Reviewing your Insurance

Tuesday, October 6th, 2009

Some people don’t have the habit of reviewing their life insurance policies.  But bear in mind that an insurance could be a vital part of your financial strategy or estate plan.

You can buy a life insurance policy and make your spouse or children as beneficiaries.  Business owners can also use a buy-sell agreement funded with an attached life insurance so that surviving owners may buy the company’s interest in case of a deceased partner.  In the same token, key-person insurance assures business aid when one of the core employees passes away.

However, there is a downside to this.  Life insurance proceeds form part of your taxable estate and your beneficiaries may be heavily taxed when you pass away.  One alternative around this law would be to allow your children or other beneficiaries to own your policy.  You can give gifts to your kids for the acquisition of the insurance - it’s like pooling their money and buying the policy for you.  Another way you can remove the proceeds of your life insurance from your taxable estate is to get irrevocable life insurance trust.

Life insurance can help you build wealth.  It can also be useful for employee benefits, business continuation, education planning, retirement planning, and estate planning.

Tags: beneficiary, business, estate, estate plan, Estate Planning, law, life insurance, policy, tax, trust, wealth
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Transfer Wealth through Trusts

Sunday, October 4th, 2009

Transferring wealth to the next generation is a very noble goal.  However, you may be hesitant to transfer wealth through a trust because you think that it may be expensive.  But if you think about it thoroughly, you will realize that simply handing it over to your children or grandchildren have a lot of risks, especially if the beneficiaries are still minors. 

Let’s face it - kids may sometimes be impulsive and easily influenced.  So how do you give inheritance to someone who’s not mature enough to handle their own money?  One way is through trusts.  You will have full control because you’ll be the one to establish its terms and conditions.  For example, you can make it restrictive and give the money to the beneficiary only when the right time or reasons come.

Of course you need to do a cost-benefit analysis for this purpose.  It doesn’t make sense for you to create a trust if you intend to fund it with only $500.  It’s not to say that $500 is not a lot of money, but just don’t make the mistake of spending three times as much in setting up a trust if you will only put $500 in it.  It’s best to consult an attorney regarding this concern if you want a sound advice.

Tags: advice, attorney, beneficiary, children, control, grandchildren, inheritance, kids, trust, trusts, wealth
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Trust Amendment

Monday, September 28th, 2009

All good estate plans are designed to accommodate and anticipate changes.  The owner reserves the right to amend or revoke the trust in part or in whole.  And the most common amendment done by the owner is changing the trust asset distribution.  It’s so common for people to delete or add beneficiaries or even to adjust the amount or percentage that the beneficiary will receive.  Also, another common change is to change the order or names of successor trustees.

Because it’s so easy to amend any trust, some people are doing it on a regular basis.  There are some trusts with seven or more amendments.  But sometimes, it’s easier to just replace the whole trust instead of amending it several times. 

However, some people don’t like the thought of doing the trust all over again because it’s a bit daunting.  In a new trust, all assets titled in the first trust’s name needs to be transferred to the new one.  And it could be too much work to re-title assets.

So instead of creating a new trust, you can just restate it.  The great thing about this is: you don’t need to re-title the assets of your old trust.  A trust restatement is already funded, and could simple replace the original trust.

Tags: asset, assets, beneficiaries, estate plans, Family Trust, owner, trust, trust amendent, trust restatement
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Katherine Jackson Wins

Thursday, September 24th, 2009

Associated Press reported that Katherine Jackson, the mother of Michael Jackson, can now challenge her son’s estate administrators without risking her inheritance share.  This is the ruling of Mitchell Beckloff, a Superior Court Judge, last Friday.  In the ruling, it states that Mrs. Jackson can remove the estate executors - John McClain (music executive) and John Branca (lawyer) - or challenge their authority without being disinherited.

Although there’s a family trust provision that calls for anyone challenging the will to lose their share in the trust, the judge ruled the complete opposite.  Previously, the lawyer of Mrs. Jackson raised concerns about a few deals that Mr. McClain and Mr. Branca have negotiated, including the involvement of Michael’s concert promoter, AEG Live.

According to Londell McMillan, Katherine’s lawyer, “We hope that this outstanding administration matter is resolved, without need for further costly obligation - this is for the best interests of Mrs. Jackson and Michael’s children, who are the true beneficiaries.”

The family trust gives 40% to Mrs. Jackson, 40% to Michael’s three children, and the remaining 20% will be given to charities.  Judge Beckloff also approved around $1 million annual allowance for the family - Mrs. Katherine Jackson, Michael’s daughter Paris, and his sons Prince Michael and Blanket.

Tags: administrators, AEG Live, Associated Press, Blanket, estate, Family Trust, inheritance, John Branca, John McClain, judge, Katherine Jackson, lawyer, Londell McMillan, Michael Jackson, Mitchell Beckloff, Paris, Prince Michael, trust
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Suing a Family Trust

Friday, August 21st, 2009

Mary Bucksbaum Scanlan, an heiress of Bucksbaum shopping-mall clan has sued the family trust as well as its lawyers for breach of fiduciary duty and malpractice.  She blamed them for investment losses from her trust shares worth $300 million. 

The 40-year-old is a daughter of Martin Bucksbaum, who’s the late co-founder of General Growth Properties Inc.  She filed this lawsuit in Chicago U.S. District Court naming attorneys Earl Melamed and Marshall Eisenberg with their law firm named Neal, Gerber, and Eisenberg LLP.  Also included in the suit is General Trust Co., Bucksbaum family trust as defendants.

The attorney representing Melamed, Eisenberg, and their law firm is Atty. Stephen Novack, who claims that losses suffered by Bucksbaum family trust were truly caused by the souring stock market and the economy.  General Growth is based in Chicago - it manages and owns over 200 malls in the U.S. but it filed for bankruptcy (Chapter 11) protection in April carrying a debt load of $27 billion.

