Lafayette Estate Planning Attorney

As 2016 Comes To a Close . . . 6 Reasons Why Louisiana Families Should Get Their Estate Planning Legal Affairs in Order

Now that we are entering the final quarter of 2016, let's take a look at the most popular reasons Louisiana families, from Houma to Baton Rouge to Lake Charles to Shreveport, engage lawyers to arrange their estate legal affairs.

1. Simplify the Estate Settlement for Loved Ones. No one wants to leave their surviving spouse, children, or other loved ones a legal mess once they are gone. Arranging your estate's legal affairs in a way that makes it easier for those in charge when you pass can be a true gift to your survivors.

2. Designate the Appropriate People to Be in Charge. I worked with a couple recently who wanted to make sure their daughter handled their estate when they were gone. Just as important was to make sure that their son would not be the one to handle their estate. If you don't designate someone in your estate legadel documents to be in charge when you die or become incapable, a judge will select someone to manage your estate. No one knows better than you who should manage your estate when you die or if you become incapable.

3. Avoid Probate. Since it's simple to avoid, many families want to arrange their financial and legal affairs so that their surviving family members can avoid a court-supervised estate settlement. Those individuals who have been through a messy probate in the past are typically the first people in line at our door to set up their estate legal documents to avoid probate by typically, creating a revocable living trust to own their "probate assets," avoiding the freezing of accounts and real estate when they die, and appointing a family member/Successor Trustee to be in charge of distributing trust assets outside of the Louisiana Succession.

4. Specific Asset Distribution. I worked with a couple recently that wanted certain pieces of real estate to go to particular children. If you want to provide that certain assets be passed to along to certain heirs, you have to arrange your estate legal documents to do just that.

5. Avoid Nursing Home Poverty. It's a shame how many people wait to late to protect assets from nursing home expenses that can wipe you out. You MUST engage a qualified estate planning attorney at least five years before you or your loved one enters a nursing home. Otherwise, you may lose your life savings to the nursing home or to Medicaid. Don't dilly-dally around if avoiding nursing home poverty is a top priority.

6. Avoiding Taxes. It's smart to act NOW to arrange your estate legal affairs to avoid tax which can consume a large chunk of your estate when you die.

The bottom line is that everyone has different estate planning priorities but you all know that it's critical to have everything in order. Whether your primary issue involves avoiding probate, avoiding nursing home poverty, protecting minor or irresponsible children, avoiding taxes, putting the right family member in charge, or disinheriting a son-in-law, take action now to get all in order because you never know when your number might be called.

Interesting Louisiana Estate Planning Factoid About Leaving an IRA to Grandchildren

I met with a very nice couple last week that wanted to leave their investments to a trust for their grandchildren. One of the issues that we had to deal with was that the bulk of their investments were held in their IRA account.

I spent some time educating them about what their grandchildren would be facing from an income tax standpoint. The couple expressed that they did not want the grandchildren to get any of it until they were well into their adulthood.

I explained that since they were leaving an IRA to their grandchildren - even though it is going to a trust for the grandchildren, the grandchildren will be required to take distributions starting the year after the surviving spouse dies. I explained that the best we could do would be to set things up so that after the couple died, the grandchildren would be forced to follow the rules of an "Inherited IRA" and they would be required to take immediate distributions based on their life expectancy.

Nonetheless, we are still able to accomplish their objectives of providing an income to their grandchildren for many years, and then have the remainder turned over to the grandchildren when the grandchildren are nearing retirement age.

Anytime you name someone other than your spouse as the beneficiary of your IRA, be aware of the Inherited IRA rules that they will have to follow regarding their schedule for required minimum distributions. Their schedule will likely be very different than your schedule or your spouse's required minimum distribution schedule.

What Everyone Ought to Know About Valid Wills in Louisiana


We get questions everyday on whether a handwritten will is valid in Louisiana. Should I have a handwritten will? Should the will be typed? What if it's handwritten and it's notarized? We get all of those questions all of the time. Let me lay it out for you.

In Louisiana there's two kinds of valid wills. The one that we see most often by far is what's called the notarial will. It's the kind of wills that we prepare where it's all typed up and has all of the correct language in there that makes it a valid will. It has all of the proper bequests, executor designations, all the other legal stuff. There's a special clause at the end, it's signed on each page, it's notarized, it has to be witnessed by two people. So there's a lot of formality requirements that go into making a valid notarial will. Those are the the ones that are done most often. That's what we recommend.

