Women and Estate Planning: Part 2

January 22, 2013

Filed under: Estate Administration,Estate Planning,Estate Taxes and Lifetime Gifts,Financial Planning,Living Trust,Living Will,Long Term Care — Tags: , , , , , , , , , , , , , , , , , — Christopher J. Berry @ 9:14 pm

Estate planning often has a more dramatic effect on women due elongated life expectancy and the tendency to marry older spouses. As a result, they are three times more likely to be widowed at 65, than men. Estate planning is an imperative component in retirement planning, and with a greater probability of surviving their spouses, women often have the final word about how much wealth goes to family, charity or the taxman.

(Read more: Women and Estate Planning: Part 1)

5. Spouses Get Special Tax Breaks
Under the “unlimited marital deduction” assets inherited or received as gifts from a spouse are not taxed. Starting in 2011, portability allows a surviving spouse to add any unused estate tax exclusion of the recently deceased spouse to her own exclusion. A widow can pass on up to $10.24 million, untaxed, through either lifetime gifts or her will. If your spouse is not a U.S. citizen, the marital deduction is more limited and portability does not apply.

6. Tax Planning For Widows Is More Difficult
The primary goal, for most married couples, is to leave each other provided for financially. Upon death of the first spouse, tax saving strategies are more imperative considering the unlimited marital deduction no longer applies. However, there are a number of simple ways to save taxes while achieving other goals, like subsidizing family members who are less fortunate, educating children and grandchildren and preserving retirement assets.

(Read more: Estate Tax On the Rise, Don’t Panic, Plan)

7. Do Not Own Your Insurance
Because proceeds could be subject to estate tax, you will likely give away money to the government if you die owning a policy on your life. One way to avoid that outcome is to designate the family member who will receive the proceeds as the owner of the policy. Another is to establish an irrevocable life insurance trust. Traditionally, the ILIT buys the policy and, when you die, holds the proceeds for whomever you have named as beneficiaries.

8. Beneficiary Forms Are Key
Retirement accounts are distributed according to beneficiary designation forms filed with the bank or financial institution holding your account. You can readily name any beneficiaries you desire with an IRA, including friends, family members, a charity or a trust. For a 401(k) or other workforce plan, you must acquire or spouse’s written consent to leave it to anyone else. You must filed an amended form to change a beneficiary, if you get divorced for example.

(Read more: 8 Life Stages of Estate Planning: Part 1)

9. Cash Is King
Couples who commingle money must ensure there is sufficient funds to cover immediate expenses if one of them suddenly dies. Said funds can be held in each of your separate accounts or in a joint individual account right away.

Read more: http://www.forbes.com/pictures/efik45ehjjg/estate-planning-is-a-womens-issue-2/

Mr. Witzke practices in the areas of estate and gift tax planning, financial planning, retirement planning, LGBT civil rights, charitable giving, elder law, and small business planning. He focuses on helping clients grow, protect, and transfer wealth efficiently. Mr. Witzke is a past president and board member of the Financial Planning Association of Michigan, a member of the board of directors for Leadership Oakland, and a member of the planned giving advisory committees of Wayne State University and the Community House in Birmingham. Follow Mr. Witzke on Twitter @gr8estatelawyer.

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Finding a Deceased Loved One’s Digital Assets

May 3, 2012

Filed under: Estate Administration,Estate Planning — Tags: , , , — Christopher J. Berry @ 2:41 pm

Society with the increased used of the internet and the idea of “going paperless” is relying less and less on the real world and hard copies and putting more trust into the digital, virtual world or even the cloud.  When a loved one passes away and you are a trustee or personal representative trying to gather assets, this can present some interesting problems and quirks.  As Michigan estate planning and probate lawyers, I wanted to share some tips with you.

Know What to Find

Digital assets can include things like internet accounts, data, contractual and ineffectual property in the digital world.  You should be looking for things like email accounts, bank statements, investment accounts, credit cards, bill paying accounts, Facebook, Twitter, online gaming, online gambling, e-books, and retail.  Additionally, check for cloud based documents such as Dropbox, Google, Box.net, or SugarSync.

Get Your Google On

Do a Google search for the loved one’s name.  This may help reveal different accounts, such as LinkedIn, Twitter, Facebook or other social networking or internet sites.  It’s amazing what you can find sometimes from a simple Google search.

