Most of us have considered the estate planning basics. Who do I want to inherit my assets? Should I use a living trust? However, many important details are often overlooked. These tiny details can mean the difference between a successful and an unsuccessful estate plan.


Important Estate Planning Details



Probate is the legal process that occurs after you die. The probate court first validates your will. Then, the court ensures that your assets are distributed to your beneficiaries according to your will. People often forget how time consuming, costly, and frustrating the probate process can be. The process can last anywhere from six months to a year or longer. The estate is also required to pay court fees and attorney fees incurred along the way.


Asset protection

Before you leave significant assets to someone, it is important to consider their financial and personal situation. You must consider their potential debt, likelihood of divorce, potential for financial mismanagement and their eligibility for government benefits. For example, Medicaid has a strict cap on how many assets you may own before you are ineligible for the program. If your loved one, such as a family member with special needs, who is on Medicaid, suddenly receives an influx of money, they might no longer be able to participate in the program.


Tax planning

Currently, an individual’s estate is exempt from the estate tax if it is valued at less than $5.34 million. However, for married couples especially, it may be prudent to still incorporate some basic estate tax planning provisions in case Congress lowers the estate tax exemption in the future.


Similarly, an estate planning attorney can advise you as to how you can position your estate to properly minimize income taxes on real estate, investments and retirement accounts when you pass those assets on to your children.


Beneficiary designations

Many financial assets allow you to designate a beneficiary when you create the account. The beneficiary automatically inherits the account if you die. However, you must remember that beneficiary designations override your will; meaning that your estate-plan and beneficiary designations should align with one another. Some common financial assets with beneficiary designations include life insurance policies, annuities, bank accounts and retirement accounts.


Executor’s Access to Documents

It is recommended that you sit down and create a master list of what financial assets you own, where they are located, the account numbers and any secret access information (such as usernames and passwords). Adding a list of your creditors can also save your executor time and money. This is because all creditors must be paid before your estate can be distributed to your heirs.   In our office, for example, we create detailed asset reports for most of our estate planning clients, which can later be an invaluable tool for their executors and trustees, saving them countless hours and headaches in tracking down account information.


Contact us!

If you have any additional questions about creating an estate plan, please call our office at (919) 443-3035 for a free phone consultation or contact us online. At the end of the call, you’ll know the next step and at a minimum, we’ll point you in the direction of resources that can help you.   There is no obligation to you.


As many of you know, May is National Elder Law Month.  The National Association of Elder Law Attorneys (NAELA) has declared this month the time for Elder Law attorneys across the nation to take time out of their busy practices to help educate the public about Elder Law and how an Elder Law attorney can help seniors and their families by offering solutions to the unique issues that come with aging.  This article will discuss a debilitating condition that many Americans eventually face as they age:  dementia.  First, we will describe what dementia is and what it isn’t.  Then we will turn our focus to its costs to the individual, the family and our nation.  As Elder Law attorneys we are specially situated to help find solutions to many of the problems this condition brings with it.  While we can’t stop dementia, we can help protect those in its clutches while the medical world continues to seek prevention, treatment and reversal of the condition.


Dementia Defined 


The Alzheimer’s Association defines dementia as, “a general term for a decline in mental ability severe enough to interfere with daily life. Memory loss is an example. Alzheimer’s is the most common type of dementia.”


Dementia is not actually a specified disease.  It describes, instead, a general decline in memory or other thinking skills and is identified through a variety of symptoms.  Alzheimer’s disease accounts for 60 to 80 percent of dementia cases.  In order to be characterized as dementia, at least two of the following mental functions must be significantly impaired:  visual perception; reasoning and judgment; memory; communication and language; or ability to focus and pay attention.  Dementia is not a normal part of aging as the terms “senility” or “senile dementia” infer.  If a loved one is having trouble with any two or more of these mental functions, it’s a good idea to get it checked by a doctor.  Dementia is progressive and typically takes over the mental functions over time.  In this way, it provides the individual and the family with time to plan for its disastrous affects.[1]


Cost to the Individual

The cost to the individual with dementia is difficult to quantify.  Because dementia is a progressive condition and one where aging is the greatest risk factor, it is logical that at the beginning and younger stages of dementia, the cost to the individual is minimal.  As dementia progresses, so does the need for assistance with daily activities.  This assistance often comes in the form of meal preparation, help with grooming and hygiene, transportation assistance, as well as help with many other daily activities.  Dementia patients can become so mentally challenged that they may place themselves in dangerous situations, such as roaming neighborhoods and getting lost.  While the individual affected by dementia may need only a few hours of help per week at the beginning of symptoms showing, soon they may need around the clock supervision, not only for assistance with daily activities, but to protect them from themselves.  The individual’s costs will include medical expenses as well as paying a caretaker.


