San Diego Estate Planning Lawyer Blog

Published on: December 23, 2010

United States Presidents and their Diverse Estates and Wills

It’s always interesting to see what famous people have done for their estate plans. The first three Presidents of the United States died with very diverse estates and wills.

George Washington had a blended family. He married Martha who was a widow with two children. George and Martha never had any children of their own but George was close to his nephews and adopted Martha’s children. George wrote his will himself, providing for Martha, his children, grandchildren, and slaves. He apparently had about 300 slaves. He left the majority of his estate to Martha in a life estate which means she had the benefit of the assets until her death. He provided for his nephews and made many bequests to his family and Martha’s. He also wrote in his will that he wanted to free all of his slaves upon the death of both he and Martha. Martha apparently freed some of them after George died but when Martha followed him in death, the executors did not free the remaining slaves.

John Adams, the second President of the United States, had a minimal estate, estimated to be about $100,000. Adams struggled to maintain the life style of a president with the meager salary a president had in those days. He and his wife Abigail bought some property in Massachusetts and accumulated a large library. Abigail died first and when John died, he left his residence, land, and library to his son, John Quincy Adams, with the condition that he provide for his brother Thomas an amount of money equal to half of the value of the library. The rest of the estate went to his other two sons, his grandchildren, and a niece of Abigail.

Published on: December 19, 2010

Communication Techniques for Alzheimers Patients

by Scott C. Soady

Scientists are studying how caregivers deal with people who have dementia, focusing on what they can do rather than what they’ve lost. A study by a speech professor at Ohio State University, who is studying communication with dementia patients, showed that making memory flashcards helps Alzheimer patients remember. A caregiver can put photographs of family members on flash cards with the name of the person in the photograph written underneath the picture. This professor, Michelle S. Bourgeois, developed some of the first memory books using picture and sentences to help people with memory problems recall past events.

Alzheimer’s disease affects the hippocampus, the part of the brain that is critical for learning and memory processes. Less affected are long term memory and skills like reading. Even when dementia causes patients to lose their ability to speak, they can read the flashcards and smile or nod when they recognize the concept on the flashcard. The technique has also been used to deal with anger and anxiety in dementia patients. Bourgeois has taught thousands of caregivers her methods and says it seems to help them feel happier and content.

It is so important when you have a family member or loved one that you suspect has a form of dementia, to not only have them physically evaluated but also see that they create an estate plan before they become unable to execute such documents. If a conservator has to be appointed through the court system, it is costly, time-consuming, and may not result in a distribution of assets after death that the individual would have choosen. As an example, Ann is a single woman who has no children, and wants her niece to receive her asset after she dies. She can provide for her niece in her trust as long as she still has capacity. If she fails to create a trust before she becomes incapacitated, the conservator who is appointed by the Probate Court, can petition the court under what is called a petition for substituted judgment (Probate Code sections 2580-2586)and execute a trust on behalf of the conservatee. However, the conservator can only execute a trust which will leave the assets to the conservatee’s heirs at law. Since Ann was survived by 2 siblings, her estate would be distributed to them and nothing to the niece.

Published on: December 15, 2010

Going Green in Death

by Scott C. Soady

Today there are many options for people to choose as to how their loved ones should handle the disposition of their remains. Cremation is on the rise. In 1999 only 25% of Americans were cremated. In 2009, the percentage rose to 37%. It is estimated that by 2025, 60% of Americans will choose cremation. One of the reasons is of course, cost. The average cost of cremation with a basic urn and a few extras is about $1500 as compared to $7775, the average cost of a traditional funeral without a headstone or extras such as flowers. The other reason is the mind set of this generation. Many people feel that after they have passed away, what happens to their body is not an important issue. They may state a preference for burial or cremation but leave the details to their family.

Many people who do not want cremation but still want a “green” choice, opt for a green or natural burial which usually means no embalming, biodegradable caskets, and burial in a natural setting with no headstones.

The latest of green options in the funeral industry is called bio-cremation. Rather than the usual cremation which adds to the pollution in the environment, bio-cremation involves dissolving the decedent in a heated chemical solution that leaves less of a carbon footprint and is an accelerated version of the natural decomposition that the body undergoes when buried. The first bio-cremation is supposed to take place before the end of the year in Florida. Florida leads the United States in cremations, where an estimated 50% of the deaths result in cremation. Other states that are permitting the process are Maine, Maryland, Oregon, and Minnesota.

Published on: December 13, 2010

7 Smart Money Tips for the Holidays

by Scott C. Soady

The Wall Street Journal recently had a good article with Seven Smart Money Tips to get the most for your holiday bucks. Some of the tips relate to estate planning.

Tip #1 – Set a gift budget

Rather than just go blindly to the mall and start buying, set a budget as to what you can afford and stick to it.

Published on: December 7, 2010

Administration of a Missing Person’s Estate

by Scott C. Soady

What happens when someone dies and they have property in California but the decedent can’t be found? Sometimes people go missing and are never found. Sometimes it is asssumed that someone has died in an aviation accident with no remains found. Sometimes even criminals suddenly disappear with a suitcase full of money, never to reappear. That happens to their estate?

For the immediate needs of maintenace and protection of property, a trustee can be appointed for an individual who has been missing for 90 days and is presumed to be alive. What if the individual is presumed to be dead and has been missing for a long time? The famiy needs to be able to take care of debts and take over other financial matters of the decedent.

