What Does an Executor Actually Do?

Executor's checklist
A little planning while a person is still alive can make his executor’s job much easier.

Investopedia’s recent article, “The Executor’s Checklist: 7 Tasks Before They Die,” reminds us that being executor of an estate means significant responsibility. It can be a daunting task, if you’re unprepared. Here are some simple steps to take while the testator is still alive to make the executor’s job easier.

  1. Make Sure You Know the Location of the Will and Other Estate Planning Documents. This is a no-brainer. It makes the executor’s job easier if the testator (the person who executed the Will) keeps the original Will, deeds, partnership documents, insurance policies, or other important papers in an agreed-upon spot, with copies at a backup location.
  2. Retitle Accounts Where Appropriate. If the testator has a spouse, mostly like they want assets to flow directly through to the surviving spouse (if neither spouse has children outside the marriage) or to a trust, so retitle accounts appropriately.
  3. Make a List of the Testator’s Preferences. Another way to make things easy on the executor and the family is to include document your funeral preferences in writing.
  4. Draft a Possessions List and Their Recipients. A big issue that many executors overlook is distributing personal possessions that have little financial value but great sentimental value. Along with the testator, an executor can create a list for the dispersal of personal items, as well as a system of distribution. The testator can include their reasoning for who got what gift. Sharing the list with those involved may also eliminate some hurt feelings. An organized dispersal can make an executor’s job easier and help with issues of fairness.
  5. Create an Annual Accounting Sheet and Updating Schedule. If the testator keeps track of the estate electronically on an annual basis, the executor will have a good idea of assets when it’s required. This e-document will also decrease the time spent searching for that jewelry the testator gave to a granddaughter or tracking down the funds that were supposedly in a now-empty investment account.
  6. Create a Sealed Online Accounts Document. An executor should also have a record of the testator’s online presence to deactivate accounts. This document simplifies work for the executor.
  7. Meet the Relevant Professionals. Executors should be familiar with the accountant, estate planning attorney and other professionals the testator uses. They may have further advice specific to the testator’s situation.

Preparation will greatly decease the odds of any complications when carrying out your duties as an executor. Take these actions while the testator is still alive to help make certain that the executor carries out the testator’s wishes.

Reference: Investopedia (July 11, 2019) “The Executor’s Checklist: 7 Tasks Before They Die”

Other articles you may find interesting:

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Titling Property Correctly for Your Estate Plan

‘Bye Bye Love’ Rocker Ric Ocasek Cuts Wife Out of Will

Ric Ocasek and wife Paulina
Ric Ocasek and his wife, Paulina Porizkova, filed for divorce after 28 years of marriage.

The language in the Will was very clear, according to the article “Cars singer Ric Ocasek cuts supermodel wife Paulina Porizkova out of will” from Page Six. There was no provision for his wife Paulina, since they were in the process of divorcing. He added that even if he died before their divorce was finalized, she was not to receive any elective share “… because she has abandoned me.” [Update: Porizkova is contesting Ocasek’s Will.]

It was Porizkova who found Ocasek’s body in September, while bringing him coffee as he recovered from recent surgery. The couple had two sons together and had called it quits in May 2018, after being married for 28 years. They met on set during the making of the music video for the Cars’ song “Drive.”

A filing with Ocasek’s Will stated that his assets included $5 million in copyrights, but only $100,000 in tangible personal property and $15,000 in cash. The document did not detail the copyright assets.

That may seem like a small estate for someone with Ocasek’s fame. However, an attorney who examined the document told The New York Post that it was likely the Cars’ frontman probably had more assets protected through trusts.

Like other high-profile performers who have considerable assets and who are savvy about finances, it’s possible that he has many millions of dollars. However, they will not pass through the public probate process because proper planning was done. That’s why people use trusts, especially when they’re public figures.

The Cars’ singer also seems to have left two of his six sons out of the Will. But the children he had with Porizkova were not left out of the Will.

It’s possible that the sons who were left out of the Will were compensated through other means. There may have been trusts set up for them, or perhaps life insurance proceeds.

The document indicates that Ocasek signed his Will on August 28, less than a month before his death.

Ocasek died of heart disease on September 15. He also suffered from pulmonary emphysema.

Mario Testani, his friend and business manager, is named as the executor of his Will.

