Legal Blog

What Can Happen If You Do Not Do Proper Estate Planning

From the Desk of Herb Fineburg

estateplanningLegal sources show “estimates that probate costs American families $2.0 Billion a year – $1.5 Billion of which goes to attorney’s fees.” In order to avoid probate and for other reasons, the most commonly used trust in America is now the revocable trust. The revocable trust avoids the probate of your assets titled in the name of your revocable trust. Without proper estate planning Forbes magazine found “you end up in probate court – which can be extremely time-consuming and expensive. The court takes a look at your will (if you have one), as well as your heirs or potential creditors, and then oversees the distribution of your assets [to your heirs] and payments to [your] creditors.” When James Gandolfini died without using a revocable trust, the newspapers throughout the nation wrote numerous articles listing his assets totaling almost $80 million, detailing what each of his heirs inherited and the terms of the trusts in his Last Will and Testament. If Mr. Gandolfini had a revocable trust, his estate would have avoided probate and his family would have had the benefit of privacy and been saved from the embarrassment of these very personal disclosures to the public. Everything filed with the court in probate is available to the general public. To this day, people still obtain copies of the Wills of the rich and famous. If you have a revocable living trust, your Last Will would cover the few inconsequential assets left in your name (such as your car). Your Last Will would only be a few pages and provide that these few assets would be paid to the trustee of your revocable trust. Unlike your Last Will which is filed with the court, your revocable trust is completely private and your trust and its assets are not available to the court or the public. Recommendation: Be sure you have your attorney prepare a revocable trust for you. Unlike any other trust, your revocable does not need to file any income tax returns and does not require a tax identification number. It is a seamless way to organize your personal affairs during your lifetime with no material effort by you. Every experienced financial planner will be able to properly title your investments, and every knowledgeable attorney can properly title your real estate and business holdings, in the name of your trust. There are no adverse income, gift or estate tax tax consequences from using revocable trusts and senior bankers and lenders are familiar with the benefits of revocable trusts.

ABOUT HERB FINEBURG

Mr. Fineburg concentrates his practice in the areas of Business Law and Transactions, Mergers and AcquisitionsEstate planningEstates and Trusts,  and Tax Consulting. He is recognized as one of Philadelphia’s most respected business lawyers whose substantial knowledge of tax law provides clients with strategic and cost-saving benefits in connection with commercial transactions, taxation and wills, trusts and estates matters. Known for his ability to resolve complicated matters effectively, Mr. Fineburg has assisted businesses and individuals with the organization of their finances, business and real estate affairs, and the structure of their assets (i.e., in LLCs, partnerships, corporations, trusts or joint ownership). He has substantial expertise in the preparation of buy-sell agreements for co-owners who are family members or are unrelated business partners. In addition, to working on bank financings, business contracts and employment matters for his business clients, Mr. Fineburg also provides advice on business acquisitions and sales, and the resolution of shareholder and partner disputes and buy-outs.