Estate Planning

now browsing by category

 

Top 8 reasons for cutting a child out of your will

Clients are often reluctant to talk about cutting a child out of their will.  But there can be some good, legitimate reasons for disinheriting a child.    And under Ohio law you can do it if you go about it properly.  But just failing to mention a child in a will is not sufficient.  You must be specific about your intent.  And you may want to avoid cutting them out completely and instead leave them some inheritance, even if it is a small one.

Keep in mind that a will alone may not be sufficient to accomplish your goals.  There may be other planning options that better accomplish your goals under the existing circumstances.  Trusts are often used in these situations for example.

The top reasons why someone would consider cutting a child out of their will may include the following:

  1. The child has a severe physical or mental disability such that they cannot care for themselves, and a governmental benefits program is necessary for their continued care.  Leaving money to them directly is not a good option, so disinheriting them in the will may be best.  But there may be ways to help the child using a special needs trust designed for that purpose.
  2. The child has an addiction or substance abuse problem. If the child was to receive a sizable inheritance directly this may simply cause more problems.   However, if you don’t want to cut them out completely there may be ways to provide for the child with some careful planning.
  3. The child is a compulsive gambler or has extreme debt.  Receiving a sizable inheritance at one time may end badly and is not likely to go as you intend.  Here again there may be ways to provide for the child with some careful planning.
  4. The child is in a bad marriage which is likely to end in divorce.  If an inheritance is received directly it may complicate matters and the money may wind up benefitting their spouse more than your child.
  5. There is a child with which you have never had any relationship.  Despite the lack of relationship this child has all of the same rights as your acknowledged children.  If you don’t specifically disinherit them they may be able to claim part of your estate.
  6. You and the child are estranged and/or you have not seen or heard from your child in many years.  It is unfortunate but it happens frequently for a variety of reasons.  In these situations, particularly if there are others who have cared for you, it is important to make sure your will or other planning documents reflect your wishes.
  7. One child is independently secure and would prefer to see his or her siblings get their share because they need it more.  There is no law that requires you to split your estate equally among your children.  It is more important to do it equitably.
  8. One child has received much financial help during their lifetime, while the other children have not.  In this case it may best to specifically state in the will that the one child has already received their inheritance and give the bulk of the estate to the other children.

If you have any of these situations you need to do some estate planning and make sure your wishes and intentions are followed.  Otherwise under the law your estate may pass in a way that you never intended.

 

Top 10 Wackiest Wills in the United Kingdom

A London-based team of genealogy researchers have reviewed around 200,000 wills in the United Kingdom and have made a list of the wackiest.  Normally a last will and testament is not the place you would look for humor, but these researchers have discovered some funny stuff.

Of particular note is the will of Albert Orton who cut his wife out of his will because she apparently called him “a rotten old pig” as the result of his flatulence.  The insult cost the widow a small fortune as she was left with just one farthing (a farthing is a former coin of the U.K. that was worth a quarter of an old penny).

Then there was Kenneth Gibson’s will in which he left his stepdaughter “the price of half a pound of sausages,”  apparently because she claimed that her late mother had not paid her for the sausages.  She must have complained long and hard about not being paid for that meat, but she got the money in the end and may have lost a lot more.

Frank Smith apparently did not like his son-in-law much, as he pledged all his possessions to his daughter – as long as she left her “immoral husband.”

Another man left £26,000 to Jesus Christ, but only provided that his identity could be established.  I am not sure how you could prove that in court, or why Jesus Christ would need the cash.

For more information, see the story in the Birmingham Mail:

Widow loses inheritence for criticising husband’s FLATULENCE – and other wacky wills – Birmingham Mail.

Facebook Now Allows You To Name A “Legacy Contact” for When You Die

Facebook now allows you to name a person to serve as your legacy contact when you die.  Facebook recently announced a new policy which  makes it much easier for family members or friends to take care of your Facebook account when you die.  Your legacy contact will be able to post things that appear at the top of your memorialized Timeline, respond to requests from friends and family members that may not have been connected to Facebook beforehand, and update profile pictures.

You can also allow your Legacy Contact to download an archive of your photos, posts, and profile information for safe keeping (no private messages will be saved). Of course, your Legacy Contact can also have your Facebook account permanently deleted if that’s what you prefer. Here is what you need to do to set it up:

Go to your Facebook account, and find Settings > Security > Legacy Contact.

Then type in the name of the person you would like to make your Legacy Contact.You have the option to send them a message to let them know, but it’s not required. Otherwise, they’ll be notified when Facebook becomes aware of your passing (but it does not seem wise to rely on that). Then select whether your Legacy Contact will have Data Archiving permission and whether or not you’d like your account to be deleted.

This may be unpleasant to think about, but it’s really for the people you care about in your life. Your passing will be hard on your loved ones, and giving someone the ability to either memorialize your account or delete it can help. It also keeps your account from becoming dormant, possibly to be hacked into later on.

Apparently this option is rolling out to over time, so not every account will have it at first.  If you don’t have it yet, you’ll probably get it soon.

