Carlsbad CA Estate Planning

Will SAFE Act Really Make Seniors Safe?

Elder abuse costs millions of Americans an estimated $2.9 billion annually. The expectation is that these numbers are only going to increase, as the scams targeting the elderly become more and more sophisticated. This is according to Forbes in ““After SAFE Act Passage, The Battle Against Elder Financial Abuse Remains Far From Over.”

The aim of the Senior Safe Act is to encourage financial institutions of all kinds to play a larger role in fighting against elder financial abuse. The law, which was modeled after the Senior$afe program created in Maine, requires financial institutions to train employees on detecting activities that may indicate elder abuse is occurring. If the employees are trained, the Senior Safe Act also provides a reporting process and liability protection for those who report the possible abuse.  It is thought that the liability protection would make those individuals reporting the possible abuse more proactive.  However, there are still some problems with this.

Some advisors report being reluctant to report any client who seems to be suffering from mental deficiencies or elder abuse. The problem, advisors say, is that they are not trained and won’t feel confident in making a judgement about competency. Some court cases have put the onus on the advisor, when selling certain products or strategies but advisors lack both the training and the ability to make a medical diagnosis of senior clients. Without the ability to identify competency, it is very likely that any reporting will only take place well after the elder financial abuse has taken place.

Another issue is that family members or friends are typically the ones who commit elder financial abuse. The victim usually does not want to press charges, fearing that the person will become angry with them and withdraw their emotional support. Being dependent upon the same person who may have perpetrated financial abuse, puts the elderly person in a no-win situation.

Elder abuse prevention, financial and otherwise, should start years in advance, at the first signs of declining physical and mental health. It should begin with a plan for managing financial assets and having the proper legal documents in place, including a will, power of attorney, general durable power of attorney, healthcare directive and other estate planning documents.

By being proactive while the individual is still relatively well and healthy, it may be possible to create protections that will be crucial later in life. Speak with your estate planning attorney now, to make sure that your estate plan is in place, so you and your family are protected.

Reference: Forbes (July 23, 2018) “After SAFE Act Passage, The Battle Against Elder Financial Abuse Remains Far From Over”

Model's Estate Sues Chiropractor

One of the many tasks that the executor of an estate has, is to assess whether anyone owes the estate any money or could be determined to owe the estate money, if sued. If the answer to either question is yes, then the executor has a duty to act accordingly and try to collect on behalf of the estate for the benefit of the heirs.

A recent example of this comes from the estate of Katie May, a former Playboy model. May apparently suffered injuries during a photo shoot and went to a chiropractor for treatment.

The chiropractor worked on her neck. She later died.

The coroner determined the treatment injured her artery and cut off blood flow to her brain, as TMZ reported in "Playboy Model Katie May Estate Sues Chiropractor...Your Treatment Killed Her."

May's executor and the father of her child is suing the chiropractor for wrongful death on behalf of the estate. Even if he did not personally believe the coroner's report that the chiropractor was responsible for May's death, he would likely have an obligation to sue.

While this is an unusual case in that it features a Playboy model and an apparent death at the hands of a chiropractor, it illustrates something important. Executors have duties to the estate and some of those duties can be challenging.

It is for this reason that executors are advised to get the assistance of estate attorneys to help carry out their duties.

Reference: TMZ (June 14, 2017) "Playboy Model Katie May Estate Sues Chiropractor...Your Treatment Killed Her."

Fight Over Barry White's Estate

Barry White passed away in 2003. To date, his estate has stayed out of the news.

For a celebrity estate it has been a smooth estate administration by all appearances. However, Darryl White, Barry's son, has now filed a lawsuit opening up the estate to public scrutiny.

Darryl claims that when his father passed away, his widow told Darryl that she would make sure he got his fair share of the estate, as long as he agreed not to challenge the estate. For his part, Darryl claims he never even saw his father's will to know what he was supposed to receive.

He received regular payments until 2015, when they suddenly stopped. He believes the money is now being wasted by his stepmother.

Darryl has filed suit and is demanding to see the will to know what it is he should be receiving.

TMZ reported on this story in "Barry White's Son Sues My Dad's Widow Can't Get Enough of His Dough."

In one sense, this is not an unusual story.

It is very common for children to have fights with a step-parent over an estate. On the other hand, this is an extremely unusual story.

It is not at all common for a child to trust the step-parent enough to agree to her terms, without at least seeing the estate plan and knowing what the child is supposed to inherit.

If nothing else, this case illustrates why it is an obviously bad idea for the child to agree to that.

Reference: TMZ (May 24, 2017) "Barry White's Son Sues My Dad's Widow Can't Get Enough of His Dough."