The lawsuit of Mrs. Scanlan alleges the attorneys (also the trustees) of breach in their fiduciary duties since they kept most of the assets of the trust in General Growth stock during the time that stock has declined in 2007 from $67 to $1 last year.  Allegedly, the attorneys also failed to inform her about the loans made to executives of General Growth with a total of $100 million.

Tags: attorneys, Bucksbaum, Chicago, Earl Melamed, Family Trust, General Growth Properties, heiress, law, lawsuit, lawyers, malpractice, Marshall Eisenberg, Martin Bucksbaum, Mary Bucksbaum Scanlan, Stephen Novack, stock, sue, trust
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Prescott-Based Family Trust

Friday, August 21st, 2009

A family trust based in Prescott made a request to Planning and Zoning Commission because it plans to lease and probably sell their vacant building.  The agent for Polland Family Trust, Eileen Fowler, said, “They’re just trying to make use of the building they have.  Commercial developments are lying on both sides of the aforementioned property.  It covers 16 acres adjoining Highway 69 (west side) between Bradshaw Mountain Road and Village Creek Boulevard.”

She was referring to Century Productions’ former home - 15 acres of family land near Prescott Country Club.  She added, “If we could sell this lot, we would want to push through with that.  Most of this building is located on a hillside.”

Fowler is acting as the family’s agent and she applied to the commission in order to rezone the land (coming from residential to commercial including minor-industrial planned area development).  Another request was separately filed for General Plan amendment coming from low-density residential and going to regional commercial for 2 acres because they’re outside the boundaries of town.  The planning staff recommends approval of these requests from family trust provided that they would keep a 200-foot natural buffer in between Prescott Country Club and the property.

Tags: Eileen Fowler, Family Trust, Planning and Zoning Commission, Polland Family Trust, Prescott, Prescott Country Club, property
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Benefits of Bowers Trust

Tuesday, August 18th, 2009

Frances Bowers, a Mannington woman, passed away in the year 2000.  Her family members have all passed away as well and they have compiled the largest fortune in the community - they’re famous for the second largest state district fair.

Bowers was on the First Exchange Bank board.  Her father was late George Bowers, owner of Warwick China Co. and Bowers Pottery Co. (two very prosperous businesses).  He died around 1940s and left his three daughters with a huge estate.  Frances was the last surviving offspring.  She’s a private and opinionated woman who traveled a lot.

Upon her death, a part of the family trust has been placed in George Bowers Family Charitable Trust - many students and organizations in the area benefited from this trust ever since.  People may not know that the family did a lot of good things to the community.  It’s like a federal government awarding to organizations that need funds yearly.  Also, it’s similar to an annual gift; but the surprise is who will reap the rewards. 

Although many organizations are applying, only so many can be given out each year.  For instance, this year, East Fairmont Junior High, Fairmont Senior High, Disability Action Center, Mannington Middle School, and Salvation Army were some of the lucky ones awarded with grants.

Tags: Family Trust, First Exchange Bank, Frances Bowers, George Bowers, George Bowers Family Charitable Trust, Mannington, trust
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English Family Trust

Monday, August 17th, 2009

Finance Minister Bill English is called by Labour to release his family trust details due to questions over his qualification for an accommodation allowance of $700 per week.  In Parliament yesterday, the arrangement was put under fire - to replace Prime Minister John Key, Gerry Brownlee was taking questions.  English qualified after he signed a declaration that states he has had no financial interest on a trust owning his family home.   

Pete Hodgson, Labour MP, said that the public should judge whether English controlled the family trust so he needs to release details of it, even if he deletes family names as appropriate.  Under Mr. Key’s office rules, it’s permissible to lease a family trust home and use it as ministerial residence only if there’s no pecuniary interest of the minister.

Officials took their concerns to Mr. Key’s office on whether English truly qualified for the rent allowance.  Mr. Hodgson said, “Gerry Brownlee confirmed in the house that it would depend on the structure details whether or not this trust passed the test.”   

As of March, the trust title was transferred to Mary, the wife of English.  The Endeavor Trust owns Karori property worth $1.2 million, and everything would be okay when English has certified no financial interest in it.

Tags: Bill English, Family Trust, Finance Minister, Gerry Brownlee, John Key, Karori property, Labour, Mary, Pete Hodgson, Prime Minister, trust
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Hershey and Cadbury Deal

Sunday, August 16th, 2009

Hershey family trust controls 80% of Pennsylvania chocolatier voting stake.  The biggest obstacle is that they wouldn’t likely agree to a deal with Cadbury because they wouldn’t want to dilute their stake significantly.  Kraft bid $16.73 billion for Cadbury, and there’s a wave of speculation out there that says Hershey will counter that with a higher offer.

According to an analyst from Stifel Nicholaus, Christopher Growe, “We believe that this transaction should be roughly 65% equity and financed at 12x EBITDA multiple to trump the proposed offer of Kraft.”  However, this high stock component may threaten Hershey’s trust control.

When Cadbury and Hershey discussed a 2008 possible merger, the trust balked.  There’s no reason to think that a lot has changed after a year.  Growe divulged that when Hershey’s former CEO, Rick Lenny, approached Cadbury with this combination, it led to his company exit.  Also, the trust has substantial control over the board of the company.  Recently, there were two board members who resigned due to new risk committee installation that oversees most of Hershey operations.

Hershey may offer more cash instead of stock to avoid this dilution issue.  But where would they find that cash?  The company has an $8.8 billion market value compared to Kraft which has a market value of $39.2 billion.

Tags: analyst, Cadbury, Christopher Growe, equity, Family Trust, Hershey, Kraft, merger, Pennsylvania, Rick Lenny, Stifel Nicholaus
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Local Fundraisers Benefit Disability Group

Wednesday, August 12th, 2009

From a donation of a fundraising group, a group of people with physical and learning disabilities enjoyed a great day out on North Yorkshire Moors Railway.  The day was organized by Rotary Club’s Pickering District for Wilf Ward Family Trust service users, with lunch as well as a railway trip.

