This e-zine was originally sent on January 29, 2010.  It may have been edited somewhat from the version that was originally emailed, so be sure to sign up to make sure you are getting our e-zines fresh!

“If you keep thinking about what you want to do or what you hope will happen, you don’t do it, and it won’t happen.”

- Desiderius Erasmus

Hi Aaron,

I hope you’ll allow me to be a proud dad for a minute. My youngest daughter (the six year old), got first place in first grade at her school’s science fair this week!  It was a project having to do with measuring different amounts of baking soda mixed with vinegar and how much it blew up a balloon.  Very fun!  She definitely gets her science gene from her mom — not me that’s for sure!

Well, I thought I’d talk a little this week about some changes in the estate planning laws.  You might have heard that the estate tax has been “repealed” for 2010.  While, this may be good news for a few families, something like 6,000 or so, but for the rest of us…

It’s not all rosy.

Read on to hear what I mean…

Aaron Miller’s

“Straight Talk” Personal Strategy

Married Couples Affected By New Estate Environment

Because of a Congressional failure to act before the end of 2009, there’s good news and bad news to report on the Estate Planning front.

The good news is there’s no Estate Tax if you die this year.  The bad news is, that you may owe significant capital gains taxes if a loved one dies this year and leaves you significant appreciated assets. If you have total assets of around $1 million or more (including face value of life insurance, retirement plans, home equity, etc.) you should make sure their estate plan is up to date.

Congress has had nine years to prevent this from happening, but has failed to act.

Under the provisions of a tax-cut bill enacted in 2001, the estate tax exemption has been gradually raised over the past eight years, while the tax rate on estates has been reduced.

For estates of those dying in 2009, only assets worth $3.5 million or more were subject to estate taxes, at a rate of 45 percent. But now, for the year 2010, the estate tax has disappeared entirely, only to be restored in 2011 at a rate of 55 percent on estates of $1 million or more, which is exactly where things stood before the 2001 change.

Many Couples At Risk

The new world of “no estate tax” places at particular risk certain couples who have built in “Credit Shelter” trust provisions (also called “Bypass Trust” or “Family Trust” provisions), which are designed to allow both spouses to take advantage of their estate tax exemptions.

These are common arrangements used in estate planning for married couples. With the estate tax gone, one possible problem is that the wording of some of these trusts could cause all assets to completely bypass the surviving spouse when the first spouse dies. For a more detailed explanation of this potential problem, see this blog posting:

http://www.ncestateplanningblog.com/2010/01/articles/estate-planning/the-estate-tax-is-gone-for-now-estate-plan-updates-are-imperative/

Everyone — Especially Married Couples — Should Have Their Estate Planning Reviewed ASAP.

Because of these tax changes, a review of your existing estate planning documents is essential.

Hope that helps!

To your family’s wealth, health, and happiness!

Aaron Miller

Miller Law Firm, PLLC
Your Life is Our Life’s Work
101 E. Park Blvd., Suite 600
Plano, Texas 75074
Connect via: Facebook Twitter LinkedIn

PS–If you are receiving this and are NOT a subscriber to our weekly “Straight Talk” Personal Strategy Email series, click here to sign up.

To ensure we don’t make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this for the addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you have received this message in error, please advise the sender immediately by reply e-mail and delete this message. PHEW!

This e-zine was originally sent on January 14, 2010.  It may have been edited somewhat from the version that was originally emailed, so be sure to sign up to make sure you are getting our e-zines fresh!

“The whole idea of motivation is a trap. Forget motivation.  Just do it. Exercise, lose weight, test your blood sugar, or whatever. Do it without motivation. And then, guess what?  After you start doing the thing, that’s when the motivation comes and makes it easy for you to keep on doing it.”

- John C. Maxwell

Hello,

This week my oldest daughter turned 12!  She and her mom are planning a mystery party, which should be a lot of fun for the kids.  Other than the party, I think she was most excited about getting to ride in the front seat (remember when that wasn’t such a big deal when we were kids – no air bags!).  I guess it won’t be too long until she’s sitting in the driver’s seat.  I don’t know if I’ll ever be ready for that.  For now though, I’ve got to remember to keep the junk out of the front seat so she has a place to sit!

Oops, I probably should have said this before — I’m not trying to frighten you. Yes, the people I mentioned in that subject line have passed on to a different place, but I’m not suggesting you’re next!

