Central Tennessee Estate Planning Blog

What is a spendthrift trust?

On behalf of Richardson & Richardson Law, LLLP on Thursday, April 11, 2019.

Most parents continue to love their children regardless of any faults the children have. However, that does not mean that every parent feels comfortable leaving a large, lump sum inheritance to their children without any limitations. If you worry about your hard-earned money being squandered by your beneficiaries, you might consider creating a spendthrift trust.

In general, a trust is an estate planning tool that can help manage property during your lifetime and can supplement or replace a will after your die. However, one of the most important ways trusts differ from wills is that property that passes to beneficiaries from a trust does not have to go through probate. By avoiding probate, you can spare your beneficiaries the time, expense and public record associated with probate. There are many different kinds of trusts, and each one serves a slightly different purpose.

Karl Lagerfeld's estate planning leaves millions to beloved pet

On behalf of Richardson & Richardson Law, LLLP posted in estate planning on Wednesday, March 6, 2019.

Karl Lagerfeld's impact on the world of fashion is undeniable, and his legacy will live on for years and years to come. However, the fashion guru spent his time doing more than just designing clothes -- he was also designing a very specific estate plan. His estate planning priorities seemed to focus around ensuring inheritances for his named heirs, including his pet cat. While Tennessee pet owners do not need to leave behind millions for their pets' care, they can still make sure their four-legged friends are well cared for.

In 2018, Lagerfeld spoke with Numero magazine and disclosed that he had named his beloved cat Choupette as one of the heirs to his fortune. The feline is reportedly set to receive as much as $300 million. While Lagerfeld was born in Germany and passed away while living in France, there are plenty of U.S.-based celebrities who are planning to leave a significant sum to their beloved animals.

Are retirees doing enough estate planning?

On behalf of Richardson & Richardson Law, LLLP posted in estate planning on Wednesday, February 20, 2019.

Although the thought might be uncomfortable, the reality is that no one can escape death, so it is best to be prepared. Most people in Tennessee would probably agree that estate planning is an important part of being prepared, but are people following through with this notion? According to one study, not really.

The study from Merrill Lynch and Age Wave looked at the prevalence of estate planning among Americans who are 55 or older. They discovered that only 55 percent of people in this age group have a will. Wills are the bare minimum when it comes to estate planning, though. For most people, the combination of a will, living will and durable power of attorney can provide the best protection both before and after death. Only 18 percent older than 55 have all three.

Is avoiding probate possible?

On behalf of Richardson & Richardson Law, LLLP posted in probate and estate administration on Tuesday, February 5, 2019.

The aftermath of a loved one's death involves more than just grieving that loss. Tennessee families are generally still tasked with handling a person's estate, which can be an overwhelming prospect, particularly when probate is involved. However, with careful planning, some individuals may choose to construct their estate plan in such a manner that it successfully circumvents probate altogether.

Probate is not an inherently bad process. Simply put, it is the process of distributing a person's property under court supervision. This includes things like paying creditors, distributing inheritances to heirs and following other wishes as outlined in the will. To accomplish all of this, an estate must pass through several steps, including having the will authenticated.

Estate planning when an heir struggles with addiction

On behalf of Richardson & Richardson Law, LLLP posted in estate planning on Tuesday, January 22, 2019.

Deciding how to leave assets to family members can be difficult enough as it is, but there are certain factors that can complicate things. These can be things like an heir's age, maturity and responsibility when it comes to financial matters. However, estate planning when a family member is struggling with addiction can be especially difficult.

In general, it might not be advisable to leave a lump sum inheritance to a Tennessee family member who is either currently dealing with an addiction or has in the past. This does not mean that this person has to be left out of an estate plan altogether, though. An incentive trust may be a good solution to this particular problem.

New rule now benefits estate tax exclusion

On behalf of Richardson & Richardson Law, LLLP on Tuesday, January 15, 2019.

The ability to use the increased exclusion offered in the 2017 Tax Cuts and Jobs Act enacted by Congress needed some revision, and the IRS and Department of Treasury has done just that.

At issue is the gift and estate tax exclusion. The exclusion in 2017 was $5 million, but in 2018 – thanks to the new law – the exclusion jumped to $11.18 million. The exclusion will remain and be indexed for inflation until 2025, when it will drop back to an inflation-adjusted $5 million

Is estate planning right for you?

On behalf of Richardson & Richardson Law, LLLP posted in estate planning on Thursday, January 10, 2019.

Creating an estate plan is not a priority for many people in Tennessee. Some even view estate planning as wholly unnecessary or a practice reserved only for the very wealthy or those who own lots of assets. While it is true that an estate plan is important for both of these situations, it is also important for virtually every adult in every stage of life. Consider these estate planning steps for a better idea of how important an estate plan can be.

In general, a will is one of the first documents people create when making an estate plan. However, before anyone can create a will, they must first identify all of their assets. This includes listing out all property, bank accounts, retirement accounts, life insurance policies and more. This step gives people a better picture of what they have to leave behind, which can make it easier when deciding who gets what. Even those individuals who do not have much property or accounts should still do this step, as they can update their wills when necessary.

The end of a marriage means estate planning changes are necessary

On behalf of Richardson & Richardson Law, LLLP posted in estate planning on Monday, December 24, 2018.

The end of a marriage will bring about significant changes in a person's life, but it is important not to overlook the potential changes that also need to be made to an existing estate plan. When a person separates from or divorces a spouse, he or she likely does not want that person as a beneficiary or making medical decisions on his or her behalf. Tennessee readers would be wise to make the estate planning changes necessary to protect their interests.

It is smart to remove an ex-spouse from a will, but that person could still be mentioned in other estate planning documents as well. One important step is to review a will but also not to overlook potential adjustments that need to be made in things such as medical directives and powers of attorney. It is also useful to review anything that could name a spouse as a beneficiary or any type of personal representative.

Should young adults even worry about estate planning?

On behalf of Richardson & Richardson Law, LLLP posted in estate planning on Thursday, December 13, 2018.

For young adults in Tennessee, some things in life may not feel urgent. Estate planning, for instance, is often eschewed by young adults -- particularly millennials -- because the idea of dying not only feels far away, but is also an uncomfortable thought. However, setting aside these feelings of discomfort to craft a comprehensive estate plan is essential for everyone regardless of age.

Creating a will is a popular first step toward estate planning. This involves listing all of a person's assets and then designating how they would like them distributed upon their death. This includes things like vehicles, finances and even virtual property. That is right, even social media passwords and email login information counts as property and should be put in a will to avoid any frustrating issues for family members.

Estate planning: IRS plans to raise estate tax limit

On behalf of Richardson & Richardson Law, LLLP posted in estate planning on Wednesday, November 28, 2018.

The idea of an estate tax might be uncomfortable for some people in Tennessee, but continuing changes to the current estate and gift tax exemption may come as good news. The Internal Revenue Service announced that it will increase the current exemption, which is a temporary measure established through recent tax cuts. This new information is important to take into account during estate planning.

In 2000, the exemption for the federal estate tax was $675,000 for individuals. Although this might seem like an extremely high limit, it can actually be quite easy to hit once the entirety of a person's estate. Assets like homes, vehicles, retirement savings accounts, life insurance policies and more could all end up being lumped into an estate's worth without the proper estate planning, which left many people vulnerable to a heavy federal tax.