In Louisiana, our state allows what's called olographic wills or hand-written wills. They scare me to death. Yes, it is a valid will if you do it in your own handwriting, do it on your own, you sign it, you date it. However, the question for me is not, "Is it a valid will?" The question is always, "Does it do what it needs to do?" If you write one word the wrong way it could cause havoc among your surviving family members. It's kind of like a doctor. Can you do your own surgery? Sure, but you may mess it up. Wills are the same way. Can you do your own will? Sure, but don't mess it up. You could be creating more problems than if you had no will at all. I also write a lot more about that in my book "Estate Planning in Louisiana." Feel free to check that out. But yes, handwritten wills, if they meet the necessary requirements, are valid. But they often do more harm than good because the person who wrote the will is not properly trained in how to write a will to cover all the things that need to be covered in it. So be aware of that.

Key Feature of a Louisiana Revocable Living Trust

In the past few months our firm has been preparing an abundance of Revocable Living Trusts for Louisiana residents seeking to avoid probate or succession, as it is called in Louisiana. One of the essential parts of a Louisiana Revocable Living trusts is what's known as a pour-over will. Often clients are confused by this term, because their thinking is; "If I have a revocable living trust I shouldn't need a will". Well I'm here to explain exactly what the pour-over will is used for.

When you have a revocable living trust, your Louisiana pour-over will is a essentially the back-up plan for property that is not a part of your trust when you die.  First, the pour-over will governs the distribution of your assets that will not need to pass through a Louisiana succession or probate procedure. These assets include your vehicles and personal effects. The pour-over will is in place to dictate what will happen to such assets.  The other assets that the pour-over will covers are assets which should have been placed in your living trust, but for some reason or another, have not made it into the trust. The pour over will is there just in case there are some assets that still need to go thorough probate. The pour-over will typically leaves these assets to your living trust to be distributed according to the terms of the trust. However, the hope, in setting up a Louisiana revocable living trust, is that your estate will never need to pass through a Louisiana Succession.

If you are interested in setting up a revocable living trust, give me a call and I will work with you to establish a plan to protect your assets and provide great peace of mind.

Wondering if Your Louisiana Estate Plan Should Include a Power of Attorney - Read This


Many of our clients come in to the office and want to get their affairs in order.  The thinking is that signing a last will and testament will do so, and often times it willl.  But what happens if you're incapacitated, either by sickness or another accident for an extended period of time?  In that case you may need a power of attorney.  Laws in Louisiana differ from the laws in other states for power of attorney. 

I would like to share a situation that we hear about all of the time.  Jerry has three kids, Harry, Larry, and Mary.  Jerry is getting older and his health is beginning to decline.  He takes no action, however, and suffers from a heart attack.  Luckily,he survives but for weeks he is in no condition to handle his own affairs. 

This is a terrible situation and since a power of attorney was not executed there will likely be a court-supervised interdiction proceeding.  Harry, Larry, and Mary will have to sue their dad and have him interdicted.  The family will be at the mercy of the court and after a great deal of time and cost the court will pick a curator whose job it will be to manage Jerry's affairs and report to the court for permission to act on Jerry's behalf.

Let's take the same example, but this time when Jerry notices his health is declining he decides he wants his son, Harry, to handle his financial affairs for him if he ever becomes so sick that he can't take care of his own affairs.  Jerry signs a power of attorney authorizing Harry to take care of all of his financial affairs. 

There are many benefits to signing a power of attorney in Louisiana including:

* Your family avoids the court supervised interdiction proceeding that may be required if you have not properly executed a power of attorney.

* YOU can designate the person who will handle your medical or financial affairs for you if you ever become incapacitate

* YOU can authorize your agent in your power of attorney to engage in tax planning and Medicaid planning techniques that he or she would have been able to perform in an interdiction proceeding.

At Rabalais Estate Planning almost any estate planning documents we draft will include this important document.  We want to make sure to cover all of your bases when protecting your estate.  If you want to know how to establish a power of attorney, then give me a call.  I will be happy to help you take all of the necessary steps to get a complete estate plan in place and move you closer to having the peace of mind you deserve. 

Secrets Every Louisiana Couple Should Know - Is It Best to Have One Living Trust or Two?

