Why is Angelina Jolie Leaving Her Total Estate to Just One of Her Kids?

Angelina Jolie has made the decision to reward her son Maddox for supporting her during her divorce from Brad Pitt. Jolie wasn’t happy that only one out of her six children totally sided with her in the couple’s divorce. Others close to the Jolie/Pitt family say that Brad is upset with Jolie for leaving the other children out and treating Maddox as her “Golden Child.”

Hollywood News Daily reports in its article, “Angelina Jolie Plans To Leave Son Maddox Millions Ignoring Other 5 Children Per ‘Radar’” explains that the final estate planning decision to will Maddox her empire was made by Jolie because of his loyalty.

“Brad is in an absolute fury and fit to be tied over Angie’s moves!” revealed the insider. “It finally seemed like they were reaching some kind of compromise with the divorce. But he’s been blindsided by this mess over Maddox.”

In September of 2016, the story surfaced that Jolie decided to file for divorce from Pitt, after becoming increasingly worried about his parenting methods. The news reportedly followed a nasty encounter between Brad, Angie and Maddox that put the family through one of the nastiest celebrity divorce and custody battles in recent memory.

Jolie claimed that Pitt allegedly attacked Maddox during the fight. An investigation was made by the Los Angeles County Department of Children and Family Services, but no charges were filed. However, according to a family friend Brad remains very upset by the entire situation and especially angry with Angelina for not setting the record straight.

Brad feels that his other children are getting short-changed, and he won’t permit it, the friend says.

Brad Pitt is angry that Jolie would treat their children so differently, cutting out Pax, Zahara, Shiloh, and 10-year-old twins Knox and Vivienne. Leaving it all to Maddox, is just wrong in Brad’s view.

“Maddox took his mother’s side in the divorce, and now she’s made him the head of her movie empire,” said the insider.

“He’s her golden boy, but Brad feels someone needs to remind her that she has five other children!”

If this rumor winds up being true, then most likely Pitt and Jolie will continue to wage brutal battles regarding the welfare of their children for years to come.

Reference: Hollywood News Daily (April 24, 2019) “Angelina Jolie Plans To Leave Son Maddox Millions Ignoring Other 5 Children Per ‘Radar’

 

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When your spouse cheats on you financially.

You have worked hard, planned and saved to have a comfortable retirement together. Then, one day, something happens that makes you question whether your spouse is being honest with you about money. There might be a perfectly innocent explanation, or your spouse might be leading a double life that poses a threat to your financial future. Here are some suggestions about what to do when your spouse cheats on you financially.

Reasons That Spouses Hide Money from Each Other

Many different factors can motivate a person to hide money from a spouse, such as:

  • Planning to separate from the spouse and building up a nest egg to fund the new path in life,
  • Paying for activities, like gambling or drugs,
  • Lack of trust because of an experience with a previous spouse,
  • Has not paid taxes or other bills, and is stockpiling money instead,
  • Is having an affair, or
  • The current relationship is dysfunctional and the “hiding” spouse feels the other spouse is a control freak about the finances.

How Spouses Hide Money from Each Other

There is no end to the ways people can take money right under the noses of their significant others. Here are a few examples:

  • Selecting the “cash back” option, when paying at the grocery store, gas station or other places,
  • Taking money that is supposed to pay for other things, but keeping it,
  • Not telling a spouse about a raise or bonus, scratch-off ticket winnings and other unexpected money,
  • Hoarding cash, gold coins, or other valuables and hiding them in the garage, attic, office or a storage unit, and
  • Selling items online and not telling one’s spouse.

How to Avoid Financial Infidelity

Many people have an underlying communication problem, and money can be a particularly uncomfortable topic. Ignoring this situation will not make it go away. Experts offer these tips to make sure that you and your spouse are honest with each other about money:

  • Both parties should handle the financial management tasks. When one person controls all the finances and the other person merely signs papers without reading them, you have a recipe for disaster. No matter how much you might dislike dealing with the bills and other financial matters, you have to protect your future, so that you will not be destitute when you retire. Alternate the bill-paying chores monthly or quarterly.
  • Give your financial picture a check-up twice a year. You should both pull your credit reports twice a year and go through them together. Doing this prevents your spouse from having secret bank accounts or investments.
  • Agree on a budget and retirement plan together.
  • Get copies of the tax returns and statements from the retirement accounts, investments, and bank accounts right away, if you suspect that something shady is happening.
  • Know the signs of financial infidelity. If your spouse is over-controlling or is unwilling to talk about money, you need to get to the bottom of the situation. If the accounts are lower than you thought they should be, or your spouse has changed her wardrobe, lost weight, or has new expensive hobbies, you need to ask questions.

An elder law attorney can help you protect yourself financially.

References:

AARP. “When Your Spouse Cheats on You – Financially.” (accessed April 11, 2019) https://www.thegirlfriend.com/money/spouse-cheats-fina

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Trusts v Wills: What’s Right for You?
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Trusts v Wills: What’s Right for You?

You have likely heard the words “Trusts” and “Wills” as part of estate planning. What are the differences between the two, and how do you know which one you need?

It’s a good idea to take the time and make the effort to create an estate plan to take care of your estate — no matter if it’s a condo apartment and a housecat or a big house and lots of money in the bank — just in case something unexpected occurs tomorrow. That’s the advice from AZ Big Media in the article “The pros and cons of wills vs. trusts.”

Estate planning is the area of the law that focuses on the disposition of assets and expenses, when a person dies. The goal is to take care of the “business side” of life while you are living, so your family and loved ones don’t have to pick up the pieces after you are gone. It’s much more expensive, time-consuming and stressful for the survivors to do this after death, than it is if you plan in advance.

You have likely heard the words “trust” and “will” as part of estate planning. What are the differences between the two, and how do you know which one you need?

A will is the most commonly used legal document for leaving instructions about your property after you die. It is also used to name an executor — the person who will be in charge of your assets, their distribution, paying taxes and any estate expenses after you die. The will is very important, if you have minor children. This is how you will name guardians to raise your children, if something unexpected occurs to you and your partner, spouse or co-parent. The will is also the document you use to name the person who you would like to care for your pets, if you have any.

Burial instructions are not included in wills, since the will is not usually read for weeks or sometimes months after a person passes. It’s also not the right way to distribute funds that have been taken care of through the use of beneficiary designations or joint ownership on accounts or assets.

Another document used in estate planning is a trust. There are many different types of trusts, from revocable trusts, which you control as long as you are alive, and irrevocable trusts, which are controlled by trustees. There are too many to name in one article, but if there is something that needs to be accomplished in an estate plan, there’s a good chance there is a special trust designed to do it. An estate planning attorney will be able to tell you if you need a trust, and what purpose it will serve.

Trusts can be used by anyone with assets or property.

A will can be a very simple document. It requires proper formats and formalities to ensure that it is valid. If you try to do this on your own, your heirs will be the ones to find out if you have done it properly.  If it is not done correctly, the court will deem it invalid and your estate will be “intestate,” that is, without a will.

Many people believe that they should put all their assets into a trust to avoid probate. In some cases, this may be useful. However, there are many states where probate is not an onerous process, and this is not the reason for setting up trusts.

A trust won’t eliminate taxes completely, nor will it eliminate the need for any estate administration. However, it may make passing certain assets to another person or another generation easier. Your estate planning attorney will be able to guide you through this process.

Whether you use a will or a trust, or as is most common, a combination of the two, you need an estate plan that includes other documents, including power of attorney and health care power of attorney. These two particular documents are used while you are living, so that someone you name can make financial decisions (power of attorney) and medical health decisions (health care power of attorney) if you should become incapacitated, through illness or injury.

Speak with an estate planning attorney. Every person’s situation is a little different, and an estate planning attorney will create an estate plan that works for you and protects your family.

