Grynberg didn’t anticipate that his now ex-wife and children would take over the companies that he created, built and ran. His attorney said that his children had made no contributions to these companies and have now received about $1 billion that he had earned, while Grynberg has kept less than $5 million for his 25 years of hard work.
Meanwhile, the attorney representing his three adult children and ex-wife reportedly said the judge’s decision confirms that they were within their rights, when they acted to assert control over the oil and gas companies. They say that they did so to protect the companies and their father’s legacy.
The case centers on the argument that Grynberg, 87, wasn’t the same as he was when he battled major oil conglomerates and foreign governments with accusations of cheating and wrongdoing. It was through the extensive use of the courts that Grynberg built his fortune. A Holocaust survivor and graduate of the Colorado School of Mines, Grynberg said he put his family’s name on the companies, with the understanding that he would maintain control of the business during his lifetime.
In February, an Arapohoe County jury disagreed with that and said the family owned the companies and could fire Grynberg whenever they wanted. That is what the family did. Grynberg asked for back pay of about $400 million.
The family didn’t know that they had the legal right to fire him until 2016. Prior to that time, he had complete control of the companies. When a family member had an opinion or disagreed with him, he’d refuse the request. When all was well, the family was fine with this arrangement, However, as he aged and his decisions became more questionable, the family decided it was time to take control.
The judge maintained that Grynberg was a brilliant businessman, describing him as “very astute and calculating in all of his business decisions.” In other words, when he gave control over to the family, he knew exactly what he was doing.
Life happens and so does death, so it is best to be prepared.
It doesn’t matter how much money you have. You always need an estate plan, whether married or single, in order to be sure those left behind are cared for and that your assets are distributed as you wish, according to the SouthFlorida Reporter in “Why Estate Planning is so Important.”
What exactly does estate planning mean? Estate planning is planning for the disposition of your assets when you have died. It’s also done to protect you and your family, in the event you become incapacitated and cannot convey your wishes to others. it protects your family from complications, unnecessary costs and delays about distributing your estate.
Having an estate plan means that you have taken the time to plan out what you want to happen to your property and how you want to take care of your family when you are gone. For those who have young children, your last will and testament is the document used to name the person who will raise your children. It also lets you appoint a separate person (although it can be the same person) who will look after your finances, with regard to your children.
Without a will, a court will decide what should happen to your children and your property. The court must follow the laws of your state, which may not be what you had in mind. Let’s say you have a brother who lives far away and from whom you are estranged. If you don’t have a will and he is your legal next-of-kin, in some states he will inherit everything you own. It’s far better to have a will.
Estate planning also includes tax planning. Having an estate plan that is created by an experienced estate planning attorney with knowledge of tax planning will allow you to minimize your tax liability and make sure more of your assets are passed to the next generation, than are passed to the government.
Having an estate plans gives you the opportunity to take a long look at your life and your legacy. How do you want to be remembered? Do you want to leave behind part of your estate to a charity, a school or a healthcare facility that has been important to you or another family member? Planning for charitable giving is also part of an estate plan. Some people give because they are seeking tax benefits, but many are generous because they are creating a legacy.
Your estate plan can include a letter to your heirs explaining why you have made the decisions you have about your possessions and assets. This kind of letter is not a legally enforceable document. However, if there is a dispute about your will, it can be used to support your intentions.
An estate planning attorney can advise you on creating and then updating, as necessary, an estate plan that fits your unique circumstances.
The state makes the decisions on where your assets should go.
If it is determined that if you do not leave a will or an estate plan, then probate takes over with a key focus on debts and what gets paid first, according to The Balance in “Dealing with Debts and Mortgages in Probate.” It would most likely be a better process for your heirs, if you have an estate plan.
Probate is the process of gaining court approval of the estate and paying off final bills and expenses, before property can be transferred to beneficiaries. Dealing with the debts of a deceased person can be started, before probate officially begins.
Start by making a list of all of the decedent’s liabilities and look for the following bills or statements:
Home equity loans
Lines of credit
Federal and state income taxes
Car and boat loans
Loans against life insurance policies
Loans against retirement accounts
Credit card bills
Cell phone bills
Next, divide those items into two categories: those that will be ongoing during probate—consider them administrative expenses—and those that can be paid off after the probate estate is opened. These are considered “final bills.” Administrative bills include things like mortgages, condo fees, property taxes and utility bills. They must be kept current. Final bills include income taxes, personal loans, credit card bills, cell phone bills and loans against retirement accounts and/or life insurance policies.
The executor deals with all of these liabilities in the process of settling the estate.
For some of the liabilities, heirs may have a decision to make about whether to keep the assets with loans. If the beneficiary wants to keep the house or a car they have to keep paying down the debt.
