Thursday/January/15 12:19
by Derek G. Rowley (c) 2009, All Rights ReservedThere is no better time to transfer wealth to the next generation than when everything is worth a lot less. Now, for example, would be a good time. Stocks, bonds, and real estate values have plummeted - and interest rates are at all-time lows. On second thought, I correct myself: Now is a great time for estate planning!
Read More... Thursday/October/23 10:24
The devastating impact of estate taxes and on family-owned businesses is being illustrated by the Pittsburgh Steelers organization. Art Rooney, Sr., founder of the team, left the team ownership to his five sons when he died in 1988. Since then, the value of the NFL team has ballooned, estimated to be worth between $717 million and $1.2 billion as estimated by Forbes Magazine and Goldman Sachs, respectively. At least four of the five brothers want to sell their equal shares in the team in order to avoid costly estate taxes for their children and grandchildren. But, the NFL wants the family to retain ownership and requires the approval of 24 of the NFL’s 32 owners to approve any sale. The brothers rejected an offer of $550 million from billionaire Stanley Druckenmiller, seeking something closer to what they believe is the fair market value of the organization. Estate taxes on a $1.2 billion estate could run in excess of $539 million dollars.
Read More...Tags: Steelers, NFL
Thursday/October/23 10:20
John Karoly, a prominent member of the Bar in Allentown, Pennsylvania, was indicted in September on charges of conspiring to defraud the estates of his brother and sister-in-law by creating fraudulent wills. Peter Karoly and his wife Lauren Angstadt died in a plane crash in 2007 without children - but with estates worth several million dollars. John, upset that he was left out of his brother’s 1985 will, remedied the situation by creating fake wills that intended to supercede the authentic wills.
Read More...Tags: will
Wednesday/September/17 10:57
Time to Review Your Estate Plan
by Derek G. Rowley (c) 2008. All rights reserved.
LAS VEGAS - For years, legal practitioners and estate planners have advised clients to carefully think through the appointment of successor trustees named in living trusts. That advice has never been more relevant than now, as financial titans on Wall Street and elsewhere reel from the impact of our latest financial crisis. In light of the financial meltdown, now is a good time for you to review your trust and estate planning documents to look for potential problems.
In the typical living trust, the individual creating the trust becomes the trustee and the beneficiary. Then, in the event of death or disability, successor trustees are typically named, frequently the spouse or other family member. However, the traditional “catch-all” has been to name an additional successor trustee that is thought to be guaranteed to outlive any individual by naming a prominent national or regional bank as a corporate trustee. The reason for this is that the existence of a corporate trustee will ensure that the provisions of the trust will be carried out by someone with professional fiduciary responsibility.
Today, however, that strategy may need to be re-evaluated as some of the biggest names on Wall Street and other regional and local banks are shut down, seized by regulators and their assets sold. This can result in an unanticipated change in the actual corporate trustee, often resulting in long-distance frustration for future beneficiaries.
It is important to note that the trust assets held by a corporate trustee are not counted as property of the trustee, so they will not be directly impacted by the failure or bankruptcy of a corporate trustee. Nevertheless, the trust assets can be seriously impacted my market conditions, without any clear path for how trust assets should be invested to weather financial storms.
While there may be no clear solution to these challenges, those who are aware of these potential problems may avoid serious future problems by reviewing how their living trust addresses these issues, if they are addressed at all. That, and a bit of common-sense can go a long way towards avoiding problems. Fortunately, the beauty of the living trust is that it is revocable, allowing the individual who created the trust to make any necessary changes in the trust as long as they live. So, if you find a potential problem, you still have time to fix it.Tags: living trust, corporate trustee
Tuesday/August/19 21:34
John and Mary owned a successful small business for 15 years until John suddenly died
of a heart attack. Mary did not want to run the business alone, so decided to sell it.
Read More...Tags: living trust, probate, estate tax, will