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Pre-Paid Funeral Plans May Have Hidden Costs

Making arrangements and paying for funerals in advance may have some problems. A Kansas City man who made his own funeral arrangements and paid in advance learned there were still some problems as KSHB recently reported in "Surprise fees could add thousands to your pre-paid burial plan." Bob Lockler, who did not want to leave his family with the burden of paying for his funeral, made his own arrangements with a local funeral home and paid installments on it for 12 years. When he thought he had paid for everything, he was surprised by another bill that suggested he still owed thousands of dollars. Some of the items on this new bill turned out to be suggestions and not necessary. However, there were other charges that were necessary for him to pay, including the costs of digging his grave, opening and closing the casket, and the sales tax on the casket. That Lockler would have to pay these additional charges was buried in the fine print of his contract with the funeral home. It is important to be certain exactly what you are "buying" when you purchase a funeral plan. Senior citizens on fixed incomes cannot afford to be hit with a larger bill than they expected. Ask the person selling you the plan if there is anything the plan does not cover. The Federal Trade Commission offers a checklist you can use to make sure you are getting everything you need. An elder law attorney could advise you and review any contracts in advance. Reference: KSHB (June 21, 2016) "Surprise fees could add thousands to your pre-paid burial plan."

For more information on estate planning, visit our website.

The Battles Continue in Bobbi Kristina Brown's Estate

Bobbi Kristina Brown's estate, similar to the estate of her mother Whitney Houston before her, is locked in massive family disagreements and this time the estate administrator is suing the trustees.

The drama continues with the estate of Bobbi Kristina Brown as the family of her mother, Whitney Houston, fights with Bobbi Kristina's father, Bobby Brown, over the estate of Whitney Houston.

At one point it even included a boyfriend who claimed to have been secretly married to Bobbi Kristina. Now, there is a new development. The estate administrator has filed suit against the co-trustees of Bobbi Kristina's trust, Cissy and Pat Houston.

Radar reported on this story in "Bobbi Kristina Brown's Estate Sues Pat & Cissy Houston Over Unpaid Bills."

The trust is supposed to pay for the costs of administering the estate. However, according to the administrator, Cissy and Pat Houston will not pay any bills unless they consider the bills reasonable. The administrator claims that this has impeded the operation of the estate.

Given the contentious nature of the estate so far, it would be easy to quickly condemn the trustees for acting improperly. On the other hand, without knowing the exact nature of the bills the administrator submitted for payment it would be unwise to rush to judgment.

Trustees have an independent fiduciary duty not to waste the assets of the trust.

If the payments demanded by the administrator are unreasonable, then the trustees might have been right not to pay them. Before doing that it would have been best for the trustees to consult with an attorney.

Reference: Radar (Feb. 14, 2016) "Bobbi Kristina Brown's Estate Sues Pat & Cissy Houston Over Unpaid Bills."

Who is Most Likely to Donate?

Estate planning may look closely at charitable giving and the difference between self-made wealth and inherited wealth.

An opinion by Bill Gates that the first-generation wealthy are more likely to donate generously to charities than the inherited wealthy, sparked a study of his remarks. And, it turns out that he was right, at least as it applies to the ultra-wealthy.

It was determined that billionaires who inherited their fortunes are less likely to sign the Giving Pledge or donate more than $1 million in any given year to charity than those who made the wealth.

Becker's Hospital Review reported on this study in "The self-made rich are more philanthropic than those who inherit wealth."

Those who would like their legacy to include a tradition of philanthropy might want to take this study into account when planning their estates. If people would like their family names to be associated with philanthropy long after they pass away, then they should not leave it up to their heirs to continue charitable giving. Instead, they might wish to consider setting up a foundation that will continue the founders' philanthropic goals for years to come.

Of course, the study does not conclude that those who inherit wealth never give large amounts to charitable causes. They are just less likely to do so than those who create wealth for themselves.

Reference: Becker's Hospital Review (Feb. 11, 2016) "The self-made rich are more philanthropic than those who inherit wealth."

For more information on charitable giving, please visit our website.

Your Social Security Could Go to Your Survivors

Your Social Security benefits don't necessarily end when you pass away. It is possible your dependents could receive survivor's benefits.

Social Security is a retirement plan that gives us monthly payments when we retire. You do not name a beneficiary for your Social Security but that does not mean that your savings can't be passed on through survivor's benefits.

The Lowell Sun recently listed who might be eligible for those benefits in "Social Security has survivor's benefits."

