John Lane Law

Estate Planning and Your Second Marriage

Marrying again makes estate planning more involved. How do you provide for everyone you love? Should you provide for everyone you love? How do you arrange to transfer wealth in a way that won’t hurt the feelings of certain heirs? If you have not planned your estate yet, take inventory. Spend a half-hour and jot down the assets you own, major and minor. Who should own these assets after you die? Your spouse should do this, too – and you should talk about your preferences. It may not turn out to be the easiest conversation, but agreement now may preclude family squabbles and legal challenges down the line. You should also consider two scenarios – what happens if you die first, and what happens if your spouse dies before you do.

The Meridian Star, in “Estate planning after a second marriage” explains that if you and/or your spouse have children from prior marriages, there may be issues for each of you. If you pass away first, there is a real possibility that your current spouse won’t provide for your children from past marriages. So to prepare for that possibility, you can make a child the primary beneficiary of a life insurance policy, create a trust for your children, or place certain real property under joint ownership with a child.

If you have a written a will, it may require an update. Be extremely specific about which heir gets what and state bequests convincingly. The more convincing your bequest, the less ambiguity and the fewer issues that will arise. Also, update your beneficiary designations for retirement plans, investment accounts, and insurance policies. However, if you’ve been divorced, you may be precluded from changing beneficiaries in certain cases. Talk to a qualified estate planning lawyer. Take a copy of your divorce decree with you and ask if revising your beneficiary designations will violate it.

You can also take a look at irrevocable trusts, which can be used to provide for your spouse and your kids. Some people establish a separate property trust to provide for their spouse after their death and designate their real property to their children. Parents can also create irrevocable trusts to direct assets to particular children. These can be great estate planning vehicles because: (i) a trust agreement isn’t a public document; (ii) assets within irrevocable trusts are shielded from creditors and from inheritance claims of spouses of the adult children named as heirs; and (iii) an irrevocable trust represents a “finalized” estate planning decision—which guarantees that particular assets transfer to a parent’s biological children. In addition, irrevocable trusts are rarely undone.

Pre-nuptial agreements can also play a role in estate planning, as they let you to designate personal assets for existing rather than future children. Post-nuptial agreements(similar to pre-nups, but drafted after a marriage) can also do this, but some states don’t recognize these types of agreements, and sometimes this is left up to a judge.

Be sure to consult with an experienced estate planning attorney. Estates with this level of complexity require professional legal assistance from those with a thorough understanding of estate planning and tax issues. Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: The Meridian Star (September 27, 2015) “Estate planning after a second marriage”

Marrying after 50

Coming together at 50-plus is different from getting married in your 20s, particularly when it comes to money. "You've had a lifetime of solidifying your money beliefs" and behaviors, says Janet Stanzak, president of the Financial Planning Association. These are some ways to smooth the transition if you're tying the knot this summer.

AARP Magazine published an article titled “4 Smart Money Moves If You Marry After 50” last summer that did a great job of discussing some reminders before saying “I do” after you turn age 50. These reminders will work for you if you are walking down the aisle.

Talk about prior obligations. With age comes various obligations like support payments and debts. Share your credit reports and scores, and review previous divorce agreements for details about cash flow, assets and debts.

Don't forget your adult children. Although you may have considered what you'd like to do for them financially, and they've probably have some ideas about what they may one day inherit, a later-in-life marriage changes this. It also complicates your estate planning, so speak with an experienced estate planning lawyer about the changes. The article advises that you discuss your decisions with your new spouse and adult kids to hopefully decrease or eliminate the amount of controversy down the line. You can also formalize these plans in a prenuptial agreement.

In addition to a prenup, revisit your estate plan with a qualified estate planning attorney, in addition to your beneficiary designations. Wills finish second to legal titles to real estate or beneficiary designations on financial accounts, as well as retirement plans and insurance policies. Make any changes in writing, and be careful with Social Security, the article cautions.

On last thing: if you're close to 62 and want to apply for a former spouse's Social Security benefit, you shouldn’t remarry, as you must be single at the time you apply.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: AARP Magazine (June/July 2014) “4 Smart Money Moves If You Marry After 50”

Estate Planning Advice for Your Second (or Third) Marriage

If you’re anything like the typical person contemplating a second (or third) marriage, you are older, have children, have accumulated property, and have been enjoying a standard of living you would like to maintain. Below are a few important considerations for estate planning for a second marriage.

