Tuesday, September 30, 2014

How Joan Rivers Provided for her Pets

Check out this article about how animal lover Joan Rivers used a pet trust to take care of her dogs after her passing this month.  In doing this, she made sure her four dogs (including rescues) will be cared for the way she would have wanted.  Think a trust is too complicated for someone of modest means?  Think again; almost all states now have straightforward laws about forming pet trusts, and you don't have to be wealthy to benefit from one.  A qualified attorney can advise you on these trusts and prepare one for you if appropriate.  The Illinois State Bar Association provides some useful guidance for attorneys on pet trusts here.

Published by the Law Office of Ian Holzhauer in Naperville, IL.  

Note:  The information above is not legal advice and is not the basis of an attorney-client relationship.  If you need assistance, you can hire an attorney to assist you with your individual legal needs. 

Evolving Law for Blended Families and Adopted Children

Many blended families and families with adopted children face unfortunate (even shocking) consequences when a family member dies without an estate plan.  This article discusses unique issues applicable to these families:

Monday, September 29, 2014

Will I be Subject to the Estate Tax? What About Other Taxes?

Much attention has been devoted to the Federal Estate Tax (a/k/a "Death Tax") over the past 15 years.  After much uncertainty, a December 2012 political compromise made permanent the current version of the tax.  This brief post does not delve into the complexities of the estate tax, but deals with two common questions:

1)  Am I likely to have to pay the federal estate tax?

2)  If I don't have to worry about the federal estate tax, are there still other death-related tax rules that might apply to me?

Friday, September 26, 2014

The Basics of the "Stepped-up Basis" -- a Big Loophole to Avoid Tax on Investment Gains

Even if you are not a close follower of estate planning issues, it is worth learning the basics of the most famous tax loophole in the Internal Revenue Code, known as the automatic step-up in basis at death.

After you learn the basics of the rule, remember this:  Before deciding to sell any stocks, bonds, real estate, or other investment property, always consider the consequences the sale could have on your family's ability to use this loophole.  You don't need to know all the ins and outs of the rule; simply seeking legal advice if you identify a potential "step-up" issue could save your family tens or hundreds of thousands of dollars.


Paula, a widow, has one adult daughter. 

In 2011, Paula bought 2,000 shares of Apple stock for $100,000. 

Today, Paula's 2,000 shares of Apple stock are worth $200,000. 

Paula has lived a long and happy life, but she has a serious medical condition and her doctors say she now has less than a year left to live.  She wants to give $200,000 from the Apple stock to her daughter.   Our goal is to get as much of that money to her daughter as possible.

Let's look at the tax implications of two options:

1) Paula sells the stock now and gives the proceeds to her daughter, or

2) Paula holds on to the stock and passes it to her daughter at death.

Wednesday, September 24, 2014

The Basics: Hiring an Estate Planning Attorney

The Importance a Well-Drafted Estate Plan

The benefits of a complete estate plan (and the consequences of failing to make one) are immeasurable.  For parents of minor children, a properly-drafted will ensures your children will be cared for by people you know and trust in the event of your death, not someone chosen by a judge you've never met.   This reason alone makes life without an estate plan unacceptable for most families with small children, mine included.

Aside from wills, other useful estate planning tools can be tailored to your needs.  If appropriate for you, a living trust can ensure your property is not tied up in probate after your death.  Failure to plan ahead will often leave your loved ones unable to quickly distribute property, instead forcing them to spend a year and considerable sums of money muddling through the court system, unable to move on after a death in the family.  A living trust and other documents can help avoid all of this.  There are numerous other well-documented benefits to a solid estate plan.

Competent legal advice for your estate plan is of enormous value.  The law governing wills draws back on centuries of English legal tradition before the existence of the United States.  Many of the rules about witnessing, signatures, and other formalities are both archaic and draconian.  However, failure to comply with these formalities often invalidates an entire will--an experienced estate planning attorney can help you avoid errors that could cost your family tens or hundreds of thousands of dollars in the future.   The following are some practical considerations about hiring an attorney:

Introduction and Blog Layout

This blog is intended for a wide audience, from parents of young children researching the basics of wills and living trusts, to fellow attorneys and financial professionals wishing to discuss the latest developments in trust-related case law.  As indicated in the title, my goal is to advocate for a more client-focused, personalized and less fill-in-the-blank estate planning experience.  I feel the best way to achieve this is to invite a broad spectrum of people to read and to comment.

To facilitate navigation of the blog, I will tag each post either Basic, Intermediate, or Advanced Estate Planning.  You can navigate to posts in the applicable category by clicking the tags on the right side of the screen.

Although I am licensed to practice in Illinois, and may sometimes reference my state's law, I welcome comments from practitioners in other states.  The intent is to keep the content broad enough that it is relevant to people across the country.

I invite you to learn more about my background on the About the Author link.  You can also visit the website for my firm, the Law Office of Ian Holzhauer in Naperville, IL. 

Note:  The information above is not legal advice and is not the basis of an attorney-client relationship.  If you need assistance, you can hire an attorney to assist you with your individual legal needs.