Ocasek’s situation appears to show how trusts and other estate planning methods can be used to maintain an individual’s privacy, even if their other assets pass through a Will.

Reference: Page Six (Nov. 7, 2019) “Cars singer Ric Ocasek cuts supermodel wife Paulina Porizkova out of will”

Other articles you may find interesting:

What Happens to Eddie Money’s Money?

Prince’s Estate Battle Drags On

How Will Jeffrey Epstein’s Estate Be Settled?

Jeffrey Epstein
Jeffrey Epstein

Jeffrey Epstein’s last will and testament is dated August 8—just two days before he was found dead in a jail cell. Whether he killed himself or not [insert your favorite Facebook meme here :)], he left a big mess. His estate is estimated to be worth $577 million, including fine arts and collectibles that are still to be valued. Epstein also created a revocable living trust for his property.

CNBC’s recent article, “Here’s why a bitter legal battle could be ahead for Jeffrey Epstein’s estate,” reports that a lengthy fight is coming as Jeffrey Epstein’s estate addressees the legal claims over the distribution of his assets. The 66-year-old was facing federal charges of sex trafficking of minors and sex trafficking conspiracy.

Attorneys believe there will be a long legal fight, as alleged victims file claims against the money manager’s estate. The Epstein estate will be in the middle of lawsuits for a long time – until all of the plaintiffs are paid.

Let’s look at some the issues that heirs, plaintiffs, and attorneys will face.

  1. Creditors get paid first. Jeffrey Epstein’s will tells his executor to pay from the estate several costs, including funeral and burial expenses, administration costs and “all of my debts duly proven and allowed against my estate.” The will then directs the executor to give all of his property after these payments and distributions to The 1953 Trust, which was also established on August 8. The trust distributions aren’t known, because the trust document wasn’t attached to the will.

This means creditors, including plaintiffs of the many lawsuits against Epstein who receive a judgment in their favor against the estate, will be paid before property passes through to the heirs.

  1. All trusts are not equal. Some trusts may provide creditor protection, but not all trusts offer the same level of protection. Irrevocable trusts can’t be changed by the grantor once they’ve been established. When you transfer the assets to this trust, they’re out of your estate and you save on taxes at death. You’ve given up control of the asset—that’s why these trusts offer creditor protection. However, revocable trusts can be revised by the grantor during his or her life. Because the terms can change, the assets are still deemed to be owned by the grantor—making them subject to estate taxes and seizure from creditors.

You don’t save on estate taxes when you create a revocable trust, and Epstein’s trust is revocable. And, although moving assets to an irrevocable trust may protect them from creditors, it won’t work if you’re facing legal claims.

  1. Where you live is key. Jeffrey Epstein was a resident of St. Thomas in the U.S. Virgin Islands, but his will mentions five properties, including a mansion in New York City. The other properties, all owned by corporations of which he owns shares, are in New Mexico, Florida, Paris and the Virgin Islands. New York is known to chase down well-to-do residents who claim to live in tax-free havens. They conduct non-residency audits and hit them with taxes. Big estates can mean a lot of revenue for New York.

There is a chance New York could seek its share of state income and estate taxes. Where you live is answered by looking at facts and circumstances, including voter’s registration, driver’s license and the location of family and belongings. Just spending 183 days in your “new” state alone, isn’t sufficient to protect it from an audit from a high-tax state.

Reference: CNBC (August 24, 2019) “Here’s why a bitter legal battle could be ahead for Jeffrey Epstein’s estate”

Other articles you may find interesting:

Amy Winehouse’s Ex Filing a $1 Million Claim

What Happens to Eddie Money’s Money?

Handwriting Analysis in Aretha Franklin’s Estate

Aretha Franklin
Aretha Franklin, the Queen of Soul, left two conflicting Wills.

When Aretha Franklin died in August 2018, her family thought she didn’t have a Will. However, then they discovered two handwritten Wills – one in a locked cabinet and the other under a couch cushion – that gave conflicting instructions on how her estate should be handled. One of those Wills is now being examined by a handwriting expert to see if it’s the most recent valid Will. That determination will help decide who controls most of her finances and how her songs and likeness can be used in the future.

