Did John le Carré Have an Estate Plan?

John le Carré, the well-known author of Tinker Tailor Soldier Spy, passed away recently. He was born in 1931 and spent time working for the Security Service and the Secret Intelligence Service in Great Britain during the 1950s and 1960s. He used this material for many of his best-selling novels.

Wealth Advisor’s recent article entitled “John le Carré dead: What was famous spy novelist’s net worth? Author’s fortune unveiled” reports that the author started working for the secret services, while studying German in Switzerland in the late 1940s. After a few years of teaching at Eton, he joined the British Foreign Service as an intelligence officer. During his career at MI5, he was inspired by his colleague (novelist John Bingham) to begin penning novels using the pseudonym of John le Carré.

Jonny Geller, CEO of the Curtis Brown Group described le Carré as an “undisputed giant of English literature.”

“He defined the cold war era and fearlessly spoke truth to power in the decades that followed … I have lost a mentor, an inspiration and most importantly, a friend.”

“We will not see his like again.”

John Le Carré’s net worth is estimated at $100 million.

George Smiley was le Carré’s most famous character. The character appeared in the author’s 1961 debut, Call for the Dead, then in the 1962’s A Murder of Quality.

By the time Smiley was featured in the novelist’s third book, le Carré’s was famous.

The Spy Who Came in from the Cold was deemed “the best spy story I have ever read” by fellow author Graham Greene.

Three Smiley novels followed in the 1970s: Tinker Tailor Soldier Spy, The Honourable Schoolboy, and Smiley’s People. The novels were turned into TV movies and feature films, adding to le Carré’s considerable fortune. Most recently, The Night Manager, in 2016, starred Tom Hiddleston and Hugh Laurie.

The latest adaptation was The Little Drummer Girl in 2018, with Alexander Skarsgårdr and Florence Pugh.

Reference: The Wealth Advisor (Dec. 15, 2020) “John le Carré dead: What was famous spy novelist’s net worth? Author’s fortune unveiled”

 

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Did Robert Redford Have a Business Exit Plan?

Motley Fool’s recent article titled “What Robert Redford’s Sale of Sundance Can Teach Investors About Exit Planning” says that, in announcing the sale, Redford told the Salt Lake Tribune that he’s been thinking of selling for several years. However, he wanted to find the right partners. Broadreach and Cedar plan to upgrade the resort, add hotel rooms and build a new inn. The companies have also said that they will keep the resort sustainable and practicing measured growth, as well as also continuing to host the Sundance Film Festival.

The 2,600-acre resort has 1,845 acres of land saved from future development through a conservation easement and protective covenants. The 84-year-old actor has had a lifelong interest in the environment and in land stewardship. Redford and his family have also arranged with Utah Open Lands to create the Redford Family Elk Meadows Preserve at the base of Mt. Timpanogos. The gift will reduce Robert Redford ‘s tax liability on his estate.

Both Broadreach and Cedar have extensive hospitality experience, but neither looks to have much ski resort experience. However, they’re working with Bill Jensen, an industry legend, who recently left his role as CEO of Telluride Ski and Golf Resort in Colorado.

Business exit and succession planning can be difficult—in part, because people don’t like to address such unwelcome topics. Most investors don’t have the luxury of waiting years to find the right buyer, but the Redford deal does show that planning ahead may be critical to creating a mechanism that supports the vision for the property.

When selling a large investment property, you must first understand why you’re selling, and your desired end result. Of course, a return on investment is nice, but there may be other considerations, like in Redford’s case. Another key is ascertaining the updated worth of what you’re selling. Get a valuation, especially with an irreplaceable asset.

The structure of the sale is important. You will likely be liable for tax on your capital gains, so ask an attorney. If you’re also structuring your estate plans at the same time, you’ll need to know what amount you can give and what your heirs may have to pay. Talk to an experienced estate planning attorney to be certain that you’re covering all the bases.

