A Discussion Forum for the Mississippi Estate Planning Community

Category Archives: Estate Planning – General

“Full-Nest Syndrome” and Boomerang Kids


Remember this commercial? Maybe when it aired, you had kids in junior high or just entering college. Maybe now it’s not so funny. According to its August issue, Harper’s magazine published data estimating that nearly 85% of this year’s college graduates were planning to head back to live with their parents. In 2010 researchers at Columbia University using the U.S. Current Population Survey found that 52.8% of 18- to 24-year-olds were living at home.

According to an article written by Suzanne McGee for Financial Planning, the problem is not just moving back with Mom and Dad; it’s that more and more, the grown children of affluent clients are expecting Mom and Dad to reach into their retirement savings to in order support a lifestyle that often the parents themselves projected onto their kids. Combine the expectation of a high-on-the-hog lifestyle with a sluggish economy and you have what McGee calls a “perfect storm.” 

To read the full article, see Full-Nest Syndrome – Financial Planning

When there is habitual support beyond ordinary gifting, it can wreak havoc on a trustee who may wind up holding the purse strings for these adult children. Trust documents often contain spendthrift provisions, or standards tied to “health, education, and maintenance” that may result in a trustee saying “no” to requests that Mom or Dad always said “yes” to. It’s important that parents exhibit giving behavior during their lifetime that is consistent with the terms that a trustee will have to adhere to.

Estate Planning Lessons from Tragedy

twintowerscrash On Sunday we will remember the horrific events of September 11, 2001. We will each pause and think about where we were that awful day at that terrible hour; and appropriately we will each in our own way offer prayers for the victims’ families and for the protection of our country.

This being an estate planning blog however, there are also lessons to be learned from the stories that emerged in the years following the tragedy that we as estate planners should pay attention to and share with clients who may be reluctant to do any estate planning.

In a January 19, 2004 article by Martin Kasindorf in USA TODAY titled Compensation battles inflict new wounds on 9/11 families, Kasindorf profiles several stories that validate an axiom I have adopted: money changes people. Below are excerpts from the article. To read the full article, click here.

At least 22 same-sex partners, often opposed by their deceased loved ones’ relatives, are seeking compensation. They’re having mixed success. Other battles pit one generation against another: a victim’s parents against a domestic partner, fiance or spouse.

In some of the most unusual cases, several all-but-forgotten women who want compensation for the deaths of immigrant men have traveled to the USA from their native countries — Trinidad, Bolivia, Colombia and Brazil. Saying they are the victims’ widows, they are blindsiding new wives and kids with inheritance lawsuits.

Three weeks before New York Police Department sharpshooter Santos Valentin died in the attacks, he and his wife, Selena, signed a separation agreement. She waived the rights to his death benefits, but she has filed a claim with Feinberg. In Queens and Manhattan courts, she’s battling Valentin’s sister, New York police investigator Denise Valentin, over rights to police pensions and the federal cash.

At the root of most of the family disputes: Only about 25% of those who died left a will, which generally controls distribution of an estate’s funds. Without a will, only Vermont, Hawaii and California gave inheritance rights to same-sex partners at the time of the attacks. Heterosexual domestic partners could inherit the property of a will-less decedent in Hawaii and Massachusetts, and in California with some limits.

“Personal situations today are so complex,” says Alice Rice, chief clerk of Queens County Surrogate’s Court in New York City. “Old marriages or relationships that might never have surfaced suddenly are revealed after a disaster. When money is involved, there’s even more incentive to come forward.” [emphasis added]

U.S. Trust survey finds parents are reluctant to discuss estate plans.

Yesterday, I blogged about the possible disconnect between the affluent and their advisors when it comes to leaving an inheritance. According to U.S. Trust’s Insights on Wealth and Worth Survey, only half of those surveyed felt that leaving an inheritance to their children was an important goal.

Perhaps it’s not surprising then, that the same survey finds that the affluent are also reluctant to discuss their wealth with their children, citing many reasons that seem to point to poor communication as the chief reason for these feelings. 

