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Create an Estate Plan without the Potential for Family Fighting

People reviewing documentsIt’s not uncommon for parents to be mediators between their children. But after they pass away, siblings can battle more frequently and more aggressively. The challenges of maintaining family relationships are that much greater when money is involved. Added stress is present when blended families can’t trust one another and don’t get along.
Motley Fool’s article, “Avoid family fights over inheritance,” says you might be surprised at the amount of money that can cause arguments. It doesn’t have to be a fortune—deep-seated feelings of rivalry and jealously are, in many instances, at the root of the problem. With that in mind, let’s look at four ideas to consider in an attempt to avoid a battle royal over your assets:
1. Irrevocable Trusts. When the parents are both alive, they can consider a trust. Irrevocable trusts can’t be modified by the children or even the surviving spouse. They will protect the aging parents from themselves. They also can let the children know that other beneficiaries can’t inflict undue influence.
2. Preplanning. Don’t force family members to make financial decisions during a family crisis. Consult with an estate planning attorney to talk about how to best address your specific situation.
3. Hire a Corporate Trustee. This can alleviate the scenario of children being pitted against one another. A trustee can be appointed to be responsible for administration. If you name one family member as a trustee for the other family member, it places the family in a precarious situation if there’s a disagreement about how the trustee is managing the trust. A corporate trustee can manage investment accounts, businesses, farms, and real estate. The costs of a trust company might be a small price to pay for keeping peace in the family.
4. Have a Family Conference. The family should meet, especially if the parents decide that “fair doesn’t mean equal.” It’s hard to explain how and why an estate will be distributed in a will or a trust. A face-to-face discussion is the best way to address any issues. A family meeting to talk about estate planning, with an experienced estate planning attorney to lead the process, can help keep peace in the family.
Reference: Motley Fool (November 7, 2016) “Avoid family fights over inheritance”

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Saints Owner Booted as Trustee of Billion Dollar Estate

Fortune cookie inheritance"The news represents a victory for Renee Benson who sued her father over his competency and control over the 1980 Shirley Benson Testamentary Trust."

NFL owner Tom Benson's estranged daughter, Renee Benson, will replace her billionaire father as trustee overseeing her late mother's assets in a settlement agreement approved recently by a probate court judge in Texas, according to an article in the San Antonio Express-News, "Tom Benson's daughter wrestles control of $1 billion trust in settlement"

The trust, valued at approximately $1 billion, was set up in 1980 after Tom Benson's first wife died—but before he took over as the owner of the NFL New Orleans Saints and the NBA New Orleans Pelicans.

Forbes said the elder Benson has a net worth of about $2.2 billion.

The professional sports teams are included in a separate trust that is also involved in a related court battle in Louisiana.

The assets in the Shirley Benson trust include most of San Antonio's Lone Star Capital Bank, half of five car dealerships, part of a large ranch, a mansion on Lake Tahoe, cash, a private plane and other real estate.

Tom Benson asked that the workers at the car dealerships tied to the trust fund be protected while a "reorganization" is completed. No details were released as to what the reorganization would involve.

Former San Antonio Mayor Phil Hardberger, who was a court-appointed receiver for the trust until this recent announcement, estimated the value of the estate as approaching $1 billion. However, Renee Benson disputes his estimate, claiming that the value is about one fifth of Hardberger's estimate.

Reference: San Antonio Express-News (February 19, 2016) "Tom Benson's daughter wrestles control of $1 billion trust in settlement"

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Keeping Trusts a Secret

Bigstock-Girl-Hand-With-Silence-Sign--106308902Sometimes it might be beneficial for a trust beneficiary to not know the details of a trust or even know that the trust exists. Some states do make that possible.

A major concern for wealthy people is that their heirs will not establish their own professional lives or even go to school. Instead, the heirs might rely on their inheritances and not be motivated to establish themselves.

One way to help avoid this is to create a trust that does not give anything to the beneficiaries until they reach an age where they will have settled into their adult lives. However, there still might be a fear that if a beneficiary knows that a large inheritance is eventually coming through the trust, they will not be as motivated to earn their own money as they otherwise would be.

