Probate, Trusts, and Estate Law Blog

Should You and Your Spouse Use the Same Estate Planning Attorney?

Though the decision to secure your own representation for estate planning may appear to be a simple financial one, the reality is that the choice touches on a variety of deeply personal issues in your relationship. Don’t let emotions get in the way of your speaking up and doing what you need to do to protect your family’s future.

The 6 key things to consider

A recent article at Forbes.com highlighted some of the issues surround estate planning as a married couple. Getting your affairs in order is crucial to securing your family’s future. (And when blended families are involved, it’s especially important. If a parent remarries, all too often disputes arise following the death of a parent.)

The issue the Forbes article raised is an interesting one: should you work together with one attorney or should each of you get your own representation for estate planning purposes? While it’s certainly true that joint representation is more cost effective in the short term, it can also create issues between the couple, especially if underlying trouble already exists. Joint representation can spell disaster if the couple has problems communicating generally.

The Forbes article mentions the following things to consider when deciding whether you should go it alone or work together when crafting an estate plan:

1. Only one party has children

It’s no surprise that the vast majority of people want to leave their estates to their children. The problem that can occurs is if the other spouse has no children of their own then the parent may fear dying first and leaving their kids empty handed.

2. Disparities in income

A large income gap between spouses can affect joint planning and may be a good reason for each of you to go your own way.

3. One of you typically runs the show

If one party dominates the other in every day interactions, it can spell trouble when the estate planning process begins. A communication breakdown can leave one spouse upset with the final deal, believing his or her opinions were never fully considered. A skilled estate planner should recognize this imbalance and suggest that the parties consider finding separate representation.

4. Length of the marriage

This one’s pretty obvious: the shorter the relationship, the greater reason to get separate attorneys.

5. The number of prior marriages

The author of the Forbes article believes that a solid rule of thumb says that the greater the number of prior relationships a person has, the greater the need for separate representation when it comes time to make plans for the future.

6. Large age gap

The bigger the age difference between you and your spouse, the bigger the reason to contemplate solo representation. The suggestion that you seek separate representation is not meant as a critique of your relationship’s health; it’s meant only to acknowledge the fact that you both are in very different places in your lives and, as such, face unique concerns that can be best addressed with your own estate planning professional.

Though the decision to secure your own representation for estate planning may appear to be a simple financial one, the reality is that the choice touches on a variety of deeply personal issues in your relationship. Don’t let the complicated emotions get in the way of your speaking up and doing what you need to do to protect your family’s future.

Browse our other articles:

• Remarriage: Bay Area Blended Families & the Importance of Estate Planning
• Estate Planning After Divorce - Tips from a Bay Area Probate Attorney
• Updating Estate Beneficiaries and More: A Pre-Vacation Tick List
• Estate Planning With 4 Children, 1 $7M Portola Valley Home

Source: “Estate Planning For Couples: Should It Be A Solo Or A Duet?,” contributed by by L. Paul Hood, Jr. and Emily Bouchard in the column by Deborah L. Jacobs, published at Forbes.com.

All the best,

$20M and a Green Card: How the Right Estate Tax Attorney Can Help

Everyone with a high net worth should put together an estate plan. Some may be straightforward, while others will be complex. Here is one example (there are others in my newest guide) of a person with relatively complex financial circumstances, who would benefit from hiring an experienced estate planning attorney.

Meet Barry, the Silicon Valley entrepreneur

Barry is an entrepreneur in his 50s. He is not a U.S. citizen, but he has a green card. He owns real estate here, plus stock in U.S. companies, and lots of expensive stuff in his home -- cars, antiques, etc. He also has assets in South America and Europe.

Barry wants a little bit of his estate to go to his children (who are already doing well on their own), most to go to his grandchildren, and nothing to go to his ex-wife.

A good estate planning attorney will know the applicable laws, both domestic and foreign, that apply to Barry’s situation. His estate plan can be structured so that his grandchildren don’t get control the money until they are old enough to handle it.

The planner will go through several years of tax returns to see how Barry is handling his finances now, what he paid for the properties and what they are worth today. In addition to minimizing estate taxes, the plan will minimize capital gains taxes and property taxes.

Few estate planning lawyers have the knowledge and expertise to avoid the pitfalls in these situations

There is a great deal that must be considered in international estate planning and there are no easy answers or simple solutions. That is why Barry avoided the cookie cutter approach to estate planning -- the one offered by using pre-printed forms. He did make an investment -- top shelf legal guidance is not cheap -- and got a handsome return.

Getting a plan tailored to your needs

Barry is a made up person. But if your circumstances are anything like his, I do recommend that you retain an attorney familiar with helping non citizens and non residents.

Guides I've published that might help you:

• Choosing Your Bay Area Estate Planning Attorney
• U.S. Gift Tax and Estate Planning for Non-Residents and Non-Citizens
• Picking Your Trustee in California: A Guide for High Net Worth Individuals

All the best,

Special Needs Trusts: Estate Planning Strategies for the Special Needs Family

Special children require special estate planning. If the child is receiving government benefits, it is especially important to let family members know that their well-meaning gifts must be carefully planned. For example, a well-meaning loved one could accidentally disqualify the child’s government benefits.

Example

For example, Mike is 22 years old and suffered a birth defect that makes it difficult to walk. He lives in subsidized housing and makes ends meet by working at a local grocery store a few hours each week.

Sometimes his parents help him with money, but Mike also receives a monthly Supplemental Security Income (SSI) payment of $800.

Mike’s parents created a first party Special Needs Trust (SNT) to provide for his care and needs. Recently Mike’s Aunt Joan died. Unbeknownst to Mike’s parents, Joan left Mike $60,000 in her trust.

Aunt Joan’s thoughtful gesture ended up creating serious problems for Mike. Suddenly he had more than $2,000 in the bank – which can disqualify him from receiving SSI. Luckily, it was not enough to disqualify him for his subsidized apartment, or he could have ended up out on the street.

This is a serious problem for a special needs family.

Strategies for the special needs family

In this case, there are a number of strategies that will permit Mike tp benefit from his Aunt Joan’s gift and still keep his aid:

1. The first party Special Needs Trust that Mike’s parents created includes a state reimbursement or “payback” provision. If Mike transfers the monetary gift from Aunt Joan into the Trust, his eligibility will be undisturbed.
2. Mike can spend all the money before the end of the month in which he received it.
3. Mike can purchase or invest in exempt resources, such as an automobile. If Mike inherits enough money, he can use the gift to buy a residence for himself.

Consider the consequences of large gifts

Things would have been much simpler if Aunt Joan had left the money to the SNT Mike’s parents created for him – there would have been no disruption in or threat to his eligibility for certain services.

It’s important that parents let their friends and relatives know about any Special Needs Trust they may create for their special needs child. Parents should also make those loved ones aware that any contributions they wish to make need to go into that Trust so the child’s access to public benefits won’t be jeopardized.

There are many other considerations when you are planning for a special needs child. This article was meant to make you aware of a few of them. For more information, please feel free to contact my office.

All the best,