- The Washington Times - Monday, September 10, 2007

ANALYSIS/OPINION:

You wouldn’t think all of us little people could learn valuable life lessons from the Queen of Mean. But in fact, Leona Helmsley’s will leaves all of us a gift of five useful lessons for planning our own estates. Let’s take a look at each of these:

Lesson No. 1: “Wills Won’t Work” to keep your wishes private. The media are having a royal feast sorting through and reporting on the lurid details of her highness’ estate plan. For example, we know the value of her personal fortune ($4 billion to $8 billion); we know she is leaving more to her dog and her chauffeur than to a number of her family members; and we know two of her grandsons will forfeit millions of dollars if they fail to visit their father’s grave at least once a year. (A couple of her grandchildren won’t be getting a cent.) All these juicy tidbits are open to the public because Mrs. Helmsley used a will to pass her estate. Had she used a trust instead of a will, all these personal details could have been shielded. Most people would rather keep their affairs private at death, and the best way to shut the door on snoops is with a trust.

Lesson No. 2: If you love your pet, the best way to take care of Fido after you’re gone is with a pet trust. Mrs. Helmsley left $12 million in a pet trust to make sure her dog Trouble wouldn’t run into trouble after she passed on. You, too, can leave money (it doesn’t have to be $12 million) in a trust, under the control of a relative or friend, to protect your favorite pet. With a trust, your pet will be a lot safer than if you just leave money outright to a friend, hoping your friend will actually use the money for Fido, instead of a trip to Fiji (for himself). The trust should also specify where the money will go when the pet dies, if there’s anything left.

Lesson No. 3: With a trust, you can keep control from the grave. Mrs. Helmsley created a trust for two of her grandsons of $5 million, but they only get the money if they visit their father’s grave every year. While that’s an unusual requirement, you can create incentives and requirements that are both practical and useful. For example, I have drafted language for clients providing that heirs only get money if they are working and earning a certain income (to ensure the youngsters don’t decide to quit working once they receive the inheritance). Some parents and grandparents have included rules stating their heirs only inherit if they go to college or care for a relative during that relative’s life. And I’ve set up trusts that protect a child’s inheritance from the spouse in a divorce or at the child’s death, making sure the hard-earned life savings stay in the family bloodline. These are called SAFE Trusts, and are discussed in my new book “Why Wills Won’t Work” (Penguin 2007).

Lesson No. 4: Charitable giving is a wonderful legacy. And to encourage your “good deeds,” Uncle Sam generally won’t tax assets left to charity. You can set up a charitable trust (as Mrs. Helmsley did) that encourages certain activities of your choice: e.g., scholarships for inner-city kids to go to college; subsidies for respite care for people caring for Alzheimer’s patients; or funds for the local community college to retrain laid-off workers who are 50 or older.

Lesson No. 5: You can bulletproof your estate plan — again, as Mrs. Helmsley did — with a clause in your will or trust stating that anyone who contests your document loses his or her inheritance. To make this effective, you’ll actually have to leave enough to the potential troublemakers so they have something to lose if they take your estate to court.

There are a variety of other “bulletproofers” that you can also use: Create a trust instead of a will because trusts are harder to attack successfully; get a letter from the doctor stating you are competent if you believe someone may challenge your plans on that basis; and make a videotape that proves you knew what you were doing, were competent and under no undue pressure from other family members.

You don’t need Leona Helmsley’s billions to create an estate plan that fully protects your family. To ensure your family members receive the royal treatment for their loyalty and love, you just need to understand where the pitfalls are and how to use the available safeguards.

Armond Budish is a Beachwood, Ohio, lawyer. This article first appeared in the Providence (R.I.) Journal before distribution by Scripps Howard News Service.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide