Month: November 2016

Get a Life Insurance Check-up to Be Sure the Prognosis Is Good

Insurance planning shouldn't begin until there's been some financial planning, according to CNBC in its article “3 life insurance mistakes you can easily avoid.” They cite three common mistakes that can be easily avoided or fixed: 11-03-2016

  1. Not enough insurance. About 37% of parents with young children don't have sufficient life insurance, according to a 2015 report. Of those who do have insurance, 50% have less than $100,000 in coverage. Do a thorough analysis of your life insurance needs to be sure you’ve enough to cover funeral expenses, replace your income for the family and cover debts like the mortgage.
  2. Not reviewing your medical records. You should ask for a copy of your medical records from your primary care physician before applying for life insurance because the insurers will get those records, as well. They’ll look at your medical history to gauge risk and determine rates. There could be potentially costly mistakes in the record that should be fixed.
  3. Focusing on avoiding estate taxes. You may have your spouse own the life insurance policy on you so that you can be smart with your estate planning. Since you don't own the policy, it won't be included in your estate when you die. However, what’s known as "three-corner life insurance"—where the owner, insured and beneficiary are all different is to be avoided.

This three-corner configuration has the effect of transforming the policy proceeds into a gift from the policy owner to the beneficiary but anything above the annual $14,000 annual gift tax exclusion would be considered a taxable gift to the owner. That would decrease his or her annual lifetime exclusion.

Reference: CNBC (Sept. 16, 2016) “3 life insurance mistakes you can easily avoid”

Librarian’s Estate Plan Includes $4 Million Gift to School

 

A former University of New Hampshire librarian’s $4 million gift to the school has received considerable attention due to the way the school opted to use the funds. This uproar is a reminder that estate planning is important, especially if you’re particular about the way you want your money used. 11-02-16

This is the message in the credit.com article “The Lesson We Can All Learn From the Librarian Who Left a Fortune to His Former Employer.”

Robert Morin, a university librarian for nearly 50 years, gave his entire estate to the school when he died in 2015. He designated that $100,000 go to the library but didn’t say how the remaining money should be spent, according to UNH. The school said it plans to spend $2.5 million of the proceeds on a student career center, and another $1 million on a video scoreboard for the school’s football stadium.

The scoreboard upset some people. They said using 10 times the amount dedicated to the library for a scoreboard goes against Morin’s interests—especially his austere lifestyle—which is the reason he could save such a large sum of money.

Think about the amount of flexibility we have in dictating our wishes when it comes to leaving money to others in our estates. A will or living trust can give instructions to do anything that’s not illegal, so you can put in pretty much anything you want.
Here are a few things to consider when deciding who will receive proceeds from your estate and how much:

Specific Amounts. Use caution when stating specific dollar amounts in your will or trust, especially when coupling charities and family as beneficiaries. An estate can lose value over time, so the $100,000 you want to leave to the Alley Cat Allies can sound terrific when your estate is valued at $1 million. However, if it plummets to $150,000, it will leave little for your family. Instead, use a percentage of the estate instead of a specific dollar amount and add a restriction that the amount is not to exceed a specific dollar amount.

Name Charities as Beneficiaries. Rather than mixing charities and family members in your will, make a charity a beneficiary of a retirement account. The money will then go to the charity tax-free, and, if you want to change which charity receives your donation, you only need to change the beneficiary on your IRA or 401K instead of rewriting your will.

As with most estate-planning issues, it’s smart to speak with a qualified estate planning lawyer instead of trying to do it yourself—especially if you have substantial assets and/or multiple beneficiaries.

Reference: credit.com (Sept. 19, 2016) “The Lesson We Can All Learn From the Librarian Who Left a Fortune to His Former Employer”

Former Vanity Fair Contributing Editor Makes Headlines with Estate Dispute

The 63-year-old Wolff, who is married, is also the father of a baby with a much younger TV personality. He now is also a defendant in the new Manhattan civil suit with his estranged spouse, attorney Alison Anthoine. Wolff was under the impression that he’d settled a suit with his 93-year-old mother-in-law and his wife’s three siblings in 2011 over family real estate, as reported in The New York Post article, “Ex-Vanity Fair editor tangled in $6M legal battle with in-laws.” 11-01-16

The settlement allows matriarch Edith Anthoine to live in the one-bedroom apartment until she dies, with access for Alison permitted two times a year. The settlement was reached after a judge found there was evidence supporting Edith’s claims that she’d swapped a four-bedroom on Lexington Avenue and 77th Street with Michael and Alison in exchange for her one-bedroom apartment. Edith claims the two later attempted to evict her, which resulted in her suffering a heart attack.

Nina, Robert, Nelson and mother Edith Anthoine are suing Wolff and Alison. They claim the two stole artwork from her home, took a box of antique jewelry and refused to share proceeds from the sale of a $1.85 million Manhattan apartment.

Alison, who lives apart from Wolff, visited her mother’s home in June 2015 to photograph artwork. This escalated to violence with Alison grabbing her sister’s arm and hitting her mother’s hand, according to court papers.

The lawsuit says the two “have stolen millions to support their lavish lifestyles.” The papers petition the court to disbar Alison—in addition to the $6 million in damages.

The family has been fighting over the multimillion dollar estate of Alison’s father, the late Columbia Law School Professor Robert Anthoine. The thrice-married attorney passed away in 2015 at 94. A will contest is still pending in Florida.

“These defendants have been the ultimate recipients of their parents’ bounty, in every way, and they represent an unchecked greed that has swept the society,” the New York suit says.

Wolff said he didn’t know about the lawsuit.

Reference: New York Post (September 12, 2016) “Ex-Vanity Fair editor tangled in $6M legal battle with in-laws”