Houston Estate Planning Law Blog

REAL-LIFE INDIANA JONES: MAN USES TREASURE HUNT IN ESTATE PLANNING

For some, the situation may sound too good to be true but for thrill seekers around the world, one man’s announcement regarding a real-life buried treasure is other people’s excuses to live out their lifelong dream of becoming Indiana Jones.

Forrest Fenn, an 82-year-old New Mexico man has been collecting valuable items for most of his life, but when he was diagnosed with cancer in 1988 he decided that it wasn’t about the life that a person lives that is important, it’s the mileage you accrue. “There is a wonderful and mysterious world out there to be discovered,” he’s explained to numerous reporters around the country.

It took 12 years of collecting, but after gathering an estimated $1million worth of artifacts, precious metals and rare gems, the old adventurer was ready to send someone else on a journey of their own. “I have had so much fun over the last 70 years collecting things, I wanted to give others the same opportunity,” he says.

About three years ago, Fenn packed up the treasure into a chest and buried it in the mountains just north of his Santa Fe home. Now all people have to do is extract nine clues from a poem he wrote, locate the spot where the chest was buried and the million dollar treasure is theirs.

Although this may seem like an extreme way of distributing your estate before you pass away, some would point out that this form of estate planning requires little to no paperwork and could allow people with large estates to avoid estate taxes at the time of their deaths. Even though becoming a real-life Indiana Jones may seem exciting, for the rest of us here in Texas, it’s still a good idea to speak with an estate planning attorney before burying our assets in the mountains for someone else to find.

Source: Metro News, “Forrest Fenn and the Raiders of the Stashed Gold: Real-life Indiana Jones stages treasure hunt,” Ross McGuinness, Mar. 8, 2013

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THE FISCAL CLIFF AND ITS IMPACT ON ESTATE PLANNING FOR 2013

For a little over a month now, the nation has been watching in trepidation as the fiscal cliff looms ever closer, but for some people here in Texas, and perhaps other states, they could be wondering what the concern is really all about.

During George W. Bush’s presidency, we watched as estate tax rates dropped to a mere 35 percent as the amount of money allowed for gift tax exemptions rose to a staggering $5.12 million. But come January 1 that could all change if Congress can’t come to a consensus over what the new limits will be in 2013.

If Congress doesn’t reach a decision, gift tax exemptions will roll back to $1 million while the estate tax rate will rise to 55 percent. And although this has relatively no affect on the average American, those who have accumulated large enough estates are becoming increasingly worried that their estate planning measures may need to be considerably altered so as to shelter their estates from future changes.

Many financial experts point out that it’s not too late to change your estate plans; in fact, if you are among the few whose estate exceeds $1 million, you are highly encouraged to do so before the start of the New Year. By restructuring your estates into trusts, insurance and other techniques, you may be able to prevent your beneficiaries from seeing a considerable loss in their inheritance when it comes time to collect. Some have even suggested that giving assets as gifts now instead of at the time of your death could greatly reduce the amount of gift tax that is paid out this year, which could provide more asset protection in the long run.

Some critics have argued that there is the likelihood that Congress will not allow the fiscal cliff to occur, pointing out that if any of them were even remotely successful in their business careers then they would find themselves in the $1 million to $5.12 million range. But even if these critics are wrong, it’s always better to plan for the worst and hope for the best in situations such as this.

Source: The Bradenton Herald, “Fiscal cliff causes estate planning conundrum,” Tom Breiter, Dec. 11, 2012

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PROPOSED CHANGES TO FEDERAL ESTATE TAX

There is a bill pending in Congress that, if passed, could significantly impact estate planning for Texas residents and others.

The bill is sponsored by Rep. Jim McDermott of Washington, and it seeks to roll estate tax rates back to their pre-2001 levels.

Introduced in November, the legislation would raise the estate tax from its current limit of 35 percent to 55 percent and reduce the estate tax threshold from $5 million to $1 million. The levels would be indexed for inflation beginning in 2000, and the proposed law seeks to address the fact that only a small fraction of all estates paid federal estate taxes in 2009.

The bill is heralded as a vehicle for ensuring tax equality for all Americans, but the bill’s passage could significantly impact families engaged in estate planning.

Some welcome the proposed changes and say that in these difficult times, it is reasonable to ask the wealthiest Americans to sacrifice for the greater good.

There are current estate planning opportunities for Texas residents to consider to allow individuals and families to take full advantage of existing laws as they seek asset protection and estate tax minimization so that their heirs and beneficiaries can be provided for in the future.

Individuals and families that are thinking about beginning estate planning or wishing to make changes to their current estate may consider working with an experienced estate attorney who fully understands the laws and procedures. Estate planning can be complicated at times and an attorney can help families plan a solid future for their families.

Source: Accounting Today, “Congressman Proposes Raising the Estate Tax,” Michael Cohn, Nov. 21, 2011

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