Partner’s Planning Checklist

Partner’s Planning Checklist

By: Martin M. Shenkman, CPA, MBA, JD

If you’re a partner (or possibly a second or later spouse) in a situation like Tomi Rae, there are many steps you can take to avoid the problems and legal entanglements that are facing Brown’s estate:

Write a will that clearly explains what your partner will be left, what her rights are, and so on. Hire a lawyer specializing in estate planning, and get it done right. List in the will all key family and other relationships. Brown should have listed Tomi Rae as his partner, wife, former partner or former wife. Clarifying the relationships, and your intentions, is vital to minimizing legal entanglements. It’s simple, and does not take much time or legal cost.

Communicate your personal concerns and wishes to your lawyer. Focus on the people you want cared for, not just taxes and legalities. If your lawyer advises that your requests could be problematic, seek his counsel on better ways to achieve your goals. It’s easy for a lawyer to “yes” to you and write whatever you say in your will, but often that is not protecting your goals, or your heirs. Example: Brown could have given Tomi Rae the right to live in his home for life (a) and stipulated that, following her death, the house should pass to his children. Sounds easy, but how would she pay for upkeep? What if a repair, or an improvement was needed? A better approach may be a trust with an independent trustee and sufficient cash to fund upkeep. Life estates can be really problematic. In a second or later marriage/relationship you might want to grant your partner some period of time, say 90-days, to live in your residence, even if it is bequeathed to others. During the emotional trauma following your death, a loved one (even if not intended to inherit your house) should not be thrown out by children from a prior marriage, or a lawyer doing his job as executor, etc. It is up to you to ensure that this does not happen.

Write a personal note of instruction to family, friends, and other important people that explains what you are doing, and why. In many cases, a simple note can take the edge off the pain that heirs feel. Perhaps Brown felt that Tomi Rae had adequate housing, and that his home should be made into a museum to encourage some of the values dear to him. A note explaining that may have avoided some of the problems and emotional hardships.

Never make your estate plan or will vindictive. If you have an axe to grind, deal with it while you are alive and able to; don’t surprise people at the end. Even if Brown felt he did not want to provide for Tomi Rae, they still had a child, and many years of a relationship. Perhaps some bequest to help her out, even if not what he thought necessary, may have minimized or eliminated the problems and pain.

Watch how assets are owned (“title” in legal terminology) and note beneficiary designations (e.g., IRA, insurance). Title and beneficiary designations determine where your assets go regardless of what your will says. It all must be coordinated. If Brown wanted her to have it, he could have had his house owned jointly with Tomi Rae. If Brown wanted to protect Tomi Rae, avoid the media circus, and then have the house to go to charity to establish a museum, he could have transferred ownership of the house to a revocable living trust which reserved 90-days for Tomi Rae to live there following his death, and then transferred the house to the charity.

Take steps to keep your estate decisions out of the limelight. Set up trusts now to avoid publicity. But, this will not work unless you tie up loose ends, and address key issues that could create problems later. Celebrities are often better off using lifetime transfers to minimize post-death media attention. Also, to minimize the success of a post-death lawsuit, set up a pattern of benefiting the people you bequeath your estate to, especially if there are others that view it differently. Example: If Brown wanted to minimize what Tomi Rae would receive, he should have made lifetime gifts to other heirs, intentionally leaving Tomi Rae out to demonstrate consistency with his will that may provide limited bequests for her (if that turns out to be the case).

Have a family law attorney prepare a legal document to protect your partner. If Brown thought he was marrying Tomi Rae, he should have had a pre-nuptial agreement signed. If Brown knew he and Tomi Rae were not married, he should have had a "living together" agreement signed. If Brown wanted to assure Tomi Rae of certain bequests, he could have signed a document committing to make certain bequests to her in his will (a ).This would have prevented Brown from changing his will to cut out Tomi Rae.

Assure that your partner has sufficient assets in his or her name to get him or her through the transition period that follows your death, before bequests or trusts for your partner’s benefit can be effectuated.

Plan ahead, be clear, don’t be vindictive, establish a pattern…clean up loose ends and minimize the problems.

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