Like any other couples, domestic partners have legitimate reason to want to prepare for the future and unforeseen circumstances. Whether they are trying to provide for their children or dictate who should make important medical decisions in the event of a disabling accident, there's a need for proper estate planning.
]]> Because same-sex marriages are not currently recognized by federal law, domestic partners can encounter unique challenges. In New Jersey, same-sex couples can legally adopt a child in some circumstances and efforts are under way to legalize same-sex marriage.In the meantime, nationally, it's estimated that there are as many as 2.8 million children being raised in homes with gay, lesbian, bisexual or transgender patients. So it remains vital for domestic partners to execute adequate powers-of-attorney and living wills. Both document forms are important for naming someone to make financial and medical decisions should one partner be unable to do so because of an accident or other condition.
If tragedy unfortunately strikes both domestic partners, a will is essential for distributing assets and providing for their children.
The point here is that proper estate planning is critical, but it can be difficult for same-sex couples. The law, or sometimes disapproving family members, can make it complicated. But that only means that clearly written and properly executed estate planning documents are more crucial.
Source: AmericanProgress.org, "The Changing Reality of the American Family," Jennifer Chrisler, Laura Deaton, Jeff Krehely, Jan. 27, 2012
]]>So what happens if the beneficiary of a multi-billion-dollar trust spots a loss of $200 million? There's still so much value in the fund that she isn't likely to be left without the money she might need (which is why the fund was set up in the first place). But if she feels the trustees of the trust fund dropped the ball, does she have a right to question the trustees in a suit? The trustees say no. A federal appeals court says yes.
]]> The case is being brought by Mary Scanlan, the daughter of the founder of General Growth Properties, a huge, traded, real estate investment trust. Court documents put the value of this fund at $34 billion with annual revenue potential of $3 billion. Scanlan's father set up a number of trusts with his wealth and issued orders that trustees should distribute the wealth according to his daughter's needs and her best interests.According to the suit, the trustees allegedly used Scanlan's trust fund money to buy hundreds of millions of dollars of the GGP investment trust. The purchase came even though her trusts were already heavy with GGP stock. In 2009, GGP declared bankruptcy. Its stock price tanked. Scanlan's funds lost $200 million. She sued claiming the trustees had acted not in her interest, but their own.
One federal court judge in Chicago ruled that Scanlan didn't have the right to sue because the loss her funds suffered didn't threaten her ability to get all the distributions she might be entitled to or need in her lifetime.
But the three-judge appeals court reversed that decision recently. It ruled that Scanlan has a stake in the integrity of the trust funds and their administration and so she has a right to sue. The judges said that if they accepted the position that she had no standing, the trustees would, in essence, be free to drain the trust funds to a relative fraction of their original value without Scanlan having any recourse.
Source: Courtroom News, "$200M Drop in Trust Fund Fund Is Worth Suit," Rose Bouboushian, Jan. 27, 2012
]]>Recent estimates indicate that as many as 55 percent of Americans do not have a will. Should these people unexpectedly pass away, this could create a lot of headaches for loved ones they leave behind.
]]> Those weighing the idea of creating a will should know that the process does not have to be complicated. There are a few things to consider that will make estate planning simpler:Realistically, it's never too early to begin planning your estate. As long as you're a legal adult, you can create a will. Of course, a will is not the first thing people think of doing, but it is a proactive step to take for your family and friends.
Source: Forbes, "A Common Sense Approach to Estate Planning," Nancy Anderson, Jan. 19, 2012
]]>You may remember that we wrote about the Kevorkian estate situation in an entry on this blog back in October. Kevorkian died last summer. He was in prison at the time, serving a multi-year prison sentence for an assisted suicide conviction in 1999. Before he entered prison, Kevorkian entrusted a set of his original paintings to the Armenian Library and Museum Association for safekeeping.
]]> Two suits were launched after Kevorkian's death. One was filed in Michigan by the Kevorkian estate. The other was launched by ALMA in Massachusetts. ALMA says it is the rightful owner of the art, estimated to be worth millions. The estate says the art was never anything more than a loan to ALMA and that Kevorkian always intended for it to be handed down to his only living relative, a niece.Last week, the judge in the Michigan case dismissed the estate's suit. She said the Massachusetts suit was filed first and deserves to go forward. But she said that if the Massachusetts case winds up being dismissed for some reason, the matter could come back to her.
