ESTATE PLANNING

Published on: October 12, 2009

Interesting Estate Planning Issues in Brooke Astor’s Estate Disaster

Recently you may have heard about the conviction of Anthony Marshall, son of New York philanthropist and socialite Brooke Astor. Tony Marshall, the only son of Brooke Astor, was convicted of 14 counts of grand theft and larceny for allegedly stealing millions from his mother’s estate while she was suffering from Alzheimer’s disease. The lawyer who prepared an amendment to Mrs. Astor’s will was also convicted on charges of fraud and conspiracy and one count of forging Mrs. Astor’s name to the amendment which changed the distribution of her estate. The amendment was made when Mrs. Astor was almost 102.

Now controversy will shift to what will be done with Mrs. Astor’s estimated $180 million dollar estate. Some people speculate that the conviction might cost the grandsons of Mrs. Astor, Phillip Marshall and his twin brother Alexander, about $10 million each, a fact apparently not known to Phillip when he started a guardianship proceeding in 2006. Phillip petitioned the Probate Court to appoint a guardian for his grandmother, claiming that his father Tony was allowing her to live in squalor, telling her she had no money left, all the while taking millions from her estate. The guardianship proceeding caused prosecutors to begin investigating Tony Marshall which then led to the criminal charges. Phillip Marshall has said he never knew about the inheritance for he and his brother from his father’s estate and that it was “not about the money. He wanted to protect his grandmother.”

Hopefully what this case has done in the real world is raise the public’s awareness about elder abuse. Elder abuse affects about 2 million Americans over the age of 65. It can be physical abuse such as using force or causing physical injury or it can be neglect. Elder abuse can also be financial abuse where someone wrongfully takes or uses an elder’s money or other assets. It can also involve, as in the Astor case, using undue influence of forgery to cause an elder to change a will or a trust. It sounds from the Astor trial testimony that the elder abuse there was both types. If we can help with an elder issue such as one discussed here or any other estate planning issue, call us at Law Office of Scott C. Soady, A Professional Corporation.

Published on: October 6, 2009

Martin Luther King Jr. Estate Dispute Still Pending

by Scott C. Soady

Martin Luther King Jr. died in 1968. His wife Coretta Scott King died in 2006 and yet issues are still being disputed over their estates. Two surviving children of Martin Luther King Jr. and Coretta Scott King are fighting over their parents’ estates. Bernice King, who is the administrator of her mother’s estate and her brother Martin Luther King III are suing their brother Dexter King alleging he wrongfully took money from Martin Luther King Jr.’s estate. Dexter King has counter-sued his sister to force her to turn over personal papers and love letters from Coretta Scott King’s estate.

A judge in Atlanta has ordered the personal property in dispute turned over to the Court until the issues can be resolved. The Judge has also order the three children to meet and try to mediate their differences.

Celebrities are no different than their non-famous counterparts when it comes to bickering over the administration of an estate. The probate court will treat them no differently. The only difference may be that they have to do their bickering in public as well as in the court room.

Published on: October 3, 2009

TV Shows Highlight Organ Donation

by Scott C. Soady

ER’s final season and the recent premiere of Grey’s Anatomy were emotional reminders about the importance of organ donation. Family members in both series had to make hard decisions about whether to make organ donations. If you feel strongly about organ donation, one way or the other, it is important to let your family and friends know how you feel. Not only that but you should put your feelings in writing so that family and loved ones know how to carry out your wishes.

In California you can spell out your wishes in an Advance Health Care Directive. You can state whether you want organ donation, whether you don’t, and if you do, what organs and for what purposes. You can specify that you only want to donate organs for transplant or also for education or research. Another way to make organ donation possible is to put a sticker on your driver’s license. In California you can also sign up online with Donate Life California, a nonprofit organ and tissue donor registry. Registration with this entity could speed up the donation process if family members could not locate your advance health care directive.

Statistics show that the need for organs is growing but the amount of organs available for donation is not keeping up with the need. Specifying your feelings about organ donation is just one piece of estate planning. Your family and friends also need to know how you feel about end of life issues and health care, how you want your assets to be distributed upon your death, and who you want to distribute your estate. Putting your wishes down in writing to guide your family and loved ones is the best gift you can give them. Contact our firm if we can help with putting these important decisions down in the appropriate estate plan to meet your goals and specify your wishes.

Published on: September 27, 2009

Estate Planning for Pets

by Scott C. Soady

With the increasing number of Americans who own pets, estate planning which includes pet-planning provisions are becoming more and more common. There are several options to provide for the care of a pet upon your death or disability. On our website and in past blogs, we have discussed pet trusts. Pet trusts are now enforceable in California, however you have to name a friend or family member to be the caregiver of your pet. Another option is to make a gift in your trust providing a sum of money to a named individual who will care for your pet.

There is another option for for pet owners started by University of California, Davis School of Vetererinary School called TLC for Pets. The school finds permanent loving homes and lifetime veterinary care for animals after their owner’s death. The school’s vets meet with the client and the pet or horse to match the pet with a suitable caretaker. The caretakers are usually members of the school or community members and friends that love animals.

As part of their estate plan, the pet owner gives a donation to UC Davis School of Veterinary Medicine. There is also an enrollment fee of $1000. Funds that are not needed for your particular pet will be used for other pets’ care whose funds have run out. Other veterinary schools are starting similar programs using the Davis model.

Published on: September 24, 2009

What is the Difference between a Life Estate and a Right to Occupancy?

by Scott C. Soady

A life estate is a right to exclusive possession and use of property during one’s lifetime. Thus, when a person(called the “grantor”) gives another individual a “life estate”, the recipient (called the “life tenant”) receives many of the same rights as the owner but only for his or her lifetime. When the life tenant dies, however, the property does not go to the life tenant’s heirs or beneficiaries, it goes to a beneficiary designated by the property owner.

