Leona Helmsley died on August 20th. Her Will has been filed with the Surrogate’s Court (NY’s name for their Probate Court) and it provides an interesting look into celebrity estate planning. Some interesting things I observed are:

1) Using a Will as an instrument of significant distributions. This is not something I would recommend for someone in Leona Helmsley’s position, especially if this was taking place in Connecticut. First, as is obvious by now, Wills are public and everyone now knows she disinherited some grandchildren, left a very large sum to her dog, and imposed visitation requirements on other beneficiaries. Maybe it is just me, but I find it difficult to believe someone with Leona’s history in the news would invite public scrutiny of her last wishes.

Second, the Will creates several ongoing trusts. Maybe it is different in New York, but in Connecticut creating even one trust in a Will is synonymous with ongoing Probate Court involvement for years and years as well as the accompanying legal and accounting fees. Not exactly the model of efficiency and savings. If this was my client in Connecticut, I would recommend using inter-vivos trusts for ongoing matters rather than the testamentary trusts used by Leona Helmsley.

2) Article Four Section D of Leona Helmsley’s Will requires her grandchildren visit the grave of her son annually. Failure to comply with this provision will terminate their trust share. I bring this provision up to highlight the flexibility you have in structuring your estate plan. Within the bounds of the law, you are free to create any framework you like for the distribution of your assets; including steering your beneficiary’s behavior to continue personal values you believe are important.

3) Leona Helmsley took advantage of a Charitable Trust to provide a tax efficient legacy to her beneficiaries. There are different types of Charitable Trusts and the terms of Leona’s are private, so I can’t get into specifics on this one. In general terms, if Leona did not take advantage of a Charitable Trust the tax impact on her estate would have been significant. If setup properly, the Charitable Trust allowed her to re-structure some of her estate into a more tax efficient distribution to her own family as well as charitable organizations. As proof of what I described above, compare how much we know of Leona’s Will because it is public with what we know of her Charitable Trust, because it is private.

This is a good opportunity to clear up a popular misconception of Charitable Trusts. Sometimes when people first hear the words Charitable Trust offered as a suggestion for their own estate plan they think it means leaving everything to charity. Not true, you have a lot of flexibility for dividing the interests in the Charitable Trust between your own family and the charitable organization(s). In many cases where I recommend a Charitable Trust, the primary family beneficiaries will receive more after taxes than if the distributions did not use a Charitable Trust. So the next time someone mentions this opportunity, look at the numbers closely before thinking it is not for you.

Sometimes celebrity estate planning attorneys get it done right, and sometimes they get it done not so right. The general consensus is Anna Nicole Smith’s estate planning was a disaster. Leona Helmsley’s estate plan was a little better, if not more public than necessary.

*Self-Promotion Alert*

You never know who is watching. I was pleasantly surprised to see this post this post on HR 3170 has made its way to the online version of the Wall Street Journal. In a recent column post titled Calculating Federal Estate Tax, Tom Herman discusses some of the tricky tax questions everyone is facing as the Economic Growth & Tax Relief Reconciliation Act of 2001 approaches its sunset date. You can find their link to my post in the “Blog Posts About This Topic” section at the end of the column.

*We now return to our regularly scheduled programming.*

Long Term Care Insurance can be confusing. There are a lot of moving parts to a policy and some confusing decisions to make. Whenever possible, I recommend my estate planning clients look into long term care insurance while they can secure it at a cost efficient price point for one simple reason: I can create the greatest estate plan in the world for a client but in the end it means almost nothing if my client’s estate is wiped out by nursing home costs. Duane Lipham, from The Long Term Care Review, has a story on How To Save Money On Your Long-Term Care Insurance Premiums. You can find some solid and simple tips there for saving money on your LTCI premiums.

The next two months are going to be very exciting and will provide you with an excellent opportunity to make sure your estate plan works for you.

September is “Know Your Estate Plan” month. You won’t find it on any calendar except mine. Over the last few months I have met with an increasing number of new clients that come to me and 1) do not understand how their existing estate plan from another office works or 2) have different expectations from their estate plan from another office than what the documents actually say. This is a problem in my opinion, and I’m going to do something about it. Come back on September 1 for more information.

In October, my “Medicaid Protection Winter Workshop” will take place. This workshop is designed to prepare your family for nursing home costs that average over $9,000 each month in Connecticut. This is an excellent opportunity for families that want to protect their life savings from devastating nursing home costs to get educated and get started before it is too late. I’ll be posting additional information on the Workshop and how to reserve your spot in the coming weeks.