- Thursday, 25 October 2012 23:34
The primary lesson is that one’s health care proxy should be someone who exercises caution and does not make impetuous decisions, especially for younger individuals. Secondarily, I am surprised that the victim was not a U.S. tourist. After having spent $9 on a Starbucks latte and $22 for a hamburger in Copenhagen this summer, I found their cost of living to be breathtaking if not nearly coma inducing due to shock.
- Thursday, 25 October 2012 23:33
For those who fear the probate process and think that it takes years, the below case will not quell their fears. A trust subject to probate administration in Cincinnati is being terminated after 160 years. Most probate matters are concluded in 1/160th of that time.
- Friday, 19 October 2012 23:32
To finish Estate Planning Awareness Week, Forbes has linked an oft repeated story of celebrity estate planning mistakes of varying degrees. There are some lessons to be gleaned, but I take exception to the Chief Justice Burger inclusion. Every version of this link I have seen repeats ad nauseam that he made a mistake by drafting his own will and not creating a trust. What no one explains is that the Chief Justice drafted his will after his wife had died. Once she was gone, a trust would not have provided any estate tax benefits. Just as one should not rely on the “fact checkers” during this election season, one should not trust writers who endlessly cycle the same point of view on a story without objectively thinking about it. They might be as credible as Candy Crawley.
- Wednesday, 17 October 2012 23:30
I mentioned this last year
. Huguette Clark
was the reclusive Gilded Age heiress who lived the last 20 years of her life in a hospital under a fake name even though she owned various houses and apartments worth $150 million. She also owned personal property (i.e. jewelry, art, furnishings) worth $75 million. The story is noteworthy because at the age of 98, she finally executed a will which left most of her fortune to her distant relatives who she referred to as her heirs. Once on a will signing roll, she executed another will six weeks later which left most of her fortune to charity. The distant relatives, who did not know where she lived, are contesting the second will.
1. The most recent will is presumed to be the valid will.
2. The will can be challenged on the grounds of undue influence or her lack of mental capacity. The mental capacity argument is probably a losing argument If she were incompetent when she signed the second will, one would think that she was incompetent six weeks prior, too.
3. A funded trust would have provided her privacy and kept Cincinnati estate planning attorneys/bloggers and the general public from knowing that she was worth $300 million.
4. When a distant relative is a Gilded Age heiress, a Christmas card and occasional phone call provide a great return on investment.
- Tuesday, 16 October 2012 23:29
Sad case that I intended to link
last week. A young woman was diagnosed with terminal brain cancer and eventually received a breathing tube. When she requested that the tube be removed so she could die, her parents sought guardianship of her. A court found her competent to make her own decision and denied her parents’ request. In an odd turn of events, she changed her mind and kept the tube in place to preserve peace with her parents.
A few points:
1. The case was correctly decided. The parents had no right to interfere in the decisions of their adult child.
2. If she had not been found competent, she would have been best served by having a health care power of attorney which designated someone who shared her beliefs to make her decisions.
3. We all should have conversations with our family members so they know our wishes and how we wish they would respond to specific medical situations. As tempting as it might be to get all potentially controversial topics on the table at once, save the conversation about differing views on religion, political candidates, and gay marriage for a different time
- Monday, 15 October 2012 23:28
1. Make a will and/or trust.
2. Make a living will and power of attorney.
3. Review beneficiary designations for insurance policies and retirement plans.
4. Make a bucket list,
5. Find something good in every day.
6. Tell friends and family you love them.
Of course, from my professional point of view, 1 and 2 are the most important. When clients do that, my list in 4 becomes attainable and 5 and 6 become easier.
- Friday, 12 October 2012 23:26
No, not the book. The Monkees song.
After Davy Jones of the Monkees died in February, the probate court agreed with his executrix to make his will unavailable as a public document
. For most estates, though, wills are public records and can be viewed by anyone. The speculation about the privacy request centers around Jones’ marriage to a woman half his age which occurred 5 years after he made the will and possible financial problems he was suffering. The widow has already filed a claim against the estate asking for the statutory share allowed for surviving spouses.
I doubt that his estate is proceeding as Jones would have wanted. We can learn four lessons from Jones’ errors.
1. The use of a funded trust avoids the probate process and provides privacy in administering estates abnegating the need to seal the will.
2. When marrying for the second (or especially third time), a pre-nuptial agreement is essential so that spouses know what to expect and do not file claims against the estate. It is hard to believe that Dennis Hopper got this
, but Davy Jones did not.
3. Estate planning documents should always be updated after marriage.
4. As appealing as it sounds, it is never a good idea to marry someone younger than your children.
Mike, the smart Monkee, is probably aware of all of this.
- Wednesday, 10 October 2012 23:24
I am not sure if this photo is legitimate,but it seems that a man had his living will and organ donation wishes tattooed on his arm. That should remove any ambiguity about his wishes, although a standard living will on paper with verbal instructions to his relatives, and checking the organ donation box on a drivers license would be far less intrusive. Those documents would also preserve skin space for tattooing his girl friend’s name and current favorite band.
- Tuesday, 09 October 2012 23:23
File this under news you can use. The annual gift tax exclusion will increase to $14,000 next year from the current $13,000. The gift tax exclusion is the amount of money someone may give away each year without paying gift tax (or more realistically without reducing the amount of money he may leave tax free at death). When giving away this larger amount, do not forget the blogger who shared this news. He would even settle for the incremental amount.
- Thursday, 04 October 2012 23:21
Forbes discusses 10 common estate planning myths, all of which I have heard. The most egregious myths are that without a will the state will inherit one’s estate and that having a will allows one to avoid probate. Of course, neither is true which is why they are myths.
