Overland Park Attorney

New Outlook on the “Trust Fund Baby” - especially in Overland Park, KS.

I forgot yo mention yesterday that I finially got back on-line.  Yea!

Many wealthy people worry about the potentially corrosive effect of making their children superrich. Not Larry Ellison. The Oracle founder and CEO, the third richest man in the United States — worth $43 billion, according to FORBES’ latest estimates — has never pretended that his son David, 30, and daughter Megan, 27, were anything but trust fund babies.

What comes to mind when you hear the phrase “trust fund baby”? Over privileged, lazy, easy-breezy life? Trust fund babies get a bad rap from pop culture. Many people think these kids are spared character-building inconveniences. Nevertheless, character is neither a function of personal wealth, nor is it necessarily deterred by it. In fact, an inheritance just may give your heirs the tools to do great things.

A recent article in Forbes is a case in point. The article titled “Larry Ellison's Trust Fund Babies” considers the family of Larry Ellison, the third richest man in the United States and longtime rival of Bill Gates for those top few spots. It seems the Ellison children, Megan and David are doing quite wonderful things as trust fund babies. Both film producers and financiers of some note these days.

 “The sooner my kids get experience dealing with the pluses and minuses of having a lot of money, the better” Ellison is quoted to have said.

So what does this mean to you and your heirs?

With the Ellison family we find one more example of denying extravagant inheritance for purposes of dissipation. Bill Gates is yet another example.

What about you? Do you believe giving money helps provide tools to grow or does it stunt growth? What lessons or tools will you leave to your loved ones and what will those mean to them?

Reference: Forbes (June 5, 2013) “Larry Ellison's Trust Fund Babies”

For more information on the proper method to structure your heirs receipt of their inheritance in Overland Park, KS, please visit my website.

Have You Considered a Conservation Easement for Your Land? Especially in Overland Park, KS?

When you make a charitable contribution of anything other than money or marketable securities, there will always be a valuation issue. At least, it will usually be clear what it is that you are giving away.  A conservation easement is different.  You are keeping the property as it is and giving up all the hypothetical possibilities.

Sometimes the greatest charity of all is simply doing zip, nada, and nothing. Well, at least that may be the case when it comes to being charitable with land. Why? Because the charity consists in preserving the land from development instead of capitalizing on its highest and best economic use.

Enter the conservation easement.

The perennial problem with easements, however, is the question of valuation of the “potential value” of the land.

The entire point behind an easement is that the land itself (or the façade, as the case may be with urban-dwellers) has intrinsic value worth saving. This can be hard to put into concrete numbers. But then again, there always remains the risk that certain persons may look to maximize the charitable deduction for an easement through creative valuation.

This theme was picked up in a recent Forbes article titled “Conservation Easement No Deduction For Hypothetical Vineyard.” The lesson is less outlandish than the title suggests – not every problem comes from supposing the remote possibility of a vineyard, a stadium, or a skyscraper. Rather, when asking for the easement you need to settle upon one out of every possible use of the land and the IRS has to agree that potential use is the best and most likely use.

The IRS has a presumption against any big dreams, you might say, and that can be difficult to overcome.

Proper valuation is a key component of any purchase, gift, or act of charity. When it comes to easements, however, the subject of valuation may be more difficult to capture accurately.

Placing an effective easement means building a case and an effective understanding of the true potential to any land given.

Reference: Forbes (June 5, 2013) “Conservation Easement No Deduction For Hypothetical Vineyard”

For more information about related issues for Overland Park, KS, please visit my website.

Charitable Giving or Elder Abuse? Uncertainties of a Late Heiress’s Last Years - in Overland Park, KS

Admitted in 1991, Mrs. Clark ended up staying until her death, giving the hospital at
least $4 million in donations, not counting millions more she paid just to live
there and a $1 million bequest in her final, contested will, according to court
papers.

