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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Sep 25 12

    Another Case for Estate Plan Updates

    Newport Beach Law Firm

    [If anyone needs] proof of the importance of
    revisiting their estate plans annually, consider the case of a wealthy family
    that sold its retailing business to Best Buy.

    Perhaps you have heard that 2012
    is a unique year for planning. However, did you know that 2010 was just that much more unique and many families
    are still either jubilant or remorseful for disrupted plans?

    It just goes to show that
    changing laws matter, and that your estate plans must change accordingly.

    For fresh evidence of the
    necessity for annual visitation of the estate plan, and for the oddities of
    2010, Financial Planner magazine
    recently published an article titled “Family Feud: Review Estate Plans Annually.” It’s the case of the family behind
    Magnolia Audio Visual, and the couple that sold its retail rights to Best Buy
    and accumulated a cool $100 million estate in the process. Unfortunately, the
    parents weren’t as savvy with their estate planning.

    The estate plan provided that
    the maximum amount allowable under the federal estate tax threshold would be
    passed down to the children, with the rest to pass to the surviving spouse to
    thereby avoid immediate estate taxation. Unfortunately, the plan didn’t
    account for the fact that 2010 didn’t have an estate tax (thanks to expiring
    Bush-era laws and a gridlocked Congress).

    The wife died. When the husband
    nevertheless claimed the estate that was to pass to the children under the
    estate tax planning, the children were noticeably irked. It seems they had been
    passed over and were in danger of losing a fortune afforded under the
    once-in-a-lifetime and quite unintended tax loophole. Accordingly, the children
    filed suit against their father on the grounds of “non-compliance, forgery and
    the use of undue influence.”

    If nothing else, this case
    illustrates the necessity to revisit estate plans with greater frequency,
    especially in these uncertain financial times.

    Reference: Financial
    (September 1, 2012) “Family Feud: Review Estate Plans Annually

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