There were more than 40 support workers and service users who took part in this outreach.  Several Rotary Club members also attended to make sure that the day went well.  The treasurer of Pickering District, John Fields, is pleased to support Wilf Ward Family Trust.  He said “It’s the second time this was done and so far, it was a great experience to see many local people that enjoy the local fundraising we do.”

On this day out, service users coming from Scarborough, Norton, Malton, and Pickering made the trip.  The chief executive of the Trust, Richard Pick, said, “The day turned out great for service users and a big thank you is in order for Rotary Club and all their supporters.”  Wilf Ward Family Trust is a Pickering-based trust that offers a wide range of services for those people with social care needs.      

Tags: donation, fundraising, John Fields, North Yorkshire Moors Railway, Pickering, Richard Pick, Rotary Club, trust, Wilf Ward Family Trust
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Ridglea Theater Trust Deadline

Wednesday, August 12th, 2009

A bankruptcy judge from Fort Worth gave R.K. Maulsby Family Trust trustee until Nov. 4 in order to sell the historic Ridglea Theater located on the west side of the city even for just a pending deal.  Otherwise, they shall face foreclosure.  Doug King, the trustee, told Russell Nelms (the bankruptcy judge) that he has accepted a contract from the buyer putting down earnest money of $50,000 and then paying $1,075,000 for the property.

King said that selling the property would generate enough money to pay the creditors.  However, he declined to name the buyer after the hearing.  As the only asset of Maulby’s Trust, it filed for a Chapter 11 protection to prevent property foreclosure.  Dallas’ FixFunding posted the property for a possible foreclosure because it’s behind on its payments for a $1.1 million loan.  It also owes $260,000 to TaxEase.

Nelms said “Under that contract, I gave a chance for the debtor to perform.  However, it’s a short lease.  There will be dismissal of the bankruptcy case on Nov. 4 if the contract will fall through.”   Chad Berry, the attorney representing FixFunding and Elizabeth Zieglar, the trustee of federal bankruptcy court, asked Nelms to dismiss this bankruptcy case and argued that the family trust has no valid business purpose.

Tags: attorney, bankruptcy, Chad Berry, Doug King, Elizabeth Zieglar, Family Trust, FixFunding, foreclosure, Fort Worth, judge, Maulby's Trust, Ridglea Theater, Russell Nelms, trustee
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Murdoch Family Trust

Saturday, August 8th, 2009

Rupert Murdoch, chairman of News Corp (NWS) has three wives and six children.  In addition, he also has two living sisters, a 100-year old mother, one deceased sister, and a father who passed away in 1952.

His biographer, Michael Wolff, divulged more facts about the Rupert’s family.  He said that Rupert’s first wife is Patricia Murdoch.  She was an intern at his paper but the family disapproved this marriage so it lasted only from 1956-1967.  Then during the recession from 1990-1991, Rupert’s wife was Anna Torv Murdoch and he promised her that he will retire as soon as the company goes out the mess. 

Unfortunately, this didn’t happen because in 1999, the couple was divorced.  Then on the same year, Rupert was married to Wendi Deng, a young executive in News Corp where he had two more children later on.  Everybody could have been happy except that when Rupert was divorced, he left the voting shares of his News Corp to a trust controlled by four of his children - called the Murdoch Family Trust.  In addition, he agreed to Anna’s stipulation in the trust that no new children should be admitted to this trust.

But Wendi can’t accept this arrangement and so a new one has to be created.  Suddenly, the kids of Wendi are now allowed into Murdoch Family Trust (without voting participation).  Rupert also paid $150 million to each of his first four children.  

Tags: Anna Torv Murdoch, chairman, children, Michael Wolff, Murdoch Family Trust, NWS, Patricia Murdoch, Rupert Murdoch, trust, Wendi Deng
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Taking Family Trusts to the Next Level

Sunday, August 2nd, 2009

Beneficiaries of family trusts (oftentimes referred to as discretionary trusts), typically have no entitlement to assets held in trust, not until the trustee would exercise his or her discretion and distribute capital or income in their favor.  For example, when a father passed away, his wife may inherit the house or other assets that form part of his estate.  Then, the children (if they’re not minors) would usually take control of the trust and business.  However, trusts commonly have beneficiaries who are creditors too - this part is most often overlooked.

The reason that family trusts (especially those that carry business) tend to have creditors as beneficiaries is because the trustee would be taxed on the debts with a 46.5% flat rate unless he or she distributes all profits, earnings, and realized capital gains in a financial year.  This is one of family trusts’ benefits - the ability to stream the various classes of income and give it to most appropriate beneficiaries so that in the end, a lower tax amount is paid generally compared to business structures where the owners have fixed settlement.

Ideally, a succession plan requires a solicitor, accountant, lawyer, and financial adviser working together.  This will encourage a smooth facilitation so that the estate plan is complied with in a timely manner.

Tags: accountant, beneficiaries, capital, creditors, discretionary trusts, estate plan, family trusts, financial advisor, income, lawyer, solicitor, sucession plan, trust, trustee
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Transferring Real Estate Title

Saturday, August 1st, 2009

When you own property in another state, the only way that you can avoid probate proceedings is to prepare and record a new deed that will transfer the title to include joint owners.  These owners may be your beneficiaries such as your spouse and children.  You can also transfer the title to a revocable trust or to entities like partnerships, limited liability companies, and corporations.

When out-of-state real estate’s title is transferred to a trust, the title will not be held by an individual but by a trustee.  So even when the individual dies, the trust will still continue.  Same thing for transferring to an entity - it’s the entity that holds the real estate title and not the decedent.

While these are simple procedures, there are a few downsides to a joint ownership.  Any lease, mortgage, sale, or other transactions that involve the property require unanimous consent of every owner.  Another disadvantage is this: the interest of any joint tenant is exposed to creditors’ claims.

