Will Paris Hilton See Her Dad’s Wealth?

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Barron Hilton’s father, hotel magnate Conrad, purchased his first hotel in Texas in 1919. His timing was perfect, as the oil boom ensured rooms were fully booked and could sometimes be turned over three times in a day. He then built the Dallas Hilton in 1925 and three more Hiltons in the state in the next five years. He eventually expanded his holding to create the world’s first international hotel chain. By 1966, his son, Barron, replaced him as president of Hilton Hotels.

In 1979, at the age of 91, Conrad Hilton died of natural causes, leaving $10,000 each to his nephews, nieces, and daughter, and $500,000 to his two siblings. The remainder of the estate was bequeathed to the Conrad N. Hilton Foundation, which he had founded in 1944.

Celebrity Net Worth’s recent article entitled “Barron Hilton Fulfilled His Promise To Not Leave Any Money To Paris Hilton,” notes that Barron contested his father’s will and ended up settling for four million shares of the company. Years later, Barron watched in horror as his granddaughter Paris tarnished the Hilton name. Barron sent a message. He made an estate plan that excluded Paris’ father and her siblings. His entire fortune would be donated to charity through the family’s foundation, because he felt Paris’ and Nicky’s sex tapes, reality shows, DUIs and other embarrassments sullied the family name.

At Christmas 2007, Barron announced to his family that he was making a major change to his will. Instead of leaving his $4.5 billion fortune to his family, he was leaving the bulk of his estate to the Conrad N. Hilton Foundation. He left 97% to the foundation and split the remaining 3% ($135 million) between about 24 members of his family. So rather than inheriting about $181 million each, the Hilton family members would get $5.6 million each.

It looks like Paris was entirely cut out of her dad’s will, and she didn’t get a penny from her grandfather. Barron died in 2019, and his will instructed 97% of his fortune to be given to the Conrad N. Hilton Foundation for disaster relief, treating children with HIV and AIDS, poverty alleviation, and helping homeless shelters.

Barron continues to reinforce his message to Paris and his family from the grave. He was the second-largest philanthropist in U.S. last year with the $2.4 billion he donated to charity. He’ll probably be up there again, as one of the most generous Americans in 2020 since he still has $2 billion to donate.

Reference: Celebrity Net Worth (March 2, 2020) “Barron Hilton Fulfilled His Promise To Not Leave Any Money To Paris Hilton”

Some Estate Planning Actions for 2020

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Many of us set New Year’s resolutions to improve our quality of life. While it’s often a goal to exercise more or eat more healthily, you can also resolve to improve your financial well-being. It’s a great time to review your estate plan to make sure your legacy is protected, especially if you are home and have some time to think about your finances and your family.

The Tennessean’s recent article entitled “Five estate-planning steps to take in the new year” gives us some common updates for your estate planning.

Schedule a meeting with your estate planning attorney to discuss your situation and to help the attorney create your estate plan.

You should also regularly review and update all your estate planning documents.

Goals and priorities change, so review your estate documents annually to make sure that your plan continues to reflect your present circumstances and intent. You may have changes to family or friendship dynamics or a change in assets that may impact your estate plan. It could be a divorce or remarriage; a family member or a loved one with a disability diagnosis, mental illness, or addiction; a move to a new state; or a change in a family business. If there’s a change in your circumstances, get in touch with your estate planning attorney to update your documents as soon as possible.

Federal and state tax and estate laws change, so ask your attorney to look at your estate planning documents every few years in light of any new legislation.

Review retirement, investment, and trust accounts to make sure that they achieve your long-term financial goals.

A frequent estate planning error is forgetting to update the beneficiary designations on your retirement and investment accounts. Thoroughly review your accounts every year to ensure everything is up to snuff in your estate plan.

Communicate your intent to your heirs, who may include family, friends, and charities. It is important to engage in a frank discussion with your heirs about your legacy and estate plan. Because this can be an emotional conversation, begin with the basics.

Having this type of conversation now can prevent conflict and hard feelings later.

