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    What is estate planning?

    Tuesday, May 6th, 2014

    Estate planning should be a life long process of taking steps to provide for you and the people you love.  You never know when disability will strike. When most people think of estate planning they think about transferring what they own at their death. Another equally important part of planning is thinking about making transfers during your life. Lifetime gifting can have important asset protection advantages and allows you see the impact of your giving on your loved ones.

    A good plan begins with understanding your family, what you own and how you own it and thinking about your goals.

    After A Divorce, Make Sure to Reevaluate Your Estate Plan

    Thursday, December 12th, 2013

    Your ex or soon-to-be ex-spouse may still have authority over your medical and financial affairs after your divorce. This should send shock-waves through most people knowing their ex-spouse may still have so much control over them after they part company in a divorce. This is why it is important to update your beneficiary designations and other estate planning documents to prevent your soon-to-be ex-spouse from inheriting money or remaining in positions of authority.

    Estate planning is the creation of documentation to maintain and effectively control your financial and health care security. Using legal documents such as wills, trusts, powers of appointment, and powers of attorney , including the durable financial power of attorney , the durable medical power of attorney, and a living will, estate planning helps you protect your assets and ensure your loved ones are cared for following your death or incapacity.

    Ordinarily, wills, trusts, healthcare directives, etc. are typically the last thing on your mind if you are going through a divorce . There are enough legalities to sort through and plan for while handling a divorce, which can cause estate planning to feel like an added burden during an already difficult time.

    Still, you may be surprised to learn that your most important legal and financial documents are not automatically made null and void during or after a divorce ; that is, divorce may not nullify the beneficiaries named on your accounts /documents or those to whom you have given authority roles.

    If you do not update your estate plan documents and you become incapacitated during or after the divorce proceedings, your soon-to-be ex-spouse may still have authority over your medical and financial affairs. In the event of a serious health care crisis or future disability, it is critical to have someone you trust in a position of responsibility.

    Your healthcare directives (also referred to as a living will and healthcare power of attorney ) name the person who can make medical decisions on your behalf in an emergency. If you do not amend this document, your ex-spouse (or soon-to-be) may bear the responsibility of making life and death decisions for you and managing your future healthcare needs. Also, most people would wince at the idea of their ex-spouse (or soon-to-be) having the ability to pay bills, access accounts and sell assets on their behalf.

    Or, if you should pass away during or after the divorce proceedings without updating key beneficiary designations, your soon-to-be ex-spouse may still stand to inherit from your estate. Most insurance policies , bank accounts , retirement accounts and investment account include the designation of a beneficiary. This is the person who will receive some or all of the money from that policy or account upon your death.

    To summarize, when experiencing a divorce , you should reevaluate your estate plan. Key provisions in your will, trust, powers of attorney , retirement accounts, life insurance policies, etc., must be updated to ensure your soon-to-be ex-spouse is no longer named as a beneficiary or in a position of authority over your personal affairs. You may also need to select a new personal representative (that is, an executor), power of attorney and health care surrogate whom you trust to oversee your finances and uphold your medical desires if the unthinkable happens.

    About the Author:

    The Managing Attorney of  Robert M. Goldberg  Associates, Bob Goldberg is a licensed attorney and counselor at law in the State of Georgia, as well as a member of the Georiga Bar Association, the National Academy of Elder Law Attorneys and Wealth Counsel.

    Robert M. Goldberg & Associates is a unique law firm with offices in Atlanta, Griffin and Peachtree City, Georiga who understands your particular needs and situation, and will generate value for you; services include comprehensive estate planning, elder law and probate services.

    This article is for general information purposes and is not intended to be and should not be taken as legal advice.

    How To Get Resistant Aging Parents To Talk About The Future

    Monday, September 23rd, 2013

    Do your aging parents resist talking about the future or giving you any of their financial or legal information?  You’re not alone.

    “The Talk” about the future is off limits for a lot of parents. They are fearful of losing control of their lives.  Many adult children avoid pushing because their parents may even get angry when the subject is raised.  Then, when a crisis happens, the adult children are frustrated and angry because the burden of dealing with it, operating in the dark as it were, is so unfair.