Caretaking for one with dementia varies depending on the quantity of care required.  An in-home caretaker may charge up to $21 per hour or higher.  Adult day care can run as high as $18,200 per year or more.  When an individual can no longer live alone but is not quite ready for a nursing home, Assisted Living facilities are available but may cost as much as $42,600 per year or more.  When around the clock care is needed, a nursing home can cost an individual up to $90,520 per year, or higher.  To view costs in other states and national average costs of long term care, see the MetLife Survey of Long Term Care Costs,


Cost to the Family


Where the individual with dementia is fortunate enough to have family nearby, the family will often step up to assist the ill loved one with their daily activities.  Again, the process can be gradual and before the helpful family member realizes it, they may find themselves missing work and, finally, quitting their job altogether in order to give proper care to the dementia patient.  Obviously, the cost to the family includes the loss of income from this family member’s job.


The less recognizable cost to the family, however, is the emotional strain that is placed on the family member caretaker.  In order to save the family money, many family members will work nearly twenty-four hours, seven days per week.  The ramifications are physical, mental and emotional health problems to the caretaker.  The medical costs and possible future psychological costs to the caretaker, then, must be considered.


It is important that family members take a step back from the situation and assess this cost.  Providing a caretaker with time off every day, week and year is a must to ensure the caretaker’s health.  The caretaker must have appropriate support in order to keep caring for the loved one.


Cost to the Nation


As a nation we have begun to recognize the devastation that dementia has caused and will continue to cause.  Organizations such as the Alzheimer’s Association have been effective in lobbying for monies to be put towards the research of dementia treatment, prevention and reversal.  The cost of dementia to our nation has been a great motivator for politicians to fund such research.


A study conducted by RAND Corporation in 2013, estimated the national cost of dementia to be between $159 billion to $215 billion (including an estimate for the monetary value of informal care provided).[2]  The majority of the costs associated with dementia are for institutional and home-based long-term care and not medical services.


Medicare and Medicaid pay for some of this cost, which amounts to a taxpayer burden.  According to the Alzheimer’s Association March 2013 Fact Sheet, in 2013 it is estimated that Medicare and Medicaid paid approximately $142 billion in caring for those with Alzheimer’s or other type of dementia.[3]

It is clearly in the best interest of the nation’s economy to continue research on prevention, treatment and reversal of dementia.




The costs of dementia can be devastating to the affected individual, their family and the nation.  While scientists continue to search for solutions to the debilitating condition, the families affected with it must face its challenges.  It is recommended that those families seek emotional support by way of a therapist or support group.  In addition, seeking out an Elder Law attorney can benefit the affected individual and family members in several ways.  Elder law attorneys can guide families to important resources available for the financial and other challenges they will face.  Elder law attorneys can also ensure that the family’s assets are being used in the most efficient manner considering other available resources and the family’s individual goals.


Getting an Elder Law attorney involved in planning for the challenges ahead is one of the MOST important steps a family facing the impact of dementia will take.  If you or someone you know is affected by dementia, we can help and we welcome the opportunity to do so.  Please call our office at 919-443-3035 for a no-obligation, free telephone consultation to determine whether we may be able to assist you and your family.


51-year-old actor James Gandolfini tragically died of a heart attack on June 19th, 2013. He was vacationing in Italy with his family at the time. Gandolfini is perhaps best known for his role as Tony Soprano, a crime boss balancing his roles as family man and Mafioso. It turns out Gandolfini’s Italian alter-ego was much more concerned about privacy than he was. Avid viewers of The Sopranos might recall that Tony Soprano once directed a nameless CPA to establish a trust, to keep his assets protected from “prying eyes.” In comparison, Gandolfini’s 17-page Last Will and Testament has been filed with New York’s Surrogate Court, posted online, and is accessible to the public.

Lessons we can learn from Mr. Gandolfini

Trusts keep your estate plan private and avoid probate. Wills do not.

When you die, your Last Will and Testament must be filed with the local probate court. The function of probate is twofold. First, it creates a public record of your assets, so that creditors can make claims against the estate before it is distributed to your heirs. Second, it ensures that your assets are distributed according to the will or, in the absence of a valid will, according to the state law.

Trusts can avoid the mess of probate and keep the details of your estate private. The trust is a private document that does not need to be filed with a probate court and does not become public record. An estate planner can help you design a trust with rules stating how, when, and to whom your assets are distributed. The beneficiaries of the trust and the Trustees are the only people who ever need to know the details of your estate plan.

