Estate planning for valuable art (Part Two)

Lessons Brooke Astor could have used.

To continue our discussion from May 22.  Here are several additional options and considerations you may find appealing.

CRATs and CRUTs

The donor may determine how the income interest will be calculated with a CRT. There are two types of CRTs: the charitable remainder annuity trust (CRAT) and the charitable remainder unitrust (CRUT). The CRAT is designed so that the actual dollar amount distributed to the donor (and/or the other persons the donor designates) are fixed when the trust is created and funded. Generally the predetermined annuity amount will not change no matter how the trust assets fluctuate in value. A CRAT can be appealing to the donor who needs a specific amount of income and who is concerned about a change in income payments.

A CRUT is designed so that the amount distributed to the donor is recalculated each year based on a fixed percentage of the trust’s fair market value for that year. Unlike the CRAT, the CRUT is not a fixed annuity payment. The fixed percentage will not change; however, the amount that the donor receives can fluctuate. If the CRT performs well and the trust assets increase in value, so will the income interest payment, which is calculated as a fixed percentage of the increased trust value. However the reverse is also true, and if the trust decreases in value, the income interest will also be affected. A CRUT is appealing for the investment-minded donor who wants to benefit from increased income payments resulting from the long-term appreciation of the trust assets. There are various types of CRUTs, which should be explored in greater detail before the client makes a final decision.

A disadvantage of using a CRT for art is that because art is personal property, the income tax deduction may be limited significantly. In addition, when a charitable contribution consists of a future interest in tangible personal property, no deduction may be taken until all interests and rights to possession or enjoyment of the property have expired or are held by a person other than the donor (Sec. 170(a)(3)).

The tax benefits of transferring art to a CRT and later selling it include avoiding the capital gains tax on the sale of the asset and removing the underlying value of the asset from the donor’s taxable estate. Of course, the reason that the art is removed from the taxable estate is that it is no longer owned by the donor. For that reason, some donors couple the use of a CRT with what is known as an irrevocable life insurance trust. When used together, these tools replace the art’s value and keep that value out of the donor’s taxable estate.

Trusts

The client may also choose to make a gift (lifetime or at death) of the art to family members in trust. If the client wishes the art or collection to stay with intended beneficiaries, he or she can establish an irrevocable trust and transfer the collection to it. That will protect the assets from the creditors of the beneficiaries and preclude its value from being taxed in the client’s estate. If doing so, it is advisable to add enough funds to that trust to insure and maintain the art. Choosing a trustee must be carefully considered as the trustee or trustees will have the continuing ability to manage the trust assets, including the art.

Fractional Interests

A gift of a fractional interest in art should also be considered. However, the Pension Protection Act of 2006 (PPA) greatly limited the value of this strategy. Until passage of the PPA, a collector could donate a fractional interest in a work of art to a museum that qualifies as a charitable institution. Collectors did so for many reasons, one of which was that they could take a tax deduction for the value of the fractional interest. For example, if a collector donated a 50% interest in a painting to a museum, he or she could write off half the value as a charitable deduction. The painting would spend half the year in the donor’s possession and half the year in the museum’s. Unfortunately, this led Congress to be concerned that collectors may have been abusing the write-off by enjoying more than their rightful share of the art. For example, if a collector donated 50% of the art but kept it for more than six months a year, the public would be losing out on the painting’s availability during the excess period.

To address this perceived abuse, Congress changed the law to make donations of partial interests in artwork much less attractive for donors. Generally, before the PPA, the collector would bequeath the remainder of the fractional interest to the museum so the collector’s estate would take a charitable contribution deduction for the remaining current fair market value at the time of the collector’s death. But the PPA changed the law to require that the write-off be based on the art’s value at the time the original fractional interest was donated if the art appreciated in value, rather than on its value at the time of the collector’s death. If the art’s value has appreciated in that period, as it typically does, the law will reward the collector by reducing the amount his or her estate could take as a deduction for the donation and thus increasing the estate tax liability.