    Carolyn Rosenblatt has designed a few techniques to help. It’s part of her Crisis Action Plan seminar she put together to address this specific problem.  To even have a plan, you have to start by asking questions.  That can be tricky.  Here is one way to approach the issue indirectly.

    Instead of flat out asking your parents to tell you  their personal information, it may work to talk about emergency preparedness instead.

    Natural disasters happen and talking about them can serve as a bridge to the subject of being prepared for personal health emergencies.

    So, I agree that you should bring up emergency preparedness as a roundabout way of getting to the information you need.  When the headlines tell us of the latest fire, hurricane, earthquake or tornado, you can use that opportunity to open the subject of what you would do in case a disaster created a health emergency for your aging loved one.

    There are some basics everyone needs to have.  Your agenda, hidden or not when you talk to your aging parent, needs to be to get these basics and keep your own records of them.

    The specifics:

    Have a discussion with your aging parent about what they would want you to do if there were a disaster. It’s less threatening to think about than some other kinds of medical emergencies because it’s happening to someone else, maybe somewhere else.
    You can ask, ” Mom, what would you want us to do if you were knocked off your feet by a (tornado, earthquake, flood, etc.,) and had to go to the hospital for awhile?

    If the answer is “ I’m never going to be in a hospital, so forget it”, you can’t stop there. You can point out that natural disasters happen all the time and you would be the one to get the phone call if it affected Mom. It’s not fair to leave you without any idea of where to find anything, so Mom needs to help you out.

    Ask your aging parent about how you would pay their bills if they were left unconscious as a result of a disaster. If your parent resists talking about this, you might point out that if the bills weren’t paid on time, the electricity would be shut off, the phone service would stop and if there’s a mortgage, the house could go into default.  Insurance policies could be cancelled if premiums weren’t paid, and many losses could occur.  This can help you get to and to make a record of the bank accounts, checking account. If your parent doesn’t have a Durable Power of Attorney for finances, this is an ideal time to get that done.

    Ask what your aging parents would want you to do if they got badly hurt and were in a coma.  The scenario you describe as the cause could be whatever natural disaster is most common where you live. Here in Georgia that might be a tornado or a hurricane.  Whatever it is, use headline news of these events to your advantage in bringing up the subject. It is fresh, talked about, scary and real at that moment and it can help you get to what you need to know: your parents’ wishes.  Again, if your parent does not have a Health Care Advance Directive or any document in which his or her end of life  wishes are written down, now is a good time to get that done, too.

    If you can get the names of the primary care doctor, the lawyer and the financial advisor if they have these, that’s even better.  It can all be part of the same discussion.  Another excellent addition to your record of information is the name of a neighbor, friend or someone nearby who could help if your parent were in distress and could not, herself, get to a phone.

    Store all you are able to get from your parents in a mobile device or on paper.  Keep it where you can get to it if you need it fast.

    Although your real reason for wanting the information is because anything can happen to an elder, especially in failing health, the presented reason is also legitimate. What would you do if you really did get the phone call that a disaster had struck and your aging parent was affected directly?  It may be easier for your parent to give you what you need to know if you pose it in these terms rather than in terms of the parent losing capacity from aging or developing dementia.  They can ignore those possibilities, but it’s harder to ignore things they see happening right now on TV.

    Planning for emergencies is something everyone needs to do, but we may overlook the need for it with aging loved ones.  Take the first step and find a way into the subject.  As they age, anything can happen.  You’ll feel a lot more confident if you have the information you need when the time comes.

    Lessons Learned from James Gandolfini’s Will

    Wednesday, July 17th, 2013

    No matter how much you have, estate planning is essential.

    When James Gandolfini, the actor who played mob boss Tony in HBO show “The Sopranos”, died of a heart attack at 51 last month, he left an estate valued at roughly $70 million. Commentators have declared his estate plan a “disaster” because the lack of planning leaves a significant estate tax bill. This means the people he loved will receive less money while the government will get a big chunk of his money to use as it sees fit. This violates the first principle of estate planning – staying in control. You only have three choices where your money goes when you die: Your family, charity and the government.  With better planning less money a smaller check would have to be made out to the IRS and Gandolfini’s loved ones and favorite charities would have ended up with more. While many people will not have to worry about paying estate taxes there are other lessons to be learned.

    The next problem is that because Gandolfini had a will based estate plan, in order to pass title to his property to his beneficiaries, his will had to be probated in New York. Once that happened, his will became a public record and now anyone can see who he left his assets to.  To better protect his privacy it would have made sense to have a trust based estate plan. That way probate would not have been necessary and the whole world would not have been able to learn the names of his beneficiaries and how much he left them.


    Another mistake in Gandolfini’s planning is that assets were left outright to his sisters. Because his sisters will own the assets outright , they are subject to being taxed twice: first at their brother’s death and again when they die. To avoid having to pay estate tax twice each sister should have been left her share in a continuing trust. Had this been done the money left to them would not have been in their own estate when they die and wouldn’t be subject to estate tax a second time. Each sister could have been named as trustee of her own trust with broad powers to use the money for their “health, education, or maintenance.”  In addition, through a “power of appointment” each sister could have determined who the trust would benefit and who would act as trustee if there were any assets remaining when they died. Finally,  leaving money to his sisters in a trust rather than outright would have protected the gift from both creditors and predators who might be attracted by his sisters’ new found wealth.


    Another problem is how Gandolfini left assets to his two children- Michael, from his first marriage, and Liliana, who is less than a year old. Under the terms of their trusts, each child gets complete control over millions of dollars the day they turn 21.  It is not a good idea to have a trust end at a certain age because you don’t know what the child will be like. Is a 21 year old mature enough to make decisions on how to spend money? What if they have a drug or alcohol problem?  It would have been better to have a continuing “discretionary” trust with professional trustees to manage and distribute money to the children.

    Facebook Founders Use GRATs to Avoid Excessive Taxation; You Can Too

    Wednesday, April 11th, 2012

    News sources recently revealed that Facebook founder Mark Zuckerberg—as well as other Facebook top brass—use Grantor Retained Annuity Trusts to protect their assets and investments from excessive taxation. Grantor Retained Annuity Trusts (more commonly called GRATs) are a perfectly legal—and very efficient—way to protect and pass significant assets from one person to another without incurring an exorbitantly high tax bill.

    According to the article cited above, “GRATs offer a perfect vehicle for wealthy investors who put money in start-ups, while other trusts don’t.” But we don’t recommend GRATs only to wealthy startup investors. GRATs are “an excellent way to shift wealth to others at little or no tax cost and with minimal legal and economic risk.” As such, they can be the perfect tool for business owners, professional investors, and many others.

    Setting up a GRAT allows the investor/grantor to give assets over to the trust for a pre-determined number of years. During this time the assets appreciate and the grantor receives “annual payments adding up to the asset’s original value plus a return based on a fixed interest rate determined by the Internal Revenue Service.” At the end of the trust term the assets (at their new value) are transferred to the beneficiary named in the trust with none of the usual gift or estate tax on the appreciation.

    This makes GRATs sound like the perfect (and perfectly simple) tool, but nothing is perfectly simple. The pre-determined lifetime of your GRAT will depend on your individual circumstances, as well as the tax laws at the time, so you’ll want to make sure you have the help of an experienced and knowledgeable attorney helping you design your trust. Contact our office for more information.

    Republican Primary Inspires Discussion of Trusts

    Wednesday, January 25th, 2012

    If you follow current events at all it is impossible to ignore the fact that we are now in the thick of the Republican primary race—and that the Presidential election will not be far behind. With the political machine in full swing there have been quite a few news stories about the candidates’ financial backgrounds, and more than a little talk of “blind trusts.”

    Many of our readers will already know that a blind trust is a vehicle which holds the wealth of a candidate (or a politician serving in office) in an effort to avoid any conflicts of interest. We thought this might be a good opportunity, however, to discuss trusts in general: Which trusts are out there, what are the differences between them, and what purposes do they serve?

    Revocable Trust: A revocable trust is one of the most commonly used trusts because it is able to be revoked or changed so long as the grantor (the person who created the trust) is still living. There are many other trusts that fall under the category of “revocable trust”, including a pet trust (which addresses the physical and financial care of your pets), an education trust (which provides for your child’s educational expenses), and many more.

