Category Archives: Estate Planning

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Did you know about these 5 strange bequests?

facts-about-benjamin-franklinWe are constantly urging people to write a will so that their wishes will be known when they die.  Family members won’t have to guess what they wanted to happen to their favorite possessions – their paintings, jewelry and digital assets.  Most bequests are fairly common but some aren’t.

Here are 5 strange bequests made by famous people.

1.  Benjamin Franklin – Don’t Let My Daughter Wear Jewelry.
Benjamin Franklin, suffered from obesity for many years and it’s believed that this contributed to his death. He died of pleurisy, an inflammation of the lining of the lungs, at the age of 84.

When his will was read a surprising clause was found. Among his final wishes, he asked that his daughter, Sarah, “not engage the expensive, vain and useless pastime of wearing jewels”.

The reason for this strange request was actually quite simple. Franklin also left a portrait to his daughter, which he had received as a gift while he was an ambassador to France. The painting depicted King Louis XVI and the elaborate frame was studded with 408 glittering diamonds. Franklin left the request to prevent his daughter from removing the diamonds to make jewelry.

2.  Janis Joplin – Throw A Giant Party.
Janis Joplin lived such a huge life but in the end, she paid the ultimate price for her hard living. She was discovered dead in a hotel room on October 4th, 1970, the victim of a heroin overdose at just 27.  Throughout her wildly successful career, Janis had struggled with addiction and alcoholism.

Janis loved to party so much in life that in her will she made provision for a posthumous all night party to be held after her death. She left $2,500 for her 200 favorite friends – including her road manager, tattoo artist, sister and fiancé to party it up, one last time, in her honor. The party was held at the Lion’s Share, in San Anselmo, California on October 26th, 1970.

3.  Marilyn Monroe – We Needed More Details.
When the blonde bombshell passed away in 1962 she didn’t leave a very detailed will and it ended up having a huge effect on how her possessions were distributed. Or rather, not distributed.

Instead of a comprehensive last will and testament Marilyn left all of her belongings, including clothes and shoes, to her acting coach Lee Strasberg, on the understanding that he would divide them among her family and friends.  Strasberg, who is remembered as the father of the method acting technique, never gave away a single item and instead stored everything in a warehouse where it remained for the next 36 years. When Strasberg died at the age of 80 his widow auctioned Marilyn’s belongings for $13.4 million!

4.  William Shakespeare – My Second Best Bed
Just one month before he died, William Shakespeare compiled his last will and testament where he began by saying that he was in “perfect health.” Scholars today are still unsure of what he died from.

Surprisingly Shakespeare all but excluded his wife, Anne Hathaway, from his will instead leaving the bulk of his sizable estate to his eldest daughter, Susanna. There was a provision that she, in turn, would pass it down, intact, to her first born son. Sadly his direct line died out in 1670.

To his wife he left his “second best bed”.  This request was separate from the will, tacked on as if it were just an afterthought. At this time, leaving someone a good quality bed was far from unusual but some scholars do think this could have been meant as an insult.

5.  Farrah Fawcett – Long Time Lover Gets Nothing, It Goes To Another Ex.
Farrah Fawcett will always be remembered for her role in the original Charlie’s Angels TV series and for the infamous red swimsuit that she posed in for a pin-up poster which went on to become the best-selling pin-up poster in history.

Farrah died in 2009 after a long battle with cancer.  Her longtime partner Ryan O’Neal was surprised to find that he had been left out of her will completely. They had been together for 18 years but had broken up before she died.  She instead chose to leave most of her estate to her son. To add insult to injury she also requested that another ex-lover be given $100,000.

Don’t be like these celebrities.  Spell out what you want to have happen to your belongings.  To avoid misunderstandings or possible court battles, explain what you’ve done if you think it will raise questions from your heirs…or those who have been left out.

To find helpful information about estate planning and writing wills, go to www.diesmart.com.

Do you know where your parents’ important information is? 

do you know whereIt may seem morbid but have you asked them?  

This article from a New Zealand website is very applicable to us in the United States.  It’s a topic most of us don’t want to broach with our parents but it’s one that’s necessary to address.

Do you know how to get into your parents safe if necessary?

Knowing where their important documents and valuables are located in the event of an unexpected health crisis will give you, and them, peace of mind – especially if a parent is hospitalized and is unable to tell you where things are.

So before anything happens, it’s a good idea to talk to your ageing parents about what you may need to get one day; you may also want to consider letting your own children know where your key information is located as well.

You should ask your parents for the locations of the following items: 

1. Medical records 

If your parents find themselves in an emergency medical situation, doctors will want to know if they have any existing conditions, previous surgeries and any medications they’re currently on. If they have a spouse, that person probably knows the answers but it’s still a good idea for someone else (i.e., you or your siblings) to know just in case both of your parents are unwell or injured. 