The Des Moines Register recently published an article entitled, “Estate planning for a second marriage,” that discusses several great tips to keep in mind if you are faced with this situation. Here are a few:

Discuss Money. This is a major cause of stress in any marriage; however, it can be really challenging in a second one. You and your future spouse should talk about and come to an agreement on all of the important financial issues. Make plans that both of you are OK with. If you’re considering a prenuptial or postnuptial agreement, it’s all the more important to tell all (finances-wise).

Consider a prenuptial or postnuptial agreement. This contract is critical if you will bring assets into the marriage, the article explains. A surviving spouse has the legal right to take an “elective share” of the deceased spouse’s estate, regardless of what is in the will, usually one-third or one-half of the elective estate. If this happens, it may result in the unintentional disinheritance of your children or other heirs. The only way to trump the elective share laws is to sign a prenup or postnup where both parties waive their rights to the elective share. This reduces the chance that state law will interfere with your intended estate plans.

Revise your will and other estate planning documents. Remarriage doesn’t revoke a will (although state law can supersede it), so it’s critical that you draft a new will that takes into account your new circumstances.

Providing for children from a previous marriage. It can be a big concern in many second marriages to provide for the new spouse without cutting out children from an earlier marriage. An estate planning attorney can help you place your assets into a qualified terminable interest property (QTIP) trust. With this, all trust income is devoted to supporting the surviving spouse while the principal is preserved for the children. Plus, assets passing to a valid QTIP trust qualify for the marital deduction, which helps reduce possible estate taxes at your passing.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Des Moines Register (April 14, 2015) “Estate planning for a second marriage”

Twisted Sister Drummer’s Estate Planning Didn’t Rock

When Twisted Sister drummer AJ Pero died on March 20, it caught his fans and bandmates by surprise — and Pero’s own lack of estate planning has reportedly thrown his family into chaos as well. Frontman Dee Snider has issued a typically frank statement to House of Hair, calling the situation “the unfortunate reality of irresponsible adult behavior” and using the aftermath of Pero’s death as a sobering reminder of what can happen when we don’t get our affairs in order while we still can.

“Not only did AJ Pero have a family history of heart disease, which he allowed to go unchecked, but he did not have a will, left behind two ex-wives, a longtime girlfriend, four children between the three of them and a mess of an estate to be sorted out,” said Snider in an article on the website ultimateclassicrock.com titled “Twisted Sister Drummer AJ Pero Died Without a Will.”

Oh my.

Now, the article says there’s plenty of infighting, mistrust, and dissension among the family members about how to handle AJ’s estate. “What a mess.”

Twisted Sister was planning to retire as a band after a 40th anniversary tour, and is now trying to help AJ’s survivors. “While the legalities of the situation are being sorted out, Twisted Sister is doing a show to raise some money to help the family out in the short-term,” Snider remarked.

“This unfortunate situation should be a life lesson to all to take responsibility for the world we create and will leave behind when we are gone.”

Wow, did you catch Dee Snider’s great estate planning advice?

Take responsibility now and after we’re gone.

Although Pero’s longtime girlfriend started a GoFundMe campaign to help with expenses of the daughter she had with AJ, that site is no longer online.

It’s no secret that there’s major potential for disagreements after a loved one’s death—even when there is a will. Make sure that you speak to a qualified estate planning attorney to take responsibility for your family and avoid the headaches now facing the family of Twisted Sister’s late drummer.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: ultimateclassicrock.com (April 8, 2015) “Twisted Sister Drummer AJ Pero Died Without a Will”

Estate Planning and Blended Families

In an article titled “Tips for Successful Wealth Transfer to Your Survivors,” The (Lakeland FL) Ledger explains that blended families without a proper estate plan for wealth transfer could see problems that don’t happen with traditional families. For example, state inheritance rules, intestate laws, and conflicts in beneficiary designations could be inconsistent with the will. In addition, a disinheritance of new family members without the knowledge of the entire family can cause emotional friction between the surviving family members.

There have been some laws enacted that have changed how beneficiary designations are handled, so make sure your estate plan is in sync with your retirement accounts. Do this because those beneficiary designations generally supersede what is directed in your will.

Also, the original article says having a trust as a beneficiary of an account is a good way to control wealth transfer. It allows the assets to flow through a trustee rather than an account custodian. The discretionary distribution of assets is a method of controlling "from the grave" how your money is to be given to certain family members who might have issues dealing with their finances. It’s what’s known as a "spendthrift provision."

You can accomplish secure wealth transfer and estate planning by working with an experienced estate planning attorney. Protect your wealth and the relationship with your heirs by carefully creating an estate plan and discussing that plan with your family.