Examples might be a piece of property that you want your children to benefit from during their lifetimes, but once they have passed away, the property will go to charity. Another common example is a widow or a widower who remarries and wants to provide for their spouse during his or her lifetime but wants the family home to go to the children when the spouse dies. Specific conditions can be spelled out in the life estate agreement such as that the life tenant not do anything to diminish the value of the property, keep the property in good repair, pay the taxes, even not remarry.

Life estate can be useful in some areas of estate planning and can be created by a deed or by a will or trust. In addition to giving another individual a life estate interest, you can also give yourself a life estate in property you own. An example of this occurs when a mother transfers her home to a child but retains the right to live there until her death.

Published on: September 21, 2009

Use and Abuse of Powers of Attorney

by Scott C. Soady

A power of attorney is a document that lets you appoint someone you trust (“your agent” or “your attorney-in-fact”) to act on your behalf. When you create a power of attorney,you are called the “principal.” Powers of attorney can be limited in scope or can be quite broad. You might execute a power of attorney to allow someone to close an escrow while you are out of town. You might give your agent the authority to sell your car with a power of attorney. Powers of attorney can be limited to a specific act or they can be quite broad. They also can be powers that are effective immediately or “springing” powers that come into existence when you become incapacitated.

A power of attorney can be misused which is why we emphasize that your agent should be someone you trust. Unfortunately there have been many cases where an agent acting under a power of attorney has used the document to help themselves to the money or assets of the principal. It is important to recognize that a power of attorney is a very powerful tool bringing with it a fiduciary duty to act in the best interest of the person giving the power of attorney.

Some circumstances to look for if you have a loved one who has given another individual a power of attorney are a sudden change in financial circumstances of the agent or the principal or a loved one seeming to be overly trusting of his or her agent. Remember too that a power of attorney can be cancelled or a new one executed at any time.

Published on: September 10, 2009

What is an “estate”?

by Scott C. Soady

Estate planners like to use the term”estate” frequently, assuming that everyone knows what that term means. “Estate planning,” “trust estate,” “distributing your estate,” and “estate taxes” are terms often used. What do these terms mean?

In simple terms, everything you own is your “estate”. It includes all real property, personal property, bank accounts, stocks, bonds, pension and IRA accounts, retirement plans, and life insurance. Sometimes assets overlooked are mineral rights, timeshares, deeds of trust, assignments, or notes receivable. It includes community property, separate property, or property held in joint tenancy with someone else. It includes all businesses, whether sole proprietorships, partnerships, or joint ventures. Personal property includes the furnishings in your home, artwork, tools, musical instruments, collections, guns, gold, RVs and other vehicles.

With that description, it is easier to understand other terms that have the word “estate” in them:

Published on: September 6, 2009

How Do You Know When a Loved One Can No Longer Live Independently?

by Scott C. Soady

You may wonder how to determine if a loved one is at a point where they should no longer be living independently. It is a hard decision for the individual involved and for family members who want to make sure their loved one is safe but also not be too hasty in suggesting they no longer live alone.

A free online assessment is available which asks questions designed to help you determine whether someone is safe living alone. Based on the answers to a series of questions, an assessment report is sent to you via email. The questionaire was designed by the Health and Disability Research Institute at Boston University. It asks questions like whether the person has had any falls; whether they can walk independently or use a cane, walker, or wheelchair. Questions are asked about whether the individual has difficulty preparing food, grocery shopping, washing dishes, doing laundry, writing checks, balancing their checkbook, and tending to personal hygiene. The test is designed to test basic movement and physical functioning, ability to perform daily tasks, and ability to perform life skills important to independent living.

Such as assessment may be a guide to help you decide if it is time to begin the conversation with your loved one. Part of the conversation should also be to be sure their estate planning documents are in order such as their will or trust and powers of attorney for finances and health care. We would be happy to discuss any elder issues or questions you may have. Call or email for a free consultation.

Published on: August 28, 2009

Leaving Money to Grandchildren

by Scott C. Soady

Many people want to leave their grandchildren something when they pass away. It may be small or it may be significant. There are several ways to do this, some better than others. When you draft your estate plan, you have no way of knowing whether some of your beneficiaries are going to be minors at the time you die. You have to plan for the possibility that some may be minors.

1. Outright Gift. You can simply provide in your will that a dollar amount or a percentage of your estate will go to a grandchild but this leads to problems if the recepient is a minor. Substantial amounts of money being inherited by a minor may cause a court-supervised guardianship of the estate of the minor until he or she is 18. Then at 18, the entire inheritance is handed over to the now adult, but still 18 year old, with no limitations attached.

2. Custodial Accounts. One way you can leave money to minors is in an account under the Uniform Transfer to Minors Act ( a UTMA account). This works well for small amounts of money. The account has a custodian who has the power to withdraw funds for the health, education, and maintenance of the minor. Once the child reaches the age you specify (In California it can be as old as 25), the child has full access to the funds.

Published on: August 24, 2009

If your parents die in debt, are you liable?

by Scott C. Soady

It’s often overwhelming when a parent dies, having to deal with all their paperwork, bills, and determining whether there will have to be a probate filed or a trust administered. Children often worry also about their parent’s debts. A long illness and nursing home or hospital expense can quickly eat up a parent’s assets.

What if your parent passes away with not much other than debts? Are you liable? Can you be sued personally for their debt? Sometimes heirs even get phone calls or letters from creditors claiming that as the decedent’s heirs, they are liable for the parents’ debts.

Not so! Children are not responsible for paying their parent’s debts. The estate of the person who died is liable but if there is no money or assets in the estate, the creditors are out of luck.