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Houston Estate Planning Law Blog

BONANZA STAR’S SON SELLS MEMORABILIA TO SHARE WITH REST OF WORLD

Lorne Greene, best known for playing Ben Cartwright on the television show Bonanza, is considered to be one of the most iconic people of his era and was privy to have been on what is now considered to be the second-longest-running TV Western. But Greene likely didn’t know how popular he would really become once the show went into syndication the world over, creating an even larger fan base than he probably dreamed. That may not have been his thought when he decided to leave a treasure trove of Bonanza memorabilia behind for his son when he passed away in 1987.

Treasures ranged from commemorative belt buckles to the original branding iron that was used during the beginning sequence to every episode. It’s a collection that Greene’s son now says he wants to share with the world.

A few months ago, Greene’s family contacted Anchor Auctions and Appraisals and explained that they wanted to auction off a portion of Greene’s items. As the son’s assistant explains, Greene had owned a lot of stuff and, in the end, just wanted the public to have access to it. So they got to work putting together a collection of more than 500 artifacts, including 20 from the television show, to be put up for auction. It’s not clear whether the auction, which will be open to overseas investors, was stated in Greene’s will or if the idea was that of his son who knew what about his father’s final wishes of sharing these treasures with the rest of the world. Regardless though, many Texas residents may be getting ideas about their own estates from just such a situation.

As we’ve stated in past posts, providing a detailed description of what you want to happen to your belongings and monetary assets after you pass is an important part of any estate plan. It not only ensures that the people you designate get what you want them to get, but makes sure that your final wishes are carried out exactly how you wanted.

Source: The Los Angeles Times, “Son of ‘Bonanza star’ Lorne Greene to auction off memorabilia,” John M. Glionna, June 27, 2013

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TRAGEDIES AND THE IMPORTANCE OF DESIGNATING GUARDIANS IN WILLS

It’s 2012 and somewhere in Kansas City, a man and a woman are fighting over the paternity of their 9-month-old daughter. The mother claims the child is not his. The man becomes enraged, killing the mother then later turning the gun on himself. With both parents gone, estate attorneys turn to the couple’s wills to determine which family member will get custody of the daughter. But because nothing was stipulated in the documents, family members on both sides begin fighting for custody of the girl.

Many of our readers may recognize this as the story of young Zoey Perkins, daughter of Kansas City Chiefs linebacker Jovan Belcher. Hers is a cautionary tale that teaches us that while we may not think that the worst will ever happen to us, having the a safety net in a will is always a good idea.

In Zoey’s case, two family members wanted custody of the girl: her paternal grandmother and an aunt on her mother’s side. But because no guardianship had been established prior to the parent’s untimely deaths, child custody would be in limbo until a family law judge could determine who was better suited. While both women said that they would be comfortable sharing custody of the girl–in an effort to keep her connected with both sides of her family–but the nearly 1,400 mile difference between each woman’s residence presented a problem for a judge.

Ultimately, it was decided that the girl’s aunt, who lives here in Texas, would be a better guardian for the girl after attorneys pointed out that the grandmother had a smoking habit and had had a number of police calls to her home over the years.

An important part of any estate plan for new parents would be to designate custody of your children in the event that they suddenly die or become incapacitated. Because as this story demonstrated, the ensuing custody battle can often times take a considerable amount of time to work out in the end.

Source: The Daily Mail Online, “Judge grants custody of Jovan Belcher’s $3million baby to a cousin six months after NFL player shot dead his daughter’s mother and then himself,” Rachel Quigley et al, June 20, 2013

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LETTER FROM GEORGE WASHINGTON DONATED TO UNIVERSITY OF TEXAS

Donations are possibly one of the best ways to avoid pesky estate taxes when you pass away. But what if what your donation has no price tag or could be viewed as priceless in nature? Dallas’ very own oil and gas businessman Barron U. Kidd now knows the answer to that question after his surprising donation to the University of Texas at Austin this month.

So what was Kidd’s donation? A one-of-a-kind, handwritten letter by George Washington himself. There’s no telling what the letter could have fetched at auction nor will anyone ever know since Kidd handed the letter over to the university’s Dolph Briscoe Center for American History. It’s a priceless memento that is giving academics a rare look into the past.

