Asset protection is a means of keeping property safe from creditors. Creditors could be individuals or entities who win a lawsuit against you, or even those your insolvent business owes money to. Asset protection planning involves taking assets that are subject to creditors’ claims and recharacterizing them as assets that are out of the reach of creditors’ claims. Naturally, this is a murky area, so recharacterization must be done legally and as a preventative measure in order to avoid even more liability.

• Take Preventative Measures
  Start your asset protection planning before a claim arises. If you start moving assets after a claim arises, you risk making matters worse. What you do after a claim arises could be viewed as a fraudulent transfer and undone.
• Get Insurance
  Asset protection planning is not a substitute for insurance. You should include insurance as part of your asset protection plan as a supplement to help you defend potential fraudulent transfer claims.
• Place Personal Assets in Trusts and Business Assets in Business Entities
  When personal assets are placed into a business entity, the possibility of the entity being pierced by a creditor increases. Piercing an entity would allow creditors to reach through the entity and collect the owner’s personal assets. The place for personal assets is in a trust, out of the hands of business creditors.
• Do Not Gift Away Assets You are Trying to Protect
  If you put gifts in your will or trust for your children or other prospective heirs, keep in mind that if this was your idea of asset protection, such gifts can easily be set aside as fraudulent transfers.
• Offshore Accounts
  Despite what you may have read in every John Grisham novel, courts have the power to require debtors to bring money in offshore accounts back to the U.S. through repatriation orders. If a debtor does not comply with a repatriation order, a court may hold a debtor contempt, and in jail, until the money does come back.
• Bankruptcy
  In 2005, the bankruptcy laws changed. State homestead exemptions were limited, and other new provisions in the bankruptcy code case law make parts of asset protection plans difficult to protect in bankruptcy.
• Stay in the Legal Lines
  Asset protection planning should be based on the presumption that the planning and its purpose will become known to creditors. Asset protection plans that require secrecy will inevitably face problems.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about asset protection or estate planning in general, contact The Astill Law Office at 801-438-8698.

Jimi Hendrix passed away in 1970, but litigation surrounding his estate continues to this very day. We try and give our clients an idea of how painful, expensive, and unending estate litigation can be, hoping this will motivate them to create or update their estate planning documents. For today’s motivation, here is a condensed view of the headache surrounding the Hendrix family estate planning feud.

When Jimi Hendrix died without a will, all of the rock star’s money went to his father, Al, according to intestacy laws. The brunt of the estate litigation has swirled around Al Hendrix’s will. Al left control of the estate to Janie Hendrix, her cousin Robert Hendrix, and some of Al Hendrix’s other children. Janie then started a multimillion-dollar company called Experience Hendrix. Mere days after Al’s death the family began fighting for control of the estate. Leon Hendrix, Jimi Hendrix’s brother, sought to overturn their father’s will and gain control of about a quarter of the $80 million estate. He accused Jimi’s stepsister of undertaking a scheme to disinherit Leon Hendrix and his children. The other side of the family claimed Leon Hendrix was unstable.

In 2002, a judge ruled that Leon Hendrix was not entitled to anything from his father’s will other than a single gold record left to him when his father died in 2002. The judge said that Al Hendrix cut Leon Hendrix from his will because of Leon’s struggle with drug addiction, and because he failed to complete a treatment program, is unwilling to work, and continuously demanded money.

The judge also found that Jimi’s stepsister, Janie, had breached her duties as trustee of the estate by not making payments to the 10 family members for whom trusts were created in Al Hendrix’s will. Janie and her cousin Robert Hendrix had to pay the lawyer’s fees for some of Al Hendrix’s other children who were suing along with Leon Hendrix. Janie retains control of the company, but she no longer has a say in how trust payments are disbursed to the rest of the family. The lawsuit cost millions of dollars that came from Al Hendrix’s estate.

A more recent court ruling involving Washington state’s publicity-rights law found a company called HendrixLicensing.com on the losing end of a battle with the Hendrix estate. The plot thickens, as the company is owned by a partnership that includes Leon, while the estate is controlled by Janie.

To avoid complicated ongoing estate litigation, work with an experienced estate planning attorney. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in estate planning, asset protection, wills, and trusts. If you have any questions about estate planning, contact The Astill Law Office at 801-438-8698.

A trustee has a very important role. He or she will be in charge of distributing trust assets and managing trust property for the benefit of trust beneficiaries. If a trustee fails to meet these responsibilities, not only will the trustee hurt trust beneficiaries, but he can put himself in a precarious financial position. For example, in one case where the trustee reportedly acted in bad faith, he wound up paying some of the legal fees trust beneficiaries incurred.