    Irrevocable Trust: An irrevocable trust, logically, is one which cannot be revoked or changed after it has been signed. The irrevocability is what makes these trusts useful for tax planning and asset protection. Some types of trusts which fall under the category of “irrevocable trust” include life insurance trusts (which save the beneficiary on the policy from paying exorbitant estate taxes), spendthrift trusts (which reduce the beneficiaries’ estate taxes and protect trust assets from creditors’ claims), and more. It is important to note that any revocable trust becomes irrevocable upon the death of the grantor.

    Charitable Trust: A charitable trust is one in which at least one of the beneficiaries is a charity or non-profit. These trusts allow the grantor to claim a portion of their contribution as a charitable deduction under income tax laws. A charitable trust can be either revocable or irrevocable to begin with, but if distributions will be made during the grantor’s lifetime the trust must be irrevocable.

    Special Needs Trust: Sometimes also called a “Supplemental Needs Trust”, is a trust created for the benefit of a person receiving government benefits—this usually includes someone with a physical or mental handicap—and its purpose is to allow outside sources to provide the beneficiary with supplemental funds without endangering their right to receive government benefits. A special needs trust can be either revocable or irrevocable, but usually includes a clause instructing that the trust be dissolved if its existence disqualifies the beneficiary for government benefits.

    We have only discussed some of the most commonly used trusts here, but there are many, many different kinds of trust which can be valuable for estate planning or asset protection. If you have any questions about trusts or estate planning, please contact our office.

    The Bum Rap of Prenups: Why They Are More Romantic Than You Thought

    Monday, January 23rd, 2012

    Valentine’s Day is only a couple of weeks away, and love and marriage are in the air; but going hand in hand with love and marriage should be the wisdom to protect yourself and your beloved with a prenuptial agreement. We know that most people don’t consider prenuptial agreements a very romantic gesture, but here are 5 reasons why the bum rap of the prenup is undeserved.

    1. Prenups encourage couples to think and talk about the future. The process of writing a prenup includes talking about what each party brings with them to the marriage, and how each partner envisions that contribution fitting into the whole as they create their lives together.

    2. Agreeing to a prenup is often the very thing that makes marriage possible for two people who come from complicated backgrounds or disapproving families. This is not only true of young people from families with “old money,” but also of elderly couples whose grown children may disapprove of a blending of finances so late in life.

    3. Having a prenup means that a couple has studied their finances separately, dealt with any lingering trouble spots before the wedding, and can now move forward in their marriage together, with clear minds and bright futures.

    4. A prenuptial agreement bestows security because it requires the agreement of both partners. This mutual agreement ensures that both partners feel they will be provided for as they desire and deserve, no matter what happens.

    5. A prenup is the perfect lead-in to an estate plan. The information-gathering and decision-making process for creating a prenup is very similar to the process of creating an estate plan. Couples who execute a prenup before they marry have a head start on creating the estate plan they will want to protect their family after they’re married.

    The bottom line is that prenuptial agreements will help protect you, your beloved, your family, and your future… and there’s nothing more romantic than that. Our firm can help you decide if a prenup is right for you and your partner—contact us today.

    What Will You Be Doing With This Year’s IRA Withdrawal?

    Friday, January 13th, 2012

    Many of our clients who are 70 ½ or older have chosen in the past to give a certain portion of their required IRA withdrawal to charity each year; doing so has allowed them to take the required withdrawal, keep their taxable income down, and give to a cause they care about all at the same time. Unfortunately, the individual-retirement-account donation rule expired at the end of 2011 and has yet to be restored by Congress.

    This recent article in the Wall Street Journal explains that “under current rules, the first dollars out of an IRA count as the required withdrawal. So if an IRA owner makes a withdrawal before Congress extends the law, he or she can’t redeposit the funds and make a donation of IRA funds after lawmakers act.”

    The expiration of this rule may not be a big deal for many of our readers who intend to make charitable donations as they always have, regardless of retirement-account donation benefits; but for some, not knowing what Congress may choose to do is making it hard to design a financial plan for the year, and causing increasing stress. “The problem arises for IRA owners [who are] over 70½ and must take an annual payout from the account. They want to withdraw as little as possible in order to let the assets expand but also want to donate some or all of the required payout directly to charity.”