Charitable giving in the last
years of the über wealthy tend to come under fire from family members and the
public, oftentimes questioning the donor’s aging mind and capacity to make
sound decisions regarding their finances. Such is the case of the late Huguette
Clark, her immense inheritance, and the hospital that may (or may not) have
influenced her generous donations. Ms. Clark was extremely wealthy, and during
the last twenty years of her life the reclusive copper heiress spent an
absolutely excessive amount of time in the hospital. She had few afflictions
other than, well, loneliness.

After her passing, it did not
take long for questions to arise regarding how the hospital pushed to care for
a not-so-infirm woman for so long and just so happened to be receiving sizable
donations from her all the while. What may be worse is that the allegations may
be true and there are some interesting, perhaps damning, tidbits.

This scenario and the questions
it raises were reported recently in The
New York Times in an article titled “Hospital Caring for an Heiress Pressed Her
to Give Lavishly.” The article chronicles the last lonely years on Ms.
Clark’s life.

Remember, she was only
all-too-human. If manipulation was afoot, what should be done about it and,
closer to home, how can such manipulation be prevented in our own estates or
those of our already senior loved ones?

But then there is the reverse
side of the coin: what if it was not manipulation at all? Then Ms. Clark’s
wishes and last charitable actions are being drawn through the mud for not
having been fully articulated.

Reference: The New York
Times (May 29, 2013) “Hospital Caring for an Heiress Pressed Her
to Give Lavishly”

Love Knows No Boundaries … Except When it Comes to Estate & Tax Laws - even in Overland Park, KS

The number of cross-border marriages, where
spouses hail from different countries, is rapidly rising—and so are their
international tax and estate-planning issues.

Love knows no boundaries. We are
all familiar with this phrase, but how true can it be? Not so accurate when it
comes to marriage among couples with different nationalities.

International marriage can
trigger a taxation and estate planning headache.

In fact a recent article in The Wall Street Journal reported the
following: “All told, nearly five million Americans in 2010 were married to
someone who was born in another country, twice as many as in 1960, according to
the Minnesota Population Center. Other countries have had similar jumps.”

The article, titled “A Global Love Affair,” observed that these global affairs
bridge the invisible lines on the globes between nations and unite loving
couples from Russia, the U.S., France, Germany, and places more exotic – then
tie the laws of those same countries into knots.

If you and a loved one are
separated by an incidental national barrier, then be wary of how the respective
laws of your respective nation may conflict and potentially confound. There are
almost as many sad legal stories as there are happy love stories.

Reference: The Wall Street
Journal (May 21, 2013) “A Global Love Affair”

Don’t Hold Off on Having Those Hard “Talks” … Or It Will Cost You - esdpecially in Overland Park, KS

If you haven’t had a conversation with your parents about handling their financial affairs after they die, Krysten Crawford’s tale may spring you into action.

Certain “talks” or conversations are imperative, although some of those discussions are pretty difficult to have.  And talking to your elderly loves ones about their finances normally falls into the “tough” category.

The New York Times offers one more real life example of why difficult senior parent-adult child conversation just have to happen in a recent article titled “The Talk You Didn’t Have With Your Parents Could Cost You”.

Especially with the older generations, money is often one of those taboo subjects for the family to discuss, whether in good fortune or in bad. If you have an elderly parent or loved one, then there are more important things at stake than privacy, modesty or pride. Here are some things you need to know and they need to show. Do they have an “estate,” whether many assets or few? Do they have a will and, if yes, where is it? And perhaps most important, are they taking care of their finances currently?

The original article speaks for itself and is worthy of reading. After you read it, perhaps you might share it as a conversation starter with someone you love. Having the uncomfortable conversations can provide peace of mind for all concerned.

Reference: The New York Times (May 24, 2013) “The Talk You Didn’t Have With Your Parents Could Cost You”

For more information on the various issues to address, when in Overland Park, KS, please visit my website.

Weekly Blog Digest -Overland Park, KS - Estate Planning

In review, here are the five Blog Posts from this past week for your convenience.  I welcome your feed back regarding any of these posts and your input regarding any of these areas of practice which you would like for me to address.

Dodging the Family Feud over Your Estate – even in Overland Park, KS

Unfortunately, estate planning can cause family feuds over inheritance, often leading to litigation that can become lengthy and costly with no clear winner. From our experience, family litigation occurs not from a lack of trying to solve the issue, but from a lack of planning.