Get Access to An E-Mail Account Quickly

Most people keep a spreadsheet on their computer of passwords or pass codes.  See if you can find a list stored on their computer.  If you can’t, take a stab at guessing some passwords, worse case, bring in an IT professional.

Get Access to E-Mail The Slow Way

If you are unable to access your loved one’s e-mail account, the slower option is to access it by contracting the e-mail provider.  Generally, sending a scanned copy of the death certificate along with letters of authority to the e-mail host will grant access to the account.

Do Not Close the E-Mail Account Immediately

Similar to keeping the “snail” mail coming to check on bills and accounts, it is important not to immediately shut down your loved one’s e-mail address.  This can be an easy way to find out about any bills, accounts, etc that your loved one had as the monthly emails come in to the account.

Close Your Loved One’s Other Accounts

It is important to close out the other accounts of your loved one, including Netflix, Pandora, iTunes, and especially anything that has a monthly fee associated with it.  However, be careful with certain digital assets because you need to know the value.  For example, some World of Warcraft accounts could be worth thousands of dollars and should consider being inventoried and then possibly sold.

Put Your Loved One’s Digital House in Order

Hopefully your loved one planned properly for their digital assets, for example a master document with all the relevant accounts and passwords could be stored with one’s estate planning documents.  This must be kept safe just like any other assets.

Special thanks to ICLE and Attorney Michele C. Marquardt.


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Avoiding Estate Planning? You’re Not Alone according to Study

September 27, 2011

Filed under: Estate Administration,Estate Planning,Planning for Parents with Minor Children,Power of Attorney,Probate — Christopher J. Berry @ 11:13 am

I hear it from our estate planning clients every day, that they are happy to have the peace of mind that their estate planning affairs are in finally wrapped up.  Many of our Michigan estate planning (wills, trusts, powers of attorney) clients feel that prior, to meeting with us, that estate planning is a looming task.  But once we’ve completed the process and executed their wills and revocable living trusts, they have feelings of comfort and security.

According to a 2008 study by Thomson Reuters, only 40% of Americans currently have a last will and testament.  A last will and testament is a document that provides instructions to the Michigan probate court on how to administer your estate.   Understand that a will does not avoid probate, it only gives instructions to the probate court on administration.  If you fail to have a will or living trust, then the state of Michigan will administer your estate by the laws of intestacy.

So why do so many people leave their affiars up to chance or the whims of the probate court?

Well according to an article at funeral.com, there are four main reasons.

First, estate planning in Michigan is a very detailed process.  It is legally binding, attorneys are involved, there is an investment of financial resources and a number of complex decisions need to be made.  All of these activities, along with people’s hesitation to contact a Michigan estate planning lawyer can lead to overwhelm and procrastination.

Next, the actual process of completing an estate plan can take a couple weeks.  It is very easy to get distracted with the daily minutia of life, work, and tv and put off meeting with an estate planning attorney, spending time with the attorney so he or she can document your wishes and then executing your estate planning documents.

Sometimes estate planning has a hard time making it up your “to-do” list, and I understand.  Generally, us estate planning attorneys, see clients more interested in estate planning when a child is born, when a loved one passes away, or if someone is suffering a serious illness.  The difficult part, is that during these life changes and high times of stress, it is more difficult to complete the estate planning process due to the stresses caused by the life changes.  It is much easier to go through the estate planning process during a time when its easier to focus on the estate planning itself.

The fourth reason that you may be procrastinating on your estate planning is that going through the estate planning process can raise questions that are difficult to answer or you don’t have a perfect answer.  For example, one of the biggest hurdles for parents with young children is who to name as guardians of their minor children.  The fear of making the wrong decision can keep people from making any decision at all.  Keep in mind, that even though you may not have a perfect answer to who shall serve a particular role, the answer you have is better than the answer a judge or probate court who has no familiarity with your family has.

Are you procrastinating on your estate planning?  The first step is to pick up the phone and call an estate planning lawyer to get the ball rolling.  The first step is the hardest.

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Farmington Hills Probate Litigation Lawyer

June 7, 2011

Filed under: Estate Administration,Probate,Probate Litigation — Christopher J. Berry @ 11:59 pm

Our Michigan probate litigation law firm has handled a few probate litigation cases from clients in the Farmington Hills area.  It’s like coming full circle since I grew up in Farmington Hills area.  Specifically, I grew up in on 11 mile near Middlebelt, in Farmington Hills.

Who knew I’d grow up to be a probate lawyer servincing clients in Farmington Hills, Michigan?

