If you have been living with a partner for years or more, you may consider yourself a “common-law” couple. While the term common-law is often bandied about, the legal definition of common-law is very different than the popular concept. The fact is, couples are only married through common-law if they meet very specific requirements. Let’s take a look at what it means to be a common-law couple.

Applicable States: Only 9 states allow people to get married through common-law. That means that you must live in one of the states and meet the state requirements to become a married couple under common-law provisions. Those 9 states are: Alabama, Colorado, Kansas, Rhode Island, South Carolina, Iowa, Montana, Oklahoma, and Texas.

Requirements: If you live in one of those states you must meet the specific state requirements in order to become married through common-law. Though these requirements differ slightly, they require you to be of a minimum age (usually 18 or older) and intend to get married to your partner. After agreeing to be married you must both hold yourselves out to the public as being married.

Time Requirement: There is no minimum time limit involved in a common-law marriage. Even if you have been living together for years or decades, you are not automatically married through common-law.

Marriage Rights: Once married by common-law, you and your spouse are a married couple. This means you have the same rights and obligations as has every other married couple. This means that you can only terminate the marriage when one of you dies, or if you get a divorce or an annulment. It also means each of you are entitled to inherit from one another upon the other’s death.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

For many who begin the estate planning process, the macabre notion of planning for what happens after you die soon gives way to a joy knowing that you can care for your family even after you are no longer alive. For many celebrities, however, estate planning is a method through which they can continue to express their unhappiness with their children by disinheriting them from an inheritance. There are any number of examples of famous people who have disinherited their children or, at the very least, left behind only a token inheritance.

• Marlon Brando. As one of the most renowned actors of his time, Mr. Brando left behind the film legacy that stretched over decades. After his death in 2004, however, he also left behind numerous children, yet did not leave an inheritance to all of them. Though his estate was estimated to be worth about $30 million, Mr. Brando did not leave an inheritance to one of his daughters, as well as a grandchild from a daughter who had previously died.

• Joan Crawford. The well-known actress had adopted four children, though after she died she left only two of them an inheritance and the other two she left nothing. The inheritance she left to her two children however, was only $77,500 each. She offered very little explanation for why she did this, though she did state in her will that she made her gifts “for reasons which should be well known to them.”

• Michael Jackson. Leaving behind an estate estimated to be worth about $500 million, Michael Jackson created the trust for the benefit of his children and his mother, though all other family members were excluded from his estate. This includes his father Joe Jackson, as well as all of his brothers and sisters.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

If you are an art lover who has spent a lifetime collecting and taking pleasure from your art, you face additional challenges when it comes to choosing how you want to divide the property after you die. Though collectors with both small and large collections face the same issues, they are often compounded when you have a high value collection, or individual pieces that are worth significant sums. Here are three tips to help you as you develop your art estate plan.

Tip 1: Gauge the interest.

For many collectors, their love of art is not necessarily shared by their children or grandchildren. In this situation, it’s necessary to gauge the interest that your children may have in receiving your art after you die. There may be no interest at all and leaving an uninterested child a particularly valuable piece can be more of a hindrance than a gift. If you’re not sure who may or may not want to receive art, talk to your children before you make any decisions.

Tip 2: Give choices.

For collectors with large collections it may be impractical to leave each child a significant portion. In this situation, you can allow each child to select a single piece so they have something to remember you and your collection by, but not so that you overburdened them with a massive set of art. If the children pick pieces of significantly different values, you can offset each with an accompanying cash gifts.

Tip 3: Put it in writing.

After making your decision, it’s important that you include your specific gifts in writing and memorialize it in your last will and testament or other instrument. You should also inform your family about your decision and discuss it with them before you make it so there are no conflicts later on.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

As an estimated 10,000 Americans reach retirement age every day and about $20 trillion in assets will be transferred between generations over the next 50 years, the growing need for estate planning in the United States is only becoming more complicated. Compounding the issues posed by the aging of the American population and the impending wealth transfer are numerous other issues. Let’s take a look at three of them.

Old Marriages and New Marriages

Many baby boomers on their second, third, or subsequent marriage. With all these marriages comes complicated estate planning issues involving ex-spouses, stepchildren and ex-stepchildren. For many baby boomers it is important that they ensure their own children receive an inheritance and not have it diluted by blended family concerns.