Mind Your Words with End-of-Life Health Care Planning – Especially in Overland Park, KS

Would [family members] be more likely to consent to or decline CPR depending on whether the medical order was “do not resuscitate” versus “allow natural death”?

Time for a Review? Make Sure Your Estate Plan is Up to Date -  - especially in Overland Park, KS

Circumstances change over the course of a lifetime—and your documents need to keep pace. Grandchildren enter the picture, as do second spouses and sons-in-law. Estate and gift tax exclusion limits move up and down.

The Family Farm: Tractors, Cows …and Estate Plans? In Overland Park, KS? 

The "graying tsunami" in rural America means that more farmers are being forced to decide what happens to their farm once they retire or die. If they decide not to sell the business, the farmer must decide how to divide up the operation among the remaining relatives, many of whom are not farmers.

Lessons from an Asset Protection “Game” Gone Wrong – even in Overland Park, KS

By 2007, as the real estate markets were starting to sink, Donald and one of his business partners, Robert Terhune (Robert), began to worry about certain of their real estate projects and their commitments to each other. When Robert threatened to set up an asset protection trust to stiff Donald, Donald’s attorney made it clear to Robert that Donald would consider the setting up of such a trust to be a fraudulent transfer as to Donald as Robert’s potential creditor.

Lessons from an Asset Protection “Game” Gone Wrong - even in Overland Park, KS

By 2007, as the real estate markets were starting to sink, Donald and one of his business partners, Robert Terhune (Robert), began to worry about certain of their real estate projects and their commitments to each other. When Robert threatened to set up an asset protection trust to stiff Donald, Donald’s attorney made it clear to Robert that Donald would consider the setting up of such a trust to be a fraudulent transfer as to Donald as Robert’s potential creditor.

If done right, asset protection is an expected result of proper legal planning. But if done wrong, asset protection can be misused as a means to deceive lawful creditors. Make note, this type of planning is no “game” to be won by trickery.

The case of Waldron v. Huber is illustrative of the latter.

To say Waldron v. Huber is a complex case would be a gross understatement. The Huber case included Alaska LLCs, Washington properties, a failing partnership, and a Domestic Asset Protection Trust (DAPT). A recent Forbes article, titled “Domestic Asset Protection Trust Blows Up Bigger Than Alaska In Huber Case,” provides an accurate description of the outcome.

Bottom line: in Huber, the courts found the legal planning to be too-good-to-be-true. The comprehensive analysis of the case by the Forbes article is instructive, highlighting certain considerations before electing to deploy a DAPT as part of your asset protection planning.

Reference: Forbes (May 22, 2013) “Domestic Asset Protection Trust Blows Up Bigger Than Alaska In Huber Case”

For more information on the proper ways to structure your Estate in Overland Park, KS, please visit my website.

The Family Farm: Tractors, Cows …and Estate Plans? In Overland Park, KS?

The "graying tsunami" in rural America means that more farmers are being forced to decide what happens to their farm once they retire or die. If they decide not to sell the business, the farmer must decide how to divide up the operation among the remaining relatives, many of whom are not farmers.

Estate planning is simply essential to farmers and the family farm itself – just as important as the equipment, livestock, or crops involved. Unfortunately, estate planning is too easily overlooked with all of the day-to-day work to be done.

A recent article in USA Today, titled “As farmers age, planning for the future of their business grows,” explored this common problem.

Land is one of those things that seldom loses value. Agriculture, by definition, requires land (and lots of it) to operate on a profitable scale these days. Consequently, modern farms find themselves racking up a potentially hefty future estate tax bill on the basis of their land values alone.

Problem: When the land value represents the lion’s share of the estate value itself, then what happens when the estate tax bill comes due with only the land to pay the tab? Selling the farm would be akin to killing the goose that lays the golden eggs for the farming family. To make matters worse, the owners of family farms are getting up in years, and so time is of the essence when it comes to making plans to save these family farms.