Fortune’s recent article, “How a Forensic Handwriting Expert Will Examine Aretha Franklin’s Will,” reports that in the Will thought to have been written in 2014, Franklin named her youngest son, Kecalf, as the executor of the estate. It looks like she first wanted another son, Teddy, to be in charge. However, his name is crossed out, with Kecalf written on the same line, followed by the name of Franklin’s niece, Sabrina Owens, whose name is also crossed out.

Now, in the middle of the dispute over the estate’s control, Kecalf has hired a forensic document specialist, Erich Speckin, to affirm to the court that the Will was, in fact, written by Franklin in 2014 and hasn’t been altered since. The other parties—Owens, who’s the current executor as decided before the discovery of the Wills; Teddy; and another son, Clarence—can also enlist their own handwriting experts, if they wish.

There are several steps an expert will take in making this determination. What Aretha Franklin left behind is known as a “holographic” Will, meaning that she wrote it entirely by herself, then signed and dated it. Holographic Wills are not valid in all states (such as Florida), but are valid in Michigan, provided that “material portions are in the testator’s handwriting.”

Because handwriting can change as a person ages and declines in health, the expert will try to compare the writing in the Will to as many contemporaneous sources as he can find. This may include Franklin’s lyrics, handwritten notes, birthday cards, or any other writing she might have done. The expert will use these to compare and look for anomalies. In most cases of fraudulent Wills, a forger will type out the text and forge a signature because writing out a full page in someone else’s handwriting is nearly impossible.

Once Speckin’s findings are revealed, the next skirmish in the estate battle will be based on his findings and the parties’ ability to come to an agreement. Kecalf now has only the support of his brother, Edward, in his bid to become the executor.

This is just one more reminder that everyone should have a valid Will at all times. Work with a qualified estate planning attorney to be sure make your Will is much clearer than the Queen of Soul’s.

Reference: Fortune (August 13, 2019) “How a Forensic Handwriting Expert Will Examine Aretha Franklin’s Will”

Other articles you may find interesting:

Billionaire Conrad Prebys’s Son Gets $15M after Being Disinherited

Actor Robert De Niro’s Bad Prenup

Demystifying Probate

Death and probate
Probate is the orderly distribution of a deceased person’s assets after all lawful debts are paid, and it is overseen by a judge.

Probate can be avoided with proper estate planning.

The Street’s recent article on this subject asks “What Is Probate and How Can You Avoid It?” The article looks at the probate process and tries to put it in real-life terms.

Probate is an estate administration process that works within a probate court with a probate judge presiding over the proceedings. Usually, surviving families and other interested parties initiate the process to address issues relating to the deceased individual’s estate settlement. These include:

  • The handling of the deceased’s valid will;
  • Properly citing and categorizing the deceased’s assets;
  • Appraising the deceased’s estate and property;
  • Paying off any of the deceased’s existing debts; and
  • Distributing the deceased’s property to those directed by the will (or, if there’s no will, the probate court will direct the distribution of estate assets, according to the laws of intestacy).

The personal representative (also known as an executor) handling the deceased’s estate will typically start the process with the help of a probate attorney. Here are the basic steps:

File a Petition. The estate’s personal representative will file a request for probate where the deceased resided.  Once all the required paperwork is in order, the probate judge will officially open the case.

Notice. The personal representative must send a legal notice to all applicable beneficiaries, heirs, debtors, and creditors that the deceased’s estate is officially in probate.

Inventory Assets. The personal representative will then collect, list, and provide a value for all of the deceased’s assets and supply this to the court.

Pay the Bills. The personal representative will need to pay all outstanding debts owed by the estate.

Complete Any Tax Returns. The estate may also have existing tax returns that need to be filed. An accountant can be hired by the personal representative to work on this, or the personal representative may choose to file the taxes on his or her own.

Pay the Heirs. The personal representative can now distribute the remainder of the estate to any heirs, according to the will’s instructions.

Close the Estate. Finally, the personal representative will file paperwork with the court and file to close the estate.

An experienced estate planning attorney licensed to practice in your state will be able to explain what strategies are used to avoid probate, how to remove certain assets from the process, or whether it needs to be avoided at all. In some regions, probate is swift, while in others it is long and tiresome. A local estate planning attorney is your best resource.

Reference: The Street (July 29, 2019) “What Is Probate and How Can You Avoid It?”

Other articles you may find interesting:

Does Having a Will Avoid Probate?