And if your property is a pied-a-terr in Paris or an island villa in Antigua, you need to consider estate tax systems and probate in foreign countries.  Therefore, your attorney needs to work with a lawyer in a foreign jurisdiction for proper coordination and inclusion of the property in your estate plan.   

Tags: attorney, estate plan, joint owners, lawyer, probate, property, revocable trust, tax systems, transfer title, trust, trustee
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Transferring Business Assets to Children

Thursday, July 30th, 2009

There are several methods for business owners to transfer ownership or assets to their children without the high cost of federal gift tax.  Some methods would include providing numerous money transfers until the exclusion limit, setting up family limited partnership, and setting up a family trust that will receive transferred assets.  A business owner like you should know when would be the right timing to step out of your family business.  Here are some tools you can use:

*Buy-sell agreement - this is a legal contract prearranging your business sale interest with a willing buyer.

*Outright sell - you can receive cash and use it to maintain your lifestyle through selling your business interest to any of your family members

*Grantor retained annuity trusts (GRAT) - a sophisticated succession tool in business which uses irrevocable trusts to transfer assets while at the same time retaining a specific income payment for a particular set of time.

*Private annuities - sale of property wherein the buyer makes an unsecured promise that they will make periodic payments to the seller for the rest of his or her life.

*Family limited partnerships - when you transfer ownership of your business to this partnership, control of general partnership interest will still be with you and you can gift this interest to your family members.

Tags: assets, business owners, buy-sell agreement, family limited partnerships, family trusts, famly business, federal gift tax, GRAT, outright sell, private annuities, trust
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Raising $5.1M in a Trust

Thursday, July 30th, 2009

Everyone worked the negotiations quickly when Raymond family offered to sell Maplecroft Farm.  It’s their privately owned property consisting of 250 acres of scenic views, wetlands, farmlands, and a little mix of wildlife habitat.  After 70 years, the property still has high conservation value and the development rights to various conservation organizations are for sale.

Trust for Public Land is the national nonprofit leading this fund-raising effort in preserving the property.  It has to raise $5.1 million until February to purchase conservation easements in order to keep the farm’s permanent open space.  Pending availability and approvals, the funds would come from contributions and private donations.   Currently, there’s $3.4 million in their account and most would go to purchase Maplecroft easements.

Whitney Hatch, director of Trust for Public Land, leads the fund-raising effort.  Fortunately, a Boston developer, Neil St. John Raymond, continuously living on the property approached town and conservation organizations first.  He made it clear to them that the land needs to be preserved as an open space.  As part of agreement, however, portions of this site will be used as public trail for horseback riders, hikers, etc.  Raymond declined to comment when asked on his future plans if Trust for Public Land would not be able to meet the February deadline.

Tags: Maplecroft Farm, Neil St. John Raymond, Raymond, trust, Trust for Public Land, Whitney Hatch
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Are there Expiration Dates for Estate Plans?

Monday, July 27th, 2009

There is no expiration for estate plans.  However, major life events should prompt you to review your plan and make sure that your wishes are still enforced.  Examples of these common life events include purchase of a home, death of a loved one, birth of a child, divorce, or marriage.

If you’re married, there are certain considerations that you should think about in creating an estate plan.  First, you would need revision of your trust to include your existing spouse.  Also, you may acquire a power of attorney for managing your finances if ever you’re incapacitated or unable to manage any of your financial affairs.  Therefore, a well-rounded estate plan must include a power of attorney for health care which appoints a trusted individual (typically your spouse) to make medical decisions if you’re unable to do so yourself.

While for remarriage, you need to revise your will or trust immediately.  Any gift to your ex-spouse may not be valid.  So how will the court decide who to give it to?  Therefore, you should make this change yourself so that you’re sure to carry out your wishes when you pass away.  Same goes to your children.  Appointing a guardian for the minor ones would protect them even when you’re gone.

Tags: attorney, estate plans, expiration, married, power of attorney, remarriage, trust, will
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Five Key Estate Planning Documents

Saturday, July 25th, 2009

Avoiding the creation of an estate plan may be due to dismissal of subjects such as taxes, incapacity, and death.  However, the fact still remains that you need to protect your wealth and your loved ones when you’re gone.  So here are five documents that you need to have while you’re still active:

*Will - these are simple instructions to distribute your assets to the beneficiaries after death.  You need to appoint an executor who will designate your assets, while you need to designate a guardian for minor children.

*Durable Power of Attorney (POA) - power of attorney is simply a legal document that will name another person who will act legally on your behalf.  A regular POA terminates upon a person’s disability or death.  However a durable POA will continue beyond disability and will only terminate upon death.

*Health Care POA - same as durable POA but it will authorize someone to decide for you in medical situations in case you’re unable to do so.

*Living Will - expresses your intentions for use of life-sustaining measures in a terminal illness.

*Revocable Living Trust - a type of trust that is often used in estate plans.  When you transfer assets to a revocable trust, your beneficiaries will receive the income or principal according to the terms of the trust.

Creating an estate plan will not be an overwhelming task if you work with experienced professionals such as a CPA, financial advisor, and an attorney,

Tags: attorney, death, estate plan, legal, power of attorney, revocable living trust, wealth, will
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Create your Estate Plan Today

Saturday, July 25th, 2009

Better Business Bureau reminds people that estate planning is not just for the wealthy.  They advise consumers to create an estate plan if they have something of value to pass on to their loved ones after death.  According to surveys, 55% of adults don’t want to set up an estate plan because either they don’t want to think of dying or they believe that they don’t have any assets to pass on.

However, if you don’t give your final instructions, nobody would know where your money should go or how will your children be taken cared of.  Do you want to leave these important decisions to the state?  If not, it’s important to create an estate plan and ensure that your wishes will be followed.