I submit that we in the professional advisor community are at least partially to blame for this. After all, we go to great lengths to show our clients how to leave more wealth to their children and grandchildren when many of them have great apprehensions about doing so.  But evidently, we don’t talk to our clients about how to resolve this conflict. Fully half of the respondents have never discussed ways of teaching children to handle wealth responsibly or any of the emotional aspects of wealth; and 31% have never discussed the financial needs or expectations of their children with their advisors. Let’s face it; they’re not going to ask. We have to start the conversation. 

US Trust Graph2

Do advisors and clients see eye to eye on inheritance planning?

Much has been written of late regarding the “window of opportunity” for the the ultra wealthy to take advantage of soon-to-expire allowances for passing large amounts to heirs. In a recent article by Gail Butler for Fox Business entitled, “To Give or Not to Give? The 2-Year Estate Planning ‘Opportunity”, Attorney Harold Zaritsky a nationally-recognized expert on estate planning reflects the attitude of many advisors, stating that the current two-year window is “a rare opportunity for making large gifts to future generations by gifting assets to a trust for the benefit of children and grandchildren.”

The problem with all this discussion is it seems to run counter to the attitudes held by the very clients these “windows of opportunity” are supposed to benefit.  According to the most recent survey of the wealthy* by U.S. Trust, slightly less than half (49 percent) of those surveyed feel that leaving a financial inheritance is personally important. And, even if leaving an inheritance was important, they don’t feel very good about what happens to it afterwards. Only about one-third (34 percent) of parents agree strongly that their children will be able to handle the inheritance they plan to leave them, and only 36 percent of parents strongly agree their children will be able to work together to make decisions to manage the family wealth after they are gone. To read the survey, click here.

US Trust Graph

So is there a disconnect between those of us in the professional community and the clients we advise? Or, is the best estate plan to simply die broke?

*All respondents to U.S. Trust Insights on Wealth and Worth have in excess of $3 million in investable assets.

New article on post-death estate planning decisions

Financial Planning Magazine has recently published an article by Martin M. Shenkman, CPA, PFS, JD., titled “After Death Do We Plan.” Shenkman is an estate planner in Paramus, N.J. He runs the free legal website

Most estate planning focuses on pre-death planning – life insurance, wills and trusts, gifting strategies, to name just a few. Because of this focus, few clients comprehend the plethora of planning opportunities that exist after a loved one has passed away. To drive home the importance of post-death planning, it’s important to consider the many opportunities that exist.

Shenkman discusses four areas of planning opportunity and necessity after the estate-owner’s death, including, non-tax issues, funding trusts, deferring estate taxes, and valuing estate assets.

After Death Do We Plan – Financial Planning

Executor files late return, increases tax by 25%

The selection of an executor or trustee for one’s estate is very often made without much more consideration than deciding what to have for dinner. Ask anyone who has served as an executor and you be hard pressed to find one so dismissive of the responsibility. It’s a burden not many individuals would (or should) accept lightly.

In the case of the ESTATE OF COAXUM v. COMMISSIONER OF INTERNAL REVENUE, the Executor (brother of the deceased) failed to timely file an estate tax return within nine months of death. Section 6651(a)(1) imposes an addition to tax for failing to file a required return by the prescribed filing date. The addition to tax is equal to five percent of the amount required to be shown on the return for each month the return is late, up to a maximum of 25 percent. Sec. 6651(a)(1), (b)(1). The return was filed more than five months late. Therefore the addition is equal to 25 percent of the net estate tax due.

In addition to the late filing, this executor also failed to include over $400,000 of annuity assets in the decedent’s taxable estate, claiming that they were excludable for the sole reason that these amounts were reported as taxable income on another brother’s Federal income tax return. This is a reference to the deduction potentially allowed by section 691(c) to the brother in calculating his income-tax liability, but did not permit excluding the value of these assets from the decedent’s estate.