Reference: AZ Big Media (March 21, 2019) “The pros and cons of wills vs. trusts”

 

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Here’s One Way to Handle the Son-In-Law You Hate
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Here’s One Way to Handle the Son-In-Law You Hate

Gillian Williams hated her son in law and provided an important lesson in disinheritance when she died. When Gillian Williams died in May 2017, it’s unlikely that she expected to be at the center of an international spotlight on her family’s life. She left behind a married daughter, Julie Fairs, who is accused, along with her husband Brian, of falsifying a signature on her mother’s last will and testament. The mother’s own sister testified that her sister would never have left her daughter anything, because of how much she disliked her son-in-law, reports Above the Law in the article “What To Do When You Hate Your Son-In-Law: A Practical Lesson in Estate Planning.”

The matter became public when it went to trial. There’s been a lot of nasty family business being shared. Most people avoid going to trial for will contests, since the underlying emotions come out in full view.

Not everyone has friendly family relationships with in-laws. Frequently, the in-law relationship is prickly at best. There is no law that you must like your son-in-law. However, the law presumes that you like your child enough to include her in your estate, regardless of how you feel about her spouse. That means that if there is no surviving spouse, children are permitted to be the “natural object of your bounty.” In other words, these are the individuals who will receive your assets when you die, based on social and public policy and the law.

There are issues in estate planning, when a person wants to exclude a child because of their dislike of the child’s spouse. You may want to exclude a child out of concern that the spouse will mishandle the money or benefit from the money in a divorce. Sometimes parents can’t get past their dismay over a child marrying against their wishes. Disinheritance is not an unusual punishment. However, increased scrutiny is going to be applied to the review of a will, when a child is excluded.

When one child is disinherited, it colors their relationship with their siblings. The beneficiaries and the executor are left to defend the decedent’s decision of disinheritance. That is not easy to do, unless an explanation of why this happened was done beforehand.

There are options to disinheritance, if the child’s spouse is an issue. A beneficiary’s share can be held in a continuing trust, so the spouse does not have access to the funds. The assets can be protected and preserved, in the event of a divorce or just for general money security. It should be recognized that while inheritances are generally protected in divorce, the second the monies are co-mingled, they become joint property. A trust is often the best way to protect an inheritance in this situation.

Another tactic is for the person to skip a generation and instead make a bequest to the grandchildren. The option works best when the funds are not significant, since the parent may be insulted by the decision to leave a bequest to their children and this could pit the child against their own child (the grandchild).

Dividing the estate among the children in unequal shares can be done so as not to cause a complete disinheritance, but to leave less money. This also holds the potential for creating bad feelings between family members.

The last will and testament is a very permanent document and may not be the right forum to be used to let feelings be expressed or take a stand about an unfavorable life decision by an adult child. The impact of this decision can also have long lasting effects, including lawsuits and family fighting. It is also likely to create a battle between the child and their spouse.

A conversation with an estate planning attorney, who has likely seen this situation hundreds of times in their practice, should be able to help sort out the best solution. There may be a way to avoid conflict, or at least to make sure everyone is clear from the get-go, as to what is going to happen in the future, and why.

 

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How Can I Protect My Child’s Inheritance, If They Have a Substance Abuse Problem?

Kiplinger’s recent article, “Selecting the Right Trustee and Protector for a Substance Abuse Trust,” explains that selecting the trustee for a substance abuse trust should start with a good idea of the duties they will perform. Next, find a person or institutional trustee that’s most qualified to fulfill those obligations. Parents should then think about naming a trust protector, who serves in a supervisory role to ensure that the trust is being properly administered.

The basic duties of a trustee include a fiduciary duty to administer the trust in good faith and in accordance with its terms and purposes; loyalty to the beneficiaries, by acting solely in their interests; invest the trust property prudently by considering the purposes, terms, distributional requirements, and other circumstances of the trust; and to act impartially, when there are multiple beneficiaries.

There may also be special duties of the trustee. For a child with a substance use disorder, the trustee’s duties for distributions could be linked specifically to paying for the costs of rehab, job training, professional service fees and other items that are part of the treatment plan developed by the beneficiary’s treatment team. Tying distributions into the treatment plan would mean the trustee, and maybe someone familiar with treatment management, would have to work closely with the treatment team to carry out the plan.

