NEWS AND COMMENTARY

Published on: September 5, 2014

California May Adopt Uniform Law on Conservatorships

California is poised to join the majority of its sister states in adopting a uniform law designed to promote interstate cooperation on the subject of adult conservatorship proceedings. In May, the California Senate passed SB-940, a bill that would enact the Adult Guardianship and Protective Proceedings Jurisdiction Act, a model law created by the National Conference of Commissioners on Uniform State Laws. A California Assembly committee approved the Senate bill on July 2, and it is likely to pass the full assembly sometime this month.

Making Interstate Conservatorships Easier

A conservatorship proceeding may be necessary when an adult cannot manage his or her own financial, personal or health care decisions. For example, an adult child might petition a California court to be named conservator of her elderly father’s person or estate because he suffers from dementia. In California, a probate court supervises such conservatorship proceedings.

Published on: September 4, 2014

Leaving a Legacy or Financial Abuse of the Elderly?

by Scott C. Soady

Many people use their estate plan to “leave a legacy.” A common example of this is making a gift to a charitable organization as part of a last will and testament. A person might, for instance, leave a gift to a university with instructions to establish a scholarship in his or her name. Some wealthier individuals might go so far as to establish a charitable foundation as part of their estate plan.

Then there are more unusual efforts at leaving a legacy that, unfortunately, often lead to expensive and unnecessary litigation. A recent case from Illinois presents one example. The case involved the estate of the late Virginia Rogers. In 2000, Rogers was a widow with no children or other immediate family. In a purported effort to continue her family name, Rogers signed a contract with her neighbor, George Dohrmann, whereby she would leave more than $5 million worth of property from her estate to him; in exchange, Dohrmann agreed to legally change the names of his two children to include the middle name “Rogers.”

Dohrmann apparently held up his end of the bargain. Rogers, however, did not amend her estate planning documents to reflect the terms of this supposed agreement. Instead, Rogers’ will left her estate to various friends, distant relatives and charities. In 2004, Rogers transferred ownership of her apartment-which Dohrmann claimed was part of the $5 million promised to him under the contract-to her living trust. By 2008 Rogers, who suffered from dementia, was judged legally incompetent to continue managing her own affairs.

Published on: August 1, 2014

Bernard Madoff ran one of the largest Ponzi schemes in history. Madoff ran his own brokerage firm for nearly 50 years, claiming unusually high returns on investments. In reality, Madoff’s company stopped trading in stocks in the early 1990s. Instead, he s

by Scott C. Soady

Bernard Madoff ran one of the largest Ponzi schemes in history. Madoff ran his own brokerage firm for nearly 50 years, claiming unusually high returns on investments. In reality, Madoff’s company stopped trading in stocks in the early 1990s. Instead, he simply used money provided by new clients to pay off fabricated returns to existing customers. In late 2008, in the midst of a credit crunch, Madoff’s scheme collapsed, leaving roughly 4,800 clients holding $65 billion in phantom assets.

The estates of some of these now-deceased former clients now face unusual probate issues. An estate must always take inventory of a deceased person’s assets and determine the date-of-death value for tax and probate purposes. But how does one value an investment based on a lie? The Internal Revenue Service and several estates are presently struggling to answer that question.

Estate of Kessel

Published on: July 20, 2014

Can a Tenant Object to the Probate of a Landlord’s Estate?

by Scott C. Soady

In preparing a last will and testament, you need to be conscious of the location of any property you own. In the United States, wills and estates are handled on a state-by-state basis. If, for instance, you live in California but own a second home in Arizona, your will must be admitted to a secondary (or ancillary) probate in Arizona to dispose of any property located in that state. And if you own property in another country, your will may have to comply with foreign laws.

You must also be aware of any other persons who may be affected by the disposition of property in your will. This can include creditors or persons renting a property you own. A recent case from the California Court of Appeals illustrates the type of dispute that may arise when probating a will in more than one jurisdiction.

Estate of Dubs

Published on: June 2, 2014

Who Can Be Held Responsible for an Estate’s Debts?

by Scott C. Soady

The Washington Post reported recently the Internal Revenue Service has “intercepted” hundreds of tax refunds to repay decades-old debts. What is disturbing is that these are not debts owed by the taxpayers, but by their long-deceased parents. The IRS claims that in the past, families of deceased Social Security beneficiaries received overpayments from the government.

Even more shocking, the government now claims the right to collect those “overpayments” without having to prove the validity of the debt. According to the Post, the IRS makes no effort to determine who actually benefited from the alleged overpayment; instead “the policy is to seek compensation from the oldest sibling and work down through the family until the debt is paid.” After public outcry over the Post report, the IRS subsequently announced it would suspend its collection program.