California Probate Code section 12400 – 12408 provides a method of administration and distribution of an estate of a decedent who has been missing continuously for 5 years. This “presumed dead” petition must be filed in the county where the missing person last lived if the person resided in California. If the decedent was not a California resident, the petition can be filed wherever the decedent owned property in California. The petition must state the time and circumstances of the disappearance, last known residence, and a description of what search and investigation occurred concerning his or her disappearance. The Court determines at a hearing whether the person can be presumed dead or there should be further investigation. If the Court finds that the missing person is presumed dead, the Court can also determine the date of death and appoint a personal representative to administer the estate in the same manner as any other decedent’s estate.

Published on: December 3, 2010

Congress Working on the Federal Estate Tax Issue

by Scott C. Soady

As we draw closer to the end of the year, Congress is working to resolve the issue of tax cuts and the federal estate tax exemption. Within the last few days, President Obama announced that the administration and the Republicans had arrived at a proposal for a bipartisan agreement that would extend the Bush-era tax cuts and give workers a 2% reduction in Social Secuirry Tax for 2011.

Although details have not yet been made public, it is believed that the bill will reinstate the federal estate tax with a $5 million exemption amount and a top tax rate of 35%. What this means in laymen terms is that estates over $5 million will be taxed at a rate of 35%. Other aspects of the agreement would allow businesses to write off 100% of their equipment and machinery purchases during 2011, extending unemployment benefits for 13 months, and retaining “key tax cuts” for working families.

What Congress does will determine how estate planners address their clients’ estate plans. As past blogs have reported, 2010 was a year when there was no estate tax at all. Without action by Congress, the federal estate tax exemption is due to return to a level of $1 million. Many California residents have a gross estate of $1 million and need to be concerned about estate taxes if Congress doesn’t act and they should happen to pass away in 2011.

Published on: November 30, 2010

Legal Fight for Spider Man, Iron Man and X-Men

by Scott C. Soady

Our San Diego probate court hears litigation arising out of probate and trust disputes but nothing like the billions of dollars which are at stake in a probate court dispute over comic book characters. You’ve no doubt heard of such comic book icons are Iron-Man, X-Man, Spider Man, the Incredible Hulk, and the Fantastic Four. They were created by comic book artist Jack Kirby who was responsible for 45 of Marvel Entertainnent’s most popular characters.There has been an ongoing attempt by the estate of comic book artist Jack Kirby to terminate a copyright grant over his work. The children of Kirby, after his death, sent notices to terminate the copyrights. Marvel Entertainment then sued the estate in New York District Court alleging that the creation of such comic book characters were “works-made-for-hire and not eligible for termination.

Last week the Judge found in favor of the estate on an important issue which could mean she will issue a future ruling favoring the estate. There is a chance that an unfavorable ruing against Marvel could cost them control over the characters. Marvel was successful on another issue however, in avoiding an accounting on how much money is involved, at least until the issue is decided as to whether the Kirby children can terminate the copyrights.

Interestingly, the impact of the judge’s ruling will also impact Disney, since Disney purchased Marvel for $4 billion last year.

Published on: November 27, 2010

5 Wacky Wills

by Scott C. Soady

From time to time it is fun to look back on what are some of the strangest bequests people have put in their estate planning documents.

1. An eccentric lawyer named Charles Vance Miller, a resident of Canada, was noted for his practical jokes. He left a large sum of money from his estate to the woman who could produce the most children in the ten year period after his death. The contest which became known as the Great Stork Derby resulted in 4 women each receiving $125,000 (Canadian money) for each bearing 9 children.

2. Harold West thought he might become a vampire after his death in 1972 so he left instructions in his will that his doctor drive a stake into his heart just to be sure he was properly dead. Who knows if the doctor carried out his wishes.

Published on: November 24, 2010

Practical Advice for Successor Trusteees

by Scott C. Soady

After the death of a loved one, the individual named in the decedent’s trust who will administer the trust and distribute the trust assets is the successor trustee. A successor trustee has a number of fiduciary duties. Some of these duties are the duty of loyalty, duty to avoid conflicts of interest, and duty to preserve trust assets. These are just a few duties; there are many more however, this blog is not so much about the legal responsibilities and duties of a successor trustee but rather practical information to make trust administration go smoothly and avoid any difficulties with the beneficiaries.

One thing that is so important is to keep impeccable records. Make sure you maintain accurate records and document all transactions. Keep all receipts. Detailed records are imiportant because it may become necessary to prepare an accounting of all the deposits and income going into the trust and all the disbursements and distributions.

Keeping beneficiaries informed is also really important. As a successor trustee, you do have a duty to keep beneficiaries informed, but even for items that are not subject to this duty, it is a good ideal to keep in touch with the beneficiaries, answer any questions they have, and maintain a friendly relationship. Many cases of trust litigation arise because beneficiaries become disgruntled about not being kept informed or not feeling like they are “in the loop.”

Published on: November 20, 2010

California State Bar’s Legislative Proposals for 2011

by Scott C. Soady

There are a number of legislative proposals affecting probate and trust law suggested by the California State Bar for possible introduction in the California legislature next year.

One proposal is to broaden who has the right to control the disposition of remains. This proposal would add the conservator of the person and the conservator of the estate to the list of persons who may control the disposition of a decedent’s remains. This proposal would amend section 7100 of the Health and Safety Code.

Another proposal is to repeal the Rule Against Perpetuities and clarify the rule against restraints on the power of a trustee to sell or transfer trust property. The Rule Against Perpetuities came from common law rule against vesting interests in property which do not vest within a life in being at the creation of the interest plus 21 years. The Rule prevents a person from putting provisions in their will or trust that will continue to control or affect the distriibution of assets long after he or she has died. Some states have already abolished the Rule Against Perpetuities.