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Five Ways to Bungle Trust Administration in Michigan

May 26, 2011

Filed under: Do It Yourself Estate Planning Gone Wrong,Estate Administration,Federal Estate Tax,Probate,Probate Litigation — Christopher J. Berry @ 7:34 pm

Estate planning with revocable living trusts answer at least three main questions which includes: Who gets what?  How do you minimize settlement costs, such as probate and estate taxes? And, who is in control after the trustmaker passes away?

Barron’s has a great article entitled “The Five Biggest Ways to Bungle a Trust” that describes many of the mistakes that do-it-yourselfers face when they go at trust administration alone.  As Michigan trust administration and Oakland county probate lawyers, we are often brought in to clean up theses messes.

The first way people screw up trust administration involves keeping faulty records.  Generally trustees in Michigan must provide at least annual accountings to the beneficiaries.  Often, these accountings are slapped together at the last minute by an overwhelmed trustee.  As Michigan trust administration and estate administration lawyers, we professionally manage this process for our clients.  Whether we handle it in-house or outsource it to highly qualified CPA’s, our client’s understand that it’s professionally done and the beneficiaries of the trust appreciate the clarity.

Another way that trustees botch the trust administration process is by failing to diversify the trust assets.  It may be tempting to sit on a big chunk of a single stock, but often times, as prudent investors, it’s important for the trustee to diversify the portfolio so as to minimize risk for the beneficiaries.

Yet another trustee issue we see is that of biased distributions.  Trustees owe a fiduciary duty to the current beneficiaries and the remaindermen.  Therefore, a trustee cannot favor one beneficiary over another or allow any personal bias into the decision making.

The fourth area we, as Oakland county trust administration lawyers, see trustees making poor judgements is in the concept of the trustee expecting a payday.   Trustees, when acting without the aid of an trust administration attorney, often expect at the end of the day they will get a windfall for the efforts, when in reality, more often than not, they are only entitled to reasonable expenses and fees.  Quite often this is a source of probate or trust litigation.

Lastly, as a trustee acting alone, often times we’ll see that they have a false sense of safety.  A trustee acting without experienced Michigan trust administration counsel can feel that there is an entitlement and honor in serving the role of trustee at the other beneficiaries will defer to any judgements or decisions you make.  This generally cannot be further from the truth.  Quite often beneficiaries are looking for any little mistake a trustee makes, even in the best of families.


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Keeping Your Assets out of Michigan Probate Court

March 22, 2011

Filed under: Do It Yourself Estate Planning Gone Wrong,Estate Administration,Probate,Probate Litigation — Christopher J. Berry @ 2:36 pm

As a Metro Detroit estate planning and probate lawyer, I try to keep up on the latest news and blogs regarding probate and estate planning in Michigan.  That’s when I ran accross my friend and colleague, Grand Rapids Estate Planning Lawyer, Michael Lictherman’s latest blog post entitlted “Tips On Keeping Your Michigan Estate Out of Court.”

In his post he references another article and has a few quality tips on keeping your estate out of the probate court, which most of our clients wish to do.

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How Do I Create A Michigan Last Will and Testament?

December 29, 2010

Filed under: Do It Yourself Estate Planning Gone Wrong,Estate Administration,Estate Planning — Christopher J. Berry @ 9:38 pm

You don’t need a Michigan estate planning lawyer to create a last will in testament in Michigan. All you have to do is hand write on a napkin what you want to happen if you were to pass away, then sign and date the napkin. Now you have what’s called, in Michigan law, a holographic will, which is legal in Michigan.

Now as a Michigan wills and trusts attorney would I recommend this? Probably not, for one thing a will, including a holographic will, does not avoid the Michigan probate process among other reasons.

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Brooklyn Court Dumps Marriage Contract In Unprecedented Action

March 27, 2013

Filed under: Asset Protection,Estate Administration,Prenuptial Agreements — Tags: , , , , , , , , , , , , , , , — Christopher J. Berry @ 5:20 pm

An unprecedented action has a Brooklyn court warning you how you get your future spouse to sign a prenuptial agreement. The Brooklyn Appellate Court panel unanimously ruled to throw out a prenuptial agreement between a multimillionaire and his wife on the grounds that the agreement was fraudulently induced. Even the most seasoned Brooklyn matrimonial lawyers were shocked by the move.