Reference: Motley Fool (Dec. 12, 2020) “What Robert Redford’s Sale of Sundance Can Teach Investors About Exit Planning”

 

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SECURE Act has Changed Special Needs Planning

The SECURE Act eliminated the life expectancy payout for inherited IRAs for most people, but it also preserved the life expectancy option for five classes of eligible beneficiaries, referred to as “EDBs” in a recent article from Morningstar.com titled “Providing for Disabled Beneficiaries After the SECURE Act.” Two categories that are considered EDBs are disabled individuals and chronically ill individuals. Estate planning needs to be structured to take advantage of this option.

The first step is to determine if the individual would be considered disabled or chronically ill within the specific definition of the SECURE Act, which uses almost the same definition as that used by the Social Security Administration to determine eligibility for SS disability benefits.

A person is deemed to be “chronically ill” if they are unable to perform at least two activities of daily living or if they require substantial supervision because of cognitive impairment. A licensed healthcare practitioner certifies this status, typically used when a person enters a nursing home and files a long-term health insurance claim.

However, if the disabled or ill person receives any kind of medical care, subsidized housing or benefits under Medicaid or any government programs that are means-tested, an inheritance will disqualify them from receiving these benefits. They will typically need to spend down the inheritance (or have a court authorized trust created to hold the inheritance), which is likely not what the IRA owner had in mind.

Typically, a family member wishing to leave an inheritance to a disabled person leaves the inheritance to a Supplemental Needs Trust or SNT. This allows the individual to continue to receive benefits but can pay for things not covered by the programs, like eyeglasses, dental care, or vacations. However, does the SNT receive the same life expectancy payout treatment as an IRA?

Thanks to a special provision in the SECURE Act that applies only to the disabled and the chronically ill, a SNT that pays nothing to anyone other than the EDB can use the life expectancy payout. The SECURE Act calls this trust an “Applicable Multi-Beneficiary Trust,” or AMBT.

For other types of EDB, like a surviving spouse, the individual must be named either as the sole beneficiary or, if a trust is used, must be the sole beneficiary of a conduit trust to qualify for the life expectancy payout. Under a conduit trust, all distributions from the inherited IRA or other retirement plan must be paid out to the individual more or less as received during their lifetime. However, the SECURE Act removes that requirement for trusts created for the disabled or chronically ill.

However, not all of the SECURE Act’s impact on special needs planning is smooth sailing. The AMBT must provide that nothing may be paid from the trust to anyone but the disabled individual while they are living. What if the required minimum distribution from the inheritance is higher than what the beneficiary needs for any given year? Let’s say the trustee must withdraw an RMD of $60,000, but the disabled person’s needs are only $20,000? The trust is left with $40,000 of gross income, and there is nowhere for the balance of the gross income to go.

In the past, SNTs included a provision that allowed the trustee to pass excess income to other family members and deduct the amount as distributable net income, shifting the tax liability to family members who might be in a lower tax bracket than the trust.

Special Needs Planning under the SECURE Act has raised this and other issues, which can be addressed by an experienced estate planning attorney.

Reference: Morningstar.com (Dec. 9, 2020) “Providing for Disabled Beneficiaries After the SECURE Act”

 

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How Can Blended Families Use Estate Planning to Protect All of the Siblings?

If two adult children from blended families receive a lot more financial help from their parent and stepparents than other children, there may be expectations that the parent’s estate plan will be structured to address any unequal distributions. This unique circumstance requires a unique solution, as explained in the article “Estate Planning: A Trust Can Be Used to Protect Blended Families” from The Daily Sentinel. Blended families in which adult children and stepchildren have grandchildren also require unique estate planning.

Blended families face the question of what happens if one parent dies and the surviving step parent remarries. If the deceased spouse’s estate was given to the surviving step parent, will those assets be used to benefit the deceased spouse’s children, or will the new spouse and their children be the sole beneficiaries?