The executor decides what bills to pay and which assets should be liquidated to pay final bills.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.
It is a good idea to have a plan, just in case you do retire.
Many business owners have worked for years to build up their business and don’t have any intention of retiring. However, that day is likely to come and it would be wise to have a succession plan, according to The Gardner News in “Do you have a business succession strategy?”
It takes a very long time to create a succession plan that works. Therefore, planning for such a plan should begin long before retirement is on the horizon. That’s because there are as many different ways to map out a succession plan, as there are types of business. A business owner could sell the business to a family member, an outsider, a key employee or to all the employees. The plan could be implemented while the business owner is still alive and well and working, or it could be set up to take effect, only after the owner passes.
The decision of how to handle a succession plan needs to be made with a number of issues in mind: family dynamics and interest in the business (or lack of interest), the nature of the business, the success of the business and the owner’s overall financial situation.
Here are a few of the more popular strategies:
Selling the business outright. There are business owners who don’t need the money and feel that no one else will care as much as they do about their business. Therefore, they sell it. There needs to be a lot of planning to minimize tax liability, when this is the choice.
Using a buy-sell arrangement to transfer the business. This can be structured in whatever way works best for both parties. It allows a slower transition to new ownership. Some families use the proceeds of a life insurance policy to fund the buy-sell agreement, so family owners could use the death benefit to buy the owner’s stake.
Buying a private annuity. This permits the owner to transfer the business to family members, or someone else, who then makes payments to the owner for the rest of their life, or maybe their life and another person, like a surviving spouse. It has the potential to provide a lifetime stream of income and removes assets from the owner’s estate, without triggering gift or estate taxes.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and can include a succession plan.
RMDs are legally required and it is best to study up on them, because taxes can be 50%.
Required minimum distributions are not always a common name to retirees but they should be, according to Forbes in “5 Things to Know About RMDs.” The withdrawals are legally required and you have to take them, despite the fact they can have a big impact on cash flow, taxes and financial planning during retirement.
There are ways to soften the impact of RMDs. However, you have to know the rules before you can create your strategy. Having a game plan for RMDs will help save the money you saved for many years, and allow that retirement nest egg more time to grow.
Note that there may be some changes coming as a result of the SECURE Act and the RESA Act, if approved.
Distribution rules that you need to know. The year you mark your 70½ birthday, that is, six months after you turn 70, you have to start taking RMDs from retirement accounts, including 401(k)s. That rule does not apply to Roth IRAs, which generally do not have any RMDs, until the owner dies.
The exception is if you are still working at a company and participating in the company’s 401(k) plan. If that is the case, you may want to roll over all your previous eligible savings into that account, to delay taking an RMD. However, there are also exceptions to this rule. They depend on your ownership stake in the company, so speak with an estate planning attorney to be sure what the requirements are for your situation.
While you’re at it, make sure that the beneficiaries listed on your accounts are correctly documented. If it’s been more than a few years since you last reviewed your beneficiaries, there may be some time bombs hidden in your IRA accounts. Divorce, death and changes of circumstances may make it necessary for you to change your beneficiaries. Do it now, while it’s on your mind. Once you die, there’s no recourse for your heirs.
When do I take my first RMD? RMDs must be taken by December 31st of each calendar year. However, the first RMD must be taken for the year in which you turn 70½. You can delay that payment until April of the following year. If you end up taking two big distributions, will it throw your tax planning off? Will you be bumped into a higher tax bracket? This is why you need to plan your RMD out carefully. It may be better for your overall situation to take the RMD, as soon as you are eligible.
Accuracy counts. You can’t rely on an online calculator, since the rules are not one size fits all. Let’s say your spouse is ten years younger than you and is your sole beneficiary. You’ll need to use the Joint Life and Last Survivor Table. There’s also the Uniform Lifetime Table, but that doesn’t apply here. Check with professionals to be sure you are taking the right amount.
Where does your RMD come from? Even if 70½ is a few years away, it’s good to have a plan for how RMDs will impact the distribution of your investment portfolio. You have options, so you want to make a good choice. For example, do you want distributions to be made in proportion to the percentage of each of your holdings in your portfolio? Let’s say 40% of your retirement investment is in short-term bonds, then you would take out 40% from your investment holdings. Or do you want to take a percentage from specific holdings?
What about charitable giving? Once you turn 70 ½, you can directly transfer funds from a traditional IRA to a charity, which can reduce your tax burden. However, this must be done properly, directly to the charity.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, as well as make sure RMDs are handled to your best advantage.
Prince did not leave a will and many, many relatives showed up to stake a claim.
