot of facts mixed up. I regret the fact that we have no physical record of these stories.

In his book, "Like a Library Burning," attorney and author Scott Farnsworth teaches his readers about the power of storytelling. The title of his book is taken from a Middle Eastern proverb that reads, "When an old person dies, it's like a library burning down."

Change the Oil, Rotate the Tires, and Update Your Estate Plan


Blog Post by:  Melissa C. Platt, Esq.

If you own a car, you know it requires regular maintenance in order to perform well and be reliable. When you purchased your car, you probably received a recommended schedule for service. If you follow that schedule, most likely your car will continue to work well. If you don’t follow that schedule, you are taking the chance that your car will let you down.

Did you know that your estate plan also needs to be “serviced” on a regular basis? Your estate plan is based on a snapshot of your life at the time your plan was created. But over time, things change. Your family structure changes, your assets change, and the laws change too. Having regularly scheduled maintenance on your estate plan will ensure it doesn’t let you down.

How Often Should You Review Your Estate Plan?

When creating an estate plan, you should look for a lawyer who will review your plan at least every three years at no additional charge. Ideally, your attorney will offer a low-cost maintenance program that will allow you to have your plan reviewed annually and make any necessary changes. I know that seems like an extremely self-interested statement coming from a lawyer! And I am of the opinion that well-informed people make the best decisions, so I’ll lay out the options for you, and let you decide for yourself.


A Holocaust Survivor and an American Soldier

Before I became a lawyer, I wanted to be a historian like my dad. As part of his work as a historian, he recorded the oral histories of Jewish Holocaust survivors. He spent a great deal of time with members of the Phoenix-area Jewish community capturing their memories and experiences of one of the darkest periods of human history.

One such interview was with a Hungarian woman who was taken to the Auschwitz concentration/death camps in Poland as a teenager. This woman survived that nightmarish experience only because of a young American G.I. This soldier, while liberating Auschwitz from the Nazis, was walking amongst the piles of dead bodies when out of the corner of his eye, he saw a foot twitch beneath dozens of other bodies. It was her foot.

Despite the horror he undoubtedly felt as he pulled the emaciated, broken bodies from off of her, he removed her nearly lifeless body and rushed her to the American medics who eventually nursed her back to health.

Shortly after the war, she emigrated to the U.S. and obtained degrees in psychotherapy and professional counseling. She has since gone on to work as a licensed therapist with hundreds of U.S. Veterans, helping them to recover from Post Traumatic Stress Disorder (PTSD) and substance abuse challenges. She has dedicated her life to giving back to those who sacrificed so much to bring freedom to those who had been so oppressed by the Nazi regime. She, for one, understood the sacrifices made by these young people on her behalf.

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