Personally, the myth I am most vested in is that people need an attorney to draft a will. For reasons stated previously on this page, the cost of retaining an attorney far outweighs the downside of an error or not addressing an issue. Just ask the illegitimate child who inadvertently inherited a share of an estate or the children from the first marriage who were disinherited entirely in favor of the second, late in life spouse.
- Tuesday, 02 October 2012 23:20
1. Obtain the consent of executor, trustee, and guardian to serve. Do not surprise them with their responsibilities at death.
2. Inform the executor of the location of the documents, but do not necessarily provide a copy if they contain provisions that will upset family harmony if known.
3. For adult children who will inherit a significant sum of money, do not inform them of the amount but suggest to them that they seek financial advice and work with the family financial advisor.
4. Related to No. 2, by all means if a child is being disinherited, or if assets are being left to charity instead of to nieces and nephews, do not inform anyone. If they find out, the disinherited heirs could make the client’s life miserable and make the client wish for a hastened death.
- Thursday, 27 September 2012 23:18
USA Today has a nice article on points to consider when preparing a will
. The most salient is that beneficiary designations over-ride will provisions. If a parent’s will divides all assets equally between 3 children, but an account is owned jointly with one child, that child will inherit the entire account negating the parent’s wishes.
Personally, the other key point is that people are discouraged from preparing their own wills. My children’s school seconds that advice.
- Tuesday, 25 September 2012 23:16
This post is a month late. Before kids departed for college, parents should have had their children execute a simple set of health care directives
so that parents can receive medical information about, and make medical decisions for, their college age children. This is especially important for children from divorced families where it is unclear which parent is the decision maker.
The recommended documents are a health care power of attorney (to make the medical decisions) and a HIPAA disclosure so a parent can receive information about their child’s health status after a bad Ecstasy trip or injury while car surfing.
- Friday, 21 September 2012 23:15
The late Dennis Hopper made several wise estate planning moves late in his life
. First, he had a pre-nuptial agreement when he married his fifth wife. Second, when he was dying and was in the midst of an acrimonious divorce with her, he created a trust for their then 7 year old daughter to which he left nearly $3 million. The then estranged spouse/now widow has no control over the trust assets.
Two points. When a couple is divorced with minor children, I always advise my client to create a trust to hold assets for the children upon the death of the client. Otherwise, the former spouse will control the assets until the child turns 18 and may benefit from the assets. Second, when marrying for the 5th time, I am glad to see that Mr. Hopper had learned enough from his 4 previous failed marriages to execute a pre-nup. Old dogs can learn new tricks.
- Thursday, 20 September 2012 23:13
After an unmarried Nevada man died, authorities discovered $7 million of gold bars and coins stashed in his house
. The man had lived alone since his mother’s death in 1992. He was apparently dead for a month before neighbors reported a smell emanating from the house. His left no will so his first cousin, whose phone had been disconnected, will inherit the estate as his closest relative.
I am uncertain about what lessons can be learned from this story but I will suggest a few.
1. It is always best to leave a will instead of relying on the intestacy statute to determine where assets where go after death.
2. People should check on their “crazy neighbors” because they, instead of cousins with disconnected phones, might inherit assets at death.
3. Living isolated and alone without visiting doctors can lead to a premature death.
4. Gold has been an incredible investment the past several years.
- Tuesday, 18 September 2012 23:10
The best estate plan will not work if beneficiary designations and asset titling are not coordinated with the provisions of the will and trust. Common mistakes includeadding a child’s name to a house deed, adding one child as the transfer on death beneficiary of a financial account to the exclusion of the other children, or not avoiding the probate process by transferring the asset to a trust or adding a transfer on death designation.
I always provide my clients with a list of how to address beneficiary designations and asset titling issues. If the issues are not handled properly, one child can inadvertently inherit most of the estate to the chagrin, and lasting contempt and hostility, of the other children.
- Wednesday, 12 September 2012 23:08
At the risk of beating the dead horse about digital assets, some articles need to be mocked. This recent WSJ article deserves derision for making a simple topic – how to access on-line accounts of a deceased person – stupidly complex.
Suggestions include the creation of a social media will with a review of each web site’s policies, the nomination of a digital or social media executor, and creation of digital asset trust to avoid those assets going through the probate process. My responses to these ideas, in order are: a standard will suffices, the executor should be able to address on-line issues and if he can not he should not be the executor dealing with assets with a monetary value, and only an idiot would list a digital account as a probate asset to be disposed of. I suspect that some people think that there is money to be made from that idiot by selling him a trust that he does not need.
My advice remains creating a list of passwords accessible at death by the executor. Simple is better and often times less expensive.
- Monday, 10 September 2012 23:06
Who should serve as trustee of a trust? Choices are usually family members or a corporate trustee from a bank or investment company.
I usually advise clients to look at their family members first, then use a corporate trustee if there is no one suitable. However, I always try to dissuade my clients from naming one child as trustee of another child’s trust as a means of preserving family relationships post-death. Grandparents can serve as trustee for the short term. However, if the parents or grandparents are Michael and Dina Lohan, I always advise that the client use a corporate trustee.
- Thursday, 06 September 2012 23:05
Returning to post-death digital assets. The web site Deceased Account assists families with closing on-line accounts of deceased family members. The site summarizes the procedures of most major (and many minor or unheard of) on-line services.
If a surviving spouse discovers that the deceased spouse belonged to eHarmony, the account can be closed by a family member by simply stopping payment. Thankfully. And indignantly.