Reference: The (Lakeland FL) Ledger (February 4, 2015) “Tips for Successful Wealth Transfer to Your Survivors”

Dispute over Doctor’s Multimillion Dollar Estate Headed for Trial

The fight over the multimillion-dollar estate of renowned plastic surgeon and burn treatment pioneer Richard Grossman, who died last March at age 81, is headed for trial this year amid new allegations against his widow. Previously, in a lawsuit filed in August, the doctor’s sons, Peter and Jeffrey, accused the doctor’s fourth wife, Elizabeth Grossman, of manipulating her ailing husband into leaving an inheritance believed to be worth tens of millions of dollars to her and nothing to his two children. Then, on February 10th, a new complaint against Elizabeth Grossman and her attorney, Peter Wakeman, alleged that the two interfered with a contract directing that Richard Grossman’s estimated $20-million Hidden Valley estate in Thousand Oaks, known as Brookfield Farms, go to his children and grandchildren. Instead, the lawsuit states, Elizabeth Grossman redirected the property to herself. The suit also accused the woman and her attorney of committing elder financial abuse and seeks an unspecified amount in damages.

A recent article in the Thousand Oaks (CA) Acorn, titled “Battle over Grossman estate intensifies,” describes the contentious fight over a noted physician’s estate between his wife and his children from a previous marriage. With all of the assets going to the wife, the children assert that the doctor had advanced dementia and wasn’t able to make his own decisions.

The Grossman fortune was a result of his position as the founder of the Grossman Burn Center in Los Angeles. His medical center was one of the first to use a hyperbaric chamber to prevent infections in burn victims and speed burn recovery. Grossman retired from his practice in 2013 and died a year later. Now the lawyers for his children and his widow are disputing the doctor’s true intentions for his estate.

The children are claiming that the doctor and his wife had a prenuptial agreement when they married in 2000 that kept the property of each separate. The children are seeking to keep her from selling Grossman’s main asset, Brookfield Farms. They believe that the doctor wanted to keep the estate in his family. They want the estate to be distributed in trust for the benefit of the doctor’s grandchildren and one of his children suffering from a neurological condition who needs family support to care for him.

Whether you own a million-dollar farm or a modest home in the suburbs, avoid fights like the Grossmans’ and seek out the assistance of an experienced estate planning attorney to make sure that your intentions are clear and carried out.

Reference: Thousand Oaks (CA) Acorn (February 19, 2015) “Battle over Grossman estate intensifies”

Fighting Begins in the Robin Williams Estate

The comedian Robin Williams hadn't been deceased for long when a fight erupted over some of his belongings. Williams' third wife and his three children from a previous marriage landed in court with a dispute over personal items, including Williams' watches. When assets are being passed on to children from a prior marriage, trouble can quickly ensue. Having a clear will and a sound trust can help ease tensions. But experts are advising people who remarry to have even stronger asset defenses—prenups and even postnups that are highly detailed and clearly laid out. The message from the experts is simple: You can never have too many documents backing up your intentions.

"The mess comes when you don't have proper estate planning," according to an attorney interviewed in a recent article titled “Remarrying? Shower kids with love, and a good prenup” from CNBC. An important tool in that toolbox, he says, is a prenup. A prenup details how assets would be split up if the marriage fails or a spouse dies. A spouse who wants to protect assets in a second marriage should also talk to an experienced estate planning attorney about trusts.

One of the best features of a prenup is that it can protect nearly every kind of asset an individual may want to pass along—this includes art collections, cash, and the family business. Without a prenup, it’s easier for a spouse to obtain some unintended part of the estate if you die. A prenup should be airtight to avoid legal issues. Although Robin Williams had a well-thought-out estate plan when he passed, which included a prenup and a trust for his children, some of his personal items were left out of the documents. This is causing a fight between his spouse and his children.

Documenting every asset is necessary. Lists of paintings owned before a second marriage can be kept in multiple places, which helps you show evidence of your intentions … and the more detail, the better! Once a prenup is signed, it’s nearly unbreakable and is typically accepted by the courts.

The original articlegives us some guidelines to keep in mind and to discuss with your attorney:

1. Both you and your spouse should understand the prenup, and both should be represented by attorneys.
2. Negotiate and sign the prenup prior to your wedding. A common mistake is signing the prenup the day of the wedding!
3. After you're married, be careful not to commingle all assets because the source of funds—like joint or separate accounts—used to buy an asset will decided who owns it.
4. The more communication, the less misunderstanding. Conduct a family meeting and discuss your intentions for your estate.

Read about more tips in the article and talk to your estate planning attorney sooner to help avoid costly court battles later.

Reference: CNBC (February 12, 2015) “Remarrying? Shower kids with love, and a good prenup”