- Wednesday, 29 August 2012 23:00
An issue that seems more problematic in theory than practice is who inherits digital assets at death. Technically, the purchaser of digital content has acquired the “non-transferable” right to use the items. Theoretically, there is no right to leave these assets to heirs and it is very difficult to distribute parts of these assets among various heirs (i.e. R.E.M. collection to daughter, Eminem songs to son).
The simple solution is to share the password so that the collection can continue to be accessed post-death on whatever devices the decedent used (i.e. Kindle, iPod). Logistically, integrating an iTunes library into another library is very technically challenging and merits a visit to www.ilounge.com.
However, from a practical perspective, do children want their parent’s digital media and vice versa? Growing up, my parents never had an album that interested me. Looking back, I still see no need for a Ray Coniff Singers or Mitch Miller album in my collection. Will others be worse off because they can not access a loved one’s Lady Gaga, Lil’ Wayne, or Black Eyed Peas collection? Will family members want to watch Cars 2, Transformers, and any Pirates of the Caribbean movie in the future, not to mention episodes of Keeping Up With the Kardashians and Two and a Half Men? I doubt it. If I am right, perhaps Apple and Amazon are doing people a favor by not easing access to the digital content of deceased family members.
- Tuesday, 28 August 2012 22:59
What happens to credit card debt at death? The general rule is that when a cardholder dies, the debt is paid from his own assets and a spouse is not liable for the bill. In Ohio, the credit card company has six months to file a claim against the estate. Otherwise the debt is not valid. If there are insufficient non-joint assets, the debt will go unpaid. This applies even if a spouse was an authorized user on the account (but does not use the account after death).
Beware of smooth talking debt collectors who will try to convince surviving family members that they should pay the debt of the deceased for moral reasons or to maintain the good name of the deceased. There is no legal reason to do so. Also, there is little moral in a business with 18% interest rates and punitive late fees.
- Friday, 24 August 2012 22:57
I suspect we will see more of this as banks consolidate further and more transactions become electronic. A bank account was closed after the owner died, but the bank reopened the account as a “zombie account” when scheduled electronic withdrawals were made. Bank of America apparently did not have a procedure for keeping closed accounts closed when electronic transactions were attempted to be made post account closing. Nor did it have a policy for dealing with worthless mortgages, but that is a different subject.
The best bet for the estate executor would be to close the account and open the estate account at a different institution.
- Thursday, 23 August 2012 22:56
More on Adam Yauch of the Beastie Boys. His will is also receiving publicity for having a handwritten clause forbidding the use of his music or artistic property for advertising purposes. One legal question is whether he can ban the use of all Beastie Boys songs in ads because he did not own all of the rights to a song or songs. Not knowing how the group worked and created music, I have no insight on that issue.
What intrigues me is the handwriting. If it was added after the will was signed and witnessed, the clause is invalid because it was not witnessed by two people. If it was added at the signing meeting, it should have been initialed by him and the witnesses to clarify that it was intended to be part of the will. To properly revise a will, a client should execute a new will or a codicil. To prevent clients from writing on wills, I offer to retain the originals in my vaults.
Also intriguing is the anti-commercial nature of the clause which stems from the pre-digital music era belief that to use music in commercials is “selling out.” Now, of course, bands use commercials as a means of getting their music heard and making money. You have to fight for your right to make a living.
- Monday, 20 August 2012 22:55
The will of Adam Yauch of the Beastie Boys illustrates how not to designate a guardian for minor children. Apparently, he and his wife could not agree on the guardian for their then 3 year old daughter, Tenzin Losel, when they executed their wills in 2001. They compromised and designated his parents if he died in an even numbered year and designated her parents if he died in an odd numbered year.
Several points. Unless the parents of my clients are very young, I do not recommend that the clients designate parents as guardians. Second, clients should re-visit their guardian designation regularly and adjust it accordingly based on life changes, especially if a client has a terminal illness. Third, unless the child is a Sherpa, I am not sure that Tenzin is a good name.
- Thursday, 16 August 2012 22:54
The WSJ has an article at the intersection of 2012 gifting opportunities and unique trust provisions
. I will repeat that the $5 million gift tax exemption for 2012 affords some people tremendous planning opportunities. Whether they want to make those gifts with unique strings attached i.e. attending the donor’s alma mater, spelling the family name a certain way, or marrying within the faith, is possible (and too controlling – at least in these examples).
However, I include a clause in trusts for all of my clients that suspends distributions if a beneficiary has a drinking, drug, or gambling problem. n.b. fantasy football and a bottle of wine with dinner do not rise to that level.
- Monday, 13 August 2012 23:01
The late Sherman Hemsley, who played George Jefferson on “The Jefferson’s” remains unburied six weeks after his death while his manager/partner and alleged brother engage in a will contest over his $50,000 estate. The alleged brother is contesting the validity of a will executed a month before Hemsley’s death from cancer.
I am somewhat perplexed about how a will contest affects the burial. However, this problem could have been avoided if burial instructions were left in writing. Generally, leaving the funeral instructions in a will is not advisable because the funeral has already occurred by the time the will is read.
The small nature of the estate compared to the legal fees to contest the will is the one factor that could quickly resolve this dispute and allow Mr. Hemsley to start “movin’ on down.” My apologies for that, but I could not resist.
- Thursday, 09 August 2012 22:53
Consumer Reports reviewed 3 on-line will preparation services. Their conclusion?
“Unless your needs are simple—say, you want to leave your entire estate to your spouse—none of the will-writing products is likely to entirely meet your needs. And in some cases, the other documents aren’t specific enough or contain language that could lead to an unintended result.”
When a client has an attorney prepare a set of estate planning documents, the client is paying for more than an attorney to correctly insert the names in the document. He is also receiving the attorney’s years of wisdom and experience in administering estates, knowledge of state specific laws, and general knowledge of human interactions through the estate process.
My conclusion? The difference between the attorney’s fee and the cost of a DIY package is small in comparison to the cost of a mistake or overlooking an issue in a self-prepared will.
- Thursday, 09 August 2012 22:52
I am back after a few weeks of slow estate planning news and 14+ days in Europe.
The story about the family who found a collection of pristine, old baseball cardsvalued at $3 million in their aunt’s attic is interesting for reasons other than the discovery of unknown valuable assets. First, it is very rare that an individual’s personal items are worth more than a few cents on the dollar. Even more rare is the family that is drawn closer together when dividing personal items.
My experience is that distributing personal property, no matter how small the value, can lead to acrimony and hostile feelings between heirs. To prevent acrimony, individuals should specify which heir is to receive specific items in a memorandum. Any hostile feelings can then be directed to the deceased and relations among siblings can be preserved. Hopefully.
- Thursday, 12 July 2012 22:01
When contemplating the big questions in life, did you ever wonder what would happen to your estate in the absence of a will? Probably not. But if you are morbidly curious, this calculator will tell you.
Note that this does not apply to insurance proceeds or retirement benefits unless the estate is designated as the beneficiary. Note also that the State only receives assets if there are no relatives under any branch of the family tree.
- Wednesday, 11 July 2012 22:00
At the intersection of estate planing, celebrity, and public voyeurism, is theThomas Kinkade estate litigation. At the time of his death, Mr. Kinkade was separated from his wife for 2 years and had been living with a girl friend for 18 months. His girl friend has offered 2 barely legible wills which leave her various sums. The illegibility is allegedly due to his inebriation while writing. Generally, a handwritten will is valid as is a will made while drunk (see the full article for some of the conditions and exceptions). This matter will take years to resolve.
What advice can we glean from Mr. Kinkade’s handling (or non-handling) of his affairs:
1. Once separated from a spouse, change the estate planning documents immediately.
2. If changing the documents, hire an estate planning attorney rather than DIY.
3. If eschewing an estate planning attorney in favor of DIY, write the will while sober, not highly inebriated.
Still unresolved is the effect of his death on the value of his art. I am betting downward.
- Tuesday, 10 July 2012 21:59
Back after a slow 4th of July news week. A checklist of items to address when getting re-married:
1. Consider a pre-nuptial agreement.
2. Revise will.
3. Change beneficiaries on retirement plans and insurance policies.
4. Take an inventory of assets (could be useful in lieu of a pre-nup).
5. Consider a pre-nuptial agreement. Repeated for effect. The other items will take care of themselves in the context of creating a pre-nuptial agreement.
- Thursday, 28 June 2012 21:57
Individuals need different estate planning instruments at different times of their lives, essentially building on what they had earlier.
1. An 18 year old should have a health care power of attorney and HIPPA disclosure form so parents can assist with medical decisions.
2. Unmarried and recently married couples need wills and health care documents to take care of each other during sickness and after death.
3. Couples with young children need wills and trusts to designate a guardian and to provide for their children.
4. Divorcing couples need to revise documents to remove the soon to be ex-spouse from them.
5. Re-marrying couples need a pre-nuptial agreement and perhaps a trust to provide for the new spouse, but ultimately distribute assets to children from a prior marriage.
In summary, for the recent high school grad, the soon to be betrothed, or soon to be re-married, the ideal present is a gift card for legal services.
- Wednesday, 27 June 2012 21:55
“When Harry Met Sally” remains one of my favorite films. Nora Ephron, its screenwriter died yesterday. In her last book, Ms. Ephron mentioned a humorous list of items she will not miss and items she will miss after death.
The not missed list is dry skin, Clarence Thomas, the sound of the vacuum cleaner, and panels on “Women in Film.”
The missed list is her kids, Nick (her husband), taking a bath, coming over the bridge to Manhattan, and pie.
Update 6/27: After today’s Obamacare decision, apparently Chief Justice Roberts will now be on the missed list. Unfortunately.
- Wednesday, 27 June 2012 21:54
As part of an estate plan, an individual should have a health care power of attorney to make medical decisions in the event of incapacity. Key factors/characteristics of a decision maker are:
1. Level head.
2. Question raiser.
3. Lives near the individual.
Under these criteria, I doubt the Lohan family would designate Lindsay to make their decisions.
- Wednesday, 20 June 2012 21:53
Wills are public records. Any assets distributed by the will are also public. In Hamilton County this info is all accessible on-line.
Joe Paterno’s family recently was criticized because they asked for, and received, permission to keep his will under seal. After a bit of an outcry, they agreed to remove the seal.
A few thoughts on this issue:
1. The will is vanilla – all of his assets will go to his trust agreement. I see no reason to keep this info private other than general public figure hubris which thinks that laws and policies for everyone else do not apply to public figures. c.f. Geithner, Tim and Rangel, Charles among others.
2. By asking for an exception to the privacy rules, the family and its attorneys made this a public matter. Now, they have attorneys in Cincinnati opining on the will and their privacy request when it would most likely have remained under the radar for everyone except those in State College.
3. The interesting info that the family would like to keep private is the net worth of JoePa. This info could have been remained private if the trust were funded during JoePa’s life, or if the financial assets had transfer on death designations.
I do not know if the assets were re-titled in his trust, but there is no excuse for not doing so. Anyone who is 85 years old should make sure that his estate plan is current and assets are titled properly. An 85 year old with an aggressive form of cancer should make sure to review his estate plan and asset titling as of yesterday.
- Tuesday, 19 June 2012 21:52
Fifteen years ago, a friend mentioned to me that divorce is the worst kind of estate planning. Those words ring true not only for estate planning, but also financial planning. Accordingly, here are 10 things a divorce lawyer will not tell you.
n.b. It is purely coincidental that today is my 19th wedding anniversary.
- Monday, 18 June 2012 21:51
Once you have a will, you should do the following to make the executor’s eventual task easier:
1. Inform your executor where the will is located.
2. Place a list of your financial assets, including life insurance policies, with the will.
3. Place a list of on-line passwords with the the will.
4. Place a list of instructions about various items of personal property with the will.
Do not place the will in a safe deposit box – it will be inaccessible.
- Tuesday, 12 June 2012 21:50
Living wills are great conceptually, but can be vague when actually needed. Some advisors propose making them more detailed and walking people through a lengthy series of questions about specific situations. Because this topic makes clients squeamish on a good day, and because clients’ wishes about death change as it becomes more imminent, people either would not complete a living will or it would not reflect their current wishes. The proposed solution is no solution.
Instead, I recommend executing a health care power of attorney in addition to the living will. The health care power of attorney allows a family member to make decisions for the incapacitated client. After executing the health care power of attorney, it is imperative to discuss wishes with the designee. Of course, with Obamacare’s “death panels,” perhaps this will all be moot.