As Briscoe Center Executive Director Don Carleton explains, the letter “sheds light on Washington’s views on Indian relations” from that time. In the letter, the future president writes about his outrage at the murder of three members of the Mingo tribe by white settlers, calling their actions “villainy” in nature. According to some scholars, this letter could change many of the perceptions people had about the first president and how he felt about hot-button topics of the day.

As for how Kidd came to possess the letter before his donation, sources do not say, but it’s likely that the businessman will continue his streak of being one of the university’s major donors. Some would reguard his move as an effective form of estate planning because it equally protects his assets for the future while preserving knowledge and history today.

Source: The Dallas Morning News, “Dallas businessman donates 1769 George Washington letter to UT-Austin,” The Associated Press, June 5, 2013

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WHAT IS YOUR PLAN FOR YOUR FAMILY’S HEIRLOOMS?

Everyone in Texas knows that you can’t take it with you when you die. But what might have been important to one generation quickly turns into a dust-gathering memento for the inheritor. It’s a trend the nation has been seeing more frequently lately, especially when it comes to family heirlooms.

The question we pose to our readers this week is whether they themselves have a plan for their family heirlooms. While some families are meticulous about handing things down through the generations, a growing majority of younger generations fail to see the sentimental value or importance these treasures once held to previous generations. As a result, things that were once valued are being sold to second-hand stores, away from family members they may have been intended for.

While you can’t take these things with you, a person can ensure that a treasured memento, such as a hand-carved hope chest or a set of formal china, stays in the family. This can be done through estate planning documents such as wills. A person can specify not only an inheritor of an object but can leave instructions to that person about what should be done with that object down the road.

It’s also a good idea to talk to your family members about your belongs as well. Divvying them up before your passing can not only save you time when preparing your will but you can have those serious conversations with your loved ones about why certain objects are important to you. By conveying your sentimental attachment to something, your loved ones may be more inclined to keep it in their possession down the road.

One of the major problems inheritors say they run into is having the room to put the belongings they inherit. One way to remedy this problem is to discuss estate sales. This way, the person passing on items can decide which ones they would like to see sold instead of later inheritors trying to figure out if selling something is “really what they would have wanted.”

Having these discussions and making these decisions are all part of a solid estate plan. Because in the end, if you can’t take it with you, make sure you determine its future before it’s too late.

Source: Wicked Local, “No longer save for generations, family heirlooms are being shed,” Kim Palmer, June 4, 2013

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THINGS TO CONSIDER WITH YOUR LIFE INSURANCE POLICY

In a world of uncertainty, we try our best to inform our blog readers about important estate planning events before it’s too late. One issue we run across from time to time is life insurance policies. Incredibly important, these documents can often carry with them incredible burdens, especially if they aren’t prepared correctly and maintained properly. Hopefully this week’s blog post can clear up some confusion and get our readers on the right track again.

The first thing to consider when establishing a life insurance policy is who to name as a beneficiary. While most people only name a primary beneficiary, it’s often a good idea to list others just in case your primary predeceases you or dies at the same time as you. It’s also important to communicate your intentions with your beneficiaries. Letting them know who the policy is through and the general specifics about the policy before your passing can make sure they’re not blindsided by the process in the future.

It’s important to consider who you’re naming as a beneficiary as well. Consider for a second that you choose your minor child as your beneficiary. Some states will not allow that insurance policy to be paid out until the child is a certain age. On top of that, a guardian might be required which can end up adding additional costs to the process.

Consider too that Texas is a community-property state. This means that regardless of designation on the policy, if your spouse does not waive their right to the money, the policy could be paid out to them instead of the intended recipient.

Not having specific wording in your policy and not maintaining it properly can also cause headaches down the road. But considering these things and clearing them up with a skilled estate planning attorney before hand can help your loved ones from experiencing future frustrations down the road.