Anyway, what’s interesting about these celebrities is that each one of them made some major mistakes in their planning BEFORE tragedy struck…and it cost their loved ones dearly.

And, I thought you’d be interested to learn some of these “behind the celebrity” stories I ran across. They’re from a new book called Trial & Heirs by Andrew Mayoras, a probate litigator, and they make for interesting reading!

Let me know your thoughts!

Aaron Miller’s
“Straight Talk” Personal Strategy
Estate Planning Mistakes of the Rich & Famous

Florence “FloJo” Griffith Joyner

Mistake: Not telling your executor where to find your original documents.

When Olympic sprinter Florence Griffith Joyner died at 38, in 1998, her husband couldn’t find her original will, and failed to file it with the probate court within 30 days of her death, as required by California law. Joyner’s husband and mother took disputes, including whether Joyner promised her mother could live in their house the rest of her life, to court. Joyner never filed the original will, and the judge eventually appointed a third party to administer the estate.

Our Lesson: Make sure at least two people you trust know where to find your original will. To be safe, keep two copies, and leave the original in your bank safety deposit box, or in a safe here at our offices.

Doris Duke

Mistake: Bad choice of executor.

Tobacco heiress Doris Duke, who died in 1993 with a fortune estimated at $1.3 billion, named her butler as executor and as trustee for a huge charitable foundation. After the butler’s lifestyle and spending habits were called into question, he was removed from his duties by a probate judge, then reinstated by New York’s highest court. A settlement agreement created a board of trustees to manage the foundation.

Our Lesson: Don’t have the butler do it. Pick someone competent and trustworthy as your executor. And, of course, we can help you with that!

Princess Diana

Mistake: Relying on a “letter of wishes” to give away belongings.

After her tragic death in 1997, Princess Diana left a detailed will–naming her sister and mother as executors. She also wrote a separate “letter of wishes” asking her executors, at their discretion, to divide her belongings among her sons and her 17 godchildren. But instead of getting stuff worth an estimated 100,000 pounds, each godchild got only a trinket.

Our Lesson: Don’t rely on executors’ sense of duty; put bequests in your will or trust or in a signed, dated list.

Jimi Hendrix

Mistake: Never writing a will.

Music legend Jimi Hendrix died at age 27 in 1970 without a will. Under state law, his dad, Al, got everything, leaving his close brother Leon with nothing. Al built Hendrix’s musical legacy into an $80 million venture, but, in his own will, he cut out Leon and his family, in favor of his daughter through a later marriage.

Our Lesson: Even young rock stars aren’t immortal. Sign a will or living trust document.

Ted Williams

Mistake: Conflicting directions on burial wishes.

In his will, baseball legend Ted Williams said he wished to be cremated. But his two children from a second marriage produced a grease-stained note saying he wished to be put in “biostasis” after his death, and they froze his body after his death in 2002. It’s become a bit of a macabre joke in the sports community, unfortunately. His eldest daughter fought to have his body unfrozen and cremated, but gave up the fight when she ran out of money.

Our Lesson: If you change your mind about your burial wishes, change your will by adding a codicil, or writing a new one.

I hope these stories help you avoid becoming a celebrity cautionary tale!

To your family’s wealth, health, and happiness!

Aaron Miller

Miller Law Firm, PLLC
Your Life Is Our Life’s Work!
101 E. Park Blvd., Suite 600
Plano, Texas 75074
Connect via: Facebook Twitter LinkedIn

PS–If you are receiving this and are NOT a subscriber to our weekly “Straight Talk” Personal Strategy Email series, click here to sign up.

To ensure we don’t make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this for the addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you have received this message in error, please advise the sender immediately by reply e-mail and delete this message. PHEW!

This e-zine was originally sent on January 1, 2010.  It may have been edited somewhat from the version that was originally emailed, so be sure to sign up to make sure you are getting our e-zines fresh!

“Be miserable. Or motivate yourself. Whatever has to be done, it’s always your choice.”

- Wayne Dyer

Hi Collin County,

Happy New Year!

It’s a slow week around here, after Christmas.  Santa managed to find four(!) Zhu Zhu pets, so the younger two girls were very excited.  (Our oldest couldn’t have been bothered about them.)  The kids have torn through all the rest of their presents and are now working through those gift cards they’ve racked up.  My folks are down visiting my sister in College Station and we have my mother in law in town now.  When she came in this week, she said she felt like she was checking in to the Miller Hotel!  We sure do love do have our folks come to visit – I just wish we could talk them into living closer!