2. Health insurance and life insurance information

It’s important to know where your parents keep their health and life insurance info, including any extras. You’ll also need to know where those cards are and you should ask to see their life insurance policies to double check their premiums are up-to-date.

3. Advance healthcare directive

This is a legal document that is also known as a living will and usually includes your parents wishes in the event of a major medical emergency. For example, they may have a Do Not Resuscitate (DNR) order or a health care power of attorney (POA) which differs from a general power of attorney. A POA allows a person to make decisions on behalf of another regarding his or her healthcare or medical treatment – this becomes active when a person is unable to make those decisions on their own or can’t communicate what they want. That’s why it’s important to talk to your parents about what they want to do if they find themselves in a situation where they’re no longer able to speak for themselves. 

4. Banking information 

This is a touchy subject but if a parent is suddenly out of commission, bills still have to be paid so find out where your parent’s bank is and get their account numbers, online access codes and PINs. It’s also important to learn how your parents pay their bills. Do they pay online, by check or direct debit? Ask them if they’ll add your name or one of your siblings to their bank accounts so someone else can access the account to make payments and manage it. 

5. Investment information 

This is information that cannot be ignored. Find out not only the location of your parents’ investments, but also the name and contact information of their advisor. You’ll also need to know what fees, required distributions and withdrawal penalties are. 

6. Deeds and titles 

Your dad may have kept the deeds and titles to your parents’ property in a box somewhere when you were a kid but do you know where those documents are now? Find out where the deeds to houses and land are as well as titles to their cars and/or recreational vehicles are. You may need them in order to liquidate their assets should a health crisis or sudden move to a care facility occurs.

7. Safe deposit box

Do you know if your parents have one? If yes, find out where they keep it and the keys and ask them what steps need to be taken to access the box. They may need to put your name on file so check with their bank. 

8. Hidden valuables

It’s been three years since my grandma died and my mum is still finding money and jewelry Grandma hid around her granny flat. Grandma lived through the Great Depression and had apparently stashed anything of value in the most curious places: money wrapped in plastic tucked inside the toilet cistern; jewelry hidden in the freezer, between her mattress, and even shoved deep inside the toes of some of her shoes – so it’s important to know if, and where your parents have hidden things. If they don’t want to tell you while they’re still alive, ask them to make a list and keep it with their wills. 

9. Wills, birth certificates, marriage licenses

Asking your living parent about their will may seem morbid and highly uncomfortable for everyone but dying without a will can be a costly affair and could start family infighting. It’s important to know if their wills are up-to-date. You’ll also need to know where their birth certificates and marriage license are located.

10. End-of-life decisions 

My father’s been telling me for years that if Mum dies, to put him in a boat and push him out to sea. While that seems rather melodramatic, it is important to know what your parents would like you to do after they die – do they want to be cremated? Buried at a cemetery? Have a huge party or somber church service? Find out what their end-of-life preferences are and let them know you intend to honor their wishes. 

For more information on this topic, check out our website, www.diesmart.com.

 

Do famous people have wills?

imagesLess than 50% of people in the United States have a will and it seems that famous people are just as bad as average folks when it comes to writing one.  The younger the person, the better the chance that there’s no will.  A will can be a fairly simple document to prepare and is something that everyone should have.  That way, when you die, there won’t be any squabbles over what you’ve left behind and there won’t be any arguing about what you would have wanted to do with them.

Here are just a few of the famous people who died without a will.

Pablo Picasso died in 1973; he was 91 year old.  He left behind an estate valued at $250 million.  Because he didn’t have a will, his heirs had to fight for six years and spend about $40 million to settle his estate.  If he had just done some basic estate planning, many of the issues could have been avoided.

Jimi Hendrix died at age 27 in 1970 from a drug overdose.  When he died, his father Al fought with two children who Hendrix had fathered out of wedlock.  Eventually, Al won and he inherited the whole estate.  When Al died in 2002, he left Hendrix’s estate to his adopted daughter, while neglecting to leave his biological son anything.  Since Hendrix died without a will, his family spent millions of dollars and more than 30 years fighting over the rights to his property.

Bob Marley died from cancer in 1981.  His estate was worth about $30 million and many people claimed a portion of it.  His wife only received 10% based on Jamaican law.  With a will, he could have left her more.  This estate, too, took more than 30 years to settle.  Millions of dollars were spent in court costs and family relationships were badly damaged.

Whether you’re famous or not, you should definitely have a will.  A free, simple form can be found on the web or, if you have a large estate as these folks did, an attorney should be consulted.  Your will can state what you want to have happen to your assets and who you want to receive what.  Your family will have a rough enough time dealing with your death when you’re gone.  Don’t give them the added burden of fighting over your things.

