How to Make Most of Your Heirs Mad

Occasionally I will get an estate planning client who wants to leave all of his or her property to one child in the belief that  it will somehow make their estate easier to probate and that the chosen child will “know what to do.” This is a recipe for disaster. I have never prepared an estate plan that does this because I always talk the client out of it. I have two main objections: (1) the child is not obligated to follow the decedent’s instructions, and (2) if the child does follow the decedent’s instructions then they may be liable for gift taxes. 

Both objections come down to one basic problem. Once you have left all of your estate to a person, that person owns it and is not obligated to give it away. If they do give it away, then they may be liable for gift taxes for any amount in excess of $14,000 for the year (as of 2014). The First DCA confirmed that this was the case late last year. If you leave all of your estate to one person, that person has the discretion to honor your wishes or not. 

As you can imagine, this is a recipe for litigation. It is much better to take the time and effort to decide exactly how you want your estate divided than to kick off a fruitless and expensive battle between your heirs. Even if your heirs choose not to fight, you will have done extensive, probably irrevocable damage, to their relationships. 


2012 in review

The stats helper monkeys prepared a 2012 annual report for this blog. And now I’m sharing my report with you. Enjoy!

Here’s an excerpt:

600 people reached the top of Mt. Everest in 2012. This blog got about 3,700 views in 2012. If every person who reached the top of Mt. Everest viewed this blog, it would have taken 6 years to get that many views.

Click here to see the complete report.

Ex-spouses Won’t Be Laughing All The Way To The Bank Anymore

I have handled more than one case where someone died and a former spouse unintentionally received life insurance proceeds as a result. Some times the former spouses hated each other and the pay out was many years after the divorce. If the potential client was a family member, I usually could not do much for them. If I was defending the former spouse against the family or subseqent spouse, then I was likely to succeed. It is a fairly frequent occurrence for a former spouse, more often than not the husband, to forget to change the beneficiary of his life insurance policies. Thus, many years later the ex-spouse (usually the wife) would get a delightful surprise of several thousands of dollars much to the chagrin of the second wife in many cases. The same could and did happen with joint accounts, payable on death designations, and named beneficiaries for annuities, IRAs, 401(k)s, and other financial accounts.

With more than a trillion dollars changing hands as the oldest baby boomers pass away, the Florida Legislature has passed a new statute to address this problem. Florida Statute section  732.703 took effect as of July 1, 2012. It provides in part as follows:

A designation made by or on behalf of the decedent providing for the payment or transfer at death of an interest in an asset to or for the benefit of the decedent’s former spouse is void as of the time the decedent’s marriage was judicially dissolved or declared invalid by court order prior to the decedent’s death, if the designation was made prior to the dissolution or court order. The decedent’s interest in the asset shall pass as if the decedent’s former spouse predeceased the decedent. An individual retirement account described in s. 408 or s. 408A of the Internal Revenue Code of 1986, or an employee benefit plan, may not be treated as a trust for purposes of this section.

In other words, once the marriage is dissolved (i.e., the parties are divorced) or declared invalid, any asset transfer or payment that is effective at death is a nullity as to those assets listed in the statute. This statute is not, however, an excuse to be lazy or incautious. A failure to change beneficiaries could still result in a payment to the former spouse. The current spouse or beneficiaries would then have to sue the former spouse to recover the money and the insurer or other payor can not be sued. So a failure to take care of the details could still be trouble for the family. 

For a detailed discussion of the new statute with links to other helpful posts, you can visit attorney Juan Antunez’s Florida Probate and Trust Litigation Blog.


“To Joojoo” Enters The Lexicon After Arrington Gets Munsoned

The other day I wanted to use the phrase “bad joojoo.”  I hate to misspell things so I wanted to make sure that the word was spelled “joojoo” and not “juju,” or “joujou,” or some other variation.  So I Googled it.  I was surprised and amused to discover that “The Urban Dictionary” defines “joojoo” as: “What results from Michael Arrington failing to create a proper contract with shady Singaporean business Fusion Garage.” It also states that “joojoo” can be used as a verb meaning “to steal a business idea.”  OUCH! Learn a lesson from attorney Arrington and my last post and get it in writing.  That way you won’t run the risk of getting munsoned so badly that your deal becomes slang for failing to have a contract. See, the movie “Kingpin.” Here’s more about the JooJoo, Fusion Garage, and what happens when you don’t have a contract from Engadget.

Brian Williams Doesn’t Support the U.S. Economy and He’s an Idiot!

Lately it seems like even those whose income shouldn’t have changed due to the down economy are not spending their money.  That’s why an article about how NBC anchor Brian Williams is not spending his money caught my eye.  It seems that Williams, who makes $10,000,000.00 per year or about $866,000.00 per month, feels it is “not cool” and “not very sensitive” to spend money right now.  Good golly man!  Get up off your wallet and go stimulate the economy fool!  Don’t let your misguided desire to show solidarity with the common working man, take food off that man’s table.

You don’t have to “ostentatious” to spend money.  If you make enough for a Bentley Continental GT like Williams then buy yourself a Cadillac like your average Florida retiree instead.  You’ll be helping the economy, but you still won’t be ostentatious for your income level.  There’s a fine line between reckless spending and wise spending within your means.  But it seems that people have gone from acting like they have bottomless pits of money to behaving like the well is completely dry and they live in the Sahara.  It is true that people were feeling rich and spending like there is no tomorrow, but that doesn’t mean that the penduluum must swing completely the other way.

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