Failing to Plan is Planning to Fail — Common Estate Planning Mistakes

Unfortunately, when it comes to checking tasks off your to-do list, estate planning is probably at the bottom of the list.   According to legal services website Rocket Lawyer, 64% of Americans don’t even have a basic will.   But as the old adage goes, failing to plan is planning to fail.

Although it’s nice to think that you can trust your family or heirs to do the right thing, unfortunately if you don’t have your wishes formalized, there may be some dispute amongst your loved ones  over what the right thing actually is.  Even well-meaning and otherwise rational family members may wind up in a quarrel when faced with the stress and strain of your death or disability.  Or there may be some member of the family who is in dire financial straits and tries to take advantage of an uncertain situation.

The best way to avoid family discord and disputes when you are gone is to prepare an estate plan with clear instructions on how your wishes are to be carried out.

Assuming Estate Plans Are Only Meant for the Wealthy or Those With Complicated Situations

Somehow many people hold the belief  that estate planning is reserved only for rich people.  But in reality it’s for anyone who wants to control what’s going to happen to their end-of-life medical care, assets, children, pets, or other private affairs if they become incapacitated or die.

In addition to dealing with what will happen to your money or property after you die, estate planning also includes tasks like setting up a living will, deciding on a guardian for any minor children, or pre-planning funeral or burial arrangements. If you’re not clearly stating your directives in these areas, you may be leaving a mess that will cause grief for your loved ones and result in decisions being made by the courts or the state.

Many people may assume that their financial or family situation is so straightforward that they don’t need to draft formal documents, like a last will and testament or a living will.  The reality is that no one’s life is as simple as it seems.  Putting protections in place to help ensure that your wishes are known will help your loved ones handle things when you are incapacitated or die.

And if you have young kids, you should decide who will take care of them and who will handle the finances should you pass away sooner than expected.  These things are important whether or not you have substantial or complicated finances.

Procrastination – Putting Off Estate Planning for Too Long

According to the Rocket Lawyer poll, 57% of Americans say their excuse for not having a will is that they “just haven’t gotten around to making one.”  We all tend to procrastinate on some things, but estate planning should really move to the top of the to-do list.  At the very least, think of estate planning as a way to reduce familial stress when you’re no longer in a position to make decisions.  Often it is the proverbial “pay me now, or pay me (much more) later” situation.  If, for instance, you become disabled and don’t have powers of attorney in place appointing people to manage your financial affairs and health care decisions, your loved ones may need to engage in a court process to establish a guardian or conservator.  Or if you don’t plan for the transfer of your assets your family may wind up paying far greater court costs and attorney fees to get matters properly handled.

Not Preparing for “What If” Scenarios

If things are going well, many people tend to carry on as if it will always be so.  While it would be nice to believe that marriages last forever and that everyone stays healthy into old age, we all know that not every story has a happy ending.  Unfortunate events have a habit of happening when you least expect it.  No one wants to think about life changing events such as catastrophic accidents, businesses failing, serious health problems, or the like.  But we all know these things happen.  It is prudent to plan for such situations.

And as circumstances change, whether it be from divorce, health problems, or death, you should review your estate plan and adapt it to the situation.  It is an ongoing process that should change as things in your life change.

Casey Kasem’s Sad Story Points Out The Importance Of End-Of-Life Planning

The sad story of Casey Kasem and the bitter dispute between his wife Jean and his children from his first marriage points out the importance of end-of-life planning.  Due to Mr. Kasem’s dementia he was unable to make medical decisions as his health deteriorated.  Apparently things got so bad that he was no longer able to survive without medical life support.  His wife wanted to continue medical care at all costs, while his three children believed care should be withdrawn.  The children filed a case in a California court, where the children prevailed.  Life support was withdrawn and Mr. Kasem died not long thereafter.

This helps demonstrate the importance of a living will and of designating an agent to make medical decisions when you are unable to do so.  Even if these documents have been signed and provide direction, terminating medical treatment at the end of someone’s life is a difficult and painful decision.  Without such documents in place the situation becomes much worse, unfortunately leading to bitter legal disputes in some cases like Mr. Kasem’s.  Without a living will or a healthcare power of attorney the probate judge may wind up being the one making the decisions about medical care.

In Mr. Kasem’s case unfortunately the problems did not end with his death on June 15, 2014.  A dispute arose about the handling of his remains.  His wife had his body removed to Montreal Canada shortly after his death leading to charges by his children that his body was missing.  Subsequent news stories indicate that he will be buried in Oslo, Norway, against the wishes of his children, who maintain that he wanted to be buried in a certain cemetery in California where he had lived for most of his life.  At least one Norwegian funeral home said it won’t bury Casey Kasem after his  protests from his children and people signing an online petition.

It has been reported that Casey Kasem left an estate of $80 million.  You may not have that type of net worth but a some planning could save your loved ones a lot of grief and emotional suffering nonetheless.