For more information about estate planning and wills, go to www.diesmart.com.

 

Should you set up a joint bank account?

6-3-jen-stuartWe read an interesting post awhile ago that we thought might help some of you.  The author is Jennifer Stuart, Attorney, Senior Law Project Jennifer Stuart is an attorney in Raleigh with Legal Aid of North Carolina’s Senior Law Project (SLP).   The post is repeated here in its entirety.

When I draft wills for older clients, they often ask about “adding a name” to their bank account – in other words, setting up a joint account. Joint accounts can make perfect sense for seniors who depend on family members for help paying bills and other day-to-day tasks. Joint accounts can also help avoid the need for probate, an often-complex process that requires court involvement to carry out the will.

Undoubtedly, joint bank accounts can make life easier for the right people: seniors and their trusted family members or caretakers. However, they can also make things easier for the wrong ones: people who want to exploit seniors and get access to their money. I hear this concern from a lot of my clients. Their son is in and out of rehab, or their daughter may be easily manipulated by an abusive spouse. Is it safe to add their name to the account?

My clients are right to be cautious, because opening a joint account gives the joint owners virtually unlimited access. They can withdraw any amount of money, at any time, for any reason, without your permission. And the process is irreversible: Once you give someone access to your account, the only way to remove them is to close the account. (The same warning applies if you make someone a co-owner of your home with a new deed; you cannot change your mind and deed it back to yourself unless they agree to give back their interest.)

Therefore, my advice to clients is always: Pick someone you can truly trust, and understand how joint accounts work so both you and your bank know what you want.

If you want someone to have access to your account while you’re alive and receive full ownership of the account when you die, then you want a “joint account with a right of survivorship.” If you want this type of account, make sure the written agreement you sign with your bank clearly states that the account has a right of survivorship.

If you want to give someone access to your account only after your death, then you want a “payable on death” account that names a beneficiary. You can set up a POD account if you are the sole owner of the account, or if the account already has a joint owner and you want the beneficiary to be a third party. Be aware, though, that this will create problems if your joint owners do not agree on the POD beneficiary.

Finally, be aware that setting up a right of survivorship or POD account will not necessarily prevent a portion of the account from being used to pay your debts after your death if you have no other money or assets.

So, when clients ask me about “adding a name” to an account, I tell them that joint accounts can definitely make life easier, but they are first and foremost a matter of trust.

For more information about topics of interest to seniors, check out our website www.diesmart.com.

 

Can celebrities teach us about estate planning?

be83d9254a85f218c3e112c005779b85We came across this post by John J. Scroggin, AEP, J.D., LL.M. and thought it was worth reposting.  Too many people think that things will take care of themselves…but they won’t.

“It is interesting how the common estate planning mistakes of average clients are so often replicated and exaggerated in celebrity situations. This column will discuss some of the things we can learn from high-profile celebrity estates, recognizing that our typical clients receive much less media attention and, often enough, have a few less zeros on their estate values. It is not that celebrity estates are more confounding than your average client’s estate. It’s that most celebrities have been allotted more than 15 minutes of media time, with much of it collected after they die.

Dying Without a Will

Dying without a will doesn’t damage the deceased, but it sure makes it hard on the survivors. Abraham Lincoln was shot on April 14, 1865. He died the next morning without a will despite being a skilled and successful attorney. He left an estate of $110,296.80 (the equivalent of several million dollars today).1

Prince died without a will on April 21, 2016. His estate has been estimated to be worth $300 million.2 His sister and five half-siblings initially appeared to be his only intestate heirs, until Carlin Q. Williams, a 39-year-old convicted felon being held in a maximum security prison, claimed to be the love child of Prince from a one-night-stand when Prince was a teenager.3If DNA tests had proven his relationship to Prince, Williams could have inherited 100 percent of Prince’s intestate estate.

Unfortunately, a significant number of Americans seem to be following Paul Simon’s perspective from his 1965 song Flowers Never Bend with the Rainfall: “So I’ll continue to continue to pretend that my life will never end.” The 2014 Rocket Lawyer Make-A-Will Month survey showed that 64 percent of Americans do not have a will.

Estate planning sounds as if it is for the wealthy when, in fact, it applies to everyone at every adult age (Georgia is the only state that allows a person as young as age 14 to sign a will).

In many states, each child and the surviving spouse will inherit an equal percentage (with the surviving spouse inheriting some minimum amount). If a trust is not established by a will, a minor child may be entitled to receive inherited assets by age 18, before they may be mature enough to handle the money. Ex-spouses may have control of the inheritance until the children reach adulthood.