In a perfect world, all children would be treated equally, and assets would flow to the right heirs.  However, that does not always happen. There are many cases where the best of intentions is clear to all, but the death of the first spouse in a blended marriage change everything.

Other events occur that change how the deceased’s estate is distributed. If the surviving step-spouse suffers from Alzheimer’s or experiences another serious disease, their judgement may become impaired.

All of these are risks that can be avoided, if proper estate planning is done by both parents while they are still well and living. Chief among these is a trust,  a simple will does not provide the level of control of assets needed in this situation. Don’t leave this to chance—there’s no way to know how things will work out.

A trust can be created, so the spouse will have access to assets while they are living. When they pass, the remainder of the trust can be distributed to the children.

If a family that has helped out two children more than others, as mentioned above, the relationships between the siblings that took time to establish need to be addressed, while the parents are still living. This can be done with a gifting strategy, where children who felt their needs were being overlooked may receive gifts of any size that might be appropriate, to stem any feelings of resentment.

That is not to say that parents need to use their estate to satisfy their children’s expectations. However, in the case of the family above, it is a reasonable solution for that particular family and their dynamics.

A good estate plan addresses the parent’s needs and takes the children’s needs into consideration. Every parent needs to address their children’s unique needs and be able to distinguish their needs from wants. A gifting strategy, trusts and other estate planning tools can be explored in a consultation with an experienced estate planning attorney, who creates estate plans specific to the unique needs of each family.

Reference: The Daily Sentinel (Dec. 16, 2020) “Estate Planning: A Trust Can Be Used to Protect Blended Families”

 

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What Do I Need to Know about Creating a Simple Will ?

A simple or basic will allows you to specifically say the way in which you want your assets to be distributed among your beneficiaries after your death. This can be a good starting point for creating a comprehensive estate plan because you may need more than just a basic will.

KAKE’s recent article entitled “What Is a Simple Will and How Do You Make One?” explains that a last will and testament is a legal document that states what you want to happen to your property and “worldly goods” when you die. A simple will can be used to designate an executor for the will and a legal guardian for minor children and specify who (or which organizations) should inherit your assets when you die.

A will must be approved in the probate process when you pass away. After the probate court reviews the will to make sure it’s valid, your executor will take care of the collection and distribution of assets listed in the will. Your executor would also be responsible for paying any debts owed by your estate.

Whether you need a basic will or something more complex, usually depends on a few factors, including your age, the size of your estate and if you have children (and their ages).

Having a will in place can be a good starting point for estate planning. However, deciding if it should be simple  will or complex will can depend on a number of factors, such as:

  • The size of your estate
  • The amount of estate tax you expect to owe
  • The type of assets and property you own
  • Whether you own a business
  • The number of beneficiaries you want to name
  • Whether the beneficiaries are individuals or organizations (like charities)
  • Any significant life changes you anticipate, like marriages, divorces, or having more children; and
  • Whether any of your children or beneficiaries have special needs.

With these situations, you may need a more detailed will to plan how you want your assets to be distributed. In any event, work with an experienced estate planning attorney. With life or financial changes, you may need to create a more complex will or consider a trust. It is smart to speak with an estate planning attorney, who can help you determine which components to include in your plan and help you keep it updated.

Reference: KAKE (Nov. 23, 2020) “What Is a Simple Will and How Do You Make One?”

 

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What’s Going on with the Estate of Kenny Rogers ?

TMZ reported that the estate of the late Kenny Rogers alleged that Kelly Junkermann convinced the country and pop singer to allow him to film his last tour.

Kenny supposedly agreed but did so under the strict condition that the footage be only for personal use.

Rogers’ estate now says that Junkermann disregarded that agreement and attempted to commercially release a DVD called “Kenny Rogers — The Gambler’s Last Deal.”