Consider the example of a painting worth $1 million when the collector first donated 50% to the museum. The collector bequeaths the remaining 50% of the painting when she dies, at which time it is worth $10 million. Under the old rule, the painting would pass to the museum and the estate would take a $5 million charitable contribution deduction. Under the new law, her estate may only deduct $500,000 and the estate would have to pay taxes on $4.5 million more than it would have under the old law.

The PPA also introduced recapture rules (deductions turned back into taxable income) that further reduce the desirability of contributing a partial interest in art. If the collector fails to donate the balance of the art to the museum on or before the earlier of 10 years of the original gift or the collector’s death, the collector will be forced to recapture the deduction. In addition to paying income tax and interest on the recaptured amount, the collector must pay an additional 10% tax on it. This essentially requires the collector to donate or bequeath the remaining fractional interest or lose the tax benefit of the original gift.

Conclusion

If the client has valuable art, it is important that he or she assemble a team of advisers that understands how to deal with it. The team may include an attorney, financial adviser, tax specialist, and an art succession planner. It is wise to make sure that the team members know the extent and value of the art and how the client intends to dispose of it so that it can properly be taken into account when establishing a financial and estate plan.

The decisions and choices as to how to preserve the legacy of artwork should be thought through with care and involve a discussion with the client, the intended beneficiaries, the charitable organization, and the team of advisers.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Patricia Annino Receives “Best in Wealth Management” Award

The Euromoney Legal Media Group chose Patricia Annino, Chair of Prince Lobel’s Estate Planning and Probate Practice Group, to receive the prestigious “Best in Wealth Management” award at the second annual Americas Women in Business Law Award ceremony held May 24, 2012, in New York City.

Selected from a short-list of eight well-known, highly-qualified nominees, Patricia’s award was based on extensive peer review research conducted by Euromoney’s research team, her professional accomplishments during the past 12 months, and her advocacy and influence in the field of wealth management.

Following the success of similar award ceremonies in Europe and Asia, the Americas Women in Business Law Awards was launched by Euromoney Legal Media Group to give law firms and professional services firms the recognition they deserve for their efforts in helping women advance in the legal profession.

Patricia Annino is a nationally recognized expert on estate planning and taxation, with more than 25 years of experience serving the estate planning needs of families, individuals, and owners of closely held and family businesses. She speaks regularly on many issues of concern to family owned businesses, including succession planning, risk management, managing a business with multiple stakeholders, the risk of divorce, and more. Annino is a graduate of Smith College and Suffolk University School of Law.

Patricia is the author of two widely utilized professional texts: Estate Planning in Massachusetts, and Taxwise Planning for Aging, Ill, or Incapacitated Clients. Patricia’s recent books for consumers include, Cracking the $$ Code: What Successful Men Know and You Don’t (Yet), Women in Family Business: What Keeps You up at Night, and Women & Money, A Practical Guide to Estate Planning.

About Prince Lobel

Prince Lobel Tye LLP is a full-service law firm providing a wide range of services for Fortune 1000 companies, closely held businesses, and individuals. Prince Lobel’s attorneys are guided by the highest standards of legal excellence, professionalism, and service – whether they are addressing complex business issues or providing advice on personal legal matters. Practice areas and industries served encompass corporate law, data privacy and security, domestic relations, employment law, estate planning and probate, insurance and reinsurance, intellectual property and Internet law, litigation, media law, nanotechnology, real estate, telecommunications law, construction law, environmental law, renewable energy, health care, and education. For more information, visit Prince Lobel at PrinceLobel.com.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

How Psychedelic Drugs Can Help Patients Face Death & What it Means to Estate Planning Effected Towards the End

I recently read an article in the New York Times (read article here: http://nyti.ms/Kp9yct) about a study using Psychedelic Drugs to help patients cope with facing death as the result of a life-ending diagnosis, like cancer.  In the article it indicated that these end-of-life researchers only included otherwise healthy patients, those with no indication of mental illness, in the study.