Not having a will can create some difficult situations for your loved ones and some of them are not expected, according to Arizona Central in “Here’s why you don’t want to die without leaving a will.” For example, in Arizona, an estate creditor can step in and become your personal representative after death, if you haven’t designated someone to administer your estate and your family members don’t step up to be involved.
Are you still not convinced? Without a will, you have no say in who inherits your money and possessions, which will be distributed according to the laws of your state.
Here are some tips to help get your estate plan started:
Work with an estate planning attorney. Using an attorney provides accountability, ensures that your wishes are reflected in the estate plan and makes sure that your will is deemed valid by the court. All too often, online documents are found to be deficient, declared invalid and the family is left with the laws of the state.
Name an executor. Your will should include the name of an executor, who will be responsible for handling your financial affairs after you die. She will manage your assets, identify what bills need to be paid, file state and federal tax returns and keep records of anything done on behalf of your estate.
Keep your will in a safe location. Make sure your executor has a copy and knows where it is. Tell your family where it is.
Don’t forget a residuary clause. If you forget to include any assets, a residuary clause will name someone who will receive them.
Don’t forget other important documents. That means a power of attorney and an advance directive. The advance directive spells out what kind of medical treatment you would want, if you are unable to communicate. Power of attorney gives a person you name the authority to act on your behalf.
What if my family fights a lot? Your best bet will be to name a private fiduciary to act as your personal representative. That way, no one can be accused of playing favorites, and a family history of sibling rivalry won’t undermine your wishes.
An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances.
More than half of seniors file early for benefits.
Some people may find it necessary to file for Social Security because of circumstances, such as a job loss. However, it is really important to make sure you are making your decisions on facts rather then myths, according to the Washington Post in “Don’t believe these Social Security myths.”
Some people have no choice and must take their benefits early, because they’ve lost their job and have no savings. Others have better options, but they aren’t aware of them. That’s because of the many myths about Social Security. A survey found that while 77% of Americans thought they were pretty smart about Social Security, 95% couldn’t answer eight basic questions about the program.
Let’s look at these myths.
It doesn’t matter when I take Social Security. Benefits increase by about 7% every year from age 62 to your full retirement age, and then by 8% each year between full retirement age and 70. This is a planned adjustment to ensure that people who opt for a larger check for a shorter period don’t receive more than those who file earlier and receive smaller checks. It’s better to delay, both for the larger check and the benefits that the surviving spouse receives. People who live longer can run out of savings, so having a larger check in your 90s could make a huge difference.
If I don’t expect to live a long time, I should claim benefits early. Most of us underestimate our life span. A 65-year-old man today can expect to live to 84, and a 65-year old woman can expect to live to 86.5. Life expectancies are even longer for those in their mid-50s. However, here’s the thing: even if one spouse doesn’t live as long, by taking Social Security earlier, their spouse will have a smaller benefit. Married couples lose one of their checks when the first spouse dies, causing a big drop in income. The survivor receives the larger of the two checks the couple was receiving. Therefore, the higher earner in a couple, whose check will be larger, should delay taking benefits, if at all possible, to benefit the surviving spouse.
I can claim benefits early and invest the money to come out ahead. No investment today offers a guaranteed return as high, as what can be obtained from delaying benefits. You’d have to take a lot of risk to get close to the 7% or 8% guaranteed by Social Security.
As soon as I stop working, I have to file for Social Security benefits. Not true. You don’t have to file for Social Security benefits until you want to. Even delaying four years, from 62 to 66, can translate into a sustainable 33% increase in your standard of living.
I better apply before Social Security runs out of money and closes down. This myth becomes more widespread every year. If Congress doesn’t act, which is unlikely, by 2035, the system will still be able to make payments, although they may be curtailed by 20%. Eighty percent of your Social Security check is not zero. It’s more than likely that Congress will address Social Security fixes.
Digital assets include information on phones and computers, content uploaded to social media sites like Facebook, Instagram and others, creative/intellectual content in digital property and records from online communications, including emails and texts.
Do these accounts really have any value? Yes—according to security software provider McAfee, the average American’s digital assets are worth about $55,000.
Estate strategies for digital assets require an awareness of new and changing laws about digital assets. Almost every state has now passed some version of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which has defined a path for the future of digital accounts, when the owner passes. RUFADAA has set a hierarchical structure for the transfer of digital assets.
First, if the service provider has a means of permitting the transfer of the asset to a designated party of the original asset owner’s choice, that takes priority. Gmail and Facebook have a means of creating a directive to state the owner’s wishes.
If no such directives are on the website, then the instructions denoted in traditional estate documents must be followed, assuming that those documents are prepared properly.