Not the Normal Way to Satisfy Debts

Published on: April 10, 2014

What You Need to Know about Estate Planning and “The Cloud”

by Scott C. Soady

In the Internet age, your estate no longer includes just physical property but digital assets like social media accounts, cloud storage and even computer-based currency. Taking stock of your digital assets is therefore an essential part of California estate planning. Here are a few issues to consider with respect to your “online estate.”

Online Devices and Cloud Storage

Recently the BBC reported on the story of Anthea Grant, a woman who passed away from cancer. Grant’s will directed her estate be divided equally among her five children. The children decided among themselves how to allocate individual pieces of property. Grant’s son Joshua received her iPad, manufactured by California-based Apple Inc.

Published on: March 24, 2014

Actor Philip Seymour Hoffman’s Will Provides Insight Into Estate Planning Process

by Scott C. Soady

Academy Award-winning actor Philip Seymour Hoffman died on February 2, 2014. His last will and testament was recently filed in a New York City probate court. Curiously, the will directed Hoffman’s executor to distribute his estate according to the provisions of New York intestacy law, which normally applies to estates in which there is no will. In this case, that presumably means Hoffman’s entire estate will be equally divided among his three minor children. Hoffman had a longtime partner, Marianne O’Donnell, but they never married and, according to media reports, separated shortly before his death. O’Donnell, however, was still named executor of Hoffman’s estate.

Distinguishing Desires from Directions

A number of media outlets mentioned a particular clause in Hoffman’s will, in which he asked that his son-he and O’Donnell only had one child at the time he signed the will-be raised in New York City, or alternatively in either Chicago or San Francisco. In reality though, the will made no such demand, and O’Donnell will presumably retain full custody of all three children. Had she died before Hoffman, however, his will nominated a guardian-O’Donnell’s sister-to assume custody. In that event, the will asked the guardian to take into account Hoffman’s “strong desire, but not direction” that his son be raised in either New York, Chicago or San Francisco. Nothing in the will though restricts O’Donnell’s right to determine where her children should live.

Published on: March 7, 2014

Bing Crosby Lawsuit Highlights Role of “Publicity Rights” in Estate Planning

by Scott C. Soady

Estate planning is about providing for the future. Sometimes, it’s about providing for a very distant future. For example, the famous actor and singer Bing Crosby died nearly 40 years ago, yet a California appeals court just recently issued a decision regarding property that still belongs to his estate. Even more remarkably, the other party to the case represents the estate of Crosby’s first wife, who died more than 60 years ago.

Crosby v. HLC Properties, Ltd.

Harry “Bing” Crosby, Jr., began singing professionally in the 1920s. His most famous recording, that of the Irving Berlin song “White Christmas,” reached No. 1 on the charts in 1942. Also during the 1940s, Crosby became well known as an actor, appearing with Bob Hope in a series of movies, and winning an Academy Award in 1944.

Published on: February 19, 2014

“Undue Influence” Between Spouses Can Affect Estate Planning

by Scott C. Soady

Marriage may be sacred, but under California law, one spouse cannot take advantage of the other when it comes to estate planning. Spouses have a fiduciary duty to one another, and when one party exerts undue influence over the other, the courts may intervene. Recently, a California appeals court upheld a lower court’s decision to invalidate part of a deceased man’s trust after finding his wife exercised such undue influence.

Lintz v. Lintz

Robert Lintz was a real estate developer worth millions. He was married several times, including twice to his final spouse, Lois Lynne Lintz. Shortly after their second marriage in 2005, Robert Lintz amended one of his trusts-which held his northern California properties-to give his wife a one-half share upon his death. The trust was amended several more times between 2005 and Robert Lintz’s death in 2009, each time increasing Lois Lintz’s share and decreasing the amount left to Lintz’s children from his prior marriages.

Published on: February 17, 2014

The Potential Conflict Between a Prenuptial Agreement and Estate Planning

by Scott C. Soady

How does a prenuptial agreement affect your estate planning? A prenuptial agreement is a contract between intended spouses designed to settle any property disputes that may arise following divorce or the death of one spouse. In many cases, a prenuptial agreement may override state laws providing for certain spousal rights in the other’s estate. That’s why, as with any contract, it’s important for both spouses to fully understand any prenuptial agreement before they sign it. Failure to do so can result in costly litigation down the line.

Liu v. Wang

A recent decision by the California Court of Appeals addressed the interaction of prenuptial agreements and estate planning. Please note this case is discussed here simply to illustrate the types of issues involved and should not be construed as a definitive statement of California law on the subject. The case itself involves a wife’s challenge to a prenuptial agreement with her late husband.