Wealth Advisor’s recent article entitled “Kenny Rogers estates sues longtime friend over unauthorized tour DVD” reports that the lawsuit states that Junkermann consistently asked for approval to use the content he’d collected but was always denied.

Regardless of this rejection, he moved forward and inked a deal to distribute the footage.

The lawsuit states that the tour footage is filled with “priceless and irreplaceable audio, video, photographic and audiovisual content that were compiled over the course of Kenny Rogers’ decades-long career.”

One of the reasons the estate wants Junkermann’s DVD blocked, is that it has its own DVD of the final tour and doesn’t want fans to be confused. The estate also says that Junkermann’s DVD isn’t up to Kenny’s high standards.

TMZ reported that the estate blocked the release of Junkermann’s DVD earlier in 2020, but it cost nearly $300,000 in legal fees to be accomplished.

The Rogers estate is formally suing for damages and for an injunction blocking the DVD from Junkermann from ever coming out.

The country music icon, who passed away in March at age 81, announced his Gambler’s Last Deal Tour in 2015 and completed it two years later. Officially, the star’s last show was in October 2017 at a star-studded farewell concert in Nashville. However, he played a few shows after that, until he canceled all remaining performances after April 2018.

Junkermann’s DVD was actually set for presale in late 2019, but links to online vendors and video trailers are no longer working.

Junkermann also had a forward written for the package.

Reference: Wealth Advisor (Dec. 1, 2020) “Kenny Rogers estates sues longtime friend over unauthorized tour DVD”

 

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Can I Inherit Debt ?

When someone dies and leaves debts, you may ask if you have any personal liability to pay them. The answer is typically no, even though those debts don’t automatically disappear. However, there are situations in which you may have to address issues with a loved one’s creditors after they are gone, says KAKE’s recent article entitled “Can I Inherit Debt?”

The responsibility for ensuring the estate’s debts are paid, is typically that of the executor. An executor performs several tasks to wrap up a person’s estate after death. They include:

  • Obtaining a copy of the deceased’s will, if they had one, and filing it with the probate court
  • Notifying creditors and other entities of the person’s death (like the Social Security Administration to stop benefits)
  • Creating an inventory of the deceased’s assets and their value
  • Liquidating assets to pay off any debts owed by the estate; and
  • Distributing the remaining property to the individuals or organizations named in the deceased’s will (if they had one) or according to inheritance laws, if they didn’t.

In terms of debt repayment, executors must notify creditors who may have a claim against the estate. Creditors are given a set period of time to make a financial claim against the estate’s assets for repayment of debts. It’s not that uncommon for a disreputable creditor to attempt to get paid by the deceased’s relatives.

Any assets in the estate that have a named beneficiary, such as a life insurance policy, a 401(k), individual retirement account, payable on death accounts or annuity, would be transferred to that beneficiary automatically and cannot be touched by creditors.

You typically don’t inherit debts of another like you might inherit property or other assets from them. Thus, if a debt collector tries get money from you, you’re under no legal obligation to pay.

However, if you cosigned a loan with the deceased or opened a joint credit card account or line of credit, those debts are legally yours, just as much as they are the person who died. If they pass away, you’d be solely responsible for repaying them.

You should also know that you may be liable for long-term care costs incurred by your parents, while they were alive. Many states require children to cover nursing home bills, although they aren’t always enforced.

As for spouses, the same rules of debt responsibility apply. However, for debts that are in one spouse’s name only, it’s important to understand how living in a community property state can impact your liability for marital debts. If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), debts incurred after the marriage by one spouse can be treated as a shared financial obligation.

Reference: KAKE (December 2, 2020) “Can I Inherit Debt?”

 

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How Much Should We Tell the Children about the Estate Plan?

Congratulations, if you have finished your estate plan. You and your estate planning attorney created a plan that is suited for your family, you have checked on beneficiary designations, signed all of the necessary documents and named an executor to carry out your directions when you pass. However, have you talked about your estate plan with your adult children? That is the issue explored in the recent article entitled “What to tell your adult kids when planning your estate” from CNBC. It can be a tricky one.

