ESTATE PLANNING FOR SAME-SEX COUPLES IN 2014
The Heckerling Institute on Estate Planning, held every January, is the nation’s leading conference for estate planners. This year’s most-discussed topic was big changes in planning for same-sex couples.
The discourse focused on last year’s major decision of United States v. Windsor. In Windsor, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA) which defined “marriage” and “spouse” for federal purposes as only applicable to heterosexual couples. The result is that a marriage between any two persons now will be recognized under federal law if it is recognized under the law of the state where it occurred.
The practical result is that same-sex married couples now have access to federal estate and tax planning tools. This includes use of the marital deduction, portability, disclaimers, joint income tax returns, grantor trusts, spousal rollover of qualified retirement accounts, joint ownership of property, split gifting to maximize annual gift tax exemption, marriage settlement agreements, and GST transfer planning (i.e., reverse QTIP).
On the other hand, same-sex married couples will feel the impact of the “Marriage Penalty” on their tax rates, mortgage interest deductions, and more, just like heterosexual married couples.
Although the Windsor decision has clearly brought about significant change, it did not invalidate DOMA as a whole. Instead, it left intact Section 2 of DOMA, which allows the states, U.S. territories, and Indian Tribes to refuse to recognize same-sex marriages performed in other states, territories, or tribes. As a result, the lack of uniformity of laws among the states will continue to create issues for same-sex couples to navigate with the assistance of tax and estate planning professionals.
The focus at Heckerling was on the tax and financial implications of these new laws. Stay tuned for our “Relationship Series” where we will focus on the more personal and human side of planning in different relationships.
From Sochi: Telling Your Olympic-Sized Story
The 2014 Sochi Olympics are in full spectacular, suspenseful, stirring swing. We enjoy watching the events play out, but we also love tuning into the segments about each Olympian, discovering their path to the biggest games in the world and learning their inspirations and motivations. They have amazing stories to tell just about how they got to where they are today. And then imagine the stories they will have to tell about this experience for the rest of their lives!
These first few days of competition really got us thinking and talking here at the office about an aspect of our work as estate planning attorneys not often discussed: our ability to help preserve a story, to preserve wisdom in addition to financial wealth. It’s just one of many reasons we love what we do.
Maybe you aren’t in Russia this winter, but that doesn’t mean you don’t have an Olympic-sized story to share and pass on. As you consider or begin the estate planning process, we hope you’ll talk with us about the legacy you’d like to leave. We have special tools to help you record your stories!
HOW TO TALK TO YOUR LOVED ONES ABOUT ESTATE PLANNING
We have heard many excuses to avoid discussing wills, trusts, and everything else relating to estate planning. The most common stem from concerns that it is too personal or sensitive a subject. Some even believe that talking about their potential demise will cause it to happen. However, having a conversation about estate planning with your loved ones is an opportunity for you to explain your wishes, discourage future discord through transparency, and open the door to better planning through better understanding. Here are some tips on where to begin:
Timing is Key: Consider your audience and when and how to approach them. If the person you want to talk to is busy or does not respond well to surprises, you may want to schedule your conversation. On the other hand, it may be best to broach the subject unannounced on an occasion you know you will provide time to discuss it without distraction, such as on a long drive or walk.
Start with a Story: You may find it easier to begin with a current event or a friend’s experience rather than diving straight into more personal concerns. Relating a story about how someone else’s estate plan – or lack thereof – affected his loved ones may also help you convey why the conversation is important to you.
Break it Up: Depending on your individual circumstances, and the personalities of your loved ones, it may be better to plan to have more than one conversation. To facilitate a true discussion where all parties feel they are heard and understood, consider addressing each topic, or even each family member, on separate occasions.
After you get the conversation started, let us help you define your wishes and learn about your options. Attending one of our monthly estate planning workshops is both a great way to keep the discussion going and the first step in our estate planning process.
For more great tips on initiating an estate planning conversation, click here for the Forbes slideshow that inspired us.
PET TRUSTS: PLANNING FOR THE FURRY MEMBERS OF YOUR FAMILY
My dog is definitely part of my family. Whether I leave for five minutes or five hours, he is always overjoyed when I return. He is our resident clown, making my husband and me laugh after even the longest day at work. We often say we love him like a child.
Since you are reading this article, you likely feel the same about your pet. If I asked you what you do to keep your pet happy and healthy, I bet you could name dozens of things that you do to take care of your furry companion. But what would happen to Fido or Fluffy if something happened to you?
The sad truth is that most people fail to make proper arrangements for the care of their pets in case they are no longer available or able to do it themselves. They may assume that a family member or friend will step into their shoes, or even have an informal agreement to that effect. However, without a valid legal document in place, that family member or friend is not bound to care for your pet – properly, or at all!
The good news is that many states, including Florida, allow pet owners to plan for their pet by creating a pet trust. You can use a pet trust not just to name the person(s) who will take care of your pet in case of your disability or death, but also to specify what kind of care your pet must receive and provide the funds to pay for it. A qualified estate planning attorney should be able to create a pet trust as part of your overall estate plan. At Cramer Law Center, we would be happy to help you develop a comprehensive estate plan for your family, whether furry, human, or both!
CASEY KASEM: ANOTHER HOLLYWOOD PLANNING FAILURE
Casey Kasem became famous as one of the founders and longtime hosts of American Top 40 and the voice of Shaggy on the cartoon series Scooby Doo. However, these days he is making headlines as the subject of a legal dispute between his second wife and his three children from his first marriage.
Casey is confined to his home, bedridden at the age of 81 due to Parkinson’s disease. His wife and caregiver, Jean, has refused to allow Casey’s children to visit him, alleging that any visits would only upset Casey. After a failed attempt by the children to get a conservator (guardian) appointed for Casey, they are now negotiating for visitation with their father, airing the family’s dirty laundry in court.
The saddest part is that, as we see so often, Casey could have spared his family this public drama if he had planned properly. We believe that comprehensive living trust planning includes planning for disability, including leaving detailed instructions as to how you would like to be treated if someone else has to take over your affairs. If Casey had done this type of planning, he could have addressed the predictable discord between Jean and his children by specifically requesting that his children be allowed to visit him, or explaining why he did not want them to visit, if he became disabled.
If you would like to learn more about protecting yourself and your family through comprehensive living trust planning, you are welcome to attend one of our monthly Truth About Estate Planning workshops. The workshop schedule for 2014 is now posted on our website.
ALZHEIMER’S CAN’T STEAL MAN’S LOVE OF THE GAME
We recently came across a wonderful article about a man with Alzheimer’s disease and his continuing passion for soccer. Most of us have seen, or at least heard of, the havoc that Alzheimer’s wreaks on the memory of its victims. This man, John, is no different; he is progressively losing the ability to remember who he is. However, he somehow remembers that he loves soccer.
John has been going to a local park twice a week, for the past 25 years, to play a regular pickup game of soccer. With the help of his wife and daughter, and the compassion of his fellow players, he still participates in every game. Although he is no longer coordinated enough to do much with a soccer ball, and may forget which team he is on, it is clear that John has a wonderful time playing and he leaves the field smiling.
We have heard similar stories from some of the wonderful facilities that we work with and applaud them and any other caregivers who help Alzheimer’s patients continue to do what they love. However, we believe that we must continue to fight for a future without Alzheimer’s disease. If you want to join the fight, it is not too late to join us for the 2013 Walk to End Alzheimer’s this Saturday, November 16, or to support the cause with an online donation.