The list includes:

• Widows/Widowers – A widow or widower can get full survivor's benefits when he or she reaches retirement age or sooner if taking care of a child under the age of 16.
• Divorced Widow/Widower – Someone who was married to the deceased for at least 10 years may be able to get survivor's benefits.
• Minor Children – Children of the deceased under the age of 18 are eligible for the benefits. If still a full-time student, then benefits are available until the age of 19. Benefits can be claimed at any time if the child of the deceased became disabled before the age of 22.
• Parents – If a parent depended on the deceased for at least half of his or her support and the parent is over the age of 62, then the parent is eligible for survivor benefits.

An elder law attorney could answer your questions about eligibility for survivor benefits.

Reference: Lowell Sun (Jan. 24, 2016) "Social Security has survivor's benefits."

Please visit our website for more information on estate planning.

The Sumner Redstone Saga Continues

Interest by the media and Wall Street in the life and drama of billionaire Sumner Redstone is not unusual as once again an aging billionaire makes the news as his personal life and wealth come under study.

Sumner Redstone, the chairman of CBS and Viacom Media, resigned recently among reports of ailing health and incompetency charged by an ex-mistress. Falling stock prices soon followed.

Redstone owns 80% of National Amusements, through which he still has a controlling stake in both CBS and Viacom. His daughter owns the other 20%.

After he passes away, Redstone's shares are to be put in trust for his grandchildren. That has led to controversy as the new chairman of Viacom is also one of the trustees. Redstone's daughter claims this is a conflict of interest.

As reported by the New York Times in "When Family Fortunes Beget Vicious Power Struggles" this is not the first time a feud over a family-owned business has been made public when the founder begins to age or passes away. It is actually fairly common when the founder has done little to pave the way for a successor to operate the businesses and instead holds onto control for too long.

The saga over Redstone's media empire is just beginning and it might still work out. However, it should be considered as a lesson for anyone who owns a family business. It is extremely important to have a solid succession plan in place as part of an estate plan and that succession plan should be developed over a period of many years.

An estate planning attorney can help set up a smooth transition of power.

Reference: New York Times (Feb. 11, 2016) "When Family Fortunes Beget Vicious Power Struggles"

Please visit our website for more information on business succession.

Kansas City Schoolteacher Leaves a Large Estate

Schoolteacher Anna Kurzweil left most of her estate to the Jesuits and the size of the estate came as a surprise.

Schoolteacher Anna Kurzweil, who made less than $25,000 a year, was not known as a wealthy person. She came from a farm outside of the Kansas City metro area and worked as a teacher after graduating college. She also took a job in a factory to produce airplanes during World War II.

A deeply religious woman, Kurzweil joined a religious order after the war. However, before taking her final vows she left to take care of her mother who had grown ill. Kurzweil returned to teaching and made less than $25,000 year.

Eventually, she retired and lived on a modest pension. Thus, it was a surprise when she passed away in 2012 and bequeathed $2 million to the Jesuits.

Religious News Service reported this story in "Kansas City teacher astonishes with $2 million gift to Jesuits."

Kurzweil's secret to amassing her fortune was simple. She lived modestly and frugally. She invested her money wisely and let it grow. It also probably helped that she never married and never had children.

Reference: Religious News Service (Feb. 9, 2016) "Kansas City teacher astonishes with $2 million gift to Jesuits."

Please visit our website for more information on charitable giving.

Retiring and Living to 100

Retirement money could be challenging for those who join the rising number of Americans living to celebrate their 100^th birthday.

While the total number of Americans living to see their 100^th birthday is relatively low at 72,197, the growing trend toward an increase in centenarians grew 44% from 2000 to 2014, according to the Center for Disease Control and Prevention. This could create quite a challenge for retirement funding.

Recently, U.S. News & World Report offered some tips for planning for such a long retirement in "How to Finance Living Until 100."

The advice includes:

• Delay Social Security Benefits – Every year you delay taking Social Security past full retirement age increases your monthly benefits by 8 percent.
• Be Wary of Inflation – Invest in assets that are either guaranteed to keep up with inflation or have historically done so.
• Get A Pension – If you have a job that offers a pension, then you will have more money to spend during retirement.
• Get an Immediate Annuity – While they are not right for everyone, getting an immediate annuity will allow you to receive regular payments no matter how long you live.
• Draw Down Slowly – When you do retire, be as conservative as possible in drawing down your retirement savings.

It is still unlikely that any particular person will live to be 100. However, it is always good to plan for the contingency that you might be one of the lucky few.

A good estate plan could be helpful for those who become centenarians. And, if you do not live that long, the assets will not be wasted as long as you get an estate plan that appropriately passes the assets on to your heirs.

Reference: U.S. News & World Report (Jan. 22, 2016) "How to Finance Living Until 100."

