An heir to the Johnson & Johnson fortune created a trust to benefit four children.  The trust was set up so that it would provide money to charity for a period of years, then be distributed to the four children and their spouses. By the time the distribution came around, one of the children (named Mary) had died.  Her third husband, Martin, who was married to her when she died, claimed that he was a “spouse”

From 1997 to 2003, a family could take an estate tax deduction of up to $675,000 if more than half of the estate property consisted of interest in a family business.  This law is scheduled to go back into effect in 2010, so it’s wise to be aware of it. In particular, you should be aware that certain business decisions you make now- such as making personal loans to your company as opposed to capital contributions

The IRS has given families a little more flexibility in handling a 401 (K) and pension plans.  According to an IRS announcement, children who inherit a 401 (k) or pension plan can now roll it over directly into a Roth IRA. Before, a spouse who inherited a 401 (k) or pension plan could roll it over into a Roth IRA, but this was not true for a beneficiary other than a spouse, such as a child. 

The recent dip in interest rates has created a golden opportunity to save taxes while giving income-producing assets to your heirs.  You can do this with a “grantor retained annuity trust,” or GRAT.  It allows you to continue receiving income from the property for a number of years, and you can then give it to your heirs while dramatically reducing your estate and gift tax. The amount of taxes you can save is determined by a

Shareholders in closely-held corporations have won an important estate tax battle with the Internal Revenue Service. The issue is how to place a value on a corporation that has a lot of “built-in” capital gains-meaning that if the company’s assets were liquidated, it would owe a hefty capital gains tax.  In this case, a man named Frazier Jelke owned about 6 percent interest in an investment company.  The company had $188 million worth of assets.  However,

It’s hard to imagine that someone could accidentally disinherit their own children, but it happens all the time to people who don’t regularly update their estate plan. It’s important to update your estate plan with a professional every few years, or whenever there is a significant change in your circumstances or in the tax laws. Below are six ways disinheritance can happen:  1)      Harry wrote a will leaving his house and his business to his children,

When you send your son or daughter off to college, the last thing you’ll probably think of getting for him or her is a will.  But there are a few simple legal documents that any young adult should have.  Getting them takes a short time, and is definitely worth the effort.  One such document is a medical power of attorney.  Once your student is a legal adult, you can no longer automatically make medical decisions for

The latest wrinkle in “identity theft” involves criminals opening accounts in the name of people who are recently deceased.  If a relative has recently died, you might want to take steps to avoid this problem.  For instance, you should immediately notify the Social Security Administration of the death, to prevent someone from using the deceased’s Social Security number.  You should also contact the three leading credit bureaus and report the death.  (Social Security will typically notify

A “power of attorney” is an important part of almost any estate plan.  This document allows someone else to take over your day-to-day financial affairs if you become incapacitated but like any element of an estate plan; a power of attorney needs to be reviewed occasionally to see if it still meets your needs.  If you signed such a document many years ago, it might be a good idea to check whether it needs to be

In the old days, trusts tended to be pretty simple.  Typically, a trustee was expected to invest the funds conservatively and pay interest to a beneficiary at regular intervals.  That was about it. Today, however, trustees are often expected to invest aggressively and successfully in a much more complex market.  They may be subject to far more tax, compliance and regulatory requirements.  And they may have to provide not for a single beneficiary but for a