Source: Fox Business, “Naming Life Insurance Beneficiaries: 10 Ways to Screw up,” Barbara Marquand, May 22, 2013

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HANDLING ESTATE PLANNING MISTAKES BEFORE THEY’RE A PROBLEM

As readers of our blog know, estate planning often requires a lot of preparation and a lot of maintenance in order for everything to go relatively smoothly upon death.  Even the best of planned estates can hold their challenges. But as we’ve said in past posts, the better prepared your assets are upon your passing, the less likely your heirs will have these difficulties.

But to ensure smooth sailing, it’s important for people here in Texas, and the rest of the country for that matter, to remember that it’s easier to fix mistakes while you’re still able to.  And as many lawyers will tell you, these mistakes in estate planning can happen to anyone–even the professionals.

Most people never think about drafting a will or establishing a trust until they reach retirement age, the unfortunate truth about life is that anything that can go wrong, will go wrong.  That’s why we always stress the importance of having a plan in place.  But it’s important to know what you’re getting yourself into.  Although there are a lot of terms and laws to remember, knowing these before you speak to an attorney can actually help you in the long run.  Afterall, even professionals can make mistakes and it would be worth your while to be able to catch that mistake now rather than leave it to your bereaved after your passing.

While not having a plan is likely the worst-case scenario, having your loved ones find out a mistake was made during your planning process can often times be just as detrimental.  This can lead to arguments, family rifts, and even litigation.  Avoiding these unnecessary headaches now by double checking things before you pass can really save time and money for your family and loved ones down the road.

Source: Fox News, “Duck Estate Planning Fiascos Before It’s Too Late,” Sheyna Steiner, May 13, 2013

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HOW ONE FAMILY TURNED 5 CENTS INTO $3.1 MILLION

When it comes to our belongings, it’s often times hard to put a price tag on the things that hold sentimental value to us. Sometimes, when it comes time to sell those possessions, it’s amazing how much someone else will pay for something you may have thought to be worthless.

Such was the case for one family who wanted to see how much one particular family heirloom could fetch them. What started as the simple inheritance of a 1913 nickel that had been in their mother’s possession since 1962, soon turned into $3.1 million, providing the family with more financial security than they could ever imagine.

The heirlooms story began in 1912 when the coin was minted, along with four others, with the year 1913. Shortly after the coins were broken up in 1942, a man purchased one of the coins for a reported $3,750. When the man died in a fatal car accident in 1962, the nickel passed to his sister who was told that it was a fake.

Deciding to keep it as a family heirloom, the coin was placed in a box with other family items and stuck in a closet. Upon her death in 1992, the coin was inherited by her children. Despite being told that it was a fake, the children wanted to know if their family heirloom carried any value to someone else. Surprisingly, it did and the coin sold at auction for $3.1 million. After taxes, the children will split $2.7 million amongst themselves.

Although it was bittersweet to part with the coin, the family now has the means to invest their newfound inheritance for future generations.  Proof that even the smallest of assets in a will can turn into something big in the end.

Source: The Twin Falls times-News, “1913 nickel fetches more than $3.1M at auction,” The Associated Press, April 26, 2013

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ESTATE PLANNING FOR THE 8 STAGES OF LIFE

Readers of our blog know that we stress the importance of starting your estate plans early and updating them as often as possible.  That’s because, no matter what stage of life you’re at, you’ll want to have the stability and financial cushioning most aspects of estate planning can offer.

But knowing what to do and in what stage of life can often times be a tricky thing.  So, to clear up a little of the confusion for our readers this week, we wanted to go over the commonly considered ‘8 stages of life’ and the specific estate planning measures that should be taken in each one.

Let’s start with the first stage which is your young and single years.  While most of your assets were taken care of when you were younger, after 18 financial responsibility sort of gets thrust upon you.  Assigning power of attorney and putting together a living will are probably the two most important things you can do at this time.

Grouping stages two through four cover the time between pre-marital relationship and ‘just married.’  During this time it will be important to change power of attorney to your spouse if desired and make sure that they are also included in your living will. This will also be the time to discuss combining assets, health insurance coverage, and getting a mortgage for your first home.

