San Antonio, TX Estate Planning

Your Options Did You Inherit a Roth IRA? Get to Know

In order to make sound financial decisions, you must have a good understanding of the rules.  Receiving an inheritance is one of those situations you may have to make decisions that could impact your future finances. If you inherit a Roth IRA, the options you have are similar to that of a traditional IRA, however, there are some differences in the rules.

Before you can decide what to do with an inherited Roth IRA, you need to know what your options are.

Recently, the Wills, Trusts & Estates Prof Blog published an article titled "Options for Inherited Roth IRAs."

Here is a list of the options identified in that article:

• Disinherit the IRA.
• Take a lump sum distribution.
• Roll it into another inherited Roth IRA.
• Roll the funds into your own Roth IRA. This last one is available only if you inherited the Roth IRA from a spouse.

Those are your options and you will want to read the original article for more details.

Of course, other rules exist about when you can take distributions. This, however, should give you a general idea so that you can start deciding what you might want to do.

Take no action until you consult an experienced estate planning attorney regarding how these options impact your unique circumstances. For professional legal guidance contact us today to set up a free initial consultation.

Reference: Wills, Trusts & Estates Prof Blog (March 15, 2015) "Options for Inherited Roth IRAs."

Beware – Inheritance Thief!

A 'black widow' who married a man on his death bed just eight days before he died has been jailed for stealing his granddaughter's inheritance.

Being the administrator of an estate comes with great responsibility. Who would you choose to handle your own estate? Can they be trusted to do as you wish?

Eight days before he passed away, Roy Mitchell married a woman named Judith Brown. Months prior, Mitchell had already changed his estate plan to leave the bulk of his assets to Brown. However, he still stipulated that a portion of his estate was to be divided between his four grandchildren.

As the administrator of the estate, Brown's job was to make sure that the grandchildren received their money. However, she never gave any of the funds to the grandchildren.

Instead, Brown spent it on herself. She has now been imprisoned for two years for theft.

The Daily Mail  has more on the story in an article titled "'Black Widow' who married man on his death bed just eight days before he died is jailed for stealing his grandchild's inheritance."

A criminal conviction and jail time are among the potential consequences awaiting administrators who do not properly distribute an estate under their charge. An administrator can also be forced to pay the money back out of his or her own assets.

This is one reason why an administrator should have an attorney to assist with the estate. Not only can the attorney guide the administrator through the legal hoops, but he or she can help make sure all is done according to the estate plan.

In Brown's case it appears she acted intentionally. However, even if you have no intention of mismanaging the estate, you can be held liable if things go wrong.

Again, it cannot be emphasized too emphatically - you need an attorney to help ensure everything is done correctly. It's never too early to protect you and your heirs. Click here to read more about what is involved with setting up your estate plan.

Reference: The Daily Mail (March 12, 2015) "'Black Widow' who married man on his death bed just eight days before he died is jailed for stealing his grandchild's inheritance."

Irrevocable Trusts Can Actually Be Revoked … Say What?

Here are some developments in trust law that led to irrevocable trusts being not exactly irrevocable.

Is an irrevocable trust truly unchangeable? In the past, it almost certainly was. But this irrevocability led to problems when the circumstances that existed when the trust was created changed greatly and made the trust less than ideal.

Lawyers and judges grew increasingly frustrated about trusts that needed to be revoked, but were difficult to revoke. Fortunately, over the last 20 years or so, legal developments have made it much easier to revoke a so-called irrevocable trust.

The Wills, Trusts & Estates Prof Blog recently published a list of these developments in "Taking the Meaning Out of 'Irrevocable'."

The list includes:

• 29 states and Washington D.C. have passed the Uniform Trust Code which allows courts to modify or terminate irrevocable trusts.
• 22 states have decanting statutes.
• Two states have passed the Trust and Estate Dispute Resolution Act which allows revocation in some circumstances.

Do you have an irrevocable trust, are the trustee of one, or are the beneficiary of one? If yes, and you believe the trust should be modified or revoked, you do have options.

This is not a do-it-yourself project, however. Contact an experienced estate planning attorney to explore your options.

Contact us today to set up an appointment to review your current plan.

Reference: Wills, Trusts & Estates Prof Blog (March 13, 2015) "Taking the Meaning Out of 'Irrevocable'."

Sibling Rivalries Don’t Always End after Childhood

Siblings can be our closest family members. But when it comes to litigation over family property or money, genetics can fall by the wayside and siblings can quickly become our biggest adversaries.

Do these song lyrics hold true about siblings?

 

Hey brother! There's an endless road to rediscover

Hey sister! Know the water's sweet but blood is thicker

Oh, if the sky comes falling down, for you

There's nothing in this world I wouldn't do

 

Maybe so, in some instances. Siblings will often protect each other against anyone else in the world. However, they also have a tendency to compete against each other, especially when it comes to their parents’ estate.

Siblings can be hyper-alert to any slight and any perceived favoritism shown by their parents. Managing how siblings interact is often one of the most difficult parenting tasks when the children are growing up.

It does not get any easier when the children are adults and the parents are trying to create an estate plan.

This conundrum is the subject of a recent Private Wealth article titled "Blood Feuds."

The biggest issue can be when children believe a sibling is more loved by their parents. It is not always true, but the perception exists. And perception is reality to the perceiver.

When preparing an estate plan, naming one child as an executor or trustee can bring out this perception. The other children often then look for things the designated child might be doing wrong.

This, in turn, can lead to sibling feuds over the estate.

When creating your estate plan carefully consider how your children interact and how they all will react to your decisions with the estate.

Better yet, consult an experienced estate planning attorney regarding how to craft an estate plan to avoid sibling feuds.

For more information about estate planning in San Antonio, Texas and the surrounding areas click here to contact us.

Reference: Private Wealth (March 10, 2015) "Blood Feuds."

Estate for Sale: Come One, Come All!

Liquidating a relative’s estate is one of the most personal ordeals, yet it is becoming increasingly common, people in the industry say. As the population ages, the estate sale business is booming.

Estate administrators and those who inherit estates can take advantage of an estate sale to get rid of tangible property that is not wanted.

The New York Times recently published an article titled "Managing Estate Sales Becomes Big Business" which documents this interesting trend.

However, elderly people can take advantage of this trend as well.

If a couple is looking to retire either to another state or a retirement home, they can sell their estate before it becomes an estate. The proceeds of the estate sale can be used for living expenses or even made a part of an estate plan. It becomes a way of disposing of your estate before your heirs have to do it.

Of course, you may not want to include all of your possessions in an estate sale. Valuable heirlooms and other items of value should be handled differently in your estate plan.

An estate sale is just one way of helping to manage things. It is not a substitute for a complete estate plan and, for that, you should engage the services of an experienced estate planning attorney.  Click here to read more about what is involved with setting up your estate plan.

Reference: New York Times (March 11, 2015) "Managing Estate Sales Becomes Big Business."