Unwinding a trust is tricky business


Best book and movie about estate planning topics

Yes, there are exciting stories about estate planning! Here are our choices.

Best movie – The Descendants with George Clooney:


Best book – The Summons by John Grisham:


Good analysis of how stock market may react to end of the Fed maintaining low interest rates

Can Stocks Hold Up Once Tapering Begins?

Great summary and review of a classic book on investing

Review: The Little Book of Common Sense Investing – The Simple Dollar

How to deal with rising interest rates and the resulting decline in bond yields

Get Ready for the Next Round of Bond Pain

Short answer: hold shorter duration bonds

Fifteen wealthy people who will be leaving the majority of their estate to charity

Estate Planning may never be the same:

Not all of the world’s billionaires are dedicated to being extraordinarily altruistic — many decide to spend their money indulging in fancy cars, planes, and yachts.

But others want to spread as much of their wealth as possible before they die. A select few even want that last check to only cover the cost of their funeral.

Of course, not everyone stands to gain from such selflessness — namely, the children of these generous donors.

Though they will still have untold opportunities, advantages, and connections, to help them succeed, the children of these 15 tycoons won’t be living large off their inheritances.

  1. Warren Buffet
  2. Pierre Omidyar
  3. Michael Bloomburg
  4. Gene Simmons
  5. Gina Rinehart
  6. Bill Gates
  7. Jackie Chan
  8. Bernard Marcus
  9. Chuck Feeney
  10. Nigella Lawson
  11. Ted Turner
  12. John Arnold
  13. Andrew Lloyd Webber
  14. George Lucas
  15. T. Boone Pickens

Most of the above, is in response to The Giving Pledge, an initiative started by Bill Gates and Warren Buffet, encouraging billionaires and other wealthy individuals to give away at lease 50% of their wealth to charity.

In regards to their estate planning, quite a few want the last check they write to bounce.

See the full story:


It’s been a tough couple of years for hedge funds

From the Wall Street Journal: Hedge Funds Severely Underperforming This Year

A typical hedge fund has risen 4%, on average, this year through Aug. 9, according to an analysis conducted by Goldman Sachs. That performance compares to a 20% total return (including dividends) for the S&P 500 over the same time frame, meaning the market has outperformed an average hedge fund by five times this year.

Hedge funds, on average, underperformed the markets last year as well, with an 8% gain, compared to a 16% total return for the S&P 500.

State level estate taxes are hitting some people hard

Washington finally declared a truce on the death tax this year, with estates now taxed at 40% with an exemption of $5 million. President Obama insisted on preserving this tax to spread the wealth, though it raises less than 2% of federal revenue and discourages lifetime savings, as even a 1981 study by Mr. Obama’s former chief economist Larry Summers showed.

Now the death-tax debate has shifted to state capitals, with mixed results depending on which party runs the state. Prior to 2001, states could impose an estate tax of up to 16% with no extra burden on their residents because a federal tax credit offset state estate taxes. That policy has ended and now state death levies are paid out of the assets of the deceased.

Four states—Indiana, North Carolina, Ohio and Tennessee—have reacted wisely by eliminating or phasing out their estate taxes. This leaves 18 states plus the District of Columbia that still impose a gift or estate levy. (See the nearby list.) Most of them still apply a 16% rate—as if federal rules haven’t changed.

The grand prize for self-abuse goes to Minnesota, which this year enacted a new 10% gift tax with a $1 million exemption. A gift tax is a levy on money given away while still alive. This tax is in addition to Minnesota’s 16% estate tax. The new law is all the more punitive because it applies the 16% estate tax (6% on top of the earlier 10% gift tax) to any gift within three years of death.

More at The Wall Street Journal: The Die Harder States

James Gandolfini’s Will – A Case Study In What Not To Do

On TV he played a ruthless mobster pursued by the Feds. But in real life actor James Gandolfini was a generous soul. Indeed he may even have endeared himself to the IRS as his will is revealed as an example of how not to settle your affairs, according to the experts.

Gandolfini’s will was written in a way that astute estate planners say skipped many options for minimizing his tax bill.

One example: Gandolfini left just under 20 percent of his assets to his wife, with the rest going to his sisters and infant daughter. (He made “other provisions” for his son Michael from a previous marriage, the will says.)

Federal tax laws allow for unlimited tax free transfers to spouses, but taxes are applied to most other bequests in estates over $5.25 million. Gandolfini only took limited advantage of that provision, so close to 80 percent of the assets covered by the will could now be subject to state and federal taxes that together can reach a rate of 55 percent.

More at CNBC.com: Gandolfini’s will a case study on what not to do

Emotions and Investing – Some Good Advice From Vanguard

From Vanguard: Principle 4: Maintain Perspective and Long-term Discipline

In the face of market turmoil, some investors may find themselves making impulsive decisions or, conversely, becoming paralyzed, unable to implement an investment strategy or to rebalance a portfolio as needed.

Discipline and perspective are the qualities that can help investors remain committed to their long-term investment programs through periods of market uncertainty.