If none of that is in place, then the service provider’s Terms of Service Agreement (TOSA) takes priority. If the provider’s TOSA says that the account is a nontransferable lifetime lease, its ownership may not be transferred to another person. However, as a result of RUFADAA, the owner has the right to appoint a fiduciary to access, manage or close out an online account. The power may be exercised if you are dead or if you are incapacitated.
However—you must name this fiduciary and grant the legal power to an individual through your will, power of attorney or trust agreement. Otherwise, no such authority can be given.
What else should you do? Leave a digital road map for your executor: accounts, passwords and username. Note that if the platforms use facial recognition or other biometric markers, they may not be able to gain access to the accounts. Check with social media and merchant websites to see what policies are for transferring or maintaining digital assets, when the owner dies. You should also look at reward points and credits to see how they can be transferred, and find out how pending transactions, like automatic orders, can be handled.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and protects your digital assets.
Who do you want to be responsible for your well-being?
A will, power of attorney and health care power of attorney are the key building blocks of your estate plan, according to the Traverse City Record Eagle in “Simple steps to peace of mind.”
If you die without a will, your state has a plan in place for you. However, you, or more correctly, your family, probably won’t like it. Your assets will be distributed according to the laws of inheritance, and people who you may not know or haven’t spoken to in years may end up inheriting your estate.
If your fate is to become incapacitated and you don’t have an estate plan, your family faces an entirely new set of challenges. Here’s what happened to one family:
A son contacted the financial advisor who had worked with the family for many years. He asked if the advisor had a power of attorney for his father. His mother had passed away two years ago, and his father had Alzheimer’s and wasn’t able to communicate or make decisions on his own behalf.
Five years ago, the financial advisor had recommended an estate planning attorney to the couple. The son called the attorney’s office and learned that his parents did make an appointment and met with the attorney about having these three documents created. However, they never made an estate plan.
The son had tried to talk with his parents over the years, but his father refused to discuss anything.
The son now had to hire that very same attorney to represent him in front of the probate court to be appointed as his father’s guardian and conservator. The son was appointed, but the court could just have easily appointed a complete stranger to these roles.
The son now has the power to help his father, but he will also have to report to the probate court every year to prove that his father’s well-being and finances are being handled properly. Having a will, power of attorney, and medical power of attorney would make this situation much easier for the family.
Guardianship is concerned with the person and his or her well-being. Conservatorship means a person has control over an individual’s financial matters and can make all decisions about property and assets.
There is a key difference between powers of attorney and conservatorship and guardianship. The person gets to name who they wish to have power of attorney. It’s someone who knows them, who they trust and they make the decision. With conservator and guardianship, it’s possible that someone you don’t know and who doesn’t know your family, holds all your legal rights.
A far better alternative is simply to meet with an estate planning attorney and have him create these three documents and whatever planning tools your situation calls for. Start by giving some thought to who you would want to be in charge of your life and your money, if you should become unable to manage your life by yourself. Then consider who you would want to have your various assets, when you die.
I’m a “new” mother. I have a 2 ½ year old son and 8 month old twin daughters. Each and every day, I worry and plan for what seems like a million different scenarios. Did I remember to order more baby wipes? What will I prepare for my son’s lunch and back-up lunch (he’s a picky eater)? Am I forgetting an appointment for them? And the questions go on and on beginning the moment I open my eyes.
In addition to being a mom, I’m also an estate planning attorney. That profession has taught me ask myself additional questions like: Who will take care of my children if I and my husband could not? What important values would I want passed on to them? Do we have the financial resources in place to take care of our children? Answering those questions may be difficult and no parent wants to imagine a life for their children without them in it, but we owe it to our kids to plan for that possibility.
Some important documents to consider include:
Nomination of Guardian and Temporary Guardian - In the Nomination of Guardian document, you are choosing who will become the permanent Guardian of your children in your absence. By nominating a Temporary Guardian, you are choosing who will take immediate and temporary custody of your children until such time as the Permanent Guardians can be take physical custody of your children.
Medical Power of Attorney for Minor Children - This document allows you to name someone to act as health care representative for your minor children if you are unable to do so.
Revocable Living Trust – This document will allow a Trustee to manage assets for your children under the terms and conditions that you set forth.
Durable Power of Attorney – This document allows you to name individuals who can step into your shoes and make certain legal and financial decisions on your behalf. With this, if you were incapacitated, the person you named would be able to access your assets to provide for your children.
Through the years, I have seen many families in crisis because of a failure to plan. Since becoming a parent myself, I’m even more dedicated to educating families about their planning options and helping to provide peace of mind.
If you’d like to discuss your family’s concerns, goals, and planning options, please contact my office at 508-994-5200.