Even giving the brother/executor the benefit of the doubt with regards to his actions, this case illustrates why a little more time should be given to the selection of an executor than normally occurs. For a short list of executor duties, click the link below.

Avoiding Estate Planning Litigation Paper Published

GERRY W. BEYER, Governor Preston E. Smith Regents Professor of Law; Texas Tech University School of Law, has published Avoid Being a Defendant: Estate Planning Malpractice and Ethical Concerns. Below is the abstract of his paper:

An estate planner may become a defendant in a case involving an estate he or she planned in two main ways. First, the attorney may have performed his or her services in a negligent manner potentially creating exposure to malpractice liability. Second, the attorney’s conduct may have lapsed below ethically acceptable standards.
This article reviews the exposure an estate planner may have to malpractice liability with emphasis on Texas law and then focuses the reader’s attention on ethical issues that may arise while preparing or executing the plan. I hope that by pointing out potentially troublesome areas, the reader will avoid the ramifications of drafting a flawed estate plan or having a lapse of ethical good judgment which may lead to the frustration of the client’s intent, financial loss to the client or the beneficiaries, personal embarrassment, and possible disciplinary action.

When Mom becomes a Tenant

The trust business involves many roles, and most corporate trustees perform well most of the time with the fiduciary and administrative roles that years of statutes and uniform laws have helped to define. At least as important is maintaining a healthy and cooperative relationship with all the parties to a trust in order to handle the inevitable conflicts that will arise given enough time.

Years ago we became trustee of a trust established for the benefit of a minor with proceeds received in a wrongful death litigation. The minor’s mother, as guardian of his estate, was allowed to enter into the trust agreement on the minor’s behalf. Subsequently the court approved the trust’s purchase of a home for the minor, which of course the mother also lived in; as well as monthly support payments to the mother as caregiver for the minor. Read more of this post

Portability Versus Bypass Trust: Practical Planning Tips – Wealth Strategies Journal

Portability Versus Bypass Trust: Practical Planning Tips – Wealth Strategies Journal .

The Wealth Strategies Journal has posted a new article entitled, “Portability Versus Bypass Trust: Practical Planning Tips,” by Martin M. Shenkman, CPA, MBA, JD, Esq. and Robert S. Keebler, CPA, MST, AEP.
This article was adapted from an upcoming Special Teleconference sponsored by The Ultimate Estate Planner.  More information about this teleconference, scheduled for Tuesday, June 14, 2011, is below:

SPECIAL TELECONFERENCE – Portability: What Every Professional Should Know

with Martin M. Shenkman, CPA, MBA, JD, Esq. and Robert S. Keebler, CPA, MST, AEP

Join two of the nation’s leading experts on a special 90-minute teleconference on the topic, “Portability: What Every Professional Should Know” on Tuesday, June 14th at 12pm Eastern Time. 

For more information or to register, click here

Providing for the care of pets in estate planning

Author with "Chap" Gerry Beyer, Professor of Law at Texas Tech Univ. School of Law and author of the Wills, Trusts & Estates Prof Blog, has co-authored a book with Barry Seltzer titled  Fat Cats & Lucky Dogs—How to Leave (Some of) Your Estate to Your Pets.  According to the authors,

Pets are becoming more important in our lives. This is borne out by recent research, which shows that 75% of American dog owners view their animals as family members and more than 50% of cat owners feel the same. About 20% of pet owners have actually changed romantic relationships because of disputes over pets. Nearly 40% of pet owners carry pet pictures in their wallets and more than 30% have taken time off work because of sick pets. A majority of pet dogs and cats sleep indoors, most on their owner’s bed or on a blanket or pet bed. A recent survey revealed that more pet owners would rather be stranded on a desert island with their pets than their spouse.

Attorneys in some United States jurisdictions report that, when asked, 90% of their pet-owning clients want to make provisions for their animals, either through trusts or some other mechanism. There is even a website devoted to estate planning for pets, with the appropriate address,


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