In 1994, Kurt Cobain committed suicide at the age of 27. He left behind a detailed suicide note, but had not signed a will. Cobain’s wife and daughter were his only intestate heirs. In 2010, control of Cobain’s Right of Publicity passed to his daughter on the day she turned 18, and the next year the daughter reportedly purchased a $1.8 million home in Hollywood.

Intestacy can create messy dispositions based upon the order of death. For example, in most states, if a married couple with no descendants and no wills were injured in the same accident and one spouse survived the other by a few seconds and then died, the surviving spouse’s relatives could inherit all of the couple’s joint estate with the other spouse’s family receiving no assets.4

Professional wrestler Chris Benoit murdered his wife and son before taking his own life in 2007. In the probate hearings, the order of death became the pivotal issue for the disposition of assets. Under Georgia law, Benoit was considered to have predeceased both his wife and son.5 If the wife died first, then for the short time his son was alive, he would have inherited his mother’s and father’s assets, which would pass by intestacy at his death to Benoit’s two children from a prior marriage (as the closest living relatives of the deceased son). But if the son died first, then the wife’s closest relatives (her mother, in this case) would have inherited all the assets. Apparently the two families reached an out-of-court settlement in 2008.

Without a will, the courts will have to decide on the person(s) to manage assets for any minor children (and potentially during adulthood). Martin Luther King Jr. was assassinated in 1968 and died without a will. Particularly since the passing of his widow, Coretta Scott King, their children have fought over the control and benefits of his legacy and assets.

In the event of an intestate estate or the failure of all named personal representatives, state statutes generally set an order of appointment, with the surviving spouse normally being the first person to be appointed, followed by the closest blood family members. Note that the statutory appointment is by relationship, not competence. Do you really want that brother who has been bankrupt twice running the estate for your minor children?

Prince’s death without a will created an environment in which the six equal intestate heirs will control his vast music empire and the release of previously unreleased songs. None of the siblings have experience handling either his business interests or his significant estate. Recent reports indicate that conflicts are emerging among the six intestate heirs over the management of the estate.6

Many clients provide some level of support for their parents and other family members. When the client dies intestate, the surviving spouse and/or children of the deceased generally have first-priority rights to the assets. Thus, other family members who may have expected to receive continued support lose it. NFL player Steve McNair purchased a million dollar home for his mother to live in, but retained title to the residence and failed to create a will passing the house to his mother. When he died, his wife demanded that his mother pay $3,000 per month in rent. The mother moved out because she could not afford the rent. After she moved out, the estate billed her $53,363 for appliances and other items she took out of the house.7

Failing to Plan for Incapacity

Every adult of every age should plan for their incapacity.

According to the American Bar Association, only 33 percent of adult Americans have executed a medical directive. In 2000, AARP reported that only 45 percent of Americans over the age of 50 had executed a durable general power of attorney. And a 2009 Lawyers.com study reported that only 29 percent of Americans had either a medical directive or a general power of attorney.

Media mogul Sumner Redstone is one of the wealthiest people in America with an estate estimated to be over $42 billion. In 2015, a series of conflicts began over his competence and control of his estate. As the fights continued, Redstone’s granddaughter said her aunt and other family members had “succeeded in reversing decades of my grandfather’s careful estate planning and are poised to seize control of Viacom and CBS.”8

Clients may revise their dispositional documents when they are of marginal competence, and therefore, inappropriately influenced. A person who lacks the capacity to enter into a valid contract may still have the ability to sign an enforceable will.9

With a low standard for determining competence, it is generally hard to succeed in such a challenge to a testator’s competence, even when their behavior is odd or erratic. For example, the Michigan Supreme Court ruled in 1879 that “[a] man may believe himself to be the supreme ruler of the universe and nevertheless make a perfectly sensible disposition of his property, and the courts will sustain it when it appears that his mania did not dictate its provisions.”10 And the California Court of Appeals ruled: “Appellant produced evidence of forgetfulness, erratic, unstable and emotional behavior, and of suspicion, probably delusional at times, on the part of the testatrix. This is of no avail unless it were shown, as it was not, that it had direct influence on the testamentary act.”11

When a client dies, the first priority may be to change the locks to the house. Conflicts over dispositions of personal property appear to be endemic to all levels of wealth. In February 2015, The New York Times reported that Robin Williams’ widow and his three children from his two prior marriages were in conflict over the issue of how his “cherished belongings that include his clothing, collections, and personal photographs” should be passed.

Disposing of tangible personal property seems to be the most forgotten part of the average client’s estate plan. It is the author’s experience that this is single-greatest source of conflict among surviving family members.”

For more information about estate planning, check out our website www.diesmart.com.