Generation Gap

For baby boomers who plan on inheriting the wealth of their depression-era parents, the attitude the two generations have towards money are markedly different. Depression-era parents tend to be much more thrifty and save more, while baby boomers tend to spend and often have more debt problems. This conflict in attitudes towards money can lead to significant disputes between aging parents as well as aging baby boomers.

Longevity

As medical technology continues to advance and the average lifespan continues to increase, a lot of wealth is getting transferred to the healthcare industry. The rising cost of healthcare and increased longevity of aging parents continue to deplete inheritances, often to the detriment of baby boomers who are relying on receiving it.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

Step 1: Pick a cause and a list of charities.

If you don’t already have a specific charity or nonprofit institution in mind, you can begin your search by thinking about those causes or institutions that matter to you the most. Some people choose to leave their gifts to their church, local community, alma mater or charities with which they are most familiar. However, you should also consider charities that deal with issues you are most concerned about. You can never give every charity all the money you would like, but you can pick charities that you feel strongly about and which allow you to feel better about your own estate plan gifts.

Step 2: Investigate the organization.

To be even more secure in your choice, you need to take some additional effort and investigate each of the charities you’ve identified. A good charity typically uses at least 60% of its income towards the cause it supports. The more money a charity uses towards pursuing its goals, the better, though some newer charities may have higher start-up expenses then established ones. Always research the charity properly so you can be doubly sure that your choice is the correct one.

Step 3: Choose the Instrument

After making your choice, you need to speak to your estate planning attorney to determine the best way to ensure your charity receives the appropriate gift. Sometimes it is enough to state the explicit gift in your will, while other times you may want to include a specific gift as well as create a trust. There are specific trusts that are available to you in charitable situations, and your estate planning lawyer can tell you more about them.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

The phenomena of the depressed and aimless trust fund heir is nothing new. While many of us believe that wealth will bring us happiness, the opposite is often the case. For those considering leaving a substantial inheritance to your children or others, you need to consider what impact a financial windfall has on other people. Though rarely spoken about, there are specific and concrete issues that affect people who come into new wealth.

Issue 1: Destroying Personal Relationships

Once a person becomes wealthy, many of their relationships can change and can do so incredibly quickly. If inheritors are not prepared to deal with the financial reality of an inheritance, they may soon find that they have either been taken advantage of or that they view much of society with suspicion and even outright hostility. Consider carefully if a child is prepared to inherit wealth, and how you can better ensure he or she will be ready to manage the issues that accompany large inheritances.

Issue 2: Finding a Purpose

Billionaires like Warren Buffett and Bill Gates have both expressed concerns about leaving too much of their fortunes to their children. Mr. Buffett, for example, has famously said that he wants to leave his children “enough so they would feel they can do anything, but not so much that they could do nothing.” What he means is that wealth can be a blessing and a curse for those who inherit it. Because heirs do not work for their inheritance, this can bring with it a lack of a sense of fulfillment and purpose. Leaving enough money so the child is cared for, yet not so much that every whim is achievable, is key.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

Nominated for five Academy Awards in 2012, and winning for best adapted screenplay, The Descendents is a movie about Matt King, a man going through a midlife crisis. Played by George Clooney, King is any wealthy trial attorney whose wife has recently been injured in an accident and was left in a coma. This leaves King to care for his two daughters, a 10-year-old and a 17-year-old. In the meantime, he learns that his wife had been planning to divorce him and had been having an affair.

What makes this movie of interest to estate planning is the fact that King is descended from a Hawaiian princess and a wealthy white banker. As the descendents of these two, King is left a beneficiary of a valuable trust that owns real estate on one of the Hawaiian Islands. Because the trust is about to end, King is forced to decide between keeping the land and selling it to a developer.