Prenuptial agreements are cynically described as “weapons” that a spouse may utilize in a contested divorce proceeding. A prenuptial agreement is a written contract created prior to marriage. It generally outlines all of the property each person owns and specifies what each person’s property rights will be in the event the marriage dissolves.

(Related: Basic Estate Planning 101: What You Need to Know)

The 1998 marriage between Elizabeth and Peter Petrakis had all the ingredients of a fairytale  Peter earned his money in smoke shops and real estate to the tune of $20 million.

After a few years of marriage, the couple called it quits. There was an obstacle in the contested divorce: Elizabeth signed a prenup that enabled Peter to keep everything that is in his name in the event of a divorce.

For years, Elizabeth claimed that she was coerced into signing the prenup arguing that her soon-t0-be husband threatened to call off the wedding if she did not sign.

(Related: Estate Planning For Your Digital Assets)

“He told me he would rip it up as soon as we had kids,” Elizabeth told the New York Post. Three children later, the prenup was still intact.

Siding with Elizabeth’s contention that she was coerced into signing the prenup, the court found Peter “credibility to be suspect,” and thus invalidated the prenup.

“I’m utterly surprised. I’m actually quite shocked,” Brooklyn attorney Peter C. Lomtevas said of the ruling.  For many matrimonial attorneys, it is rare that they face an invalidated prenup.

“Prenups aren’t vacated all that often,” said attorney Louis Sternberg. “This is a very new approach. Prenups are supposed to be hard to overturn.”

Not all attorneys are convinced that the ruling was that surprising.

“There are very fact specific reasons why a prenuptial agreement would be overturned,” advised attorney Steven D. Cohn. “One factor being if the agreement was signed as a result of force or duress.”

(Related: Study reveals more middle-aged adults care for kids and aging parents)

Divorce attorney Jennifer Garcia agreed. “What [Ms. Petrakis] argued is that there was some kind of undue influence,” Garcia elucidated. “She signed the prenup four days before the wedding. That is too close to the date of the marriage, and that is why the prenup was thrown out.”

As a result, attorneys will be modifying their strategy when advising couples pre-marriage.

“If we see this sort of thing continuing then attorneys will certainly start putting extra precautions into prenuptial agreements,” said Alexander Yakov Tsiring, Esq.

Lomtevas offered a word of caution to attorneys and their clients:  “If a prenup no longer protects you, what do you do with your money?”

Read more: http://www.brooklyneagle.com/articles/prenup-trashed-brooklyn-court-dumps-marriage-contract-unprecedented-action-2013-03-11

Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning.  Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander

Wealthy Gay Couples Seen Paying More If Unions Legalized: Part 1

March 6, 2013

Filed under: Estate Administration,Estate Planning — Tags: , , , , , , , , , , , , — Christopher J. Berry @ 9:14 pm

In states where the law permits, top-earning gay married couples may soon be paying more in income taxes as the U.S. Supreme Court considers the legality of same-sex unions.

Currently, couples’ finances are frequently complicated by the division between federal and state law: They’re able to handle their finances and tax-filing jointly under their state’s law while the federal government — which doesn’t recognize the marriages — treats them as though they are single.

(Related: 5 Tax Deductions & Credits For Special Needs Families)

The ruling could mean thousands of dollars in higher income taxes for gay couples where both earners are making salaries of $400,000 a year or more, if the court accepts the legality of these unions. High-earning couples already face added costs when they file their taxes, share employee benefits such a health insurance and transfer assets.

The Supreme Court will consider gay marriage for the first time this month in two cases. The first, a dispute over a California ballot measure banning the practice. The second, a challenge to a 1996 federal law called the Defense of Marriage Act, which defines marriage as solely a union between a man and a woman. A ruling is expected to be reached by the court in June.

(Read more: Who Owns Your Facebook Pages When You Die?)

Estates, Benefits

While the rulings may not legalize gay marriage nationally, meaning that same-sex married couples who move to states that don’t recognize their union would still face challenges with their finances, estates, employee benefits and other rights.

More than 1,000 federal rights and benefits involve marital status. Some couples would be hurt, but most would see some advantages in other parts of their personal finances. Wealthy gay married couples would be able to delay estate taxes if their unions were legalized. But still, there are downfalls to being married from a federal tax standpoint.

(Read more: Women and Estate Planning: Part 1)

A primary disadvantage for high-earning couples on the income-tax side is the marriage penalty. As it stands, two partners each earning $400,000 a year in taxable income don’t pay the top rate of 39.6 percent, which starts at income above that amount for singles and at $450,000 for married couples.