Believe it or not, there is quite a bit of talk right now about estate tax in some circles. The estate tax is set to expire at the end of this year, but that was only going to last for another year until it came back in 2010 at a much lower rate.  That is still the law right now [as of the time this e-zine originally went out], but no one thinks it is going to last – Congress just hasn’t gotten around to “fixing” it right now.  Here’s an article from two weeks ago about this confusing process from the WSJ:
http://online.wsj.com/article/SB126090367887892391.html

Not much has changed since then.

But no matter what Congress does or doesn’t do, it won’t matter for most people because Estate planning is MUCH more than avoiding the estate tax.

In my opinion, this is why so many regular families get taken by surprise when they least expect it–after all, their estate wouldn’t be subject to the estate tax.

But then they get socked with all kinds of other fees, maybe even placed in probate and their wishes aren’t honored by the courts.

All because they never went through the process with someone like us.

Now, most of our clients know this already, which is why this email is perfect to send to your friends and extended family. It’ll be a true gift–peace of mind!

So, in that vein, I’m continuing my series from a couple weeks ago and doing some “myth busting”. Read on…send your feedback…

Aaron Miller’s

“Straight Talk” Personal Strategy

Part 2: Common Myths About Estate Planning

A few weeks ago, I wrote about these common myths–still held by the majority of Americans.

In fact, as of this writing, it’s a fact that almost 60% of Americans don’t have a basic will, and that’s a big problem.

Much of the reason for this is because of misconceptions about estate planning, and I dealt with two already:

Myth 1. Only rich people prepare estate plans.

Myth 2. Everything goes to your spouse, if something happens.

Well, I’ve got three more for you to chew on, and dispense with.

Myth 3. After I create my will or living trust, there’s nothing else to think about.

Well, if you follow this line of thinking, it could lead to a lot of problems. For instance, once you set up a trust, you need to re-title the assets you want to transfer to the trust. Otherwise, the trust doesn’t help a thing.

On top of that, families need to periodically update their will or trust to reflect major life events, such as a divorce or the birth of a child. You’ll also want to revisit your estate plan if you move to another state.

In fact, it’s a good idea to meet with us every 3 years to make sure your plan is fully up-to-date. (Which, incidentally, we provide free to all of our clients. Ask us about that.)

Myth 4. If I have a will, my estate automatically won’t go through probate.

Well, again–that’s not the case. Probate is a  process in which a court determines whether a will is actually valid and ensures that relatives and creditors are notified. This process can take several months and drain money from your estate.

So here’s one way to avoid that entirely–create that living trust. Essentially, a living trust is a legal document you create which holds property (such as brokerage accounts and real estate). When you die or are incapacitated, the property is smoothly transferred to your beneficiaries. This transfer occurs outside of the probate process, which can save a TON of hassle.

Not everyone needs one of these documents, but it’s something which you can’t paint over with a broad brush. Which is why it’s important to walk with a competent guide on these matters.

By the way, if you own property in more than one state, a living trust is a no-brainer. Going through probate in multiple states can be a nightmare.

Another advantage to a living trust is privacy. A will is a public document, and anyone can come to the probate hearing to see if any fights break out. Living trusts aren’t published in any courthouse, so people can’t gain easy access to them. That’s quite nice.

Myth 5. I could be held responsible for a deceased parent’s debts.

No, you’re not responsible for credit card debts from your parents.

In general, children aren’t responsible for a deceased parent’s debts, and in some cases spouses are often exempt as well. Again…you can’t paint it with a broad brush. But as a general rule, the estate is responsible for paying debts. If there isn’t enough in the estate to cover the amount owed, the debts usually go unpaid.

Most of all, we’re here to help.

To your family’s wealth, health, and happiness!

Aaron Miller

Miller Law Firm, PLLC
Your Life is Our Life’s Work
101 E. Park Blvd., Suite 600
Plano, Texas 75074
Connect via: Facebook Twitter LinkedInn

PS–If you are receiving this and are NOT a subscriber to our weekly “Straight Talk” Personal Strategy Email series, click here to sign up.

To ensure we don’t make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. This message may contain confidential and/or privileged information. If you are not the addressee or authorized to receive this for the addressee, you must not use, copy, disclose, or take any action based on this message or any information herein. If you have received this message in error, please advise the sender immediately by reply e-mail and delete this message. PHEW!