Creating an estate plan may be simple if you just draft a will.  But it can also be complex when you’re trying to set up a trust or a living will.  A will is something that you create to allocate your assets and establish guardianship of your children.  On the other hand, a living trust could set up conditions to distribute your assets while reducing inheritance taxes and avoiding probate.  Finally, a living will communicates a person’s desire for lifesaving measures in case there’s mental incapacity to decide on an emergency medical situation.  To help you draft these important documents, make sure that you consult an estate planning attorney.

Tags: attorney, Better Business Bureau, estate plan, estate planning attorney, living trust, living will, wealthy, will
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Holding Company Sought by Mount Airy

Friday, July 24th, 2009

With a holding company’s aid, Mount Airy Casino Resort expressed their interest to transfer casino ownership.  It will be transferred from Louis DeNaples to his daughter Lisa DeNaples D.M.D., who will head a family trust.

According to Michael Sklar, Mount Airy attorney, “The purpose of this holding company is to ensure a smooth casino operations financing during the transfer.”  Under the plan, a Dunmore businessman, Mr. DeNaples, would sell to the holding company all his interest in Mount Airy.  And then Dr. DeNaples’ trust will purchase all these interests from the holding company.  Once this sale is completed, Mr. DeNaples will no longer manage or control the holding company’s affairs.  Dr. DeNaples, who is also the chief operating officer of the casino, would be joined eventually by her siblings Donna Dileo and Louis DeNaples Jr., M.D. in managing the trust.

This transfer occurred due to the perjury charges filed against Mr. DeNaples by the district attorney’s office (Dauphin County).  The charges were dismissed in April after 16 months of license suspension.  However, part of the DA’s office agreement is the pledge to turn over Mount Airy’s control to the trusteeships that should be run by his children.  

Tags: attorney, Dauphin, Donna Dileo, Family Trust, holding company, Lisa DeNaples, Louis DeNaples, Michael Sklar, Mount Airy Casino Resort, perjury, trust, trusteeships
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Over $10 Million for McDowell Charities Trust

Tuesday, July 21st, 2009

McDowell Family Trust, which is a charitable trust set up by Thomas John Rider McDowell and Victoria Cross Knight-McDowell in 2005 contributed more than $10,000,000 to several charities including Hospice organizations, Breakthrough Men’s Community Workshop, and Lawrenceville School Camp.  The largest recipient of this trust includes inner city children’s 100-year-old camp based in New Jersey and Warren County.

Lawrenceville School Camp has 54 acres of land owned by Lawrenceville School’s student body.  This is a boarding school in the east coast attended by Mr. McDowell.  He said “Victoria and I felt that it was important to give a helping hand to kids who are lacking the opportunities we’ve had.”  In addition, Victoria said that, “we’ve selected Hospice because of the invaluable contribution they are giving to America.  Also, we’ve seen their indefatigable efforts and beautiful spirit first hand.”

Mr. McDowell is Pine Bros. company owner with interests in entertainment and organic farming.  He recently made “The Mercy Man,” which is his feature film-directing debut.  While Mrs. McDowell is the former owner and founder of Knight-McDowell Labs, the makers of Airborne formula.  It also created Airborne Teacher’s Trust Fund, distributing $250,000 every year to music and art programs across public schools in America.

Tags: Breakthrough Men's Community Workshop, Family Trust, Hospice organizations, Lawrenceville School Camp, McDowell, New Jersey, Thomas John Rider McDowell, trust, Victoria Cross Knight-McDowell, Warren County
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A Unique Legacy

Sunday, July 19th, 2009

In 1963, the Grover family bought a property just outside of Hamilton and made it into a ranch named Sawtooth Ranch.  It’s a big meadow where you can have sweeping views of Bitterroot Mountains and hear the Sawtooth Creek murmur.  Since that day, there were three generations of Grover family working, exploring, and loving this 840-acre of grass and timber.

Other than a few steel-post fence lines, a caved-in barn, and a new house, nothing has changed on this place for decades.  The present owners, Joe and Carrie Grover, decided to make sure that the ranch would never be developed. 

Ravalli County Commission approved this by using $550,000 of Open Lands Bond monies of the county to purchase the conservation easement that would keep Sawtooth Ranch intact forever.  Rocky Mountain Elk Foundation donated $20,000 toward the easement cost while the Grovers generously donated $350,000.

Executive director of Bitter Root Land Trust said that it’s a unique opportunity to protect the ranch from future development.  While Joe Grover said, “It would take time to build a trust necessary for this, and we appreciate the efforts of Bitter Root Land Trust for putting together this easement.  They’re wonderful to work with.”

Tags: Bitter Root Land Trust, Bitterroot Mountains, Carrie Grover, Grover, Joe Grover, Open Land Bond, Ravalli County Commission, Rocky Mountain Elk Foundation, Sawtooth Creek, Sawtooth Ranch, trust
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Proper Way to List Assets in your Trust

Friday, July 17th, 2009

Most trusts would include an asset list being transferred to it (sometimes called Schedule A or Exhibit A).  This list would be for the benefit of the successor trustee, who’s the person knowledgeable about the contents of your trust.  Merely listing a home or bank account on the list does not place assets in the trust.

Also, it’s important to keep the asset list current.  It has to be updated and revised continuously, perhaps with a photocopy of asset list given to the successor trustee.  The values of the properties or balance of the accounts don’t need to be included.  On top of listing the assets, you should also transfer the asset title to the trustee - this is called “funding your trust.”

Also, a deed given to “Smith Family Trust” would not be sufficient because there might be numerous Smith family trusts out there.  The trust deed should state “Mary Smith, trustee of Smith Family Trust u/a (under agreement) July 17, 2009.” 

Sometimes, the initial “u/d/t” is used, which is short for the words “under declaration of trust.”  In summary, the individual trustee holding the legal title must be identified as well as the date of trust so that the bank could clearly determine who has legal rights or access to the trust.  

Tags: assets, deed, funding your trust, successor, trust, trustee, trusts
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Trust Fund for Adopted Kids Created

Wednesday, July 15th, 2009

Early Wednesday morning, Melanie and Byrd Billings’ family held a news conference to thank the community and investigators for their support.  Recently, the Billings were murdered in a home invasion robbery.  Nine of the adopted children (in their home) have special needs, and unfortunately, they witnessed the whole event.