There are certain parts of estate plans that should be shared with adult children, even if money is not among them. Family conflict is common in many cases, whether the estate is worth $50,000 or $50 million. So, even if your estate plan is perfect, it might hold a number of surprises for your children, if you don’t speak with them while you are living.

The best estate plan can bequeath resentment and enduring family conflicts, if family members don’t have a head’s up about what you’ve planned and why.

If you die without a will, there can be even more problems for the family. With no will—called dying “intestate”—it is up to the courts in your state to decide who inherits what. This is a public process, so your life’s work is on display for all to see. If your heirs have a history of fighting, especially over who deserves what, dying without a will can make a bad family situation worse.

Not everything about an estate plan has to do with distribution of possessions. Much of an estate plan is concerned with protecting you, while you are alive.

For starters, your estate planning attorney can help you with a Power of Attorney. You’ll name a person who will handle your finances, if you become unable to do so because of illness or injury. A Healthcare Power of Attorney is used to empower a trusted person to make medical decisions for you, if you are incapacitated. Some estate planning attorneys recommend having a Living Will, also called an Advance Healthcare Directive, to convey end-of-life wishes, if you want to be kept alive through artificial means.

These documents do not require that you name a family member. A friend or colleague you trust and know to be responsible can carry out your wishes and can be named to any of these positions.

All of these matters should be discussed with your children. Even if you don’t want them to know about the assets in your estate, they should be told who will be responsible for making decisions on your finances and health care.

Consider if you want your children to learn about your finances during your lifetime, when you are able to discuss your choices with them, or if they will learn about them after you have passed, possibly from a stranger or from reading court documents.

Many of these decisions depend upon your family’s dynamics. Do your children work well together, or are there deep-seated hostilities that will lead to endless battles? You know your own children best, so this is a decision only you can make.

It is also important to take into consideration that an unexpected large inheritance can create emotional turbulence for many people. If heirs have never handled any sizable finances before, or if they have a marriage on shaky ground, an unexpected inheritance could create very real problems—and a divorce could put their inheritance at risk.

Talk with your children, if at all possible. Erring on the side of over-communicating might be a better mistake than leaving them in the dark.

Reference: CNBC (Nov. 11, 2020) “What to tell your adult kids when planning your estate”

 

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The Most Common Myths about COVID Vaccine

The unprecedented speed of the development of the vaccine to fight COVID-19 has led to several misconceptions and rumors that have created some skepticism among some Americans. AARP’s recent article entitled “7 Myths About Coronavirus Vaccines” provides some of the most prevalent COVID vaccine myths and the truth about the medicines that will fight COVID-19:

Myth #1: If you’ve had COVID-19 already, you don’t need to get vaccinated. Unsure. It’s not certain how long you are protected from COVID-19 after a previous infection (natural immunity).

Myth #2: Once you receive the COVDI vaccine, you’re immune for life. Perhaps. It’s not yet clear how long immunity from a coronavirus vaccine will last and if it’ll need to be administered more than once, or even on a regular basis, like the flu shot.

Myth #3: You can stop wearing your mask after you get vaccinated. Wrong. The COVID vaccine is just one tool that can help slow the spread of the coronavirus. However, we still need to end the pandemic, which will require mask wearing, social distancing, frequent handwashing and testing. It will take months to get the majority of Americans who want a coronavirus vaccine vaccinated, and until a good percentage of the population develops resistance to COVID-19 and so-called herd immunity is reached, the virus will continue to spread and sicken people. Protection also isn’t immediate. We also don’t know if the vaccine will block virus transmission.

Myth #4: The vaccines use a live version of the coronavirus. No. None of the vaccines in late-stage development in the U.S. use the live virus that causes COVID-19, the CDC says. The COVID vaccine may cause side effects, such as injection site pain, fatigue, headaches, chills and muscle aches.