One of the themes in the film is how King deals with unearned wealth he inherited from his ancestors. Though King lives off of his income, he believes that if he gives his own daughters a substantial inheritance they will become spoiled and not be able to have a fulfilling life. Voicing similar concerns as those held by Warren Buffett, the character says he wants to leave his children enough so that their lives have options, yet not so much that they will never have to do anything. Such concerns are often expressed by those considering transferring wealth to their children.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

If you haven’t yet been through it, you may be surprised to learn that personal property is the main cause of family fights when a loved one dies.  Money and financial assets are easy to divide in half, thirds, fourths, and so on.  Personal property is not.

Personal property is not easily divided under the “one for you; one for me” system.  Parents’ wedding photograph, treasured childhood books, Grandma’s red kitchen stool, Mom’s engagement ring, Gramps’ Antarctica ice pick, and Dad’s favorite ice cream bowl have all been the center of sibling controversies.

You can avoid family discord by:

• Giving special items away during your lifetime.
• Making a list of special items to be distributed at your death, indicating who gets what and why that particular person is receiving that item.
• If you give a gift to one person in a particular class of beneficiaries (i.e. children, grandchildren, or nieces and nephews), provide a gift for all persons in that class.  Even if you’re not particularly close to one person, make the specific gift.  This helps to keep the peace and foster relationships among family members.
• Make provisions for the distribution of the remaining items that aren’t specified for a particular person.  For example, have each child pick a number out of a hat to determine the order of making a selection, instructing them to take turns in selection.  Appoint a mediator to settle any disputes.
• In blended families, be sure that all of your personal property does not go automatically to your second spouse.  If you do, your children from a previous relationship will be totally disinherited.  While you may not want the sofa and kitchen table that your spouse uses daily to go to your children, they are sure to treasure personal possessions and family heirlooms to remember you by.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

A revocable living trust is often the center of an estate plan.  While it’s not all encompassing and is used in conjunction with other ancillary estate planning documents, a trust is incredibly beneficial for most estate planning clients.

Cindy had read several books on estate planning.  She did more online research and realized that she and her husband, Jack, needed a revocable living trust.  She emailed her CPA and asked for a referral to a qualified estate planning attorney and was pleased to receive an immediate response.

Cindy made an appointment for she and Jack to meet with the estate planning attorney who agreed with her conclusion that they would benefit from an estate plan including a revocable living trust.

After much thought and consultation, the estate plan was designed, drafted, executed, and implemented.  Cindy and her attorney were both very good at follow through; Cindy wanted to get everything in order before their third child was born.

Just a few months later, Jack was killed in a work accident.  He was electrocuted and never regained consciousness.  Cindy called the estate planning attorney who took care of everything so Cindy could focus on her family.  He kept Cindy abreast of all actions taken.

Through provisions in the revocable living trust, an asset protected family trust was set up with Jack’s share of the assets.  The trust benefited Cindy and her three children.  Cindy and the CPA were trustees.

On the way to playgroup just 6 weeks after Jack’s funeral, Cindy was distracted for a moment because the kids were crying and she was still distraught over Jack’s death.  She went through a red light and plowed into an SUV containing a family.  Everyone in the SUV was killed, but for one child in a car seat.

Lawsuits ensued.  All of Cindy’s assets were seized.  She and the three children would have been left with nothing but for the family trust which was asset protected and couldn’t be seized in any law suit.

To this day, Cindy is grateful that she and Jack did revocable living trust planning.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

With the use of a college savings plan, saving for the costs of college can be a lot easier.  Texas is a state that offers several different savings plans.  The Texas College Savings Plan is just one of these opportunities.

What is the Texas College Savings Plan?

The fees associated with this plan are very low.  In order to take advantage of this plan, individuals must contribute a minimum of $25.  Your child can use the funds at almost any accredited school in the United States.

Additionally, this plan makes it possible to save for the education of anyone, including a child, grandchild, friend, or even yourself.

What are some of the benefits of the Texas College Savings Plan?

There are many benefits to this plan.  For one, you’re able to start saving as early or as late as you’d like.

You’re also able to have complete control over your contributions as well as your beneficiary designation.

You’re also able to take advantage of tax benefits.  If you make withdrawals from the account for college-related expenses, you won’t have to worry about paying federal taxes on the withdrawals.  You’re funds will also grow federal and state tax-free.

Because of the many benefits of this plan, individuals just like you are taking advantage of this opportunity to save.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.