What Happens To Mom’s House When She Dies?

What Happens to Eddie Money’s Money?

Eddie Money
Eddie Money’s money – what happens to it now?

“The Money Family regrets to announce that Eddie passed away peacefully early this morning,” his family said in a statement (via Variety). “It is with heavy hearts that we say goodbye to our loving husband and father. We cannot imagine our world without him. We are grateful that he will live on forever through his music.”

Wealth Advisor’s recent article, “How Much Is Eddie Money’s Estate Worth?” said that earlier this year, Money revealed on his Real Money reality TV show that he’d been diagnosed with stage 4 esophageal cancer.

“I thought I was just going in to get a checkup, and he told me I got cancer,” he said. “Am I gonna live a long time? Who knows, it’s in God’s hands,” he continued. “But you know what? I’ll take every day I can get. Every day above ground is a good day.”

However, TMZ reported that Money died of complications from a heart valve procedure that he underwent a few months ago.

Eddie Money’s road to rock stardom was a strange one. He was the son of an NYPD police officer and originally wanted to stay in the family business. Money served on the force for two years, before quitting and pursuing his rock and roll dreams.

“I would have been a very lenient cop,” he told Rolling Stone in 2018.

Money struggled with drug addiction during his career, and in the early ’80s, his life almost ended. According to People, Money overdosed on fentanyl in 1981. This led to him badly damaging his sciatic nerve. His 1982 album, “No Control,” was written about the experience.

Money had eleven Top 30 hits on Billboard’s Hot 100 and earned a Grammy nomination for his hit “Take Me Home Tonight.” According to Celebrity Net Worth, he may have been worth about $20 million at the time of his death.

Money is survived by his wife and five children. However, the terms of his Will are not yet clear. As a California resident since 1968, his family won’t be subject to a state inheritance or estate tax because the state doesn’t have these taxes. Depending on what form his fortune takes, his estate could liable for several million dollars in federal estate taxes. It’s not known who owns the rights to his music catalog.

While his success peaked in the mid-’80s, he still had a strong fan base and made several concert appearances each year, in the years before his death.

Reference: Wealth Advisor (September 17, 2019) “How Much Is Eddie Money’s Estate Worth?”

Other articles you may find interesting:

Billionaire Conrad Prebys’s Son Gets $15M after Being Disinherited

Prince’s Estate Battle Drags On

Amy Winehouse’s Ex Filing a $1 Million Claim

Amy Winehouse
Amy Winehouse (Image may be subject to copyright)

Amy Winehouse’s ex-husband, thirty-seven-year-old Blake Fielder-Civil – the man who admitted that he started Amy on heroin – is asking for a lump sum payout plus a monthly allowance from her estate.

Fox News’ recent article, “Amy Winehouse’s ex files $1 million claim on late singer’s estate,” reports that one family member was quoted as saying, “To say that it would be inappropriate for him to benefit from her estate would be an understatement.”

Amy Winehouse died at aged 27 of alcohol poisoning in 2011. She didn’t leave a Will, and her after-tax assets of $3.64 million went to her parents. Since her death, the value of her estate is thought to have grown considerably from song royalties.

Fielder-Civil has told Amy’s family his legal counsel believes that he has a valid claim, because he was with her for six years when she released some of her best-selling material. The two were married for two years and split in July 2009.

Amy gave Blake a $309,000 payoff, but attorneys say the details of that settlement will be critical in Fielder-Civil’s legal claim. If it was designated as a “clean-break,” then he has no real argument for demanding more money. However, if it didn’t, he may have a case.

Fielder-Civil, the inspiration for the late Grammy winner’s heartbreaking hit single “Back to Black,” was in prison from July 2008 to February 2009.

Amy’s parents created the Amy Winehouse Foundation to help young musicians and people with addiction problems. The family inked a deal to make a biopic about her life. The proceeds will go to the foundation.

Amy’s friends and family are upset that any successful claim by Fielder-Civil could take money from the charity.

Reference: Fox News (July 28, 2019) “Amy Winehouse’s ex files $1 million claim on late singer’s estate”

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Angelina Jolie Leaving Her Estate to One Child?

Actor Robert De Niro’s Bad Prenup

Does Having a Will Avoid Probate?

a will means probate
Probate will not be avoided just because you have a Will.