Reference: Tennessean (Jan. 3, 2020) “Five estate-planning steps to take in the new year.”

If I’m 35, Do I Need a Will?

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Estate planning is a crucial process for everyone, no matter what assets you have now. If you want your family to be able to deal with your affairs, debts included, drafting an estate plan is critical, says Wealth Advisor’s recent article entitled “Estate planning for those 40 and under.”

If you have young children or other dependents, planning is vitally important. The less you have, the more important your plan is, so it can provide as long as possible and in the best way for those most important to you. You can’t afford to make a mistake.

Talk to your family about various “what if” situations. It is important that you’ve discussed your wishes with your family and that you’ve considered the many contingencies that can happen, like a serious illness or injury, incapacity, or death. This also gives you the chance to explain your rationale for making a larger gift to someone, rather than another or an equal division. This can be especially significant if there’s a second marriage with children from different relationships and a wide range of ages. An open conversation can help to avoid hard feelings later.

You should have the basic estate plan components, which include a will, a living will, advance directive, powers of attorney, and a designation of an agent to control the disposition of remains. These are all important components of an estate plan that should be created at the beginning of the planning process. A guardian (or guardians) should also be named for any minor children.

In addition, a life insurance policy can give your family the needed funds in the event of an untimely death and loss of income—especially for young parents. The loss of one or both spouses’ income can have a drastic impact.

Remember that your estate plan shouldn’t be a “one and done thing.” You need to review your estate plan every few years. This gives you the opportunity to make changes based on significant life events, tax law changes, the addition of more children, or their changing needs. You should also monitor your insurance policies and investments because they dovetail into your estate plan and can fluctuate based on the economic environment.

When you draft these documents, you should work with a qualified estate planning attorney.

Reference: Wealth Advisor (Jan. 21, 2020) “Estate planning for those 40 and under”

Why Would I Need to Revise My Will?

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OK, great!! You’ve created your will! Now you can it stow away and check off a very important item on your to-do list, right? Well, not entirely.

Thrive Global’s recent article, “7 Reasons Why You Need to Review your Will Right Now,” says it’s extremely important that you regularly update your will (and other documents, such as a revocable living trust) to avoid any potential confusion and extra stress for your family at a very emotional time. As circumstances change, you need to have your will reflect changes in your life. As time passes and your situation changes, your will may become invalid, obsolete or even create added confusion when the time comes for your will to be administered.

New people in your life. We all know life changes. If you have more children after you’ve created your will, review your estate plan to make certain that the wording is still correct. You may also marry or re-marry, or you may have grandchildren that you now want to include. Make a formal update to your estate plan to include the new people who play an important part in your life and to remove those with whom you lose touch.

A beneficiary or other person dies. If a person you had designated as a beneficiary or executor of your will has died and there is no backup, you must make a change or it could result in confusion when the time comes for your estate to be distributed. You should update your will if an individual named in your estate plan passes away before you.

Divorce. If your will was created prior to a divorce, you will probably want to remove your ex from your estate plan. If you have minor children with your ex, you may also want to change your distribution and nominate a guardian of the estate to take care of any money you want to pass to your children. Talk to an estate planning attorney about the changes you need to make.

Your spouse dies. Even though wills should be written in such a way as to always have a backup plan in place, that’s not what always happens. For example, if your husband or wife dies before you, their portion of your estate might go to another family member or another named individual. If this happens, you may want to redistribute your assets to other people.

A child becomes an adult. When a child turns 18 and comes of age, she is no longer a dependent.  Your documents might have included provisions for dependents that now no longer apply to your children, but you would like to still help them out if you were to die. Therefore, you may need to update your will in any areas that provided additional funds for any dependents.

You experience a change in your financial situation. This is a great opportunity to update your will to protect your new financial situation. If you now have more than the minimum amount needed for probate, you may also want to create a trust to avoid probate. In California, if a person has more than $150,000 in their estate when they die (including the value of any houses), they will have to go through probate. Create a trust and change your will to a pour-over will to save your loved ones the trouble of going to court.