    Your best bet right now may be to consider your ultimate goal both for your IRA payout and for your charitable giving for the year, and then talk to a trusted advisor. One thing any estate or financial planner will tell you is that there is almost always more than one way to accomplish your goals. We cannot stress enough, however, how important it is to stay on top of any legal requirements or changes in the law when it comes to IRAs and retirement savings.

    Friendly Reminder to Take Advantage of Tax Deductions Before Year’s End

    Monday, December 12th, 2011

    As 2011 draws to a close just about everybody has their minds on vacation, travel, and gift-buying, so we just wanted to take a moment to remind all of our readers to take advantage of your tax deductions and allowances before the year is over. These may include sending a check to your favorite charity, giving a generous cash gift to children or grandchildren, or selling securities that have lost money this year.

    This isn’t all you can do to wrap up your 2011 tax package. This article in the New York Times explains that the next two years of tax policy are likely to be a bit rocky, and that “beyond the usual recommendations… you should use this year to get your affairs in order for what promises to be an uncertain two years of tax policy.”

    If you’re not sure which deductions might apply to you, our office (along with the article mentioned above) has come up with a list of tax breaks to consider:

    1. Charitable gifts to most non-profit organizations are tax deductible; and while you can’t deduct any time you spend volunteering, you can deduct any out-of-pocket expenses incurred while volunteering.

    2. You can give monetary gifts of up to $13,000 to as many individuals as you would like without incurring the gift tax.

    3. The 30% energy tax credits of 2010 expired at the end of last year, but new (albeit lower) credits were passed for 2011. Check the energy star website for information if you made any energy-efficient improvements to your home this year.

    4. If you are over 70½ you are currently allowed “to directly donate the required minimum withdrawal from [your] retirement account to charity.” (This is something that may disappear with new tax laws in 2012.)

    5. Teachers are allowed to deduct up to $250 spent on classroom expenses.

    6. A significant tax loophole set to end this year is one that “allows people whose marginal tax bracket is under 15 percent to pay no capital gains tax when selling securities held for more than a year.”

    These are only a few of the tax strategies you may want to consider before the end of the year. For more tax-saving strategies please talk to your financial advisor.

    Speculation About the Estate of Steve Jobs Continues

    Friday, December 2nd, 2011

    The public has been curious about the estate of Steve Jobs ever since he passed away in early October, but with his assets wisely protected with a trust, his family’s privacy regarding the distribution of inheritance has remained intact. (Privacy is only one of the many benefits of using a trust as part of your estate plan.) However, what is not a secret is that Mr. Jobs’ significant investments in both Disney and Apple stock will pose some interesting questions for his advisors and heirs. Whatever the family chooses to do, it’s clear that estate tax and capital gains tax laws will have to be taken into consideration.

    This article in Investment News discusses what Jobs’ trustees or heirs might choose to do with his valuable investments. According to the article Jobs had billions of dollars invested in Apple and Disney stock. Now, “under the U.S. Tax Code, his heirs may sell shares of Apple and Disney, and avoid $867 million in capital gains taxes. If Apple’s late co-founder left his estate to his wife, Laurene Powell Jobs, the family won’t be liable for the 35% estate tax until she dies or gives money to others, according to estate planners.”

    An executor or trustee has a responsibility not only to follow the wishes of the grantor of the trust, but also to look out for the best interests of the beneficiaries; which in this case may include selling or diversifying investments Jobs had chosen to hold onto for sentimental reasons.

    Additionally, any executor or trustee will have tax laws to consider–not only the laws in place right now, but any changes to the estate or capital gains tax laws being considered by Congress for 2013. “The capital gains tax is set to rise to 20% in 2013, from 15%, and high-income Americans also will be subject to a 3.8% levy on unearned gains.” This means that advisors and heirs won’t want to wait too long before making any decisions.

    The estate of Steve Jobs may be larger than most, but the same issues and questions will face the executors, trustees, and heirs of estates of all sizes. Whether you are a grantor, executor, heir or trustee, our office can help you through any questions or concerns you may be facing. Don’t be afraid to contact us.