These drugs are also being examined as treatment for alcoholism and other addictions.  While I can see the advantages of such treatment for those facing the end of their lives due to grave illnesses, it also makes me very aware of how this might affect the ability for someone to consider and finalize their estate planning needs at a time when they are not only facing their own demise, but while under the influence of psychedelic drugs.

Could this open up their decisions to scrutiny after their death?  Even though they are otherwise considered of sound mind, does this open the door for others to challenge a person’s Will or other estate planning functions finalized after such diagnosis, and while using psychedelic drugs.

I am an advocate for putting your affairs in order early on, long before you might be facing something like this, but the reality is, even if plans had been made, depending upon the individual situation, such a diagnosis could cause someone to rethink or alter their plans.

It seems like we would need to take some sort of extra steps during this process to make sure we can forego any challenges that could or would be made to change your final wishes.  I’m not exactly sure what that might look like, how we could provide verification of your ‘sound’ mind at such a time.

What do you think?  Leave your comments or questions below and expand the discussion!

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

New Risk to Family Cohesiveness: Impact to individual goals and life plans

New Risk to Family Cohesiveness: Impact to individual goals and life plans by the increasing lifespan of baby-boomer generation. Take the Steps Now to Put the Oxygen Over Your Own Face First and Decide Who Will Make Your Health and Financial Decisions If You Are Unable To Do So.

Another risk to family cohesiveness is the impact of increased lifespan to individual goals and life plans. Traditional risks included the illness, death or incapacity of a key family figure. In the family business and in the co-ownership of investment and commercial assets, the new risk is the increased work lifespan of the older generation, which results in the delayed succession of the middle generation. In essence, with the older generation in good physical and mental health and working far longer, the middle generation may in effect be knocked out of position and never get its day in the sun. By the time the older generation decides to move along, the individual goals and life plans of the middle generation may have been passed by; and the baton may be passed to the next generation. This new risk can be mitigated by intentional strategic planning and clear communication among all generations as to what the expectations are for the working lifespan and when the baton should/will pass.

Strategies to Mitigate the Risk of Increased Lifespan to the Ability to Control Your Own Health and Affairs and the Risk to Next Generation’s Life Plans:

1. Understand that estate planning is much more than what happens when you die; in an increasingly aging population that is living longer disability or incapacity planning is essential. Make sure you have in place the legal mechanisms so that you can be taken care of in the way you desire. It is important we all remember what the flight attendant says every time you board a plane- if the cabin pressure changes and the oxygen mask falls down put that mask over your own face first –it is only when you do put the mask over your own face that you will have the strength to protect others. In other words, protect yourself first.

2. Make sure the documents that will protect you if you are unable to care for yourself (Health Care Proxy and Durable Power of Attorney) are up to date and the way you want them.

A Health Care Proxy is a document in which you give the authority to an agent to make medical care decisions if he/she becomes unable to make them. The document can authorize everything, including minor and routine medical involvement, and can give the agent access to all your medical records. It can authorize someone to supervise your care if you are incapacitated, to consent to have you undergo certain types of treatment or to have them withdraw from treatment; to make hospital or nursing care arrangements; and to employ or discharge caregivers.   It can also empower the agent to make such major decisions as whether or not to terminate your life.

Under federal law, only one person at a time can be named as health care agent, but a Health Care Proxy can name a succession of people as alternatives.  This is done so that someone else can take over if, for instance, both spouses are in the same car crash, and neither one of them is in a condition to make medical decisions.  A copy of the Health Care Proxy should be given to your primary care physician and becomes part of the medical record.

As with a financial Durable Power of Attorney, in the health care area, couples usually designate each other to make medical care decisions and list their children as successor agents.  The health care agent must be someone they trust, who shares your value system, who is willing to perform the task and who has a clear understanding of what your preferences are.