You change your mind. It’s your will, and you can change your mind whenever you like.

Reference: Thrive Global (June 17, 2019) “7 Reasons Why You Need to Review your Will Right Now”

Don’t Forget to Update Your Estate Plan

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There are some people who sign their will once in their life and never change it. They may have executed their estate plan late in life, or after they were diagnosed with a serious disease. However, even if your family life and finances are pretty basic, there are still changes in the law that you may need to incorporate into your estate plan.  Some of the people that you named in your will could also have died or moved away.

Forbes’ recent article, “Why You Should Change Your Will Now,” warns us that if you’ve taken the “one and done” approach to your estate plan, think again. In addition to the reasons already mentioned, your assets may have changed dramatically since you signed your will and other estate plan documents. The plan you put in place years ago may not have considered new federal and state estate taxes. Now that you’ve accumulated significant wealth that will be passed on to your children, you might need to review your plans for that wealth for your children.

You may want to include grandchildren to help pay for their college education. It is also not uncommon for parents to want to protect their children from themselves. This can be because of addiction issues or a lack of financial literacy. If that’s an issue, some parents elect to hold monies in trust for adult children, as a way to ensure that the funds will be there throughout the child’s lifetime.

A person’s estate plan should grow with them over time. An estate plan for a twenty-something may be very basic, but a newly-married couple will want to include provisions for their spouse. Parents need to think about providing for and protecting their children. Adult children have another set of concerns and you need to prepare for the possibility of divorcing spouses, poor life choices, addiction issues, and just poor money management. There are many stages in life when you may need to readjust the provisions for your children in your estate planning documents.

If you haven’t looked at your estate plan in a while, do it now.

Reference: Forbes (August 27, 2019) “Why You Should Change Your Will Now”

At What Life Stages Should I Review My Estate Plan?

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When a person hits the age of 18, they should at least have powers of attorney to designate who will make their healthcare decisions and handle their finances, in the event of any incapacity. When a person starts to accumulate assets and have children, it’s critical to have an estate plan in place, including guardianship nominations.

Bankrate’s recent article, “Estate planning triggers: When to re-evaluate your estate planning strategy,” says the risk of not having a current estate plan and will that state your wishes is significant. When people fail to put any plan into place, it leads to confusion, chaos and unintended consequences. Use this list of important life events as triggers to remind you to discuss your current situation with a trusted attorney.

Getting married. You and your future spouse probably have had some financial conversations before getting engaged. However, if you haven’t, once wedding plans are set, it’s vital to discuss all aspects of each partner’s financial situation and the desired distribution of assets. You should decide whether to sign a prenuptial agreement, the totals of your separate and joint assets and who you want to inherit those assets should one or both spouses pass on. In light of these factors and the prenuptial agreement, an estate plan that satisfies both parties must be created.

Starting a family. The decision to have a child comes with the responsibility of planning for that child’s care. You and your partner will want to determine the amount of your assets you want to pass to your children in the case of a death, at what age your children will inherit those assets and name a legal guardian.

Divorce. If a couple decides to divorce, it’s important to update their separate estates. If you fail to change the beneficiary designations for a trust or life insurance policy after getting divorced, your ex-spouse may receive the life insurance that was supposed to be paid out to the trust to provide liquidity to pay off debts and administration expenses.

Retirement. Beneficiaries are named when setting up a 401k or Roth IRA account. If you started the account years ago, the beneficiaries may be out-of-date. Account owners should look at their total retirement assets and update their beneficiaries to reflect their current relationship and financial circumstances.

Other life events. Any significant change in assets, a move to another state, the death or disability of a person named in your estate plan, a change in tax laws, a disability of a beneficiary that arises after the initial plan is executed, and/or the birth, adoption, or death of a child are all important life events that should trigger a revision of your estate plan.

Reference: Bankrate (March 4, 2019) “Estate planning triggers: When to re-evaluate your estate planning strategy”