We work with many married couples throughout Louisiana. Every once in a while we work with a married couple and their goal is to avoid probate and sometimes they ask the question, "Should we have one trust or should we have two trusts?"

Quite frankly, the answer is that most married couples, particularly the traditional families (a married couple that have children together), typically have one trust. They have the same beneficiaries so after both spouses pass away typically their children are going to share in the trust assets.

However, there are many married couples that meet later in life, they already have children, and perhaps they even signed a marriage contract prior to their marriage.  They do this because they wanted to make sure that all of the assets remain separate and each spouse has different heirs. Perhaps they want to provide for their spouse but ultimately each spouse wants to provide for and leave their assets to their perspective child or children. Often times in those cases we'll do two trusts, one for each spouse. Each spouse will get their own portfolio with all of the trusts, and the wills, and powers of attorney, and all of the other supporting documents that are included, all of the instructions for the people who are going to be in charge when you pass away. All that information goes in one place.

So be aware, married couples, if your intent is to avoid probate with a trust, you have a decision to make, whether you want to have one trust or two. Typically it's one, but when things are kept separate, it's often two. Give me a call if you would like to gain peace of mind by taking the first step to get your estate plan in order.

What Does an Estate Plan for Louisiana Parents with Minor Children Look Like?

Twice in the past week I took care of friends of mine who wanted and needed to get their estate plan in order for the first time. Both friends have minor children and have never done any estate planning before.

Estate planning for parents with minor children usually looks something like this:

1. Lifetime Usufruct to Spouse. Parents with minor children in Louisiana usually leave their spouse the lifetime usufruct of their estate. In Louisiana, you really can't leave your estate in full ownership to your spouse because forced heirship laws require you to leave part of your estate to your kids 23 or younger. The usufruct satisfied these forced heirship rules because you are not leaving out your children - you are leaving them "naked ownership" which permits them to inherit from you after you AND YOUR SPOUSE die.

2. Children's Inheritance In Trust. If you and your spouse die, you don't want your minor/young child(ren) to inherit it all in a lump sum. So, we often create a "testamentary trust" in your will whereby you name a trustee for your kids to manage their inheritance until they are older, and you designate a term (age 25 perhaps) when your kids can have their inheritance.

3. Tutors. If you have minor children, you will name their guardian who will play the role of parents if you die before your children are 18.

4. Powers of Attorney. You will likely designate your spouse as your Agent on your Durable Property Power of Attoreny and your Health Care Power of Attorney. If your children are young, you will likely name a trusted relative or friend as the alternate agent, if your spouse is unable to act as your agent.

5. Living Will Declaration. You will likely document your wishes regarding life support machines.

These are typical items that parents with minor children address when they are setting up their estate planning legal documents. There are other issues that often come into play but these are the basics. If you live in Louisiana and want to protect your minor children (of course you do!), let us know.

Business Incorporation May Be An Integral Part of Your Estate Plan

In about 20% of all estate plans that I prepare, there is also some business planning that needs to take place. This business planning typically takes the form of Louisiana LLC formation. LLC’s, or limited liability companies, are most often formed by clients who hold investment properties or rentals as a way to protect their other assets.

The idea of the LLC is to shield yourself and your personal assets from any lawsuit arising from property owned by you. Lets say you own a rental house and your tenant slips and falls on the property and decides to sue you. Without a Louisiana LLC, the tenant will sue you individually and they can recover from all of your assets you’ve worked so hard to accumulate. When you have an LLC who’s only asset is the rental home, the tenant’s recovery will be limited to the value of the home, and any lawsuit will not threaten all of your other assets.

So as you can see, an LLC can be a very valuable tool when you own investment properties. LLCs allow you to protect assets and that is the primary goal of professional estate planning. If you would like to look into your needs when it comes to Louisiana Estate Planning and whether business planning may also be helpful to you; call me at 866-491-3884 for more information or to set up a no-cost consultation.

Lafayette Family Makes It Easy To Leave Home To Child With All Else For Their Children Equally

Helped a nice couple recently. They lived outside of Lafayette, Louisiana. They had four main estate planning goals: (1) Keep the surviving spouse in control of everything; (2) Make sure that any of their four children could handle future financial and medical decisions should the parents become incapable; (3) Make sure that one of their children (who did not own a home while their other three children all did well and had nice homes) inherits their home; and (4) Make sure that all four children work together after the parents die to sell their commercial property and divide up the proceeds as well as divide equally their stock investments and bank accounts that they have.