It is now public knowledge that Mr. Gandolfini left his jewelry to his son and gifted his long time assistant, Trixie Flynn, a sum of $200,000. But you can utilize a trust to keep your estate plans shielded from “prying eyes.”

Update your will!

At the time of his death, Gandolfini had been once divorced, had a son from his first marriage, and had a 9-month-old daughter, Liliana, with his second wife, Deborah Lin. Fortunately, the actor had the foresight to update his will each time his family’s situation changed. Failing to do so could have had a disastrous impact on his loved ones. For example, had he failed to update his will after Lilian’s birth, his daughter would have effectively been disinherited from her father’s fortune.

The actor’s careful estate planning is a reminder to us all that we must be vigilant about updating our estate plans after any major change in life circumstance (ex: marriage, divorce, birth, death of a family member, a significant change in an inheritor’s debt, etc.).

Lifetime trusts can be established for young children

James Gandolfini left approximately 20% of his estate to his infant daughter, Liliana Ruth Gandolfini. Liliana will inherit the sum, estimated to be about $14 million, outright on her 21st birthday. If you, or a loved one, intend to gift a significant sum of money to a young adult, it is recommended that you establish a lifetime trust for the child.

The trust creates a useful set of checks and balances for the child. For example, the trust can distribute the funds over a period of 10, 15, or 20 years, as opposed to all at once. You could also appoint the child and a trusted adult to act as co-trustees. This allows the child to use the fund, but requires any major spending decisions (ex: houses and cars) to be approved by both trustees. The adult can teach the child the financial skills necessary to manage such a large sum of money.

Property located abroad needs a separate foreign estate plan

According to his will, each of Gandolfini’s children inherited a 50% stake in his Italian villa. If you own any property abroad, you are advised to speak with an estate planner in the country where the property is located. Often times foreign laws do not mirror American laws. For example, most European countries, including Italy, have forced heirship laws. Under these laws, you cannot freely dictate to whom your property is left to. The heirship laws require the property to be inherited by one or more blood relatives. Gandolfini’s will is most likely fine in this regard; however, this nuance between American law and Italian law highlights the importance of seeking the counsel of a local, well-informed attorney when dealing with property abroad.

Have additional questions or concerns?

If you have any additional questions about creating an estate plan, please call our office at (919) 443-3035 for a free phone consultation. At the end of the call, you’ll know the next step and at a minimum, we’ll point you in the direction of resources that can help you.   There is no obligation to you.  The consultation is completely free. Our goal is for you and your loved ones to have peace of mind and a pleasant ongoing journey.


Time and time again, when I meet with clients that have parents living, they begin to realize that they have no idea where their parents stand in terms of having the right plans in place to protect their assets and wishes if something were to happen to them.  Even worse, frequently the adult children don’t even know where to begin looking to locate this information in the event of a crisis.

Do their parents have a will or trust and, if so, where are these and other important documents located? Should assisted living or nursing home care become necessary, what plans are in place to cover the costs? Will mom or dad even have enough money after these costs to carry them through retirement?  Where do mom and dad keep their important legal and financial documents and when was the last time that they were reviewed and updated?

These are some very important questions that need to be asked, and an experienced wills and trusts lawyer can steer you in the right direction. That being said, no matter how good your relationship is with mom or dad, the subject can be a difficult one to approach.

Perhaps the best place to start is timing. Holidays such as Christmas, Hanukkah and Thanksgiving are known to be stressful times, so avoid these occasions. Current events often present the perfect opening, as there is always some Hollywood legend or financial mogul who dies leaving a fortune for the heirs to squabble over.  For examples, see our prior blog posts on the Estates of the Rich & Famous and Lessons Learned from Michael Jackson’s EstateAmy Winehouse, Rosa Parks, Farrah Fawcett and many others serve as additional examples.

Or, the personal experience of a friend or relative can be worked into a dialogue. “So-and-So’s mother was admitted to the hospital recently and no one knew where to find her important papers.” For the adult child who is doing estate planning of their own, it would only be natural to want to discuss their parents’ plans with them during this time.

For some families, several conversations over a longer period of time might be a better approach. No one wants to feel like they are being told what to do, and money matters are often emotionally charged conversations to begin with.

Remember, advance preparations are in the best interests of your parents, so that their wishes can be carried out upon death.  Be sure to communicate this from the start to avoid your parents shutting down or getting defensive about the questions you are asking.