Mounting Debt Challenges Millennials Saving For Retirement

Many millennials who carry a large debt load could be making a mistake as they face the challenge of planning for retirement.

Mounting student loan and credit card debt has become a burden to the millennial generation as they begin their professional careers. And, while debt should be paid off as soon as possible, many of the millennial generation are making the mistake of delaying retirement planning until they are at risk of not having enough savings for their retirement years.

Recently, U.S. News & World Report offered some debt reduction and savings advice for millennials in "How to Balance Debt Reduction and Retirement Savings."

The tips include:

• Avoid High Interest Debt – Getting out from high interest debts, such as credit cards, as quickly as possible allows people to save more for retirement.
• 401(K) Matching – If your employer offers a 401(K) matching program, no matter how small, take advantage of it.
• Buy Cars With Cash – Saving money to buy a car for cash instead of financing the car purchase is a good way to have extra money for retirement.
• Be Realistic – It is important to set realistic goals about how much money you will need for retirement.
• Be Aggressive – The younger you are, the more aggressive you should be with investments.

Once millennials do start saving for retirement appropriately, they will also need to get estate plans that detail how those savings should be distributed should something happen to the savers.

Speaking with an estate planning attorney could help you meet the challenge of saving for the future and paying off debts.

You can visit our website for more information on estate planning. 

Reference: U.S. News & World Report (Jan. 22, 2016) "How to Balance Debt Reduction and Retirement Savings ."

Executor Mistakes Can Result in Liability

While it is often an honor to be named an executor of an estate the experience can become difficult and sometimes expensive if you are not prepared.

An executor has many responsibilities including figuring out estate assets, paying any outstanding debts and distributing the remaining assets as dictated in the estate plan. While that sounds simple enough, the path to success is full of potential pitfalls.

This was the message of a recent Wall Street Journal article entitled "The Biggest Mistakes Executors Make."

The article lists the following common mistakes made by executors:

• Paying Bills Too Soon – Many executors pay bills as soon as they come in. This can be a mistake as some debts, such as to the government, should be paid before other debts to ensure that there is enough money to cover higher priority debts.
• Investing Estate Assets – Some executors think they can invest assets to increase the value of the estate. While that is good in theory if the investments increase in value, the executor can be held personally liable if they do not.
• Mishandling Real Estate – Real Estate must be handled carefully. Houses should not be sold too soon or too late and it makes a big difference whether or not there is someone still living on the property.
• Losing Personal Property – Executors should conduct an inventory of valuable tangible assets to make sure they are properly stored and not taken away by someone else.

An estate planning attorney can be helpful with guiding an executor through the process.

Reference: Wall Street Journal (Jan. 31, 2016) "The Biggest Mistakes Executors Make"

Please visit our website for more information on estate planning.

A Second Marriage Could Threaten Assets

A remarriage can cause problems with distributing assets as a new spouse enters the picture and children from the first marriage receive a smaller inheritance. There are a number of ways to handle the situation but sometimes one can go too far.

A secret divorce in a foreign country has caused some problems with the protection of assets, according to the New York Post's recently published article on a bizarre lawsuit in "Husband secretly divorced wife after wedding 'to protect assets'."

It seems some 20 years ago Cristina Carta Villa, now 59 years old, married Gabriel Villa, now 90 years old. According to Cristina, as far as she knew the two of them were still married and they have lived together ever since.

However, when a tax bill for their Manhattan home arrived she grew suspicious when her name was not listed as an owner of the property. Gabriel is alleged to have taken her name off the deed. He did this by claiming that the couple was not married.

Apparently, a few months after the wedding ceremony, Gabriel Villa hired attorneys in the Dominican Republic to divorce the couple in that country even though the two of them were not living there and never appeared in court.

Cristina Villa claims that Gabriel is now trying to sell the Manhattan home to his adult daughter and cut her out. She is suing him to have the divorce she did not know about invalidated.

Perhaps one of the strangest aspects of this case is that Gabriel Villa is a lawyer. Consequently, he should have known that there were far better ways to shield some assets from his wife if he wanted to make sure they went to his daughter from a previous relationship.

For starters, before getting married Gabriel could have arranged for a prenuptial agreement. After marriage he still could have asked for a postnuptial agreement. Despite those two options, Gabriel should have remembered that a spouse does not necessarily need to inherit all of the assets of the deceased spouse. In fact, the surviving spouse maybe entitled to an elective share or common property interest, but any assets beyond that can be distributed however the deceased wants as part of an estate plan.

An estate planning attorney could help with advice on the distribution of assets when a second marriage is involved.

Reference: New York Post (Jan. 24, 2016) "Husband secretly divorced wife after wedding 'to protect assets'."

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