So, we will be helping them implement their estate legal program so that when one of them dies, the surviving spouse will not have to access the legal system to access their money or property. Probate will not be necessary when either one of them dies. Their revocable living trust will specifically provide that when they die, their home is to be transferred to their child. Their trust further stipulates that their four children will be the Successor Co-Trustees after both parents die so that the children will have immediate access and authority to work together to divide remaining assets equally and fairly - keeping sibling relationships strong, and keeping the government out of the settlement of their estate.

If you live in Louisiana and would like to start a conversation about setting up an estate legal program for you and your family, call Rabalais Estate Planning at 866-491-3884.

Divorced Business Owner Sets Up Estate Legal Program For Minor Children

I was working with a divorced business owner recently. His financial advisor recommended that he come see me. The business owner had been very successful in business, but he knew little and had no previous exposure to estate planning.

It was kind of funny when he said he wasn't sure what he needed from me, but he knew he needed to do something to protect his estate. I started a conversation by letting him know what would happen if he died with no legal plan in place.

I told him, "If you die with no legal program in place, then all of your assets will be frozen immediately. Your ex-wife will hire an attorney to start the probate proceeding. Your ex-wife will kick your fiancé out of your house. After several months or years of court proceedings, your ex-wife will start to gain control over all of your assets, including your businesses. Your business partners will have to co-own your businesses with your ex-wife. Your ex-wife will have the right to hire another set of business attorneys to search and review all of your business records. One of our local elected judges will be in charge of over-seeing how your ex-wife is handling everything on behalf of your four minor children. Ultimately, if the court proceedings ever end, your ex-wife will gain complete control over your estate. If she does not pay the $1.5 million estate tax bill within nine months after you die, interest and penalties will accrue against your estate. Then, as your children reach their 18th birthday, they will sue your ex-wife who will be forced to dump roughly $2 million into your childrens' laps, likely spoiling any desire they may have to get a good college education."

He said, "That would not be good for my four kids, my fiancé, my business partners, or my ex-wife. I don't think my ex-wife would be the best person to handle my children's inheritance." 

About an hour later, after much discussion about his family, he was anxious to put in place an estate legal program so that, when he dies, the right people will be put in charge of managing his estate. Probate will be avoided so the courts and judges and lawyers would be kept out of his estate. He designated a trusted and responsible colleague to handle the trusts for his four children so nothing would be dumped into their laps at age 18. His children would have money available to them for their college education, and they would receive their inheritance in stages at later ages. Plus, we set up the trusts for his four kids so that if they get married and divorced, they will not have to split the inheritance with their spouse.

We also had a discussion about the estate and gift tax. He was surprised to learn that if he stayed single, then only $5.45 million of his estate would escape the 40% estate tax. But if he gets married, then through the appropriate use of the marital deduction and portability, he could protect $10.9 million from the 40% estate tax.

Bottom Line: If you are divorced with children, and you don't want your ex-spouse to control everything when you die, and if you'd prefer that what you've worked for doesn't get dumped into your kids' laps at age 18 (after being overseen by judge until then), then perhaps you should give us a call at 866-491-3884 so we can start a conversation so that you can sleep well at night knowing all of your estate legal affairs are in order.


Assets Louisiana Residents Do Not Neet to Transfer to a Revocable Living Trust

A lot of couples that come into my office want to avoid a Louisiana Succession by creating and maintaining a Revocable Living Trust.  But what many people don't realize is that some of their assets, such as IRA's and life insurance policies, do not go into a trust if the ultimate goal is to avoid probate.   These types of assets are payable to determined beneficiaries, and as long as the beneficiaries are properly designated, a trust does not have to be involved.

There are other types of assets that do not have to be transferred to a Revocable Living Trust and probate can be avoided.

1. Checking and Savings Accounts.  If you simply add an adult child to your bank account as having signature authority, then after you die, that child can have immediate access to the account, close the account, and divide the funds between your heirs.  All of this can be done without the involvement of the court.

2. Vehicles.  If the person you want to ultimately receive ownership of your car provides the Will or a photocopy of the Will to the Louisiana Office of Motor Vehicles, they will transfer the title after death without court intervention.

3. Personal Effects.  Because your personal belongings are not titled, family members usually divide personal effects after the death of a loved one without the involvement of the court.