The attorney for the Kevorkian estate, who happens to have been a long-time friend of the doctor and is the estate's executor, claims that there is a written agreement between Kevorkian and ALMA that clearly states that the art was on loan. But ALMA says the official who signed the agreement didn't have the authority to make the deal.
The estate's attorney's response to that is, "Well, they never would have had the paintings if not for the agreement."
Because of the court fight it seems that the disposition of the art must not have been spelled out in a will. Had that been done, the court fights might have been avoided.
Source: The Detroit News, "Suit over Kevorkian art back in Massachusetts," Mike Martindale, Jan. 19, 2012
]]>Where families are solid and relatives abound clear plans to ensure that aging loved ones have appropriate, supportive care for the full course of their lives may be easily laid out through effective estate planning. However, there are many individuals who have no one to turn to. They have neither friends nor relatives.
]]> Their numbers are growing and that's increasing demand for court-appointed guardians. And that, in turn, according to the government, is increasing reported instances of abuse and neglect of elder and disabled individuals.U.S. Sen. Amy Klobuchar is attempting to address the issue through the Guardian Accountability and Senior Protection Act (S.F. 1744). The Minnesota Democrat told a recent community roundtable in her home state that the need for the law is clear. She points to a recent General Accounting Office study that identified hundreds of allegations of physical abuse and fiscal exploitation by guardians in 45 states and Washington, D.C. She says the GAO report highlighted 20 selected cases in which guardians raked assets from 158 vulnerable victims to the tune of nearly $5.5 million.
Under her bill, states would get federal money to help improve state court procedures regarding adult guardianship and conservatorship. And, since only 13 states now require background checks on those who step forward to serve as guardians and conservators, the measure would set up a pilot program to advance such checks. The measure also would encourage states to start leveraging technology to track and hold guardians and conservators more accountable.
The measure has been introduced. It's unclear if there is a companion House bill.
Source: Duluth News Tribune, "Klobuchar's bill aims to protect seniors, vulnerable people," Steve Kuchera, Jan. 7, 2012
]]>Not every will is created equal. Some may be complex. Most will be simple. An attorney can help determine what might work best in a given case. Ultimately, all people should use estate planning to ensure that the things they assign value to get distributed according to their wishes.
A will is one way to do this. Another tool is a trust. But, perhaps you're wondering if a trust is right for you. Or maybe you are put off by fear of the legalese if it all. Here are some straightforward questions that may help make the call about a trust.
]]> 1. Do you own a home or other land? If you do, a trust might be good to consider. Whether it covers a primary residence, a vacation home or investment property, a trust can help heirs avoid the headache of going through probate at your death or the death of your spouse or partner. Don't look to solve the issue by simply adding an adult child to a deed as a joint owner. Such a step can open the door to family squabbles, leave the property subject to seizure in a lawsuit, or give the Internal Revenue Service a target for taxes.2. Do you have a large estate or high net worth? We're talking in the realm of $5 million or more. A trust may be useful in shielding it from federal estate taxes. But that could change with the next tax overhaul, so working with an attorney is important. While current law allows for an estate tax exemption for estates up to about $5.1 million, the ceiling is due to drop to $1 million in 2013. There's also a chance that a provision in the law that preserves some estate tax exemption status for a surviving spouse will be stripped out. A trust may help in that case, too.
3. Do you have a special need to meet? A trust serves that purpose. Maybe a special needs child needs lifetime care. Maybe you have grandchildren you want to help, or a favorite charity. A trust lets you meet the need.
Source: Forbes.com, "A Common Sense Approach to Estate Planning," Nancy Anderson, Jan. 19, 2012
]]>The issue that may get left out of the equation in such situations is whether it's right to employ extraordinary measures to prolong a life if quality of life isn't going to be improved, too. The problem is, doctors don't really have a choice unless they are provided clear instructions of what a person wants through an advanced directive, also known as a living will.
]]> The concept of these legal tools is something about which doctors seem to have a really solid grasp. According to one study done in 2003, 64 percent of doctors responding to a survey reported that they had drafted and signed advanced directives for themselves. And of that group, most indicated that they do not want extraordinary measures taken to save them. There are even some anecdotal tales of doctors who either wear Do Not Resuscitate medallions. Some even have DNR tattooed on themselves to be sure the message is clear.By contrast, fewer than half of all patients who suffer from severe or terminal illnesses have living wills in their medical records. That's according to a study by the federal Agency for Healthcare Research and Quality.