The recent Utah case of Warner v. Warner entailed a 15-year long dispute between the trustees and the trust beneficiaries of a family trust. In the end, the Utah Court of Appeals held that the trustees were required to pay a portion of the beneficiaries’ attorney fees incurred in defending against the trustees’ appeal of the district court’s ruling. The trustees had to pay the fees from their own personal funds because they breached several fiduciary duties and made transfers in bad faith. The court, however, did limit the award to the actual fees the beneficiaries incurred as a result of the trustees’ bad faith conduct.

The Court also held that trustees cannot reimburse themselves from trust funds for the payment of their own attorney fees incurred in connection with their bad faith conduct. The Court held that trustees may only be reimbursed from trust funds when the trustees act in good faith. This was a good result, because the Trustees were not acting in good faith. This case highlights the need for selecting the right Trustee, and the need for Trustees to find good legal counsel.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about trustee responsibilities, or if you have reservations about serving as a trustee, contact The Astill Law Office at 801-438-8698.

Once your estate plan is completed, we recommend that you revisit it on an annual basis just to make sure everything is squared away. Years fly by, and we easily forget to update our documents despite major family and financial changes. We recommend reviewing it with your attorney at least every five years. Your estate may even need updating more often if any of the below circumstances occur.

Changes in the Law
Under the current tax law, each individual may transfer up to $$5,340,000 tax-free during life or at death. If you have not revised your will or trust during the past 5 to 10 years, you may be missing out on this tax benefit. Also, if your estate planning was done when the exemption was much lower, your plan could be unnecessarily complicated.

Financial Success
If you have experienced the benefits of a promising investment, are selling a business, or expecting a successful initial public offering of your company, this could affect your estate planning. You can shift some of the potential monetary benefits of your success to your family and loved ones.

Financial Setbacks
Just as you would update your estate plan when expecting or experiencing financial gains, you should revisit and restructure it when experiencing financial setback.

Change in Relationships
A marriage or divorce is probably the biggest reason to update your will, living trust, any assets that pass outside of these documents. Likewise, if your spouse passes away, you should update your estate plan to reflect this, especially considering that you may have inherited more assets from your spouse.

Children or Grandchildren
If you become a parent, it is vitally important to update your estate plan. If you become a parent, make sure you have named a guardian for your children and provide for them financially in case something happens to you. If you become a grandparent, make sure your will and trust cover this new family member even if his or her parents died before you.

Declining Health
A diagnosis of a degenerative disease or terminal illness should prompt you to expeditiously get your estate plans in order

Whether you need to update your estate plan or begin the estate planning process, we are here to help. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

Though there is no iron clad measure to ensure your heirs do not fight over your estate, you can definitely minimize the chances thorough estate planning with an experienced attorney. We caution clients to take any precautionary measures possible to avoid estate litigation, as this process is costly and can take years. Perhaps the epitome of never-ending and expensive estate battles is that over Anna Nicole Smith’s late husband’s estate.

Anna Nicole Smith was married to J. Howard Marshall for 14 months before he passed away in 1994, leaving an estate estimated to be worth between $500 million and $1 billion. Smith never saw a penny of her husband’s estate because Marshall’s son, E. Pierce Marshall, argued that his father made no mention of her in his will and never set up a trust her. Both Smith and E. Pierce Marshall have since passed, but the estate battle wages on.

In a new development, E. Pierce Marshall’s estate may have to pay up to $44 million to Smith’s daughter. A federal judge agreed with an argument that the son’s estate should be penalized for allegedly lying and cheating in court during the decade long battle over his oil tycoon father’s fortune. Smith’s lawyers have also alleged that E. Pierce Marshall and his attorney deliberately depleted his father’s accounts to deny Smith any money, and backdated, altered, and destroyed documents. The son may have also committed perjury, falsified notary statements, and presented documents to his father under false pretenses.

The court noted that Marshall’s actions were specifically designed to ensure all of his father’s fortune remained in his own hands, away from his Anna Nicole Smith. Lawyers for the estate of Anna Nicole Smith, to which her 7-year-old daughter is the sole heiress, have demanded sanctions be set to compensate for this tortious conduct.

The sanctions could amount to just over $44 million, but they will not be punitive. They will be civil damages, based on real losses caused by Marshall’s misconduct. But even if the sanctions are awarded, Smith’s daughter may not benefit at all from them because the money could entirely go to massive outstanding legal bills.

