When a parent dies, siblings may battle for years over their inheritance. For example, a sibling of the late guitarist Jimi Hendrix and a company affiliated with another sibling recently reached a tentative settlement in a suit involving the Hendrix estate. Their father, Al Hendrix, died in 2002 and left Jimi Hendrix’s estimated $80 million estate under the sole control of one of the siblings. Jimi Hendrix died without a will in 1970. For estates of all sizes, many of these sibling battles can be avoided, estate lawyers and financial advisers say. That can require more than simply writing a will. Leaving detailed instructions regarding jewelry and other family valuables, appointing a professional fiduciary as executor and communicating your wishes before death are a few ways to prevent your heirs from battling it out once you’re gone. Battling over a $15 watch Fights over Mom’s or Dad’s possessions—whether it is a prized watch, lucky five iron or wedding ring—is a common area of conflict in estate settlements, advisers say. Even if the object isn’t of great financial value, the emotional attachment can make it priceless in the eyes of heirs. Parents should anticipate that heirs may have sentimental attachments to certain objects, and they should plan ahead to smooth over conflicts and right any perceived wrongs. Michael Wernersback, regional estate-settlement manager for Wells Fargo Private Bank in Bay St. Louis, Miss., recalls a particularly ugly example of two sisters who fought over their late mother’s jewelry—specifically a $15 watch […]
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(Photo: Desert Valley Times) The use of a revocable trust (sometimes referred to as a “living trust” or “family trust”) to plan one’s estate has become very popular. Despite the popularity of the revocable trust, revocable trusts are not without their potential problems. First, it is important to understand that there is no definitive answer as to whether a trust is necessary. Another estate planner explained that asking whether a revocable trust is good or bad is like asking whether a wrench is good or bad. It depends on what you are trying to accomplish. A trust is just an estate planning tool. Whether it is good or bad depends on your needs and desires. Although there are many factors to consider in determining whether a revocable trust is right for you, here are a few of the more significant factors: Avoiding Probate It is true that a properly funded trust avoids probate. If the goal of the client is to avoid probate, it is critical that the trust be properly funded. To “properly fund” a trust, title to all assets and beneficiary designations for insurance policies and retirement accounts must be reviewed. A properly funded trust avoids probate because the owner of the assets (generally termed the trustor, settlor, grantor or trustmaker in the trust document) conveys ownership from him or herself (in his or her individual capacity) to him or herself as trustee of his or her trust. Probate is avoided because for “probate purposes” the deceased […]