The gap between the use of advance directives by doctors and the rest of the general population begs the question, why?
The opinion among some healthcare policy folk is that doctors know that such heroic measures often are useless. Statistics indicate that CPR only works in about 8 percent of instances when it's used away from a hospital. But even in the hospital, only about 19 percent of patients who are revived after their heart stops survive.
There is also the view that doctors know that life after heroic measures, especially for elderly patients, can be painful and end in a horrible death.
The point here is not to wax on about how a person should die but to stress the importance of making known if you have a vision for how you want your end-of-life period to be handled. The way to do that is with an advance directive or living will.
Source: Time.com, "What Doctors Know -- and We Can Learn -- About Dying," Shannon Brownlee, Jan. 16, 2012
]]>Perhaps one of the prime examples of this movement is that represented by the executors of the George and Ira Gershwin estates. Heirs of the famous brothers have been working since the 1990s to capitalize on the brand equity that goes with the Gershwin name. They are hoping to see the fruits of their labors this week when "Porgy & Bess," now titled "The Gershwins' Porgy and Bess," opens on Broadway. As an adjunct to the show, they're hoping to reissue the Porgy and Bess story in book form, without music.
]]> What once was a four-hour opera has reportedly been transformed into a more streamlined two-hour musical adaptation that the Gershwin heirs hope will lend itself to being produced by all sorts of companies, much as is done so commonly now with shows like "Oklahoma!" and "My Fair Lady."According to The New York Times, the Gershwin heirs are not alone. Managers of the estates of Alan Jay Lerner, Richard Rogers and Oscar Hammerstein are all working to polish up old plays that featured songs that became standards in their day so that they can be remarketed for a new generation. In some instances they're even refashioning productions to feature the show standards and some formerly stand-alone hits.
The actions of the estate conservators are not without detractors. Some theater purists have attacked the Gershwin heirs accusing them of greed and diluting the Gershwin legacy. But the heirs say their greater responsibility is to be sure the legacy of the music continues and that the families of the two brothers can continue to enjoy the financial benefits.
John Kander, one of the co-writers of the scores for such shows as "Cabaret" and "Chicago," offers the wisdom that in order to avoid such conflicts it behooves composers and writers, like any artist, to leave specific instructions about how to protect the works they create. The way to do that is through proper estate planning.
Source: The New York Times, "The Songs Remain the Same, but Broadway Heirs Call the Shots," Patrick Healy, Jan. 9, 2012
]]>That apparently didn't happen in the case of 1970s TV icon Farrah Fawcett. She died in 2009 after losing a battle with cancer. At the fulcrum of the disputes in the courts is one of two Andy Warhol silkscreen paintings done of the "Charlie's Angels" beauty.
]]> According to some reports, Warhol gifted both pieces to Fawcett. And a trust she drew up before dying says all of the art she collected should pass on to the University of Texas, where she attended college. The school has one of the paintings. The other is in the home of Ryan O'Neal, Fawcett's long-time lover.One of the suits, filed by the school, says it should have possession of the painting and demands that O'Neal hand it over. O'Neal says Warhol actually gave the painting to him and that he's keeping it.
The second suit was filed by O'Neal and targets Hollywood producer Craig Nevius, a man O'Neal has feuded with in court before. O'Neal alleges that the only reason the University is suing him is because Nevius told the school that O'Neal stole the painting. As noted, O'Neal says it was his to begin with.
So, at the crux of both cases is the question of who owned the painting. Was it Fawcett or O'Neal? The courts have the task now of sorting out the answer. There are those that say the issue should be easy to resolve. With an estimated value of $30 million, the painting should be covered by insurance and whoever took out the policy probably has ownership rights.
In the meantime, the issue serves as a burr in the efforts to resolve Fawcett's estate.
Source: Forbes.com, "Did Ryan O'Neal Steal Painting From Farrah Fawcett's Estate?," Danielle and Andy Mayoras, Jan. 9, 2012
]]>We see it happening regularly already. In the closing months of last year there was the story of a group of four people who allegedly held some mentally disabled adults in a basement and collected their Social Security checks. That and other stories reinforce the value of guardianship; preferably assigned as part of estate planning.
]]> Just to be clear, a guardian is someone named in legal documents, such as a will, to make decisions for someone who might not be able to for themselves. They may be appointed by a court, but individuals can name their own and that's usually the preferred method of choice.Sadly, research suggests that elder financial abuse is most often perpetrated by family members or hands-on caregivers. And because the scope of control that such a person can have over the life and finances of their charge is so broad, accountability becomes crucial. That becomes easier if you select your guardian and note it in your legal documents. Specific accountability measures can be spelled out in your estate plan.
Elder abuse experts say there are signs to watch for if you are concerned about elder financial abuse. They include sudden money shortages; money being siphoned out of bank accounts or new accounts being set up; wills or assignments of power of attorney changing unexpectedly; strangers suddenly befriending an elder; and suspicious charges appearing on credit cards.
Even if you have all the necessary legal documents in place, it is advisable to revisit them regularly. If they were drawn up even a few years ago, there may be conditions that have changed requiring some alterations. To remain in control, it makes sense to get into a habit of doing regular reviews.
Source: YorkRegion.com, "Family often behind financial abuse," Chris Traber, Dec. 14, 2011
]]>But estate planning attorneys in New Jersey and other states appreciate that assets are defined not just by the society we live in, but also by the value individuals assign to what they own. And in that context, anything can be part of an estate, making estate planning for eventual distribution in the event of death something wise for everyone.
]]> There are also situations in which estates might experience a windfall, such as has reportedly occurred in the matter of 34-year-old Angela Reid, a surgical nurse who died in 2009. The mother of two young boys was run over by a private company bus in January of that year as she was walking to work at New York University. She died three months later.Lawyers for the woman sued the company claiming that the driver of the bus should never have been allowed behind the wheel because he had an extensive record of 31 convictions for a variety of offenses. Some reportedly involved drugs. He apparently had not revealed information about his history when he applied for the job. But attorneys for the woman said the company also failed to do a proper background check on him.
According to one news report, the company recently settled the suit and agreed to pay the woman's estate $9.5 million. The bulk of the money will be put into a trust fund for her sons, who now live with their father in Florida.
If Reid's attorneys have their way, Angela's legacy will be enhanced further. They've called for federal and state laws to require private bus companies to perform proper background checks and insure proper training of drivers. They say if such a law passes it could be called "Angela's Law," in her memory.
Source: New York Daily News, "The estate of Angela Reid will get $9.5 million after she was fatal struck by a bus," John Marzulli, Jan. 4, 2012
]]>That doesn't mean that terms can't change. The courts are willing to consider changes to the structure of wills, especially if there's general agreement that it's the fair thing to do. That appears to be what has happened in the case of the Michael Jackson estate.
]]> A superior court judge in Los Angeles recently gave his blessing to a pay raise for the executors of Jackson's estate. Under the original terms of the will, attorney John Branca and music executive John McClain had been receiving 10 percent of gross earnings from the Jackson entertainment franchise. But that didn't include money earned from some of the most fruitful endeavors the executors have managed to develop in the singer's name since his death and which have earned hundreds of millions of dollars.In their petition for improved compensation, the two executors noted that they've been dedicating a growing amount of their time and attention to those efforts, but paying themselves for their services out of their estate earnings. They claimed that as a result, they've really only been receiving about 7 percent, rather than 10 percent.
Under the new terms, Branca's firm will get a 3 percent increase. It's not clear what McClain will be entitled to.
The key to the amicable situation is that the estate's attorney and the Jackson family know they have benefited from the work of the executors and acknowledge the value that's been delivered. Because of that, they've supported the changes.
Source: AP, "Judge approves pay bump for Jackson estate execs," Anthony McCartney, Dec. 19, 2011
]]>The document, called "Physican Orders for Life Sustaining Treatment" or "POLST," is already available in 30 states.
Unlike traditional living wills, which are usually drafted when the individual is still in good health, POLST is designed to be used by individuals who are afflicted with a terminal or life-limiting illness.
The document will allow individuals to specify how they wish to be cared for in their final days. For example, terminally ill individuals will be able to specify whether they wish to pursue aggressive life-saving treatment or simply be kept comfortable so they can pass in peace.
]]> To be valid, a POLST form must be signed by the individual's attending physician or advanced practice nurse. Unlike a traditional living will, the POLST form becomes an official part of the individual's medical record. It follows the individual wherever he or she receives medical treatment, be it in a healthcare facility, home or hospice center.A POLST form is fully amendable. Individuals can change their wishes at any time and are free to request medical treatment different from what is on the POLST form. Further, individuals can grant a representative the ability to modify or revoke the POLST form in the event the individual becomes incapacitated.
POLST not a Substitute for Traditional Estate Planning
Although the POLST form is a good addition to New Jersey's end-of-life planning options, it should not be viewed as a substitute for a living will or other estate planning mechanisms.
For example, if you are incapacitated by a sudden accident, you may not have the opportunity to complete a POLST form. If you do not have a living will, you may not get the treatment you desire.
Further, the POLST form does not do anything to direct how your assets should be distributed if you pass. For that, you will need to have drafted a will or set up a trust.
Nobody likes to think about the end of their life, but it is important to plan. It is better to be prepared than to be treated in a way you would not have chosen.
Source: NJ Spotlight, "For Terminally Ill, New Law Gives Final Say on Medical Care," Beth Fitzgerald, Dec. 22, 2011
]]>Across the river to the east, there is just such a battle raging over the estate of one Huguette Clark. The name may not be familiar to many, but money talks. And her $400 million estate is sparking some significant discussions in Manhattan Surrogates Court.
]]> The childless Clark died in May of this year. She was 105. She hadn't been seen in public for many years and there are reports that she had been living in seclusion at a New York City hospital, though she was not apparently ill. Her affairs were being handled by her lawyer and accountant.At the heart of the legal contest now under way are two wills. One dated March 7, 2005, leaves $5 million to Clark's nurse. The rest of the money goes to 21 distant, but living, Clark relatives. The second, dated April 19, 2005, leaves most of the money to a private foundation that is administered by Clark's lawyer and accountant.
The second will also grants huge sums of money to the nurse, a doctor, a friend, a goddaughter and some Clark friends.
In the filing with the court, the relatives note that the second will was drafted by the law firm at which Clark's attorney is a partner. That has raised ethics questions among some legal experts who say a trust would have been appropriate. The family also accuses Clark's attorney and accountant of coercing their client into signing the new will and then plundering the estate.
As examples, they point to the fact that Clark's prized doll collection, estimated to be worth $30 million, was given to the nurse. Executor roles were given to the attorney and accountant, putting them into positions that would allow them to make millions in fees. The family is also questioning accounting that shows that Clark's two guardians spent about $1 million a month while they had control of her accounts.
There's been no comment from either Clark's attorney, or the accountant.
Source: New York Daily News, "New will battle over Huguette Clark file will that left them everything weeks before they were cut out," Barbara Ross, Tracy Connor, Nov. 28, 2011
]]>It doesn't matter whether an estate is large or small. The objective is to ensure that as much of that wealth goes to fulfill the wishes of the person to whom it belonged after they have died. But when an estate is huge, disputes over its exact size become matters of big money and can spark battles royal with the Internal Revenue Service.
]]> That's just what is happening now with the estate of Brooke Astor, the late widow of Vincent Astor, who was an heir of the legendary fur and lumber mogul, John Jacob Astor. She died four years ago at the age of 105.According to court papers in seven suits filed recently by executors, the IRS has pegged the value of the estate at $223 million. And the IRS is claiming the federal bite of that estate should be $97 million. But the executors say the Brooke Astor's fortune is only $93 million, which shrinks the amount due in taxes to $35 million.
Complicating matters is the fact that in the months ahead of her death, accusations were made that Astor's son by another marriage had coerced her, and possibly resorted to forgery, to change her will and reduce amounts that were earmarked for some charities. At the time, an estimate of Astor's wealth was given as $131 million.
In light of all the claims, it's hard to know just what the value of the estate really is.
The IRS says its case rests on a finding that about $96 million that the estate claimed as charitable donations are not eligible for the deduction. The agency says it has identified another $20 million that Astor gifted away during her life that should be subject to taxes. The IRS is also seeking $2 million in penalties because the estate didn't file proper returns.
The lesson to take away is that it is possible, through proper estate planning, to avoid these kinds of hassles.
Source: Forbes.com, "Brooke Astor Estate Now Faces $62 Million Attack By IRS," William P. Barrett, Dec. 7, 2011
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