The oldest children of the couple, Ashley Markham, said that a trust is now being set up for their parents’ adopted children.  It’s a good thing that an outpouring of support came from the people around the nation.  Now, papers to formalize the trust are now being drawn up.

Funeral services were complete and burial will follow at memorial gardens of Pensacola.  There were seven people behind bars due to the murders.  The investigators are saying that the robbery was well-planned, and the suspects were in and out of the house in less than 10 minutes.  Right now, they are still questioning a suspect on possible abetting and aiding charges.

Ashley Markham also said that their family will continue the legacy of their parents.  They will stay together and help adopted children as well.  In fact, “the trust money will only be used to care for children with special needs,” Markham added.

Tags: adopted, Ashley Markham, legacy, Melanie and Byrd Billing, Pensacola, robbery, suspect, trust
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Trust Meaningless Unless with Assets

Monday, July 13th, 2009

Two siblings consulted an attorney about the estate of their father who passed away in 2006.  Both their parents have revocable trusts and a $3 million combined net worth.

Both their trusts were adequate and well-written.  It has the necessary language and complete documents to ensure that the first deceased spouse’s estate would be divided into family trust and shelter the whole $1.5 million (husband’s share) from future estate tax lasting for 12 generations because it will not be added to the other $1.5 million taxable estate (wife’s share).

Instead of writing a will, which could have resulted in tax worth $460,000, the family trust saved them from this expense.  However, even if their trust was adequate, it would be meaningless unless it has assets.  What’s worse is that the children can’t sue the attorney who drafted the trust - he has included a firm warning that there are negative consequences if the couple failed to fund the trust and even included a separate sheet on how they can do so.

As a result, they need to file probate, which would cost them an additional $210,000 for court costs, attorney’s fees, and representative fees in addition to the $460,000 tax payable to the IRS upon their mother’s death.  All of these problems could have been avoided if only their parents funded the trusts.

Tags: assets, attorney, estate, estate tax, Family Trust, probate, revocable trusts, trusts, will
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Create Financial Plan for Happy Future

Saturday, July 11th, 2009

There are only a few people who actively plan for their financial success. Some may expect it or hope for it, but only one out of five people actually have a written plan on how they want their financial lives to work out. This is according to the recent financial literacy survey of Retirement Commission.

Author Arun Abey says that “drawing a financial plan may be a minority occupation. However, aside from being purely financial, it would also bring you a sense of wellbeing.” She further said that there’s a feeling of control and high satisfactory rating for people with a financial plan – it doesn’t matter if they’re simple wage earners or a rich accountant.

So, financial planning may also give us a notion of happiness and satisfies us as individuals. If you want to experience the same sense of purpose, you may go to financial planners or estate planning attorneys. When you go to them, you will be asked to fill out a statement of your insurances, debts, assets, and income. Generally, your adviser will also ask you about the household budget and the regular things that you’re spending on. Other estate planning details, such as family trust or will should also be included.

Tags: Arun Abey, attorneys, Estate planning attorneys, Family Trust, financial literacy, financial plan, financial planning, Retirement Commission, will
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Lessons from Michael Jackson

Thursday, July 9th, 2009

Before he died, it’s a good thing that Michael Jackson made a smart estate plan.  He provided and cared for his loved ones because a separate document gathered his assets (estimated to be over $500 million, which exceeds his debt by $200 million).  It’s called a family trust - this ensures that his affairs would stay out of court and out of the eyes of the public.

He established this trust along with his will, and it’s also called a “living or revocable trust.”  The goal of this estate-planning tool would be to transfer all the property - including real estate, bank accounts, and cars - into a separate owned entity while maintaining the control as a trustee.  In Jackson’s case, he established a “Michael Jackson Family Trust.”

At his death, the control will be transferred to his successor trustee or co-trustee.  Most people (Jackson included) will set it up to “pour over” - this means that whatever assets remain outside of the trust would be eventually be added to the estate at their death.

The beauty of this trust is: people can avoid a public process called probate.  Aside from celebrities, this process would also make sense for people with significant assets because it would spare their heirs from a prolonged legal process.

Tags: assets, co-trustee, estate plan, Family Trust, legal, living trust, Michael Jackson, probate, revocable trust, successor trustee, trust, trustee, will
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Investors Get More Fund Brochures

Tuesday, July 7th, 2009

Investors are saying that they’re blanketed with hedge funds promotional materials than ever before.  These funds seek to gain back the assets lost or withdrawn because of the financial crisis’ negative performance.

“Normally, only a few funds would arrange a meeting with me before the conference.  However, this year, about 30 e-mailed or called,” said one manager from a company of family trust (he declined to be named and prefers to remain anonymous).  He’s talking about the GAIM hedge fund industry conference where investors like pension funds, family trusts, and high net worth individuals are saying that the sales drive intensified.

Mark Schindler, a Clariden Leu portfolio manager, also told Reuters “Marketing has been very aggressive this year.  I had so many calls and e-mails bombarding me so I have to be selective on who to answer.”

Ironically, in spite of apparent efforts in marketing, Mr. Schindler still noticed fewer sales staff compared to the previous year.  This means that executives and fund managers have to talk to potential investors about their investment strategy - a role that they usually avoid because it’s a distraction from running the funds daily.  “This is something that we rarely saw, the people actually managing the money are here to talk about their own funds,” Schindler observed.

Tags: conference, Family Trust, fund managers, funds, GAIM hedge fund industry, hedge funds, investors, Mark Schindler, portfolio manager
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John Wooden Builds Retirement Nest Egg

Sunday, July 5th, 2009

UCLA basketball coach, John Wooden, admitted that he made a wrong decision when he accepted a post in Westwood.  He revealed that he didn’t ask questions and he didn’t know that the coaches were not considered as members of the faculty - they were only paid by Associated Students, the activities arm of the student body.