Stage five brings you into parenthood with a little one on the way.  It’s at this stage that you’ll want to not only start saving for your child’s future but thinking about guardianships in the event you and your spouse pass enexpectedly.

Because divorce is a very real possibility after gauging the most recent U.S. statistics, we’re including stage six which is divorce.  This is the stage in life where you may want to remove your ex-spouse from your financial accounts and will need to go through the sometimes painful process of dividing your assets.

In the last two stages is where you may want to invest in long-term care insurance and transferring power of attorney over to your children.  Most experts suggest that this be done before your health begins to fail so as to avoid incurring large medical costs that can eat away your retirement funds.

As you can see, estate planning often requires changes over time; but with a heads up you can make sure that you’re on top of the ball the entire way.

Source: Bankrate.com, “8 life stages of estate planning,” G.M. Filisko

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HOW TAX LAW CHANGES COULD AFFECT YOUR ESTATE PLANS DOWN THE ROAD

With tax season well behind many residents in Texas, most people have long put out of their minds the financial information they needed to gather during tax preparation time. But while most people won’t think about their assets until next year, many estate planners suggest that now is the perfect time to start planning-and they’re not just talking about planning for tax season either.

Many estate planners are suggesting that people start considering how the new tax code will affect their financial plans for the future. Though a majority of people will not be affected by the largest tax law change, the increase of estate tax, subtle changes to the tax code could actually have a considerable impact on a majority of people down the road.

Looking over financial assets such as insurance policies and retirement funds now before they go back into a filing cabinet is a suggestion many planners are making to their clients. It might be advantageous to check contributions to retirement funds now versus closer to tax season. Because of the recession, people may have wanted to protect their money by taking smaller risks last year. With the market on the rebound, it may be time to change things around to maximize assets in the end.

During the hectic panic of the fiscal cliff, many wealthy people made decisions about their estates that they may regret next year. With the fear of rising estate taxes and reduction of exemptions for gift tax, many people rushed to turn portions of their estates into trusts. While still protected, forgetting about it could prove ominous if the tax code does not shift the way people were previously predicting.

Although the process might seem long and cumbersome to undertake at this time, failing to do so now could become regretful down the road. The question we pose to you then is why not take the time to protect your assets now while you still can?

Source: The New York Times, “Estate Planning Remains a Moving Target Under the New Tax Law,” Paul Sullivan, April 26, 2013

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HOW LEAVING A FAMILY BUSINESS TO YOUR CHILDREN CAN END BADLY

As we’ve said in past blog posts, if a person does not make the proper arrangements before their passing, the ensuing problems can often times lead to tenuous legal battles and ugly family rifts that never seem to come to a resolution. This is possibly the most true when it comes to family run businesses, which many people here in Texas can attest to.

But according to many business experts, some problems can be averted if a little more attention is paid to estate planning before a company’s owner passes the business on to their children.

It’s advice that could have been used by three Minnesota brothers who finally settled a long-standing legal battle that had been brewing since their father’s death in 2004.

Started in 1960, the men’s father began the family’s legacy by founding a company in the hydraulic brakes industry. The company quickly grew and now has an estimated revenue of around $52 million.

But it seemed that it was always the father’s dream to pass the family-owned business onto his sons, constantly urging them to take jobs at the company. Eventually, the eldest son was promoted to president of the company’s board of directors, soon followed by his younger brother who took up the position as executive vice president. All seemed well, and after the father’s passing, each son owned 50 percent of the company’s voting shares along with the responsibility of continuing what their father had started.

But eventually, the younger brother noticed that he was being left out of meetings, pulled from email lists, and was even being forced to take involuntary administrative leaves. It soon became apparent that his older brother was trying to force him out of the company. Their father’s wills and company plans never included provisions for such a thing and by 2006 the younger brother was forced to sue.

Though the lawsuit was settled in 2011, the division that occurred in the family likely could have been avoided. As some business experts point out, when leaving companies to your children when you pass, it’s often times important to plan meticulously so as to avoid a sticky situation such as the one above to happen to you as well.

Source: Star Tribune, “Lawsuit over control of family-owned MICO ends with $21.8M award,” David Phelps, March 31, 2013

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