It is prudent to update this document regularly, and, when it is updated, to make sure that the most recent contact information for those who have been designated to make health care decisions (including all telephone numbers and cell phone numbers) are current. If the Health Care Proxy was executed prior to The Health Insurance Portability and Accountability Act of 1996 (known as HIPPA) then the document must be updated. Under HIPPA, if you do not expressly waive your right to privacy in writing, hospitals and physicians do not have the legal right to speak with the health care agent or to release medical information to that person.

Choose a Health Care Agent. This important person may have different titles in different states (such as “health care agent,” “health proxy,” “patient advocate,”  “attorney-in-fact,” “health care representative,” or “health surrogate”), but the responsibilities are the same.  The official requirements for health care agents also vary from state to state, but most states simply specify that the person must be an adult (over 18) and must be someone who does not work for your health care provider or for an adult care facility in which you are residing.

It is good to designate both a health care agent and a successor agent (choice #1 and choice # 2), in case you need help at a time when the agent you have chosen is not available.  You should decide which child to choose, and if you have  no spouse or children, which friend or relative to choose.

In order for you to choose a health care agent wisely, it is helpful to establish a basis for evaluating potential candidates. That evaluation should include the following criteria:

1) Religious beliefs:  Since the concept of withholding artificial life supports runs contrary to the teachings of several religions – most notably the Catholic Church – it is helpful to find a health care agent who shares your  religious beliefs and your position on right-to-die issues.

2) Willingness to take on this task.

3)  Strength to act on your wishes and speak out on your behalf (even if faced with doctors, institutions, or family members who disagree).

4) Communication:  The agent is comfortable talking to you about sensitive issues and capable of listening to and absorbing what it is that you want.

5)  Separation:  This is a person who can differentiate between his/her feelings and yours and be able to do what you want done.

6)  Proximity: This is someone who either lives close or could travel quickly to be there when needed.

7)  Availability:  This person is likely to be accessible and capable of performing tasks well into the future.

8)  Personal Understanding:  He/she knows you well enough to intuit what is important to your.

9)  Negotiation skills:  He/she can mediate conflicts between family members, friends, and medical personnel.

Figuring Out What You Want: The following questions are designed to help you know yourself and to form a basis for discussion with the person you choose to execute your health care power of attorney.

1)  The Pleasures of Health:  How essential are these capabilities to your happiness?  (I.e. are they, Vital, Important, Mildly Important, Not important)

*Walking

*Enjoying the outdoors

*Eating, tasting

*Drinking

*Reading

*Attending religious services

*Listening to Music

*Watching television

*Avoiding pain and discomfort

*Being with loved ones

*Touching

*Being self-sufficient

2)  Fear Factors:  What are your biggest concerns about the end of your life?

3)  Spirituality:  How much of your comfort and support comes from religion?  From personal prayer?  From interaction with clergy?

4)  End of life: If you had the power to decide, what would the last day of your life be like?  Where would you be?  With whom?  What would you be doing?  What would your final words be?

5) Assistance Preferences Worksheet:  It is useful to discuss with your health care agent (and family members as well) the types of assistance you might want, should you need help, and to revisit this issue from time to time, because your preferences could very well change. Looking at each of the different scenarios spelled out below, think through what your preferences would be by asking yourself the following questions:

a) Would I still want to live at home?

b) Would I want caregivers hired to help me out in my home?

c) Would I want to be taken to a rehab or assisted living center?

d) Would I want family members to care for me?

e)  Would I want to live with one of my children?

f)  Would I want one of my children or a relative to live with me?

g) Would I want my health care agent to make these decisions for me?

h)  Would my answers differ if my spouse were still living at home?

-If you were unable to drive a car ___

-If you were unable to climb stairs ___

-If physical problems prevented you from being able to dress yourself ___

-If you had to use a wheelchair because you were no longer able to walk ___

-If you were unable to leave your home ___

-If your vision were seriously impaired ____

-If your hearing were seriously impaired ___

-If you needed kidney dialysis ___

-If you needed chemotherapy ____

-If you were in physical discomfort most of the time ___

-If you could no longer control you bladder ___

-If you could no longer control your bowels ___

-If you could not think clearly ___

The more you take the time now not only to think through who you wish to choose as a Health Care Proxy, but also how who would want various future scenarios to be addressed by that person, the more likely your wishes will be honored in the future.