Make sure your loved ones are accounted for in your estate plan to avoid infinite estate litigation. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698

We cannot emphasize enough that in order for your Trust to be effective, it needs to be fully funded during your lifetime. Your trust will be considered fully funded when all your assets are transferred into the name of the trust. If a trust is fully funded, then there is nothing left to pass through a will. This means the probate court process can be completely avoided. If assets are left out of your trust, your loved ones may have to deal with the probate process.

Take for example the case of the late Fast and Furious star, Paul Walker. We know that Walker had a will, a trust, and 25 million in assets. The reason why we know so much about his personal affairs is because he did not fully fund his trust.

Instead of putting all of his assets in a trust, Walker relied on his will. His will is a “pour-over” will, which is an instrument that passes assets into a trust upon one’s death. Ultimately, the end result of a pour-over will is the same as if there was a fully funded trust, because the trust still dictates who receives the assets and when. However, if the trust had been fully funded, the public scrutiny of Walker’s personal assets and the cost and hassle of probating the will could have been avoided. Had the trust been fully funded, Walker’s family affairs would have been kept private because there would not have been a will or public record probate filings.

Walker most likely did not have all of his assets titled in the name of his trust because he was so young. His death was heartbreaking, premature, and untimely. Still, a lesson can be learned that it is never too early, and you are never too young, to fully fund your trust.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.

Legendary radio personality Casey Kasem died on June 15th of 2014. In his last few months, Kasem had been suffering from Lewy body disease, the most common type of progressive dementia after Alzheimer’s. Simultaneously, he was the subject of a bitter court battle involving three of his children from a previous marriage and his current wife, Jean. His oldest children were challenging their stepmother for control of Kasem’s medical decisions, serving as a tragic reminder of how important it is to have a medical directive.
In 2007, after Kasem was diagnosed with Lewy Body disease, he executed a healthcare directive and appointed Kerri, his daughter from a prior marriage, instead of his wife, Jean, to make his medical and end-of-life decisions. The document stated that Casey did not want to be kept alive if it “would result in a mere biological existence, devoid of cognitive function, with no reasonable hope for normal functioning.” Casey’s document nominated Kerri, not Jean, to make the important decision of when it was time to honor this wish and effectively end Casey’s life.
Kasem’s daughter Kerri was able to win legal authority to end Casey’s suffering and have him taken off life support because of the executed healthcare directive. Sometimes called a living will or medical power of attorney, a healthcare directive allows a trusted loved one to make medical decisions, such as ending life support, when you are no longer able to.
It is tragic that Kasem’s last days consisted of a family legal battle. To avoid this happening in your own family, make sure you and every other adult over the age of 18 executes a health care directive. In the event you suffer a debilitating injury or disease, you can chose the person you most trust to carry out your medical decisions. Thankfully Kasem did exactly that, bringing his suffering to an end.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about executing a healthcare directive or estate planning in general, contact The Astill Law Office at 801-438-8698.

One of our main concerns in the estate planning process is asset protection. There are unique asset protection concerns for our estate planning clients who own businesses. For example, did you know that if you own a business, even if you operate a corporation or limited liability company, the business’s creditors could potentially go after your own personal assets? That process is called “piercing the corporate veil,” and this article is a brief summary of how that works.

Business owners often organize their company into an entity, like a corporation or Limited Liability Company (LLC). This is done specifically to limit each individual owner’s personal liability. Piercing the corporate veil allows creditors to reach through the corporate structure and collect a business’s debts from the business’s shareholders or owners.

In order for a creditor to pierce the corporate veil, it has to prove certain factors that can be hard to prove in court. These factors include:

• Defective or Inactive Formation: If the owners did not meet the legal requirements needed to form the entity, whether it is a corporation or LLC, then no entity exists to shield owners from liability. Likewise, each state imposes annual franchise fees or report-filing requirements on entities. If a company fails to keep up with these, the corporation or LLC will legally cease to exist, resulting in owner liability. This happens frequently. Don’t let this happen to you!
• Undercapitalization: If a company does not have a reasonably sufficient amount of capital to pay its expected debts, this shows potential undercapitalization, which could be grounds to impose liability on the owners.
• No Separateness of the Company: If business owners are interchangeably doing business in their own name and sometimes in the business’s name, this lack of separateness could justify piercing the corporate veil. A lack of separateness is also evident if there is commingling of company and individual assets, or transferring of assets between the company and an owner without formalities. A common mistake is to put company checks in your personal account or to pay company bills from your personal account. This is a recipe for disaster.
• Excessive Dividends or Other Payments to Owners: When owners are actually working for a corporation or LLC, they can usually pay themselves fair compensation. But if they are giving themselves additional dividends and other non-compensation distributions, without any business accounting, this could expose owners to individual liability.
• Record Absence or Inaccuracy: If corporate or LLC records are missing or inaccurate, this can form a basis to pierce the corporate veil, especially if they hinder a creditor’s collection efforts against the company.
• Misrepresentation or Unfair Dealings: Deceptive practices such as dishonesty, false statements to corporate creditors, and asset concealment can make owners liable for corporate debts.