If your ultimate goal is to set things up so your family doesn't have to participate in the lengthy and costly court probate process, then assets would typically require court involvement must be in a trust.  These types of assets include real estate, mineral interests, stock, Certificates of Deposit, interests in limited liability companies, other business interests, and non-IRA investments. 

Since many people have a large portion of their estate in retirement accounts, it's fairly easy to avoid probate by retitling the home and other probate assets to your trust.

Advice to Husbands Whose Wives Don't Handle the Money

One of the most important things you can do to enrich the lives and relationships of those you leave behind is to make sure all of your estate affairs are in order - and I'm not even talking about your estate legal documents. Sure, having all your estate legal documents in order is an important component to leaving a legacy (and not a headache) to your family, but here are five OTHER MATTERS that our best clients do for their loved ones to ensure a peaceful, stress-free, harmonious estate settlement:

1.    Funeral and Burial Instructions. If you've had your estate planning legal affairs documented by our law firm in the last 25 years, you received an Estate Planning Portfolio containing numerous sections. One of those sections includes your customized Burial and Funeral Instructions. Countless people have revealed their heart-felt wishes regarding their burials to me, but it really doesn't do much good to tell ME what you want, because I'm not likely to be the one handling your funeral arrangements. Document your detailed wishes in the appropriate section of your Estate Planning Portfolio. Your family will thank you for it and they'll brag about you to others.

2.    List Your Closest Family Members and Friends. There's a section in your Estate Planning Portfolio that we assemble for our clients where you can list the names, addresses, and telephone numbers of your closest family members and friends. Don't leave your family with the job of having to track down the contact information for those dozens of people who need notification. Do this work ahead of time and keep it up to date.

3.    Instructions to Your Executor / Successor Trustee. If you've worked with us and you have your Estate Planning Portfolio, there's a section in your Portfolio which has detailed instructions for the person that you designated to handle your legal, tax, and financial affairs when you are gone. You simply need to let that person know of the existence and location of your customized Estate Planning Portfolio, and they'll be able to flip through to the section that contains their instructions on what to do to get the job done.

4.    Organized Asset Information. You can have the most superior set of estate legal documents customized for your family, but if your surviving wife or other surviving family members do not have detailed records of what you own and what you owe, you will leave them with a frustrating, never-ending headache.  This will delay your estate settlement because no one will ever know if there is another account or asset that will be uncovered at a later date that will cause all of your heirs to drudge through more settlement paperwork. In a Rabalais Estate Planning Portfolio there is a section that includes the assets you own which will take the "guesswork" out of your estate settlement.

5.    Your Estate Planning Letter to Your Heirs. Included in a Rabalais Estate Planning Portfolio, you can communicate your wishes to your family regarding your desired distribution of personal effects, such as guns, jewelry, furniture, and other personal non-titled items. For some, making sure the personal effects wind up in the right hands is more important than the division of funds. Plus, it's easy to divide $1,000,000 among four children, but many families have been torn apart because of a fight over personal effects which had far less fair market value than other estate assets, but FAR MORE SENTIMENTAL VALUE than a bank account or investment portfolio. So take a few moments to describe your wishes and your feelings to your surviving wife, husband, children, or other loved ones. It will be your final message to them.

If you left your lawyer's office with your estate legal documents folded up in an envelope - without an organized set of supporting documents, you've missed the boat. Sure - having a superior, customized set of estate planning legal documents is critical to easing the process of settling your legal affairs, but having all of the above supporting letters, records, and instructions for those you leave behind can be the key to leaving a legacy.

The Two Secrets to Bill Gates Completely Avoiding Estate Tax

It's no secret that Bill Gates is one of the wealthiest people on the planet. You would think that the IRS will mop up when he dies, collecting billions in estate tax to be redistributed in whatever way our government distributes it - that's another story.

While Mr. Gates has not yet contacted me to customize his estate legal documents, there is little doubt that he will take advantage of two "often little known" tax rules to minimize or completely avoid federal estate tax. While I'm sure Bill has several trusts to avoid probate and make things simple, here are the two tax rules that Bill will take advantage of:

1.    The Unlimited Marital Deduction. If Bill dies before his wife, Melinda, he will leave his estate in a way so that $0 estate tax will be paid when Bill dies. You can leave an unlimited amount of assets to your surviving spouse when you die, and no estate tax will be due (the idea is that the tax is due after the surviving spouse dies);

2.    The Estate Tax Charitable Deduction. After both Bill and Melinda die, they will leave the bulk of their estate to the Bill & Melinda Gates Foundation. Anything you leave at your death to a charity escapes the federal estate tax.

