Many celebrities have used their wills in a creative way to meet their individual goals.  This includes outlining how certain memorable assets were to be distributed after death and leaving assets to a charity or favorite cause.  We’ve taken the time to discuss some of these interesting celebrity wills, below.  If you’re ready to create your own will, or if you have a question about the purpose that wills serve, meet with an estate planning attorney.

Jerry Garcia

The famous Grateful Dead singer died in 1995.  He used his will to outline how his assets and personal items would be gifted to his beneficiaries.  He chose to leave his personal items including jewelry, household furniture, books, and art to his wife.  He left some of his guitars to Douglas Erwin, the man who custom-made many of his famous guitars.  He also chose to leave a sizeable portion of his state to each of his children and to his wife.

Babe Ruth

Famous baseball player Babe Ruth died in 1948.  He left all of his personal items and household items to his wife, Clara.  He chose to leave much of his assets to friends and family members.  He also left some of his estate to the Babe Ruth Foundation, which he created during his lifetime in order to benefit underprivileged children.

You can choose to create a creative will so that your individual goals are met.  You may decide to leave your memorable creative items to a museum, family member, or friend.  Or, you may decide to leave some of your assets to a foundation or favorite cause.   You have a lot of options.

Make sure that you create a will so that your needs are met and you have a say in future matters.  If you have yet to create a will, or if you’d like more information on the benefits of wills, consult with a qualified estate planning attorney.

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

When creating your estate plan, you will not only need to appoint a guardian who will care for your children, you will need to appoint someone to manage the assets that you leave to your children.

Asset management is important

Failure to include property management in your estate plan could result in the allowing the wrong person to manage the property that you have left to your children. If no property management is planned, probate court will appoint someone who will serve as a property guardian.

Options for property management:

• Name a property guardian in your will. If your children are under the age of 18 when you die, the court will appoint (i.e. affirm) the person that you have named.

• Name a custodian. Under the law The Uniform Transfers to Minors Act, you can name a custodian who will be responsible for managing the property that you leave to your children. Texas law allows this person to manage property for children under the age of 21. These provisions can be included in your will.

• Set up a trust for each of your children. In your will, you can appoint a trustee who will be responsible for managing the assets that you leave in the trust until your child reaches a certain age that you specify. The trustee will follow your written instructions.

• Set up a pot (i.e. common) trust. This option allows you to set up a trust for all of your children. In your trust, you will appoint a trustee who is responsible for managing the trust. The trustee spends the assets according to each child’s needs. Once your youngest child is 23 or whatever age you instruct, the trust ends. Assets are then distributed to lifetime individual trust shares for each of your children.

If you have questions about asset management for your children, consult with an experienced estate planning attorney.

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

Even though we won’t know the total cost of the damage caused by hurricane Sandy for quite some time, there are relief efforts currently ongoing that can use all the support you can provide. Below you will find a brief list of charities and support agencies that are providing assistance to the recovery efforts. You can also visit ABC news.com for their lengthier list of reliable and trustworthy charities that are currently providing disaster relief and assistance.

The American Red Cross.  The Red Cross will be providing hurricane victims shelter, food, and emotional support. Visit www.redcross.org to donate, or contact 1-800-RED-CROSS. You can also make An immediate donation of $10 by texting “REDCROSS” to 90999.

The Salvation Army. Salvation Army will provide victims with food through their network of mobile feeding stations. They will also be providing emergency shelter for those left without a place to stay. You can donate to the Salvation Army by visiting their website www.salvationarmyusa.org.

The New York Blood Center. If you live in the New York or New Jersey area and want to donate blood or plasma, you can contact the New York blood Center by visiting their website www.nybloodcenter.org, or by calling 800-933-2566.  the don’t have to live in that area in order to make a monetary donation, but if you do live nearby consider donating blood because many blood drives had be canceled because of the storm.

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

By hiking 4,400 miles across the country, 23-year-old Matt Kerner aims to raise awareness and money to help veterans and their families who are struggling financially. Matt began his journey on June 4th in San Francisco after selling his car and most of his possessions. He hopes to hike an average of 20 to 30 miles per day and wind up in Washington D.C. by January of 2013.

Matt isn’t a veteran, but he carries on his backpack an American and Marine Corps flag. His brother, Justin Kerner, is a sergeant in the United States Marine Corps who have served several combat tours of duty in Iraq. Matt says he was inspired to take the journey because, in part, of the hardships that his brother endured after returning home. Matt says his brother knew several fellow veterans who committed suicide after returning home, and Justin himself has struggled with the effects of post traumatic stress disorder.