Make sure (especially if you are in a second marriage) that you have coordinated the person chosen as your Health Care Agent with the person named as your Trustee and/or your Attorney in fact under a Durable Power of Attorney so that the decisions about your medical care and how to pay for it are coordinated.

What challenges are you facing in your estate individual goals and life plan?  Share your stores in the comment section below.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Women And Money: 10 Strategies For Protecting Your Children

Making decisions about how your estate will be managed and your children protected can be stressful.  Here are 10 strategies to consider, and information to have available to your estate planner or attorney to be sure you protect your children fully.

  1. Have you executed a will naming a guardian for your minor children?
  2. Have you named a successor guardian?
  3. Have you given thought to who will manage the money your children inherit – A Custodian under the Uniform Transfer to Minors Act? A Trustee? Are you designating a person or a team of people/institutions? Have you lined up successors?
  4. Have you thought through the reasons that money should be expended to the children? For education? For post graduation education? To buy a car? For a Wedding? Down Payment on a house?
  5. Have you calculated your assets and income to make sure that if you die before your children are educated and there are sufficient funds to pay for their living expenses and college tuition?
  6. If there aren’t sufficient funds, have you met with your advisors and considered the appropriate amount of life insurance?
  7. Have you left a memorandum or letter to the guardians and trustees explaining what you would like to see happen if you are unable to be there to watch your children grow up?
  8. Have you given thought to what the guardian should receive financially (compensation, reimbursement of expenses, funds to care for the enlarged household)
  9. Have you coordinated the primary and secondary beneficiaries of all life insurance policies, annuities and retirement plan assets to be sure that the assets are put in the hands of those who will be in charge of your children’s money (custodians under a Uniform Transfers to Minors Act or trust for their benefit), rather than having those assets payable outright to children at a very young age?
  10. Have you given thought to distribution ages – at what age or ages your children should have the right to overrule the Trustee and withdraw funds regardless of what the Trustee thinks is appropriate?

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com



8 Strategies for Caring for Your Elderly Parents

Members of more than one quarter of all families in the United States today are involved in some way in the care of their elderly parents. Taking steps to prepare for your parents’ future needs is not only important for your parents. It is important for you. 

  1. Make sure they have signed a Health Care Proxy and a Durable Power of Attorney
  2. Have a family discussion about care long before it is necessary to act. Explore the role the family will play. Will they want to stay at home? Move in with family members? Enter a residential facility? Discuss who will be sharing in the care giving responsibilities.
  3. Assess your parent’s finances and their own ability to pay for care. Obtain a listing of their assets, liabilities, and income (including Social Security payments, other retirement income and the account name and numbers into which they are deposited).
  4. Evaluate your parent’s medical and personal needs.
  5. Know who the doctor is and how to contact him or her. Determine if a geriatric assessment is necessary. Find out what medications are currently being taken, dosage and side effects.
  6. Find competent medical and geriatric care givers.
  7. Review medical coverage, prescription plans, Medicare, Medigap, Medicaid options.
  8. Explore the purchase of long term care policies.

 It is very important to discuss estate planning with your parents while they are both mentally and physically healthy. If they wait to make arrangements until after one of them is incapacitated in some way, their options will be seriously limited.

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com

Asset Protection from Spouse’s Medical Expenses

Protect Your Assets: Question and Answer with Patricia M. Annino, Esquire

Question:  I am a 73 year old widow marrying a 78 year old widower. Both our spouses died after lengthy and costly battle with Alzheimer’s. We both have children and would like the assets we bring to the marriage to pass down to our respective children-not be used for the other spouse’s chronic medical care. What can we do to prevent our assets from being used in that way?