We counsel clients regularly on asset protection. We are sensitive to the unique concerns of our business owner clients, and take into consideration any issues that could implicate business owner liability. The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about asset protection, contact The Astill Law Office at 801-438-8698.

Philip Seymour Hoffman repeatedly rejected the advice of his attorney and accountant, both of whom advised him to create a trust. It is said he did so because he did not want his three children to be “trust funds kids.” For those of you who may be avoiding creating a trust because you do not want your children to be “trust fund babies,” we have written this article to dispel concerns over the misconceptions and stereotypes surrounding trusts.

The first thing worth addressing is taxes. Because of Hoffman’s aversion to proper estate planning, his $34 million estate faces a huge estate tax bill. A revocable living trust and other sophisticated planning could have provided more protection for Hoffman’s girlfriend and children and reduced his estate tax liability.

The second part of this that Hoffman just didn’t understand, is that by failing to control how his children receive distributions from his estate, he let them become trust fund babies…or worse. They don’t need to rely on a trust, they will get the cash outright! They don’t have to ask a Trustee if they can have money, they already have it.

Now you might be thinking you still do not need a trust, because you do not have a $34 million estate. This brings us to our second point. Trusts are not just for wealthy individuals. They are for anyone who wants their heirs to avoid the hassle, expense, aggravation, and stress of the probate process and for those who want to help their children avoid the mistakes of youth and immaturity. A revocable living trust can avoid probate court entirely, keeping your estate private and can control assets after you die.

In addition to avoidance of probate, and privacy, you can control when and how trust beneficiaries receive distributions. If one of your concerns is that you will create a trust for your children and they will blow through the money, a trust is actually the best estate planning instrument for you. You can set up a trust that only allows money to be spent for specific purposes. You can also create a living trust so that your children receive a modest allowance, but only if they perform certain approved tasks or achieve specific milestones. You are totally in control of your trust. You can rule from the grave for a long time!

It is not uncommon for our clients to set up distribution provisions which allow the Trustee to asset the beneficiary with education expenses, weddings, purchase of a home, and many other considerations. But the trustee can cease distributions if the beneficiary refuses to work, refuses to go to college, or acts irresponsibly, or is addicted to drugs or alcohol. You can’t always see what will happen to your children in the future. Using a trust allows you to provide your trustee with guidance and direction in how to distribute funds to your children. A common theme is to provide for principal distributions at particular ages so that a beneficiary gains experience over time.

If you have any questions about trusts, or any fears we can possibly quell, contact The Astill Law Office at 801-438-8698. We have been providing high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, give us a call.

If you are in the process of estate planning, you may be interested in the new rules about longevity insurance. In this article, we explain what longevity insurance is and how the new rules make it more available.

Longevity insurance or longevity annuity is a new buzz-word for a type of deferred-income annuity that will pay you income until you die. This kind of insurance was created to protect people from using up all of their savings as they age, and ensures retirees that they will have a guaranteed and regular stream of income.

The U.S. Department of the Treasury and the Internal Revenue Service recently issued new rules for longevity insurance. Until now, these annuities could not be widely used in 401(k) retirement plans and individual retirement accounts. This is because most of these plans require account holders to begin withdrawals at age 70 and a half. The new rules make it possible for people with 401(k) plans to purchase longevity insurance as a part of their investments by allowing 401(k) or IRA plan participants to use up to 25% of their account balance or up to $125,000 to purchase a qualifying longevity annuity

These new rules will make it possible for more individuals to purchase longevity annuities, supporting retirement security and saving by allowing retirees to purchase guaranteed income for life while still having some savings in more liquid investments.

The new rules also eliminate penalties for accidental overpayment, and gives longevity annuity owners the option to have premium payments returned if they were not yet received as annuity payments.

A good financial planner should be consulted before deciding that one of these annuities is the best thing for you.

The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about how longevity insurance may fit in with your estate plan, contact The Astill Law Office at 801-438-8698.