Myth #5: mRNA vaccines can change your DNA. No. Two of the four COVID vaccine candidates in late-stage U.S. trials (the Pfizer/BioNTech vaccine, which was authorized by the federal government on Dec. 11, and the Moderna/NIH vaccine) use a new type of technology called messenger RNA, or mRNA for short. It is like an instruction manual that tells your body to build an immune response to a specific infection.  There are now no licensed mRNA vaccines in the U.S., but a myth on social media claims that mRNA vaccines can alter human DNA. However, the CDC says this is not true.

Myth #6: You’re not required to get both doses of the two-dose vaccines. That’s incorrect. All but one of the vaccines require two doses that are administered a few weeks apart. Skipping the second shot isn’t wise. The CDC explains that the first shot starts building protection, then the second shot boosts that protection and “is needed to get the most protection the vaccine has to offer.”

Myth #7: If you got the flu shot recently, you don’t need a coronavirus vaccine. Not true! It is accurate that the flu and COVID-19 share a similar list of symptoms, but they’re two different illnesses, caused by two different viruses. You should get both types of vaccines.

Reference: AARP (Dec. 14, 2020) “7 Myths About Coronavirus Vaccines”

 

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Caregiving – Are You a Super-Ager?

Caregiving – In recent years, scientific research has explored the secrets of those in their 80s and 90s whose brains function well — by some measures, as well as the minds of people many years younger.

Researchers now call these high-functioning older people “super-agers,” and they’re learning more about what makes them special. Some factors are genetic, but many are things that we can control.

Money Talks News’s recent article entitled “5 Secrets of Seniors Who Keep Their Minds ‘Young’” gives us five things you can do to keep your aging brain sharp.

  1. Stay positive. It may be cliche but staying positive is important. In addition, stress associated with a negative outlook seems to initiate significant changes in our bodies that can speed up aging, by causing cell damage.

Elissa Epel of the Aging, Metabolism, and Emotions Center at the University of California San Francisco says, “What’s emerged is how much our mental filter — how we see the world — determines our reality and how much we will suffer when we find ourselves in difficult situations in life.”

  1. Stay in good company. Loneliness and isolation can create physically damaging stress, so stay in contact with friends.
  2. Get in shape. One of the better-understood aspects of aging well is the importance of sleep, exercise and diet. The UCSF researchers have seen physical evidence in the brain that higher levels of exercise and a Mediterranean-style diet make people more resilient to aging. It also keeps us thinking faster and more clearly.

“As we get older, when we see declines in memory and other skills, people tend to think that’s part of normal aging,” says a UCSF blog post. “It’s not. It doesn’t have to be that way.”

Some foods are also better for your brain health as you get older, such as whole berries and fresh vegetables.

  1. Try some meditation. The researchers conducted an experiment, where they placed about 24 people in a month-long intensive meditation retreat. They monitored personality traits, anxiety, depression and some microscopic physical markers tied to mental and physical age called “telomeres.” These are caps at the end of chromosomes. They shorten naturally as we age. Shorter telomeres in midlife can predict an early onset of heart disease, dementia, some cancers and other age-related illnesses.

According to the UCSF, “At the end of the retreat, the participants’ telomere length had increased significantly, and participants with the highest initial levels of anxiety and depression showed the most dramatic changes over the course of the study.”

  1. Try something new. That may be a new hobby or reading a good book. Research shows that there are clear cognitive benefits to exploring new things. Research even found that video games don’t actually rot your brain — they preserve it!

Studies also suggested solving word and number puzzles can delay the memory loss linked to dementia by more than 2½ years and can even preserve memory and cognitive function better than some medications. So never stop learning — or playing and become a “Super-Ager”!

Reference: Money Talks News (Nov. 11, 2020) “5 Secrets of Seniors Who Keep Their Minds ‘Young’”

 

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