Not everybody, even among the wealthy, is necessarily interested in creating an estate planning. According to a recent survey by U.S. Trust which examined 457 wealthy persons, many from the baby boomer generation are not all that interested in having control of their assets after they die. Less than half of those with at least $3 million in investments expressed interest in leaving an inheritance.
According to Mitchell Drossman, national director of wealth-planning strategies for U.S. Trust, Bank of America Private Wealth Management, “…a decent percentage of people with this level of wealth have no comprehensive estate plan.”
Perhaps some of the individuals surveyed are planning to take advantage of the $5 million estate tax exemption in 2011 and 2012 by spending down their retirement funds. Still, it is still important to have an estate plan even where taxes aren’t a major concern, particularly those who are remarried. Second marriages do have a fun way of complicating estate planning.
Individuals in certain situations, in particular, should consider having an estate plan if they don’t already. The first type of situation involves individuals married to a noncitizen but who also have children from a previous marriage to whom they wish to leave assets. In these situations, it is common for the children to have concerns that the noncitizen spouse will leave the country, since this can create complications for plans in which the remainder of estate assets go to the children after the death of the noncitizen spouse.
In these situations, one option is to authorize an independent trustee to oversee the handling of assets. This is the case with qualified domestic trusts, which are required to have at least one trustee that is also a U.S. citizen or corporation. Giving the children the right to get a period accounting of the trust is another option.
In our next post we’ll continue with this topic.
Source: Chicago Tribune, “Your circumstances can complicate estate planning,” Janet Kid Stewart, 13 May 2011.