If the trust has incentive clauses, the trustee will also have to determine if the beneficiary has attained the goal (like sobriety for a certain period of time) and if so, the benefit to which he or she’s entitled. These can be hard to administer, since it can be hard to verify if the beneficiary has actually met the goals.

If the beneficiary is eligible for government program benefits, like SSI or Medicaid or from private health insurance, another set of duties will be placed upon the trustee to make certain that distributions won’t be classified as “maintenance” or “support.” If so, it could result in the child being declared ineligible. Since distributions from the trust are meant only to supplement the benefits that SSI or Medicaid is providing (and not duplicate or supplant them), the trustee will have to closely watch the uses of the distributions, so they aren’t support and maintenance.

You must next look at potential candidates to see who’s best suited for the role of trustee. There are two categories of trustees: individual and institutional. Individual trustees can include family members. The advantage here is that they’ll know the beneficiary and can give more personalized service than an institutional trustee. However, appointing a family member or friend as trustee may ruin the relationship, if the trustee denies the beneficiary’s demands.

You can appoint a trust company, bank trust department, or a corporate trustee connected to a brokerage firm to serve as the trustee to avoid possible family conflicts. However, some institutional trustees may be more focused on their investment performance, than on tending to the mental and physical needs of their beneficiaries. In the case of a substance abuse trust, “hands-on” involvement with the beneficiary is vital.

One alternative may be to appoint an individual and an institutional company to serve as co-trustees. The individual could be personally involved with the beneficiary and their treatment plan, and the institutional trustee could deal with and handle the investments. However, both trustees should make distribution decisions. The best type of institutional trustee for a substance abuse trust, would be one that works primarily in administering special needs trusts. These are created for the benefit of children with disabilities. These trustees will be knowledgeable about SSI and Medicaid eligibility rules.

A trust protector, depending on applicable state law, acts as the settlor’s surrogate. This continues even after the settlor dies. This allows the trust to adapt to changing circumstances. The trust protector could also direct the trustee’s actions concerning how the trust assets would be invested and could approve or deny proposed disbursements from the trust. The trustee would be obligated to comply with such directions, unless they would be manifestly contrary to the trust’s terms or a breach of the protector’s duties.

As far as a substance abuse trust, a trust protector can provide supervision, if the trustee doesn’t possess experience in coordinating trust distributions with a substance abuse treatment plan, or with monitoring the beneficiary’s eligibility for government aid programs. Instead of the trustee appointing agents to assist in these matters, the protector would actively monitor the progress of the beneficiary’s recovery and, if necessary, direct the trustee to engage a treatment manager for the beneficiary or an advocate to secure SSI and Medicaid benefits.

Support from all parties will help the beneficiary continue on the road to recovery, which is the ultimate goal of the trust.

 

 

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As a New Parent, Have You Updated (or Created) Your Estate Plan?

You just had a baby. Now you’re sleep-deprived, overwhelmed, and frazzled. Having a child dramatically changes one’s legacy plan and makes having a plan all the more necessary, says ThinkAdvisor’s recent article, “5 Legacy Planning Basics for New Parents.”

Take time to talk through two high-priority items. Create a staggered checklist—starting with today—and set attainable dates to complete the rest of the tasks. Here are five things to put on that list:

  1. Will. This gives the probate court your instructions on who will care for your children, if something happens to both you and your spouse. A will also should name a guardian to be responsible for the children. Parents also should think about how they want to share their personal belongings and financial assets. Without a will, the state decides what goes to whom. Lastly, a will must name an executor.
  2. Beneficiaries. Review your beneficiary designations when you create your will, because you don’t want your will and designations (on life insurance policies and investments) telling two different stories. If there’s an issue, the beneficiary designation overrides the will. All accounts with a beneficiary listed automatically avoid probate court.
  3. Trust. Created by an experienced estate planning attorney, a trust has some excellent benefits, particularly if you have young children. Everything in a trust is shielded from probate court, including property. This avoids court fees and hassle. A trust also provides some flexibility and customization to your plan. You can instruct that your children get a sum of money at 18, 25 or 30, and you can say that the money is for school, among other conditions. The trustee will distribute funds, according to your instructions.
  4. Power of Attorney and Health Care Proxy. These are two separate documents, but they’re both used in the event of incapacitation. Their power of attorney and health care proxy designees can make important financial and medical decisions, when you’re incapable of doing so.
  5. Life Insurance. Most people don’t think about purchasing life insurance, until they have children. Therefore, if you haven’t thought about it, you’re not alone. If you are among the few who bought a policy pre-child, consider increasing the amount so your child is covered, if something should happen.

Reference: ThinkAdvisor (March 7, 2019) “5 Legacy Planning Basics for New Parents”

 

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Can I Draft My Own Will?

A common question among people is “Can I write my own will?” or “Do I really need a lawyer to do my estate planning?”

The Frisky‘s recent article, “Why You Should Hire A Lawyer to Write Your Estate Plan,” says that writing your own estate plan can be a complicated thing—and one that a non-attorney may find very difficult.

It’s More Than a Will. Many people believe that a will and an estate plan are the same. This is not true. An estate plan is a legal strategy that prepares you for potential incapacity and eventual death. A will is a legal document that’s part of the estate plan.

Money, Time and Energy Savings. Creating your own estate plan will be more time-consuming than you may have thought. Hiring a lawyer to do this will cost you—but it will cost you more, if you decide to do it on your own. Hiring a lawyer for your estate plan will save you time, because he or she is trained in the law to do it the right way.

If you do finish your own estate plan and you realize that it really is a mess, you can hire a lawyer to do it over for you. However, calculate how much time, energy, and resources you’ve spent on making on your quick DIY estate plan. Work with an experienced estate planning attorney and create a sound estate plan.

It’s Complicated. If you don’t fully understand what you’re doing, estate planning can drive you nuts. That’s because every word you write is crucial. Everything you write counts and may be interpreted differently. The law in this area also changes all the time. Agencies in the federal government, the IRS and the courts are always creating new regulations and decisions. Your estate planning attorney monitors all of this, makes sure your estate plan is in compliance and takes the best advantage of the current law.

Objectivity. Another thing your attorney adds to the mix—in addition to legal expertise—is objectivity. Your estate planning attorney will give you a clean, unbiased view of your current situation, along with a fair and honest assessment of your options.

Reference: The Frisky (February 6, 2019) “Why You Should Hire A Lawyer to Write Your Estate Plan”

 

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Here’s Why You Need an Estate Plan

It’s always the right time to do your estate planning, but it’s most critical when you have beneficiaries who are minors or with special needs, says the Capital Press in the recent article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently written, so the estate goes to the child when he reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for him by a trustee or executor until a set age, like 25 or 30.

Probate is the default process to administer an estate after someone’s death, when a will or other documents are presented in court and an executor is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.

Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced estate planning attorney about establishing a trust. Farmers can name themselves as the beneficiaries during their lifetime, and instruct to whom it will pass after their death. A living trust can be amended or revoked at any time, if circumstances change.

The title of the farm is transferred to the trust with the farm’s former owner as trustee. With a trust, it makes it easier to avoid probate because nothing’s in his name, and the property can transition to the beneficiaries without having to go to court. Living trusts also help in the event of incapacity or a disease, like Alzheimer’s, to avoid conservatorship (guardianship of an adult who loses capacity). It can also help to decrease capital gains taxes, since the property transfers before their death.

If you have several children, but only two work with you on the farm, an attorney can help you with how to divide an estate that is land rich and cash poor.

Reference: Capital Press (December 20, 2018) “Ag Finance: Why you need to do estate planning”

Suggested Key Terms: Estate Planning Lawyer, Wills, Capacity, Guardianship, Conservatorship, Capital Gains Tax, Trustee, Revocable Living Trust, Asset Protection, Probate Court, Inheritance, Power of Attorney

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