The good news is that today, unlike for much of the last half decade or so, we have fairly firm estate and gift tax laws. Therefore, farmers and their advisors can make estate plans based on more than gut and intuition.

So, how do you pass on the family farm? Even more important, how will you pass it intact and who will run it after you do? These are questions that need an answer, sooner rather than later.

Reference: USA Today (May 19, 2013) “As farmers age, planning for the future of their business grows”

For more information on the proper method of Estate Planning in Overland Park, KS, please visit my website.

Time for a Review? Make Sure Your Estate Plan is Up to Date - especially in Overland Park, KS

Circumstances change over the course of a lifetime—and your documents need to keep pace. Grandchildren enter the picture, as do second spouses and sons-in-law. Estate and gift tax exclusion limits move up and down.

When you create your estate plan, it is important that you recognize estate planning as a continual process. As the days go by, your life changes …and your plans need to reflect that. Have you checked over your estate plan recently? It may be time for a review.

No one said proper estate planning was an easy task. Once signed, sealed and delivered, most of us would rather not reopen and revisit the decisions contained in legal documents focused on our own morbidity and mortality.

This natural reluctance is the focus of a timely MarketWatch article titled “Make your heirs happy: Update your will.”

According to a recent Consumer Reports survey, 86% of respondents who had wills or other estate documents had not updated them within the past five years. How much happens in five years?! Five years ago it was 2008, the time of the market crash and the destruction of so much wealth and planning in the real estate crash. In addition, the last five years have witnessed five different taxation regimes governing estate and gift taxes.

Aside from financial and tax changes, what about changes closer to home? How many new family members are there and how many have passed? And how much has your own perspective on the world changed?

While there are logical reasons to review your legal documents once created, there is also an emotional reluctance to do so. Accordingly, it is best to make this another one of your scheduled “to do” items on your calendar.

As the MarketWatch article confirms, following through on your regularly scheduled estate plan review and update will make your heirs happy, and ensure that your own decisions are honored.

Reference: MarketWatch (May 8, 2013) “Make your heirs happy: Update your will”

For more information on Estate Planning in Overland Park, KS, and keeping it up-to-date, please visit my website.

Dodging the Family Feud over Your Estate - Even in Overland Park, KS

Unfortunately, estate planning can cause family feuds over inheritance, often leading to litigation that can become lengthy and costly with no clear winner. From our experience, family litigation occurs not from a lack of trying to solve the issue, but from a lack of planning.

Planning for your estate translates to planning for your family. Or is it planning for your family?

Well, it really means both – “planning for your family” (i.e., ensuring your family’s well-being financially) and, more subtly “planning for your family” (i.e., ensuring your family’s well-being relationally).

You see, family infighting is a very real and present danger, even within families that are otherwise loving and respectful. Death and the resulting inheritance are fraught with emotional danger. How do you plan to avoid the family feud?

Families are simply too complex to offer any silver bullet suggestions (each family is the sum total of each family member’s hopes, dreams, anxieties, and often petty obsessions).  However, estate planning attorneys have ways to prevent estate litigation.

Each attorney may have his or her own choice list of tactics. However, WealthManagement.com published a list worth consideration in an article titled “Avoiding Family Conflicts During Estate Planning.”

The original article is worth reading, but here is the list of bullet points in summary:

• Overcome the Concept of Fairness
• Transfer Assets Based on a Natural Flow
• Protect Family Assets
• Make Major Decisions with Every Family Member in the Room
• ·         Do Not Wait for the Original Founder of the Family Business, or a Parent, to Pass Away
• ·         Evaluate What You Can and Can’t Afford to Transfer
• ·         Treat Estate Planning as an Ongoing Process
• ·         Pick the Right Professional Advisor

It’s worth reading through the list and a few more like it.

What does your family need and how will you plan “for your family” to head off squabbles, infighting, or outright litigation?

Reference: WealthManagement.com (May 15, 2013) “Avoiding Family Conflicts During Estate Planning”

For more information on the proper methods of Estate Planning and avoiding potential disputes in Overland Park, KS, please visit my website.