Daughter Sues Mother for Wasting Her Inheritance

The story had a Hollywood beginning. A schoolteacher and a wealthy real estate investor met through a singles ad, fell in love, got married and had a child.

From that beginning, things quickly turned south.

According to court records filed by the child of that marriage, Elizabeth Marcus, her mother refused to sleep with her father after she was born. The two divorced after a few years and the father passed away, when Marcus was nine years old.

The father did not want his ex-wife to receive any of his assets and instead left half his estate in trust to Marcus. Another child from a previous marriage received the other half.

The trust was originally overseen by Citibank, but after fighting for several years, the mother took control of the trust in 2003, according to the Daily Mail in "Daughter sues her 'self-involved' mother for 'frittering away more than $13m of her inheritance - so she could buy cars and a $6m mansion next to Gwyneth Paltrow in the Hamptons'."

Marcus is suing her mother now, claiming that her mother has stolen her inheritance to buy expensive items for herself, including a mansion and fancy cars. Most of the original inheritance is now alleged to be gone.

The mother, of course, denies the accusations.

The missing piece of the puzzle from the reports is how the mother was able to gain control of the trust, if the father did not wish her to have it. He might have neglected to be clearer about his wishes in the trust documents.

Reference: Daily Mail (April 23, 2017) "Daughter sues her 'self-involved' mother for 'frittering away more than $13m of her inheritance - so she could buy cars and a $6m mansion next to Gwyneth Paltrow in the Hamptons'."

Wills Can Be Changed

It is fairly common in estate planning attorneys' offices, for a husband and wife to come in and declare that they both want similar wills drawn up. These wills are often referred to as "mirror image wills."

The most common form they take, is that each spouse gets a will leaving everything he or she owns to the surviving spouse. The second to pass away spouse, then gives everything to the children or other agreed upon heirs.

Despite their seeming simplicity, these wills are an unusually common source of litigation, as the National Law Review discusses in "Contracts to Make Wills or Trusts."

The problem starts when the surviving spouse has a change of plans and changes his or her will to divide things differently or to give the estate to different heirs.

The heirs of the original mirror image wills routinely argue in court, that the spouses entered into a contract to make the original wills. Unfortunately, that is simply not the case in almost all circumstances.

To be valid, a contract requires that a person receive some sort of compensation, called consideration, for whatever promise it is that they are contracted to perform.

In the case of mirror image wills, spouses rarely receive any form of consideration for promising not to change the will later.

It is important to understand this point, because the issue frequently comes up in estate litigation. It costs estates a lot of money, when the issue is raised.

Reference: National Law Review (April 10, 2017) "Contracts to Make Wills or Trusts."

Estate Planning Prevents Family Fights

Only the most sadistic people among us, would really want their families to fight over their estates. The goal for almost everyone is for our families to get along with each other, even after we are no longer around.

However, families do often fight over estates.

Some of those fights are unavoidable,  since they stem from longstanding family dynamics and family members who do not trust each other or get along with each at all.

Many of those fights are avoidable, as Wealth Management discusses in "How to Prevent Feuds Among Heirs."

The single most important thing that needs to be done to prevent family fights over an estate, is to get an estate plan.

Sound estate plans can often cut off any reason for families to fight. Proper planning can ensure that everyone gets their fair share of the estate.  The estate plan can set forth reasonable means for resolving any disputes that do come up.

However, just getting an estate plan is not enough.

The next thing that needs to be done, is to communicate with your family about what is in the estate plan.

People who know what they are going to get and why that was the choice of the departed, are much less likely to be upset and start fights with other family members over the estate.

If you do not already have an estate plan, get one.

If you do already have one, then make sure that you review and update it regularly to ensure that it will be effective in preventing your family from fighting.

Reference: Wealth Management (April 10, 2017) "How to Prevent Feuds Among Heirs."

In Vitro Fertilization and Posthumous Children

Before undergoing cancer treatment that could render him infertile, a Spanish man decided to freeze his sperm for possible later use by his partner. After the treatment, the couple started the process of in vitro fertilization but did not complete it, since his condition got worse and he passed away.

The day before he passed away the pair were married.

After his death, the Spanish woman unsuccessfully attempted in vitro fertilization four times. The clinic refused her a fifth attempt without a court order.

It seems that Spanish law only allows genetic material to be used for 12 months after a person has passed away, according to FOX News in "Judge allows woman to undergo in vitro fertilization with dead husband's sperm."

