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D List Actress, A List Will Contest

meadow 2C581E1600000578-0-image-m-12_1442327019151Meadow Williams is an actress of whom you have never heard and who appeared in movies you never saw.  She was married to Gerald Kessler, founder of Natural Organics natural supplements company, for four years prior to his death earlier this year.  He was 31 years older than her.  In 2013, he changed his will to leave all of his $800 million estate to her while excluding his 2 children and 5 grandchildren.  His children and grandchildren have contested the will on various grounds, including fraud, undue influence, lack of mental capacity, and the fact that Ms. Williams’ divorce from a prior husband was never finalized even though it was filed in 1994.

Several points:

1.  The fact that Ms. Williams might not have been officially divorced should not be a factor in whether Kessler’s will was valid – he could leave her money whether they were married or not.  The estate tax implications vary, but the bequest remains the same.

2.  Still, 20 years to finalize a divorce?

3.  If Ms. Williams did convince her husband to leave her all of his estate, she might have over-reached.  She could have lived comfortably on any single digit fraction of his estate while still leaving money for his children.

4.  Ironic that that the children of a fortune based on natural supplements allege fraud in a will contest.

 

 

 

 

 

 

Know Thy Neighbor (Before Giving Her Your Will)

A couple prepared wills leaving all of their assets to each other.  The husband’s father was the beneficiary if they both died.  The couple subsequently divorced.   The woman allegedly prepared a new will, which she gave to her neighbor, leaving her estate to her brothers.  That will has not been found.  After the woman died, her ex-husband produced the will from their marriage.  Although the divorce precluded the ex-husband him from inheriting from her, his father was still considered a valid beneficiary.  Courts have ruled that the will from her marriage controls and that the former father-in-law will receive her estate.  The New York Court of Appeals will hear her family’s appeal.

Several points:

1.  Most states have laws treating a divorced spouse as a pre-deceased beneficiary of a will, trust, insurance, and retirement plan.  Those laws do not affect the contingent beneficiaries.

2.  Divorced individuals should immediately update their wills and beneficiary designations as soon as possible during the divorce process.  This is more imperative for those without children.

3.  My policy is to retain my clients’ original documents,  send them copies, and urge them to notify their designated executor of the location of the copies (which have my name on them).

4.  In desperate times, leaving a copy of the will in the refrigerator is always preferable to giving the original will to a neighbor even if it ends up smelling like rotten vegetables, spoiled mayo, or Green Goddess salad dressing.

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Photo by Mark Brewer

Beneficiary Designations and Pyrrhic Victory

A Virginia man died of a rare leukemia survived by his 3rd wife.  One of his assets was a $125K insurance policy he received while employed by the federal government.  The policy listed his second wife as the beneficiary.  The surviving spouse contested the former wife’s right to the policy proceeds.

Virginia has a statute which precludes divorced spouses from inheriting from a   deceased former spouse.  Nonetheless, the US Supreme Court unanimously ruled that the former spouse was entitled to the proceeds because the 1954 federal law establishing the insurance program and providing that beneficiary designations must be followed trumped the Virginia statute which omits former spouses.

Several points:

1.  Ohio has a similar statute to Virginia.

2.  After a divorce, individuals MUST revise all of their estate planning documents and update their insurance and retirement plan beneficiary designations.

3.  After a leukemia or cancer diagnosis, no matter how positive the treatment options, individuals need to review their estate planning documents and their beneficiary designations.

4.  I suspect this was a Pyrrhic  victory for the former wife with most of the policy proceeds being consumed by legal fees during the 5 year dispute.  But then, most disputes between former spouses are Pyrrhic.

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All Posts By Jay Brinker

I am an attorney located in Cincinnati, Ohio who practices in the areas of estate planning, probate, asset protection, and small business advice. I make a difficult and bewildering process as simple as possible. Most importantly, I provide "more for less" for my clients.