Many people I talk to are shocked to find out that having a Will doesn’t mean you’ll avoid probate. In fact, unless you die with no debt and no assets, a Will makes it very likely your estate will be subject to probate.

So, why have a Will?

If you die without a valid Will, the state decides who gets your stuff. In Florida, that’s covered in Chapter 732 of the Florida statutes. Basically, it says that if you’re not married and have no children, everything goes to your parents; if they’re dead, it goes to your siblings. If you’re married, it goes to your wife and possibly your children (depending on the circumstances).

The statutes don’t address who will be the guardian of your minor children. That will be decided by lawyers and a judge ($$$).

If you create a Will, you can choose who gets your stuff – subject to Florida’s laws mandating how much you have to leave your spouse and restricting who can legally inherit your homestead. You’ll also be able to name who you’d like to serve as your Personal Representative if there is a probate, and who you’d trust to serve as guardians of your minor children.

When would a probate be necessary?

Generally, a probate would be necessary if you die with certain types of assets held in your individual name – such as bank accounts, investment accounts, savings bonds, and real property. No one will be able to access or manage those accounts/assets until a judge declares who is entitled to them.

Unfortunately, in Florida, this usually requires a fairly long, drawn out process involving a lawyer ($$$).

Occasionally a simplified process called Disposition Without Administration can be done without a lawyer, but it still costs over $200 just to file the form with the probate court. Use of this simplified process is very limited – basically it’s used when a person dies with a couple thousand dollars in a bank account, there’s no debt, and the spouse or child wants to be reimbursed for the funeral and medical expenses they paid out of their own pocket.

Is there any way to avoid probate?

Probate isn’t always a bad thing. It provides for the orderly payment of your debts and distribution of your remaining assets. It also legally protects your beneficiaries and Personal Representative from the claims of your creditors. This can be very valuable in second marriage situations, or in any family situation where there could be problems.

But, yes, there are ways to avoid probate and some of them are very simple and inexpensive. The simplest way to avoid probate is to name joint owners or beneficiaries on bank and investment accounts. Joint ownership on real estate will also avoid probate. In Florida, you can also name a beneficiary on your real estate deed (I don’t recommend this except in very limited situations). Creating a revocable living trust and retitling your assets in the name of the trust will also avoid probate.

Is there a downside to naming beneficiaries or joint owners?

Yes, sometimes using these methods without legal advice can create unforeseen problems. If you name beneficiaries or joint owners on all your liquid assets, and then a probate is needed for other assets, there’s no money to pay for the probate or taxes and your house, business, guns, or valuable heirlooms may have to be sold to provide those funds. The assets you left to the joint owner or beneficiary became 100% theirs the minute you died, and they have no legal obligation to share them with anyone or use them for your probate expenses or taxes.

Joint ownership with anyone other than your spouse can also create problems with creditors, divorces, and Medicaid planning.

Additionally, under Florida law, you have to leave your spouse a minimum of 30% of every asset you have any ownership in – even those with beneficiaries and joint owners. If you don’t, your spouse can take it away from the named beneficiaries. And, if you decide to leave your homestead to someone Florida says you can’t leave it to, the state will penalize you and your proposed beneficiary and the judge will distribute the homestead according to the law, not your wishes.

Can I type or handwrite my own Will?

Florida has many laws pertaining to what makes a Will valid. If these laws aren’t followed to the letter, the Will isn’t valid and you’ll be treated as if you died without a Will. So while you could certainly type up something simple, or use a form you find on the Internet, I wouldn’t recommend it unless you’ve personally researched and complied with all the Florida laws.

Florida doesn’t recognize handwritten Wills at all.

Additionally, never write on your original Will. Most of the time, the changes you tried to make won’t be valid, and you could end up making your entire Will invalid.

Other articles you might find interesting:

A Basic Form Doesn’t Work for Estate Planning

Yes, You Should Have a Will

Billionaire Conrad Prebys’s Son Gets $15M after Being Disinherited

Conrad Prebys
San Diego real estate developer and philanthropist Conrad Prebys.

Debra Turner, the longtime live-in partner of San Diego developer and philanthropist Conrad Prebys, has tried to sue the directors of the Conrad Prebys Foundation for their decision to give $15 million to Prebys’ son, Eric, who had been left nothing by Prebys in his estate planning documents.

