News & Resources

Author: Stephen Lacey

Tue, Nov 6, 2018| | Articles

Protecting your family’s legacy: It’s not just the rich and famous that have to worry

Sometimes there are lessons to be learned from constant media coverage of the lives of famous people.  The recent loss of two cherished musicians offer cautionary tales about the dangers of failing to plan for our families to thrive after we are gone. First, there is the tragic case of the American musician, record producer and filmmaker, Prince Rogers Nelson – better known as Prince.  Prince died unexpectedly on April 21, 2016, at the age of 57, with no surviving spouse, children or grandchildren.  Prince also had no will, trust, or other estate planning documents to provide for the disposition of his vast estate, comprised of millions of dollars in real estate, stock, cars, and intellectual property (including unreleased recordings.) Prince’s legacy included a multi-million estate. Prince died in 2016. (Photo: USA TODAY files)  Prince’s sister and his five half-siblings are the likely beneficiaries of Prince’s estate.  Because Prince failed to prepare any Estate Planning documents, the administration of his estate through the courts may take several years and result in substantial attorneys’ fees, taxes, and other costs which could have been largely avoided.  One recent article estimates fees of over $5 million paid to date, even though no funds have been distributed to the estate beneficiaries.  Additionally, Prince’s legacy may be left in the hands of unintended individuals who cannot agree about the best way to preserve and respect the entertainer so many adored. Similarly, the passing of the civil rights activist and music legend, Aretha Franklin, the undisputed “Queen […]

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Mon, Nov 5, 2018| | Blog

How to Avoid IRS Scrutiny of Family Run Foundations – Melbourne, FL, Vero Beach, FL

It makes sense to have family members at the helm of charitable family foundations. After all, who knows better what the family members intended? The IRS doesn’t see it that way. To avoid IRS scrutiny, here are some common pitfalls to keep in mind. Ensuring that the goals of the family foundation are met is one of the reasons that family members are often put in charge of the family foundation. Children or siblings of the deceased are usually appointed to run these foundations, with the hopes that they know better than anyone unrelated to the family how to achieve and maintain the values and goals of the foundation. This “keep-it-in-the-family” approach may not be the best in every family. The New York Times, in “When Family Members Run Foundations, Scrutiny Never Ends,” identifies some of the potential pitfalls awaiting unwary family members when running a family foundation. A few of the potential problems detailed in the article are: Compensation – Family members who are paid to work for the foundation must be paid a salary that would be ordinary and reasonable for non-family members working in the same positions in similar organizations. Travel Expenses – Family members who travel on foundation business can be compensated for their expenses. However, they cannot bring other people with them and charge the foundation for their expenses too. For example, the children cannot be taken along and their expenses may not be charged to the foundation. Self-Dealing – One of the biggest ways […]

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Tue, Oct 30, 2018| | Blog

What Happens When Trusts and Estate Laws Become Outdated – Melbourne, FL, Vero Beach, FL

Laws change all the time. This is especially true of estate and tax laws. An estate planning method that may have been at the leading edge at one time can become out of date or even illegal. Federal estate taxes, capital gains taxes and trusts have all changed over the years. Your estate plan needs to be reviewed on a regular basis to make sure it still works. There was a time when irrevocable bypass trusts were highly favored by estate planning attorneys as one of the best estate planning methods for married couples. It worked like this: one spouse would fund the trust with an amount that was just under the estate tax exemption. At the time that the funding spouse passed away, funds in the trust were available for the heirs, and the balance of the estate was inherited by the surviving spouse. Consequently, this approach lowered the size of the surviving spouse’s eventual estate and lessened the estate tax burden for the married couple. However, as Kiplinger’s Retirement Report points out in “Old Trusts Create Tax Issues for Heirs,” estate tax laws have changed significantly since the time when many of these trusts were created. The estate tax exemption is far higher than it used to be (now close to $11 million). Spousal portability now allows a married couple to double its estate tax exemption. The problem for irrevocable bypass trusts is that assets in them do not receive the step up basis for purposes of the […]

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Tue, Oct 23, 2018| | Uncategorized

New Legislation Enacted in Certain States to Protect Elderly Investors – Melbourne, FL

After a long and high profile life of philanthropic endeavors, socialite Brook Astor died in 2007 with an estate worth $200 million.  Two years later, her son Anthony Marshall was convicted of stealing millions from her. Astor suffered from dementia, and Marshall was paying himself from her assets. While not all families enjoy this level of wealth, the fact pattern is not all that unusual.  A large and growing number of Americans suffer from dementia-type illnesses and a equally large number of them will be taken advantage of by family members. States are now trying to provide greater protection for elderly investors, according to a recent Reuters article titled “Protecting dementia sufferers from scammers gains ground in U.S.” Retail brokers – in three states thus far, have been permitted to help deter scams against people with dementia. The laws, which are being examined by other state legislatures, allow brokerages to halt an older client’s request to transfer money to others (at least temporarily) if a wealth manager suspects that his or her customer may have dementia and may be unknowingly be the victim of a scheme. More than 5 million Americans over the age of 65 have Alzheimer’s disease, which is the most common form of dementia, the article says. Citing the Alzheimer’s Association, that figure accounts for roughly 1.5% of the U.S. population. Experts say this could grow to 7.1 million by 2025.  The elderly are often easy targets for con artists and unscrupulous family members. In fact, U.S. […]

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