Voila! No estate tax. The richest man in the world will take advantage of two often misunderstood tax principles to avoid a tax that is specifically designed to tax the rich.

When Bill calls, I'm sure we'll have a discussion about this. Moral of this story? Make sure you take the necessary actions to protect your estate from the government. Be like Bill!


Dad Wants To Keep His Estate "In the Family" - Away From In-Laws and Step-Grandchildren

Was working with a gentleman yesterday from Lafayette, Louisiana. He was retired but while working, he built up a business. He mentioned his estate was worth $7-8 million - much larger than most.

He had one child who was in his early 50's. The child had two children, but the child was divorced from their mother. The child was about to marry for the second time - to someone who had four other children of their own.

The gentleman and his wife were not particularly fond of their son's fiancé, and they quite certain that they did not want the new wife to wind up with the $7-8 million estate. And they also did not want their new step-grandchildren to get any kind of big windfall one day.

He was also concerned that if his only child received this large estate all at once, then it might do more harm than good for the child, because the child has always spent more than the child had. So we discussed arranging an estate legal plan so that after the gentleman and his wife die, the estate will remain in trust for the benefit of the child. The child will receive distributions each year from thistrust. And when the child dies, if assets still remain in the trust at that time, the trust assets would then pass along for the benefit of the child's two natural children. Neither the new daughter-in-law, nor her four children, would inherit from this couple.

If you want to make sure that your estate "stays in the family," and stays out of the hands of over-reaching in-laws or step-grandchildren, you may want to reach out to us and have a conversation about how simple it is to get things set up the right way - the first time. Call 866-491-3884.

Forget About The Estate Tax. Capital Gains Tax Is The New Sexy Tax To Avoid

Face it. Most families simply won't have to worry a lick about the federal estate tax. That's because about 99% of unmarried people don't have an estate that exceeds $5.45 million. And more than 99% of married couples don't have a combined estate of $10.9 million. So, for most families, no worries about trying to avoid the 40% federal estate tax.

But almost every family who engages in estate planning has assets that have appreciated in value. That means there is the potential for capital gains tax at both the federal and state level when those appreciated assets are sold.

Example: Let's say Dad bought stock in ABC Co. for $5 per share over the years. Now, that Dad is 76 years old, ABC Co. stock sells for $60 per share. That means that there is $55 of gain in each share of stock that Dad owns. If Dad sells the stock during his lifetime, he'll get hard with a capital gains tax.

Now let's say that Dad wants to beat the system so he decides to put that stock in his children's names before he goes into a nursing home (to avoid nursing home poverty) and before he dies (to avoid probate and to avoid death tax). So, he puts the stock in his kids' names. Voila - Dad thinks he beat the system. But after the transaction is complete, the stock goes up even more (let's say to $100 per share) and the kids decide to cash in and sell the stock. What no one realizes is that when Dad transferred the stock during his lifetime to the kids, the basis of the stock "carried over" to the kids, so when the kids sell the stock, they will have to pay capital gains on everything they receive in excess of the $5 per share. So, $95 per share will be subject to a 20BUT +% capital gains tax at the federal and state level.

Perhaps if Dad would have put the stock into the right kind of Grantor Trust, he would have removed the stock from his name for probate and nursing home purposes, BUT HE WOULD HAVE PRESERVED THE STEP-UP IN BASIS AT THIS DEATH. So, when Dad dies later when the stock is worth $100 per share, and then the kids sell the stock for $100 per share, the total capital gains tax bill for the sale will be $0 or zilch. Even though Dad kept the stock in his taxable estate by transferring it to a Grantor Trust, there will be no estate tax due to Dad's estate being valued at less than $5.45 million.

Many a "Do-It-Yourself" estate planner have mistakenly believed that they beat the government or beat Uncle Sam by putting stock or other appreciated assets in their kids' names while they are alive. But what they don't know is that Uncle Sam is laughing at them from a distance knowing that when the asset is later sold, Uncle Sam will collect a bundle because the children, unfortunately, receive a "carry-over" basis in the stock, as opposed to a "stepped-up" basis in the stock.