 

For more information see for example:

http://www.cbsnews.com/news/casey-kasems-body-headed-to-norway-for-burial/

See Casey Kasem and end-of-life planning | OUPblog.

http://www.Newsmax.com/TheWire/funeral-home-wont-bury-casey-kasem/2014/10/01/id/597903/#ixzz3EvGtUf3r

The Fight Over Bob Marley’s Estate Continues

The 33rd anniversary of the death of Bob Marley recently passed.   Meanwhile, the fight over the estate of Mr. Marley, who died on May 11th, 1981, continues in the English courts. Ownership of some of the songs written and recorded by Bob Marley will be argued at the Chancery Division of the High Court in London. Two of Marley’s best-known songs, No Woman, No Cry and War, are at stake.

Marley was a musical pioneer with his reggae music that gained an international following.  However, Mr. Marley did not leave a will, apparently because of his religious beliefs.  The Rastafarian view of death and the afterlife kept Mr. Marley from any estate planning.  In the Rastafarian belief, life is eternal and reincarnation is imminent.

As a result he created a lengthy probate mess that has continued for decades and is not over yet. There have been numerous lawsuits and probate court proceedings in Jamaica, the United Kingdom, and in the United States.

It is said that Mr. Marley’s net worth in life reached an estimated $30 million, but the value of his estate continued to grow after his death.  It is estimated that in 2012 alone the Marley estate produced about $18 million.

All the fighting over money seems ironic given the messages of peace and love that Mr. Marley spread through his music.  Much of the fighting could have been prevented with some good estate planning. Even if he could not execute a last will and testament, a living trust could have helped avoid the many legal battles over his estate.

Bob Marley’s Estate Planning Battle Continues to Explode 33 Years Later, Claims UltraTrust.com – Top News – InsuranceNewsNet.com.

Upcoming Seminar – Trusts 101

R. Bryan Nace will be one of the speakers at the National Business Institute’s upcoming Trusts 101 seminar on June 18, 2014 at the Sheraton Suites in Cuyahoga Falls, Ohio.  The seminar is designed for professionals involved in creating, administering and terminating trusts, including:

  • Attorneys
  • Financial Planners
  • Accountants and CPAs
  • Tax Preparers
  • Trust Officers
  • Paralegals

For more information, follow the link below:

65608ER | Live Seminar | Trusts 101.

Are Wills Made On iPads Valid?

At least one Ohio Probate Court has upheld a last will and testament made and signed on a tablet.  Judge James Walther of the Lorain County Probate Court has admitted to probate an electronic will written and signed on a Samsung Galaxy tablet.  The witnesses to the will testified in probate court in support of the will.  In fact, at least six persons testified as to the validity of the will.  No one objected to its admission.  Even the parents of the deceased person did not object, despite the fact that pursuant to Ohio statutory law (ORC § 2105.06) they would have inherited all if there was no will.

The Court found that the tablet will constituted a “writing” and was properly signed under Ohio statute (ORC § 2107.03).   The Court also found that the witnesses provided sufficient evidence to establish this “writing” as the deceased person’s last will and testament.

This was a case of first impression in Ohio and we are likely to see more of these types of wills.  However, this does not mean this is a good way to make a will, at least at the present time.   There are many possible pitfalls and practical problems with making a will on a tablet or other computing device.  First off there is the problem of preserving the electronic will in an acceptable format.  There is also the impracticality of having multiple witnesses available and willing to testify in support of such a will when the time comes.  And other courts may disagree with Judge Walther’s ruling.

The court case referred to above was In re Estate of Javier Castro, Lorain County Probate Case No. 2013 ES 00140, June 19, 2013 Judgment Entry.

 

 

Estate Planning Lessons from Philip Seymour Hoffman’s Estate

The recent death of popular actor Philip Seymour Hoffman points out some estate planning pitfalls.  Although Mr. Hoffman executed a will in 2004, he failed to update it after having two children.  And Mr. Hoffman earned some significant income in the following years.  Moreover,  some significant estate tax law changes went into effect after his will was done.  His 2004 will leaves everything to the mother of his children.  He was not married to her and this is a big problem, at least from an estate tax perspective.

It has been suggested that Mr. Hoffman’s estate was around $35,000,000.  Currently, $5,340,000 is exempt from federal taxes with amounts above that amount being subject to a federal estate tax rate of 40%.  It would appear then that roughly $30,000,000 of his estate would be subject to estate tax at a 40% rate.  This would generate about $12,000,000 in federal estate taxes!  New York also has an estate tax.   It has been estimated that roughly another $3,000,000 in will be paid in New York estate taxes.  Much of that probably could have been avoided with some careful planning.

Hopefully Mr. Hoffman’s estate has enough liquid assets to avoid a forced sale of assets to meet his tax obligations.  If Mr. Hoffman had life insurance that might provide for liquidity to pay the taxes due.  And the use of an irrevocable life insurance trust would have allowed for excluding the life insurance proceeds from being subject to estate tax.

A follow-up visit to his attorney could have saved millions for his family.  The lesson to be drawn from this is:  “things change and so should one’s estate plan.”

 See: Philip Seymour Hoffman: Estate Planning Lessons For Us and Especially Women | Philadelphia Estate and Tax Attorney Blog.