A Long-Overdue Will for Latafat In the late 1970s, Latafat Tilki, from Turkey, m
ID: 2750190 • Letter: A
Question
A Long-Overdue Will for Latafat
In the late 1970s, Latafat Tilki, from Turkey, migrated to the United States, where he is now a citizen. A man of many talents and deep foresight, he has built a large fleet of oceangoing oil tankers during his stay in the United States. Now a wealthy man in his 60s, he resides in Aspen, Colorado, with his second wife, Karen, age 50. They have two sons, one in junior high and one a high-school freshman. For some time, Latafat has considered preparing a will to ensure that his estate will be properly distributed when he dies. A survey of his estate reveals the following:
Ranch in Colorado
$ 1,000,000
Condominium in Santa Barbara
800,000
House in Aspen
1,500,000
Franchise in ice cream stores
2,000,000
Stock in Google
5,000,000
Stock in Wal-Mart
1,000,000
Stock in Gold Mines International
3,000,000
Other assets
200,000
Total assets
$14,500,000
The house and the Gold Mines International shares are held in joint tenancy with his wife, but all other property is in his name alone. He desires that there be a separate fund of $1 million for his sons’ education and that the balance of his estate be divided as follows: 40 percent to his sons, 40 percent to his wife, and 20 percent given to other relatives, friends, and charitable institutions. He has scheduled an appointment for drafting his will with his attorney and close friend, Gary Ingram. Latafat would like to appoint Gary, who is 70 years old, and Latafat’s 40-year-old cousin, Ceylan Sadik (a CPA), as co-executors. If one of them predeceases Latafat, he’d like Second National Bank to serve as co-executor.
Critical Thinking Questions
Does Latafat really need a will? Explain why or why not. What would happen to his estate if he were to die without a will?
Explain to Latafat the common features that need to be incorporated into a will.
Might the manner in which title is held thwart his estate planning desires? What should be done to avoid problems?
Is a living trust an appropriate part of his estate plan? How would a living trust change the nature of Latafat’s will?
How does the age of his children complicate the estate plan? What special provisions should he consider?
What options are available to Latafat if he decides later to change or revoke the will? Is it more difficult to change a living trust?
What duties will Gary Ingram and Ceylan Sadik have to perform as co-executors of Latafat’s estate? If a trust is created, what should Latafat consider in his selection of a trustee or co-trustees? Might Gary and Ceylan, serving together, be a good choice?
Please answer all seven and number each answer
Ranch in Colorado
$ 1,000,000
Condominium in Santa Barbara
800,000
House in Aspen
1,500,000
Franchise in ice cream stores
2,000,000
Stock in Google
5,000,000
Stock in Wal-Mart
1,000,000
Stock in Gold Mines International
3,000,000
Other assets
200,000
Total assets
$14,500,000
Explanation / Answer
1) Yes Latafat really need a will because he has dependents as children and wife,in this way he can choose how to divide his assets among the people he wants them to inherit.If he he were to die without a will the government would take over his assets and decide how to use those assets and distribute to the dependents as permit by the laws.Also he avoids paying inheritance tax if he writes a will than without it.
2)Common features are that a will does not become operative until a person dies.Second the will needs to be admitted to the probate court to prove the contents of the will, Third will are public records and can be successfully challenged and finally that it can be made by a human of legal age of 18 or greater.
3)The title of the assets ultimately control the distribution of your assets.
The title to assets is very important in blended marriages as here is the case. The residence or “homestead” is protected and both spouses must consent in order to transfer the residence during life. That is why powers of attorney usually need a specific statement to allow an agent to transfer the homestead. If a homestead is titled “joint tenancy with right of survivorship” then each owner owns an interest in the whole property. The surviving joint tenant inherits the homestead on the death of other joint tenant. If a spouse intends the homestead to go to his or her children from a prior marriage then that should be spelled out in estate planning documents documenting that intent. In that case the homestead should be titled in the name of one spouse and his or her children or a transfer on death (or beneficiary) deed should be filed that passes the property to the children on death.
Non-homestead property can have the same type of issues. If the property is owned jointly with right of survivorship the spouse that survives will take full title to the property and then can dispose of the property as he or she desires. This may thwart a desired distribution or could fit into the desired plan. If property is placed into a joint or individual trust then the provisions of the trust will determine the rights to the property.
4) Yes living trust is an appropriate part of his estate plan as he has dependents as minors.Under the living trust the property is transferred to the trust which manages the property until children reaches a pre determined age ,this is the change that comes with including a living trust.A will just transfer the property to any adult to manage the property but including a trust does introduce a trust that is responsible for transferring and managing the property.Property left through trust does not pass through probate as compared to will.The trust does not become a public document after death as compared to will which becomes a public document.
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