The San Diego Union-Tribune reported in the article “Court fight continues over control of $1 billion Prebys estate,” that in January, a San Diego Superior Court judge dismissed Turner’s suit, holding that she had no legal standing to bring it. She then filed an amended complaint. However, recently the judge dismissed her lawsuit.

The legal fight has kept the estate money from going to the charities favored by Conrad Prebys. During his lifetime, he donated more than $350 million to various organizations – most of them in the San Diego area.

Turner says the issue arises from the foundation board’s decision to disregard Prebys’ wishes and give money to his only child, a physicist at UC Davis, who had been written out of the legal documents in 2014.

“When Conrad made a decision, it was done, and he was adamant about revoking Eric’s gift,” Turner told The San Diego Union-Tribune in 2017.

Prebys died in 2016, and his trust left gifts to twelve individuals and institutions. The bulk of his assets were left to to his foundation to “support performing arts, medical research and treatment, visual arts, and other charitable purposes” consistent with the causes he cared about when he was alive. However, a few months after his death, the foundation directors – five unpaid volunteers handpicked by Prebys – met to consider the next steps. The directors included Turner and Laurie Anne Victoria, a longtime executive with Prebys’ real-estate company. Victoria is also the trustee of the Prebys estate.

According to Turner’s lawsuit, a foundation attorney had warned the directors that Eric might contest the will, and if he won, he could “get it all.” Several weeks later, Eric’s attorney indeed sent a letter to the board, raising questions about Conrad’s mental competency at the time that the trust was amended. Eric also believed that Turner had exerted undue influence on his father’s decisions. Turner denied the allegations. But in December 2016, the other directors authorized a settlement. Eric got $9 million, plus $6 million to cover the estate taxes.

Turner then sued the board members on behalf of the foundation, alleging they had breached their duties to protect the estate’s assets.

Victoria defended the settlement as “the only reasonable decision” to avoid the uncertainty, expense and publicity of litigation with Eric and to begin fulfilling Conrad’s charitable wishes. She said the money represented less than 1% of the overall estate.

Turner is no longer on the board, and in dismissing her suit, Superior Court Judge Kenneth Medel said that, under corporate law, Turner can’t sue on behalf of the foundation because she’s no longer a director and, thus, lacks standing. Although she was a director when she filed the suit, the law requires her to maintain board membership throughout the litigation, according to the decision.

Reference: The San Diego Union-Tribune (March 29, 2019) “Court fight continues over control of $1 billion Prebys estate”

Other articles you may find interesting:

Angelina Jolie Leaving Her Estate to One Child?

Prince’s Estate Battle Drags On

How Can a Collector Leave a Legacy?

An art collector's heirs may not share the love.
An art collector’s heirs may not share the passion.

A few years after Joan Rivers’ death in 2014, her family put hundreds of Joan’s personal items up for auction at Christie’s in New York.

As The Financial Times reported in “Why an art collector’s estate needs tight planning,” a silver Tiffany bowl, engraved with her dog’s name, Spike, made headlines when it sold for thirty times its estimated price. This shows how an auction house can generate a buzz around the estate of a late collector, creating demand for items that, had they been sold separately, might have failed to attract as much attention.

A common problem for some collectors of art and other valuable collectibles is that their heirs may feel much less passionately about the works than the person who collected them.

If you’re a collector, you can gift, donate, or sell during your lifetime. You can also wait until you pass away and then gift, donate, or sell posthumously. If you want to make certain your wishes are carried out or to eliminate family conflicts after your death, you can take the decision out of the hands of your family by placing your valuable collection into a trust.

Your trust will have your wishes documented in the agreement and you can choose the trustees – whether you choose trusted family members or independent advisers. You, as a collector, might like to seal your legacy by making a permanent loan or gift of art to a museum. However, your children or other family members can renege on these agreements if they’re not adequately protected by trusts or other legal safeguards after your death.

Even with a trust or other legal structure put in place to preserve a legacy, the key to avoiding a fight over a valuable collection after your death is to have frank discussions about estate planning with your family well before the reading of the Will or trust. This can ensure that your wishes are respected.

Reference: Financial Times (June 20, 2019) “Why an art collector’s estate needs tight planning”

Other articles you may find interesting:

How To Disinherit A Child

The Importance of Funding Your Trust