A recent article by Financial Planning, "How Silent Trusts Can Help Your Clients," discusses a type of trust that can be used to keep beneficiaries in the dark about their trusts.

The basic idea is that in a "silent trust," the terms of the trust prohibit the trustee from telling the beneficiaries about the trust or the assets in the trust. You should know that these trusts are legally controversial and are not allowed in all states.

Some states mandate that the trust beneficiaries must be told about the trust upon reaching a certain age. Delaware, however, is one state that does allow silent trusts in almost all circumstances.

If you are interested in such a trust, then contact an experienced estate planning attorney to explore your options.

For more information about estate planning, please visit my estate planning website.

Reference: Financial Planning (October 16, 2015) "How Silent Trusts Can Help Your Clients"

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Artist’s Estate Demands Nude Photos Be Removed

Bigstock-Last-Will-and-Testament-44111440Recently the estate of Jean-Michel Basquiat demanded that nude photographs of the artist be taken off of a website. However, that might not have been what the artist would have wanted.

Paige Powell, the ex-girlfriend of the late artist Jean-Michel Basquiat, took several photographs of the artist lying on the bed nude and smiling at the camera. The photographs were shown at a 2014 exhibition and from there made their way online to several art websites.

One of those websites, Animal, posted the images in 2014.

The attorney for the artist's estate, however, recently sent a letter to the website demanding that the images be removed as they are disparaging to the artist. Powell claims that Basquiat was proud of his body and would want the photographs to be seen. Page Six reported this story in "Estate fighting release of Basquiat's nude photos."

It is impossible to know whether Powell is correct that Basquiat would have wanted the nude pictures to be seen. If so, this case is an illustration that there is often a disconnect between what a person would have wanted and what those running the estate want.

For this reason, it is very important when creating an estate plan that you be as specific as possible about any requests and that you pick estate administrators and trustees who will likely view things as you would have. This is especially true for artists who wish to have their works looked after in specific ways.

An experienced estate planning attorney can help guide you and consider all of these issues.

For more information about estate planning, please visit my estate planning website.

Reference: Page Six (October 4, 2015) "Estate fighting release of Basquiat's nude photos."

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The 411 on Trusts and Trustees

Business-Puzzle---trustees-BlogsizeYou don’t have to be a CEO or multimillionaire to benefit from a trust. If you have highly specific wishes on how and when you want your estate to be distributed among your heirs, then a trust could be appropriate. Also, you might be interested in setting up a trust if you’d like to avoid the time-consuming, usually expensive and always public process of probate. Some types of trusts may also help protect your estate from lawsuits and creditors. Currently, only a small percentage of Americans are subject to estate taxes, but estate-tax laws change, so things may be different in the future.

The Bryan County (GA) News published an article, “What should you know about trusts,” that gives some good advice. The first tip is if you think a trust might be a good fit, you need to work with an experienced estate-planning attorney. Trusts are designed to be highly effective estate-planning vehicles, but they also can be extremely complex. Not all attorneys know enough about them to set them up and administer them properly. Seek a qualified estate planning attorney.

Selecting a trustee is an important decision, as he or she is legally bound to manage the trust’s assets for your beneficiaries. Before you select your oldest daughter or another family member, ask these questions:

  • Does he or she have the experience and knowledge to manage your financial affairs in a competent manner?
  • If she must make a decision that may impact family members, will she act in a fair and unbiased manner?
  • Will naming a family member as trustee create issues for the family?
  • Does your prospective trustee have the time to manage your trust?
  • Does she want this major responsibility?
  • Do you have another person in mind to serve as trustee if the trustee you selected can’t do it?

Give considerable thought into who you ask to take on these roles. You can also ask a financial institution to serve as trustee, but be sure to inquire about costs and the services they provide.

Once you start these plans, it’s a good idea talk to your family about your wishes and other beneficiaries of your estate. People get hurt feelings if they have no idea what to expect. Get your loved ones on board with your estate plan so that you’ll feel even more comfortable in putting your plans in place.

For more information about estate planning, please visit my estate planning website.

Reference: Bryan County (GA) News (August 2, 2015) “What should you know about trusts”

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