This means that he was not on the retirement plan of the University, and his situation persisted for 12 years.  Therefore, when he retired even after 10 national titles on record and 27 straight winning seasons, he was not given 12 years of credit for his pension.

The lesson here is to check things out before you continue a long-term career.  When he decided to retire in 1975, he was not certain of his future.  “I know my income after retirement will not be good,” Coach Wooden said.  All he wants is to ensure enough care for his ailing wife, maintain his standard of living, and still have something left for the children

Fortunately, his retirement had opened a new world of possibilities.  He has a steady book output that bears basketball coaching tips as well as life lessons and a steady income from several speaking engagements.  In fact, his last engagement has just been finished recently.

Now, he has a handwritten will and an old family trust.  These documents need to be updated because his estate had grown sharply due to book royalties and speaking fees.

Tags: basketball coach, estate, Family Trust, John Wooden, retirement, UCLA, University, Westwood, will
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Plane Crash Victim’s Family Fund Set-up

Friday, July 3rd, 2009

A trust fund was set up for the family of a woman in Ottawa who’s believed to be one of the passengers on a plane that recently crashed in the Indian Ocean.  Donations are being collected in order to help the husband and three children of Ensumata Abdoulghani for their funeral, travel, and living costs.

Abdoulghani had a Yemenia Airbus ticket for a trip coming from Paris and Marseille to Comoros passing through Yemen.  This plane had 153 people when it plunged in the water on Tuesday while approaching Grande Comore airport.  Only a 12-year-old girl survived.

Her husband, a Muslim teacher named Youssouf Mahamoud, traveled to Comoros after hearing the crash.  Some of his emergency money for the trip was raised by neighbors and friends in his low-income apartment.  He would still need a plane ride back and the family will extremely appreciate any help they can receive.

Before the crash, Mahamoud had been sending his earnings back to his family.  Donations for the family trust fund can be made at any branch of TD Canada Trust.  The bank will accept any cash or check that’s made out to Mohamed Mahaoud in trust.

Tags: donations, Ensumata Abdoulghani, Indian Ocean, plane, plane crash, TD Canada Trust, trust fund, Yemenia, Youssouf Mahamoud
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Common Answers about Trusts and Wills

Thursday, July 2nd, 2009

There are no additional filings or fees in setting up a trust.  However, it’s likely more complicated and more expensive compared to drawing up a will.  The costs vary widely - it would depend on the complexity and size of the estate - attorneys could charge several thousands of dollars on these documents.  But for most basic estates, wills could cost about $500 each, according to Steve Akers, a managing director of a New York wealth-management firm named Bessemer Trust Co.

Anybody having possession of your will (usually your attorney) is obligated to file it in the courts upon your death.  Therefore, Akers stressed that you should leave copies of your trusts with your designated trustees or attorneys.

A common reason for choosing to set up a trust instead of a will is to avoid the court proceedings.  These wills need to be filed in probate court in order to be executed, which means that they become public documents.  Costs could be between 1-3% and administrative court fees would come out of the estate.  Use of wills are more common in states that have simpler court procedures and hearings are quick (sometimes even for 15 minutes).  While with trust, your assets will be simply transferred to designated trustees (or trustee) upon your death.

Tags: attorney, attorneys, Bessemer Trust Co., court, Steve Akers, trust, trustee, trusteees, will, Wills
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Family Trust of Michael Jackson Controls His Estate Decisions

Tuesday, June 30th, 2009

Michael Jackson Family Trust was set up as the entity to be used in helping out the recipients of Jackson’s will.  Most importantly, this trust will control Michael Jackson’s estate.  As dictated in his will, he’s giving all his estate to the family trust where all assets will be managed as one rather than separate entities.  This will make it easier for the executors.  Having the trust in place will also help his children in the long-term as well.

In his will, Michael outlined exactly what needs to take place.  Section III of the will drafted in 2002 states that “I’m giving my entire state to the Trustee/s under that certain Restated and Amended Declaration of Trust…All such assets shall be distributed, managed, and held as part of said Trust…”

In other words, Trustees of Michael Jackson Family Trust will have great power when it comes to his assets.  However, if you read between the lines, it would mean that they’ll also need to over-see how many monetary assets as well as the intervals when Michael’s kids will see these funds.

Trusts like these need to be set up to help people awarded with physical and monetary assets in a will.  It will also allow the Trustees to disperse assets at the right time and advise the kids along with it.  Jackson’s mother, Katherine, will retain some rights as guardian of his children; therefore, she has a vested interest in this estate.

Tags: estate, executors, Family Trust, Katherine, Michael Jackson, trustee, trustees, trusts, will
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Addressing Control of Family Trust

Monday, June 29th, 2009

When you own your own business, there are many things to think of.  Often, ensuring that your personal, business, and financial affairs are in order in case of your death takes low priority.  But if you don’t address this issue, your business ownership may pass on to the wrong people.  “And if you have young or handicapped children, you may want to ensure that their future is financially secure,” writes Max Newnham.

Nowadays, there’s a lot of confusion on how discretionary trust affects one estate.  Also, a person who controls the family trust just because they’re the trustee can’t deal with the trust assets through their will.  Moreover, if the business is owned by trust, the business control is not affected by a person’s will.

There’s common misconception that all power belongs to the trustee.  However, the true power lies in the person called the appointer.  Sure, the day-to-day control of trust is given to a trustee; however, the appointer can remove and appoint a new trustee.

In other words, business owners who bequeath shares in their trustee companies may mistakenly believe that they’ve chosen the person they want to have control of the business.  Normally, the business owner will also be the appointer; but when they pass away, it’s their personal legal representative - which is often the executor - who assumes this power.  So even if the executor is not one of the shareholders in the trustee company, they can still assume business control by appointing themselves and removing your assigned trustee.