A friend of mine was called up to make medical decisions for her father upon his death bed.  She told me how stressful it was for her, because her father had never documented his wishes and had never talked to her about them.  At the end of the day, she did the best she could, but it was stressful and she always had that little nagging voice in the back of her mind saying, “is this really what he would have wanted?”  The goal is to give everyone peace of mind by knowing there is clear guidance and instructions in place and that your parents will receive the care they desire.

Finally, don’t forget to include the topic of long-term care in your conversations with mom or dad.   While no one likes to think about the possibility of becoming disabled or incapacitated by something like a stroke or Alzheimer’s disease, it does happen and it is something that must be planned well in advance for.  If you start early enough, a wills and trust lawyer can help you put the right plans in place to ensure mom or dad’s wishes during incapacity are honored and that they won’t be forced to sell or give away all of their assets in order to qualify for state or federal assistance.

Are you now ready to help your parents put a rock-solid plan in place that ensures their end-of-life wishes are honored to the fullest?  To get started, simply call our office at (919)443-3035 and ask about one of our upcoming workshops or to schedule a Peace of Mind Planning Session.


The following article originally appeared in an issue of Planning Partners Press, a free newsletter provided courtesy of Carolina Family Estate Planning to Triangle-area financial professionals.  If you are a financial professional that would like to learn more, please click here to request a subscription.

Charitable Remainder Trusts are powerful tools for estate, tax, and financial planning. The potential sale of the income interest in a CRT adds more power and flexibility to planning. The CRT is a split interest trust where the grantor retains an income interest and the remainder goes to one or more charities, which can be chosen by the grantor or by somebody else.

For example, let’s consider a business owner considering selling her business. Instead of a traditional business sale, she might consider donating the business to the Trustee of a Charitable Remainder Trust and having the Trustee sell the business. The gift to the CRT can create an immediate income tax deduction of a portion of the value of the business. The capital gains taxes that she would have to pay on the traditional sale would be deferred and possibly avoided altogether. The transfer to the trust is a charitable gift, so there are no gift tax concerns and the business is removed from the grantor’s taxable estate.

The application of this tool in specific situations is potentially powerful and complex, and this planning should be undertaken only by those who have mastered this area. One downside to this planning is that the grantor receives an annuity payment from the trust rather than a lump sum or discretionary distributions. There is little flexibility to the income stream. What if the grantor finds that she has an immediate need for the funds?

One possibility is the sale of the income interest. There are companies that will purchase these income interests. They will pay the grantor the present value of the income stream, giving the grantor immediate funds and the company some profits over time. The sale is taxed as a capital transaction, so there will probably be capital gains taxes on the sale. The capital gains tax rate will be at the current 15% bracket (or less), rather than whatever the future rates will be. Without the sale of the income stream, the taxpayer will pay taxes on all or some of the distributions, perhaps as capital gains, perhaps as other types of income. A spendthrift provision in the CRT could prevent the sale entirely, so an attorney should review the trust to ensure the sale doesn’t violate any trust provisions.

Roger Silk of Sterling Foundation Management points out that

CRTs are tax-deferral vehicles; they defer to the future the tax a client must pay on the donated assets. If tax rates are stable or falling, this deferral works great because the client gets to pay the tax at a lower rate. But if tax rates rise, the deferral works against the client by forcing them to take their income in the future, when tax rates are higher.

If a client does nothing and tax rates rise, they’ll almost certainly suffer a loss on the value of their CRT. They can avoid this loss entirely by selling their CRT interest today, for a lump-sum cash payment. The benefit, of course, is that the sale is considered a capital transaction, so the proceeds are taxed at capital gains rates.

The sale of a CRT income interest is not always the right thing to do, but sometimes it is. Financial advisers, attorneys and CPAs who have clients who have CRTs should take a look at whether the sale of the income interest makes sense. This review is best done as a team to consider the family, income tax, estate tax, and financial consequences of such a sale.



The following article originally appeared in an issue of Planning Partners Press, a free newsletter provided courtesy of Carolina Family Estate Planning to Triangle-area financial professionals.  If you are a financial professional that would like to learn more, please click here to request a subscription. I am a cop, assigned to the Bureau of Missing […]

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Do I Have to Pay Income Tax on My Trust Distributions?

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Will A Trust Really Fail For Lack Of Funding?

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Blended Families and Retirement Accounts —Is This Combination a Minefield or Opportunity for Advisors?

The following article originally appeared in an issue of The Daily Plan-It, a free newsletter provided courtesy of Carolina Family Estate Planning to Triangle-area financial professionals.  If you are a financial professional that would like to learn more, please click here to request a subscription. Retirement funds — IRAs and 401(k)s — account for about […]

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