Matt reached Twentynine Palms, California on July 4^th, where his brother is stationed, and spent the holiday with his family. Since then he’s been walking every day. Though he carries camping equipment with him he says he has only had two use it a handful of times. More often than not he is offered a place to sleep at fire stations or hotels along the way. The charity he is working with, Active Heroes, helps him by calling ahead to try to find suitable lodging.

If you want to donate to Matt’s cause or simply follow his progress, you can do so via his Facebook page: http://www.facebook.com/10millionpeoplewhosupportourtroops

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

Some families make it a holiday tradition to donate to charity, spend time volunteering or sending care packages to our military service members overseas.

Option 1: Find a service member you know. If you know someone serving in the armed forces, the best way to send a care package is to send it to the person individually. The Department of Defense, for safety and security reasons, doesn’t allow packages or materials sent to generic addresses, only individuals.

Option 2: Send to an organization. Some charitable organizations such as the USO (www.uso.org) and the American Red Cross (www.redcross.org) regularly provide services to members of the armed forces. You can visit their websites for more information about how to send packages to troops if you don’t have specific addresses to include.

Option 3: Send a charitable donation. Apart from sending an actual care package, card or letter, you can also donate to charities that provide support to military personnel and their families. Go to www.ourmilitary.mil for more information about the various military community support organizations available.

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

A qualified domestic trust is abbreviated “QDOT;” these trusts are used when an American citizen wants to transfer assets to his or her non-citizen spouse.  Assets passed in a QDOT have the benefit of the unlimited marital deduction so a citizen spouse can pass as much as he or she wants to a spouse.  Otherwise, gifting to a non-citizen spouse is subject to limits.

Why is a QDOT required?  For the same reason the IRS has most of its rules; the government wants to collect taxes on the transfer of assets.  In the case of a non-citizen spouse, the government is concerned that when the citizen spouse dies, the non-citizen spouse will leave the United States, taking the assets with him or her.  If this were to happen, the IRS would miss out taxing the money as it transfers to the next generation.

QDOT Requirements

1.       At least one trustee must be a U.S. citizen or a domestic corporation.

2.       The trust must include a provision that dictates that the trustee must withhold estate tax on principal distributed.

3.       The trust must include a provision that dictates that keeps the trust in adherence with IRS regulations to ensure collection of the estate tax.

4.       When the citizen spouse dies, his or her executor or trustee must elect, using the federal estate tax return (Form 706), to have the trust treated as a QDOT.

If you are a married couple and one of you is a citizen and one of you isn’t, consider a QDOT to qualify assets gifted or inherited by the non-citizen spouse, under the unlimited marital deduction.

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

Although there are many ways to avoid the gift tax, sometimes they must be paid.  If gift taxes are due, the person making the gift must file a 709 gift tax form and pay the taxes, in cash.  If the person making the gift fails to pay the gift tax, the recipient must pay it; and, if the recipient doesn’t have the cash to make the gift tax payment, the property (i.e. the gift) will be seized and sold to make the tax payment.

Who Pays the Federal Estate Tax?

The federal estate tax is the transfer of wealth from one generation to the next.  The federal estate tax is paid from estate funds before assets are distributed to beneficiaries.  You do not need to include inherited assets (apart from capital gains realized after you inherit) on your income tax form.

Who Pays the Generation Skipping Tax?

Because the IRS wants to tax the transfer of wealth at each generation, there is a generation skipping tax that is imposed (in addition to the federal estate tax) if you try to avoid having your children pay taxes at their death on the assets you give to them.  The generation skipping tax is paid by the estate before the distributions are made to beneficiaries.

Consult with a qualified estate planning attorney to learn how to minimize or totally eliminate the gift tax, federal estate tax, and generation skipping tax.

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

As we discussed in part one of this article, if you’re like most of our clients, you want to plan your estate to make things easier on your loved ones.  Not being a burden is a common concern.  Fortunately, there is much you can do.  Follow these tips:

6.  Avoid Probate

When working with your estate planning attorney, let him or her know that you want to avoid probate.  Avoiding probate saves money, time, and stress.  It also keeps your personal and financial affairs private.

The best way to avoid probate is with a fully funded revocable living trust.  If you and your attorney choose trust planning, be sure to fund your trust.

7.  Avoid Jointly Owned Property

Jointly owned property is the main culprit in unintentionally disinheriting children.  Sadly, it happens every day.  Avoid jointly owned property, especially with a second spouse.

8.  Pass Assets in Lifetime Asset Protection Trusts

You can protect your loved ones’ inheritances from seizure by creditors and divorcing spouses if you pass them in lifetime asset protection trusts, and NOT outright.  Any assets inherited outright are subject to seizure.

9.  Include Special Needs Provisions

Include special needs trust language in your trust so that an inheritance won’t disqualify any beneficiaries from receiving governmental assistance.

10.  Jot Down Your Wishes for Final Arrangements

Many family fights arise from the period of high stress and decision making surrounding funerals, memorial services, and burial.  In addition, often thousands of dollars extra are spent on services that no one really wants or needs.  Let your family know what you want in regard to final arrangements, jot down your wishes, and keep your wishes with the rest of your estate planning documents and important papers.

Read part one of our article, How to Plan Your Estate to Make Things Easier on Your Loved Ones, for more tips.  You’ll be glad you did.

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

If you’re like most of our clients, you want to plan your estate to make things easier on your loved ones.  Not being a burden is a common concern.  Fortunately, there is much you can do.  Follow these tips:

1.       Work With an Estate Planning Attorney

A well designed, comprehensive, legally valid estate plan goes a long way to making things easier on your loved ones.  A solid estate plan will include incapacity planning, thereby avoiding guardianship or conservatorship proceedings and court interference.

2.       Ask Your Trusted Helpers if They are Willing to Serve

Don’t just assume that your loved ones want to act as your executor, trustee, guardian, or power of attorney agents.  Ask before naming them and explain the associated duties.  Be sure to ask and name contingent trusted helpers as well.

3.       Organize Your Papers

Keep your estate planning documents in a safe place along with all your other important certificates and financial statements.  Be sure to include a list of all of your assets, including online assets with their usernames, passwords, and PINs.  Update frequently.

4.       Communicate with Your Loved Ones

Let your loved ones know that you’ve engaged in the estate planning process, where you keep those documents and important papers, and how to contact your estate planning attorney, financial advisor, and CPA.

Let them know who’s in charge when and if you’ve done anything unusual in your estate plan.  This is important in all families, but is especially important in blended families.

5.       Update Your Estate Plan Regularly

Estate planning is a process; it’s not a “once and done.”  Have your estate plan reviewed for updates every three to five years, sooner if you have a big change in your life such as marriage, divorce, a new child, health change, or move to a new state.

Read part two of our article, How to Plan Your Estate to Make Things Easier on Your Loved Ones, for more tips.  You’ll be glad you did.

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

If your loved ones aren’t clear on what you want regarding final arrangements, it can lead to family discord or gobs of money, needlessly spent.  Jot your wishes down and chat with your loved ones.  Let them know where you keep your wishes for your final arrangements and other important estate planning documents.

9 Final Arrangement Considerations

• To avoid high pressure sales, a funeral director is required to provide pricing information over the phone and can’t make you or your loved loves go in to the funeral home to obtain information.
• In addition, a funeral director is required to disclose which services are required by law and which are optional.
• Pre-paying final arrangements is not recommended because you may change your mind, you may move, and the funeral home may go out of business or change hands.
• Instead, you can set up a funeral trust account at your bank so loved ones don’t have to front expenses.
• Alternatively you can set up a Funeral Expense Trust which is a unique strategy that allows you to set aside money that can be used to pay final expenses and pass money to your heirs tax free, as well as, help provide some additional income in a time of need.
• If you use trust planning and a fully funded revocable living trust, probate is avoided and your loved ones have access to your funds much faster, so they can pay bills, including funeral expenses.
• Make a list of what is important to you such as guests, services, traditions, songs, scriptures, readings, clergy, burial, cremation, meals, celebrations, and the like.
•  If an open casket is important to you, know that you can be an organ donor and still have an open casket.
• Don’t include your final arrangement wishes in your will; it’s often not reviewed until after the funeral and then it’s too late.  Instead, let your family know what you want, jot it down, and show your loved ones where you keep your important papers (i.e. NOT in your safe deposit box.)
• If you change your mind, update your written plan and advise loved ones.

If you have questions regarding final arrangements, consult with a qualified estate planning attorney.

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