Tags: appointer, business, discretionary trust, estate, executor, Family Trust, financial, Max Newnham, ownership, trustee, will
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Trust for Special Needs

Friday, June 26th, 2009

When children have special needs, the parents would most likely worry about their future.  After, they’re gone, they are wondering who will take care of the needs of these children.

So if you’re a parent with this concern, you might consider “special needs trust.”  This is a trust used for disabled children.  It’s designed so that a child can receive government aid and still receive the benefits or inheritance from their parents.  The extra money can be used to enhance their self esteem and improve the quality of their life.  These items may include salon services, appliances clothing, automobiles, and computers.  However, it cannot be used for cash, food, or rent.

Wait-and-See Approach Trust and Omnibus Budget Reconciliation Act (OBRA) Trust are widely used.  Wait-and See Approach is used for high functioning child that may need government aid later while the OBRA is used when a child with special needs receives money from a lawsuit award or inheritance before trust is established.

Setting up a special needs trust may cost a little more, but remember that it’s a one-time setup cost.  You can have quick access to privacy and funds as well as avoid estate taxes.

Tags: children, OBRA, special needs, special needs trust, Wait-an-See Approach
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Trust Fund Spending Defense

Thursday, June 25th, 2009

Dan Winkler spent over five hours on a witness stand on Tuesday to answer questions about using donations from Huntingdon Church Christ Fund in caring for his granddaughters.  Attorneys for Mary Winkler, the children’s mother, filed a motion that says legal expenses for Dan should be paid back because donations for this fund were primarily solicited to care for and provide future education for the Winkler children.

Mary was convicted of manslaughter for the 2006 killing of Matthew Winkler, her minister husband and also the children’s father.  In the court, Dan said that $226,525.26 was collected in Huntingdon fund and $215,341.75 worth of expenses was withdrawn from this account.  “The current account balance according to records is $11,183.51 because I don’t think more funds were deposited into it,” he testified.

He was co-signatory on the account during the grandchildren’s care, and the church elders informed him that he needs to be taken off it because the funds are being used for attorney’s fees.  Winkler defended himself by saying that the money goes to litigation - he sued Mary to terminate her parental rights so that he (and his wife) could raise the children.  He also said that he never withdrew money from the family trust fund; he just made withdrawals from the account in Huntingdon to reimburse the expenses incurred for the children.

Tags: attorneys, Dan Winkler, Family Trust, Huntingdon, Mary Winkler, Matthew Winkler, trust fund
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Money is thicker than Blood?

Tuesday, June 23rd, 2009

A business lawyer in Toronto, Bliss White, said, “You need to manage succession so that you won’t run into disputes.  You usually run into disputes when you’re in the second generation and other siblings are involved.  An “issue of fairness” will rise, which will create tension and may spillover into a brawl in the family.  These disputes come up when the parties try to take advantage of each other.

“Greed is often the root of family fights,” said Bryan Haynes, corporate lawyer in Calgary.  “It seems that money is now thicker than blood.  However, the problem festers due to lack of succession planning,” he reveals.

Moreover, a lawyer in Toronto, David Malach, said “One way that the family can have peace is for the parents to maintain the company’s voting control through family trust.  It may be structured properly so that the next generation can benefit from the company’s growth.  In the meantime, the parents still maintain control and keep the children in line.”

“Communication is the key.  The founder must make sure that everyone understands the reasons in deciding the roles that each of them will have in the business,” Malach added.  Furthermore, lawyers say that a shareholder’s agreement is also an important document to make when the founder plans to pass the company to the next set of owners.

Tags: Bliss White, Bryan Haynes, business lawyer, Calgary, corporate lawyer, David Malach, disputes, Family Trust, lawyer, shareholder's agreement, siblings, Toronto
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Advantages of Revocable Family Trust

Sunday, June 21st, 2009

A trust can only be effective if you own the title to the asset or property.  Remember that when you transfer your assets’ title into trust, it’s called “Funding your Trust.”  And when assets are already moved, then there’s no need for probate because the control of the estate is now transferred to the trustee.

Here are some advantages of using revocable family trust:

• -If ever an accident or illness leaves you incapacitated, then your successor trustee would be able to handle your financial affairs - the court will not need to appoint any conservator or guardian.
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• -If beneficiaries are minor children, the trust continues to hold assets until the children reaches a more mature age.
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• -If you own real estate properties in several states, you can avoid the hassle, time, and expense of multiple probate proceedings.
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• -Husbands and wives can maximize federal estate tax exemptions.
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• -Trusts are more difficult to contest compared to a traditional will. In order to invalidate it, either you prove that it’s signed under duress or the maker was incompetent during the signing day.
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• -It’s almost impossible to contest family trusts. When wills are contested, the assets are usually frozen, however, assets placed in family trusts can still be distributed pending the legal challenge outcome.

Tags: advantages beneficiaries, asset, estate, Family Trust, family trusts, probate, property, trust, trustee, trusts
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Getting to Know Family Trust

Friday, June 19th, 2009

A family trust is also known as a living trust or revocable living trust.  It’s a legal document holding ownership or title to your assets and real property.  When you create a family trust, it means that you will transfer the ownership of your assets to this trust.  This asset transfer is typically called “funding.”

You do not relinquish control when you transfer title.  Therefore, you can still borrow, buy, or sell.  Family trust may look similar to a will because it includes information and details of the instructions for your estate at your death.  Unlike wills, however, properly funded trusts:

• -Do not go through probate,
• -Give you control over assets you’re going to leave to your children or grandchildren, and
• -Prevent courts from controlling assets at incapacity.

In other words, you will not lose control of your assets when you write a family trust.  Also, it enables you to pass the property to your family or loved ones after your death.  In addition, it allows you to pick out a successor trustee (or any appointed person) to make sure that your property will go to the people you chose when you pass away.  As a result, you’ll have peace of mind.

Tags: assets, estate, Family Trust, funding, living trust, probate, property, revocable living trust, successor trustee, title
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