‘Kind of Brutal’

In the event the federal law is overturned and the same-sex spouses file jointly, their combined income is $800,000 of which $350,000 would be subject to the highest federal rate.

Legally married gay couples will endure both pluses and minuses if the Supreme Court finds the act, known as DOMA, unconstitutional and have to plan for them.

“The biggest impact for DOMA being repealed especially for wealthy same-sex couples is the availability of the federal estate-tax marital deduction,” said Lisa Siegel, senior wealth planner at Wells Fargo & Co. (WFC)’s private bank unit. “That completely changes estate planning for same-sex couples.”

Same-sex spouses aren’t treated as married for federal tax purposes, which means when one spouse dies their assets don’t transfer to the survivor free of estate taxes.

Surviving Spouse

The effect of the marital deduction for heterosexual married couples is to defer federal estate taxes owed until the death of the surviving spouse.

For older couples with significant wealth, it will make a lot of sense — from a tax perspective — to get married if the federal law is overturned, especially if one spouse has a lot more wealth than the other.

Same-sex married couples would be able to use a variety of marital trusts and benefit from so-called portability rules under federal estate-and-gift-tax laws. This provision enables a widow or widower to retain the unused portion of a deceased spouse’s lifetime exclusion from estate and gift taxes. In 2013 that amount is $5.25 million for individuals or $10.5 million for married households.

Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning.  Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander

Who Owns Your Facebook Pages When You Die?

February 6, 2013

Filed under: Asset Protection,Estate Administration,Estate Recovery — Tags: , , , , , , , , , , , , , , , , , — Christopher J. Berry @ 7:11 pm

Most people probably spend more time on Facebook than they’d like to admit — but what happens to your Facebook page when you die?

New Hampshire is one of the several states trying to figure that out. State Rep. Peter Sullivan introduced legislation to allow the executor of an estate control over the social networking pages of the dead. The New Hampshire House of Representatives voted last week to give Sullivan more time to write an amendment that begins a study of the issue.

(Related: Technology Companies and the Deceased)

Sullivan, a Democrat from Manchester, per the proposed bill, would allow control of someone’s Facebook, Twitter, and even Gmail to be passed to the executor of their estate after death. He believes that if if this bill passed, it would bridge a gap in policies of social media sites regarding posthumous users.

“This would give the families a sense of closure, a sense of peace. It would help prevent this form of bullying that continues even after someone dies and nobody is really harmed by it,” Sullivan said.

(Related: Ethical Wills and Leaving a Legacy Worth More Than Money)

Five other states, including Oklahoma, Idaho, Rhode Island, Indiana and Connecticut, have established legislation to regulate an individual’s digital presence post mortem.

Opponents of Sullivan’s bill hold that contracts and provisions between the social media user and the site already lay out what happens to the page once the user passes. Also, they believe the bill is unenforceable and incomplete, while others contend the issue would be better covered under federal law.

In 2010, a similar bill was sponsored by Oklahoma state legislator, Ryan Kiesel, called the Digital Property Management After Death Law. While Kisel supports state’s efforts to bring clarity to this issue, he is one of the believers that it is a case that should be eventually taken up by the federal government.

“Facebook and other online providers have changed their privacy policies to keep up with the times, but we still see a lot of flux within different sites like Facebook , Flickr, or Google, for example.” Keisel told ABC News. “The federal government should pass uniform laws to govern all digital assets because it is quite difficult for an estate to have to navigate endless numbers of digital policies postmortem.”

Now a civil rights activist, Kisel compared a digital legacy to the distribution of tangible assets after death.

(Related: Managing Digital Assets with Online Services)

“In Oklahoma, if you are administrator of the estate of a deceased person’s house and you find a box under their bed, you are well within your right to see what’s inside that box and if property is worth distributing, you should distribute it accordingly.” Kiesel told ABC News that the same idea goes for digital legacy.

Facebook recently celebrated the ninth Anniversary of its launch, and currently has over 1 billion active users. That number, up from just a million users in 2004, hints that the is likely an enormous number of Facebook pages that are currently occupied by the deceased.

As is, Facebook has created a memorial function allowing Facebook pages to become memorials after they have died.

“Please use this form to request the memorialization of a deceased person’s account,” the site reads. “We extend our condolences and appreciate your patience and understanding throughout this process.”

Read more: http://news.yahoo.com/facebook-death-172350356.html

Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning.  Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander


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