Answer:

Spouses are obligated to support each other. It does not matter if you are married three days or 50 years. If one of you has serious medical costs law and public policy mandate that you have an obligation to support your spouse. You should consider purchasing long term care insurance to cushion the blow of any long term care expense. As you know an annual stay in a nursing home can range from $70,000 to $100,000 per person. At home care is also very expensive.

You should also consider executing a prenuptial agreement which mandates that if either of you incurs medical expenses then your income and your assets must be used in full (to the extent of depletion) before your spouse’s assets are touched. Putting that intent in writing and agreeing to it could be a useful document for your spouse to show your children if you become ill and your spouse begins to deplete all of your assets and not his on your care.

In a second marriage situation where the concern is health issues it is also important to execute health care proxies in which you name your spouse as your health care agent and you give your spouse the legal authority with a durable power of attorney to access your assets to pay for your care. If you do not put those legal documents in place your heirs-at-law (spouse and adult children) all have the right to be heard on who should be in charge of your medical decisions and your financial decisions.

It is your responsibility to put this in place now so that everyone understands their roles and responsibilities.

Patricia M. Annino, Esquire, is the author of the highly acclaimed book, Cracking the $$ Code: What Successful Men Know And You Don’t (Yet). Patricia is in demand nationally as a speaker for womens’ organizations on assorted topics.  Patricia works with organizations and women looking to educate and empower them to plan and work smarter with their finances and estates.  For more information visit:  www.patriciaannino.com

Protect Your Assets – Gifting the Family Business

Question: My 32 year old son is working in the family business.  He is dating a young lady I think he will marry.  We have worked very hard to build the business to where it is now. Although we like his fiancée, we are aware of the statistics – one-half of the marriages end in divorce.  He is contributing significantly to the value of the business.  We would like to begin gifting the business to him now.  Will any gifts or inheritances of the business we give him be divisible in any divorce? And if so how can we protect our assets? 

Answer: It depends 

Some states are community property states and generally those states classify gifted and inherited assets as “separate property” which means that as long as they stay in your son’s name and he does not transfer them to joint name with his wife they will remain his property – even in divorce.

Other states are “equitable division” states –meaning that a judge can take gifted and inherited assets and the expectancy of receiving assets into account in your son’s divorce. 

In Massachusetts and Connecticut it is very common for a parent to be subpoenaed in a child’s divorce proceeding. If the divorcing spouse serves the soon to be ex in-laws with legal papers the parents must turn over a summary of their estate planning documents, the date they were last amended and their net worth statement.

 Not complying with that order will land them in jail for contempt.

The Judge is then authorized to take those gifted and inherited assets as well as any the child may receive in the future, into account in determining how the marital assets will be allocated between the spouses. Typically if there is one spouse that will be receiving gifts or inheritances the Judge will order a division of the marital assets that is not equal – in other words the spouse who is not receiving the gifts/inheritances will receive a greater percentage of the marital assets than the spouse who will be receiving them downstream.

 Even if you do not live in an equitable division state that does not mean your child’s gifted or inherited assets are safe –he may move to an equitable division state at some subsequent time and the laws of that state will impact how his assets are divided. 

 When a family owns a business subpoenaing the parents’ assets has an additional obstacle. The value of your family business will be on that financial statement.  That means that there is the potential for your ex daughter in law to question whether or not the value on that statement is right.  Many parents find that unnerving.  Gifting (lifetime or death time) your assets to your son in trust form does not solve the problem.  All that does I affect the valuation of the asset.  If the asset was transferred to him directly the value is easier to determine than if he has expectancy in the trust.

 Encouraging him to sign a prenuptial agreement prior to marriage which specifically excludes all gifted and inherited assets (and can exclude what they appreciate to) is your best defense.

Patricia M. Annino, Esquire, is the author of the highly acclaimed book, Cracking the $$ Code: What Successful Men Know And You Don’t (Yet). Patricia is in demand nationally as a speaker for womens’ organizations on assorted topics.  Patricia works with organizations and women looking to educate and empower them to plan and work smarter with their finances and estates.  For more information visit:  www.patriciaannino.com

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