The interesting aspect of this case is that the government chose not to argue in court on legal grounds that the woman should not be able use the sperm. Instead, the government argued on the moral grounds that it was impossible to know whether the man would still want the child or even if he would still want to be married to the woman, if he were still alive.

The government took the position that the man could not consent to having a child, but the judge was not persuaded and ruled in favor of the woman.

Similar cases are expected to appear with greater frequency and present a challenge to current estate law.

It is not clear how estates that are already settled, will be able to handle a child born years after the deceased passed away.

Reference: FOX News (March 23, 2017) "Judge allows woman to undergo in vitro fertilization with dead husband's sperm."

An Estate Battle over Support for Donald Trump

Throughout the late 20th century, Phyllis Schlafly was a well-known and powerful force in Republican politics. She is often credited with personally defeating the Equal Rights Amendment, when it appeared to be on the verge of passing.

Although she had faded away from the public eye in recent years, Schlafly remained an important figure in Republican circles until she passed away in 2016. When she endorsed Donald Trump for President during the 2016 primaries, it might not have mattered to the general public, but it did matter in the Republican operative world.

It also appears to have mattered to her children and her estate, as the Daily Mail reports in "Children of late conservative icon Phyllis Schlafly at war over their inheritance and have been fighting since she threw her support behind Donald Trump."

Schlafly's endorsement of Trump created a rift between her sons, who supported the decision, and her daughter, who opposed it. The daughter claims that the decision was influenced by Republican political operative Ed Martin.

Since Schlafly passed away, Martin has been creating political action committees in her name to support Trump and the daughter has attempted to stop him. She also claims that Martin and her brothers unduly influenced their mother to change her will in their favor and to make it more difficult for the daughter to challenge the will.

This is disputed by the sons.

Reference: Daily Mail (March 23, 2017) "Children of late conservative icon Phyllis Schlafly at war over their inheritance and have been fighting since she threw her support behind Donald Trump."

Tennessee's Cowan Rule

J. Don Brock, the late CEO of Astec Industries, wrote many wills over the years. He executed new wills in 1994, 1998, 2006, 2012 and 2013. His first three wills all did different things with regard to his five adopted children.

They were given various amounts of money or cut out from receiving anything in the different wills. The last two wills did not mention the adopted children at all. They claim that was done by their stepmother, in order to preserve the assets of Astec Industries for herself.

The children filed a lawsuit against the estate, but lost in the lower courts. The Supreme Court of Tennessee has now agreed to hear their case, according to the Times Free Press in "Tennessee Supreme Court agrees to hear J. Don Brock estate challenge."

The main issue in this case is a 110-year-old decision by the Supreme Court of Tennessee that created what is known as the Cowan Rule. It limits the ability of potential heirs to challenge a will, if they were not mentioned in the previous will.

The adopted children lost in the lower courts because they were not mentioned in the 2012 will. The rule makes some sense.

Why?

Merely having the 2013 will ruled invalid would not create an inheritance for the children,  since it would just validate the 2012 will, unless it is also successfully challenged.

However, this is not how other states handle disinherited children.

In other states, it is presumed that if a child is not mentioned in a will at all, it was a mistake and the child can challenge the estate, regardless of what an older will might state.

Reference: Times Free Press (March 21, 2017) "Tennessee Supreme Court agrees to hear J. Don Brock estate challenge."

Audrey Hepburn's Sons Reach an Agreement

Audrey Hepburn starred in some of the most beloved movies of all time. She came to symbolize beauty and grace in mid-century Hollywood.

When she passed away in 1993, she left behind a gigantic amount of memorabilia from her acting career, including some of the costumes and jewelry that she wore in her iconic roles. These items have obvious value to collectors, but so far no one has gotten their hands on them.

Why?

The items have been the source of a long dispute between her two sons.

Hepburn specified in her estate plan that everything she owned should be split between those sons equally, but she left no instructions regarding just how that was to be accomplished.

Which son should get which item?

Her memorabilia has been contested in court for the last two years, but the sons may have finally reached an agreement, according to the Daily Mail in "Audrey Hepburn's sons agree to split their late mother's treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute."

The sons have agreed to submit the question to mediation and use that process to determine the distribution of particular pieces of memorabilia. However, this will not be the end of all battles concerning Hepburn's estate, since a charitable fund she founded is now suing one of the sons for interference with its affairs.

Hepburn's mistake was not including some way for her son's to resolve any disputes about who gets what in her estate plan. She could have made provisions for a mediator to resolve the disputes. That would have saved a lot of headaches and legal bills for her family.

Reference: Daily Mail (March 9, 2017) "Audrey Hepburn's sons agree to split their late mother's treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute."