July 2011 Archives

Iron Clad Will Likely Avoids Inheritance Fight After Death of Amy Winehouse

July 29, 2011,

Inheritance feuds are quite common when a family member dies without an estate plan. Those who die young are the most likely to have failed to leave any legal documents that express their wishes. Unfortunately, the perception still exists that estate planning is something with which only seniors need be concerned.

Inheritance fights often make headlines when they involve the fortune of a high-profile public figure who died without leaving behind any indication of how they wanted their wealth to be distributed. Many well-known celebrities have died young, without a will, setting the stage for drawn out fights over the distribution of their estate. For example, Jimi Hendrix died tragically in 1970 at the age of twenty seven without conducting any estate planning. As a result, the legal battle over his assets raged on for more than thirty years.

Examples like that are often mentioned as a reminder of the importance of visiting an estate planning attorney to ensure that one's affairs are in order. However, it is also helpful to highlight well-known instances where proper preparation was completed and fighting was avoided. That appears to be the case following the passing last week of singer-songwriter Amy Winehouse. The young entertainer lived a tumultuous life, but she was serious about making her wishes known regarding distribution of her assets. According to reports in Daily Finance, even though she was only twenty seven years old at her death, Winehouse had an "iron clad" will that passes her wealth to her parents and brother. She understood the importance of updating estate planning documents following changes in life circumstances. Winehouse executed a new will following her divorce from her husband, preventing possible challenges resulting from out-dated legal documents.

Failure to draft a valid will, create a trust, or conduct similar planning risks causing costly and prolonged family infighting. This is true for people of all ages. While some planning is usually better than none, not all estate plans are created equal. Attempting to write a will or engage in other preparation without professional assistance may leave the door open to later challenges. In our area, local residents are well served by visiting a New York estate planning lawyer to put a plan in place to distribute assets and avoid inheritance feuds.

See Our Related Blog Posts:

Celeste Holm's Family Feud Highlights Importance of New York Inheritance Planning

Lack of a Will Leads to Controversy in Estate of NFL Legend Gene Upshaw

Married Same Sex Couples Need to Consider Effect of Defense of Marriage Act

July 27, 2011,

Nearly nine hundred same sex couples were married in New York on Sunday. It marked the first day that members of the LGBT community could receive marriage licenses after the landmark marriage equality bill was passed late last month and signed by the Governor. Marriage equality will provide each partner with a variety of financial benefits and legal rights at the state level. However, the lack of any federal recognition means that many area same-sex couples will still need to conduct unique New York estate planning to protect their assets and provide for their loved ones.

The 1996 Defense of Marriage Act (DOMA) defines marriage at the federal level as a legal union between one man and one woman. The federal government usually recognizes any marriage so long as it is valid in the state where it was entered into, but that is not true for same sex couples. That is why a story this weekend in the USA Today suggested that all local LGBT newlyweds visit a New York estate planning attorney when they get back from their honeymoon. The main reason is that complications remain for these couples because the federal government will continue treating them as two economic units. This presents these married couples with financial planning complications.

Married same sex couples will still be denied the over one thousand federal benefits automatically given to heterosexual married couples. As a result, transferring assets from one spouse to another is not as seamless or certain for LGBT newlyweds. For example, even after the passage of marriage equality in New York, married same-sex spouses cannot pass assets upon death to the other without an estate tax bill nor do they have a right to the other spouse's Social Security benefits.

The United State Senate held hearings last week on a new piece of legislation known as the "Respect for Marriage Act" that would repeal DOMA. If enacted, the measure would return the federal government to its usual position of recognizing as married all couples who are treated as married by their individual state. While the bill is seen as having strong support in the United States Senate there is more vocal opposition in the House of Representatives. No matter what, all same-sex couples will need to be alert to possible changes in the coming years to ensure their estate plans adequately account for the current legal landscape.

See Our Related Blog Posts:

Marriage Equality May Change New York Estate Planning Needs for Same Sex Couples

Same Sex Couples and the GLBT Community

The Inheritance Rights of Children Conceived After Death By In Vitro Fertilization

July 25, 2011,

The Wall Street Journal wrote this weekend on a unique estate planning issue that is becoming relevant to a growing number of families: the inheritance rights of children conceived after one's death through in vitro fertilization. More people than ever before are cryopreserving their gametes which can then be unfrozen later and used in fertilization. This practice is growing in popularity among cancer patients before undergoing chemotherapy, those in the military, and others in high-risk occupations.

The total number of infants born through use of this technology has doubled in the past decade and the clinics offering this service have increased. For area residents, use of this science may have an impact on their New York estate plan. Many are beginning to question what inheritance rights these children have if their parent passes away before they were conceived? In an effort to provide clarity, more and more states are passing laws defining their rights with regard to insurance, Social Security, trust participation, and similar topics. However, the legal landscape is far from clear.

Families who are considering their options or who have already frozen gametes should take a close look at the forms associated with the procedure. The clinics should clearly explain what happens to the material in the case of the donor's death. Some families may be surprised that the language in those agreements does not match their intent.

For example, one woman has been engaged in a seven year legal battle with the Social Security Administration in an attempt to get insurance benefits for her son. The child was conceived from frozen gametes used shortly after the death of the woman's husband. The man signed a contract asking that all the material be transferred to his wife upon death. However, government officials are arguing that there was no record that the man actually intended to father a child. The lesson from this unfortunate situation is to ensure that all details are spelled out in writing in advance.

Charles Kindregan, the author of "Assisted Reproductive Technology: A Lawyer's Guide to Emerging Law and Science" confirmed that the law in this area is ambiguous. The fact that the law remains in flux makes it is particularly important to consult an estate planning attorney with all questions regarding the rights of late conceived children.

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Planning For Your Digital life After Death

Instructions Should Help Family Find the Information They Need

Planning For Your Digital Life After Death

July 21, 2011,

One of the more novel aspects of modern New York estate planning includes determining what to do with one's digital life after death. Social networks like Facebook, Twitter, email archives, and other online resources continue to expand. Individuals of every age are using the services to store past communications, share personal information, stockpile photographs, publish essays, and much more.

Everyone may have different wishes for these unique assets after death, and so making those plans known is an important part of a New York estate plan. Just as with traditional assets, it is a mistake to allow default rules to dictate what happens to online property. In the digital context, rules of privacy often mean that loved ones are permanently locked out of online accounts. As a result, important memories, blog articles, photos, online journals, and other items may be forever lost.

Digital asset planning gained national attention a few years ago following a high-profile legal case. The parents of an American soldier killed in Iraq sought to have access to his old email account. Privacy policies at the email service did not allow such access, regardless of the death of the account holder. The family was forced to bring a lawsuit before eventually winning the right to access their son's email archives.

Many online services have since sprung up seeking to help individuals carry out their wishes regarding their online information. My Life Scoop profiled some of these digital estate planning tools. The services come in a variety of forms, often including the storage of digital passwords under the control of a trustee. Others allow users to store specific digital files that are released to named individuals upon the death of the account holder.

A prudent estate plan should consider whether preparations for digital information need to be made. So much effort is spent creating online letters, photo albums, and other personal effects that it may be worthwhile for others to have the material down the road. However, there is some online information that one might wish to keep private after death and never intended to be seen by others.

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Instructions Should Help Family Find the Information They Need

The Dynasty Trust May Keep Inheritance in the Family

Tips to "Lawsuit-Proof" An Estate

July 19, 2011,

Our New York elder law estate planning lawyers know that proper estate planning can help clients save money on taxes and probate costs, ultimately allowing them to pass on more of their assets at death. Besides leaving a larger estate, preparation also ensures that the distribution is likely to occur exactly as desired. Unfortunately, family infighting can erupt after a death that leads to a lawsuit challenging an estate. These legal struggles tear families apart and can distort the intent of the one who has passed.

Estate battles should be avoided at all costs. Last week Forbes published a helpful "tip list" of common sense and practical ways to "lawsuit proof" an estate. For one thing, it is very helpful to divide up specific possessions among friends and family members before death. Distributing family heirlooms--like a wedding ring, antique furniture, and similar items--can be contentious if not done ahead of time. There is no "right" way to divide these possessions, but communication is crucial. Talking about the issue gives families a chance to understand what items actually matter to each of them and avoid lawsuit-provoking surprises at death.

If you give large loans, advances, or gifts to children while alive it is helpful to provide close records of the transfer. Sometimes a parent will give a child a large amount of money--perhaps for a down payment on a house. Afterwards there may be disagreement about whether that money was "in advance" of an inheritance. By unequivocally clarifying your intent beforehand, a donor may prevent others from litigation the issue in the future.

One of the most common allegations in estate litigation is that someone did not have sound mind when their plan was created. Understanding this risk and accounting for it can go a long way in preventing a lawsuit ever being brought. Some seniors who seem vulnerable may be particularly apt to having their wishes attacked on this ground. In those cases evaluation by a treating physician and geriatric psychiatrist immediately before signing documents can help dissuade potential litigants from attacking the estate plan.

Continue reading "Tips to "Lawsuit-Proof" An Estate " »

Careful Consideration Required Before Selecting A Trustee

July 15, 2011,

A trust is a centerpiece of many New York elder law estate plans. Trusts are usually superior to wills for transferring assets at death. Trusts are preferred because they can be used to avoid probate, reduce estate taxes, protect children from earlier marriages, and more. Essentially these entities remove assets from a personal estate and place it in a trust so that more wealth can be given to beneficiaries.

Transferring assets to a trust means that a trustee must be designated to manage the entity and its assets. Therefore, selecting an appropriate trustee is an important aspect of the New York estate planning process. A Yahoo Finance article this week discussed the role of the trustee and the need to give careful thought to trustee selection. Those who create a trust usually chose between an individual trustee (often a friend or family member), a professional trustee (like a bank, lawyer, or trust company), or a combination of both.

Trustees have a fiduciary duty to the beneficiaries of a trust, and so it is vital to select a trustee who can fulfill that duty. Trusts require the trustee to appropriately balance the needs of a current beneficiary while preserving capital for future beneficiaries. In addition, trustees must be able to file annual fiduciary returns. While friends and family members will usually try to act in the best interests of beneficiaries, they are often inexperienced with trust management. Difficulties often arise when family issues conflict with the best interests of the beneficiaries. Also, a trust may be held in limbo if an individual trustee dies or becomes incapacitated in some way.

In many cases a professional trustee is a prudent choice. The article notes that "while trustees often do an acceptable job of completing basic tasks, conflicts and problems can arise when trustees don't understand where their loyalties should be and how to deal with the complex financial issues that can come with the job." Banks, lawyers, and trust companies are capable of providing the management services needed to maximize the value of a trust. In addition, a professional trustee will not come with potentially distracting family conflicts. In these ways, choosing a professional trustee is often the best way to ensure quality, consistent management of a trust.

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Estate Plan Can Provide For Lifetime Care of Pets

July 13, 2011,

Pet estate planning is growing in popularity as more jurisdictions have begun allowing residents to create legal documents to provide for their animals after death. Pet trusts are becoming an important part of the New York estate planning process as New York is one of forty five states that permit owners to create these entities.

Yesterday, North Jersey News discussed the increasing use of pet trusts across the country. Many claim that the widely reported New York trust created by Leona Helmsley for her dog, Trouble, spurred the rise in popularity of the animal care giving option. Many area residents consider their beloved dogs, cats, birds and other animals to be members of their families, and so it is logical for those individuals to provide for their pets as part of their New York estate plan. Pet trusts are legal agreements which explain how an owner wants their animal to be provided for when they are no longer around. This includes the ability to leave money for the animal's care and designate specific individuals as trustee and guardian of the pet.

As with all planning documents, a New York pet trust should be carefully worded to ensure that animal friends are quickly turned over to designated caregivers when the time comes. Disputes may arise regarding the amount of money left to the animal, and so proper drafting of these trusts is essential. The basic amount to be left is usually reached by multiplying the animal's expected lifespan by the annual cost of care. Discovering that cost involves going through pet records to get an accurate accounting of how much money is spent on the pet each year. Food, grooming, veterinary bills, and other expenses add up quickly--sometimes the trust may even be funded with several hundred thousand dollars.

Besides setting aside funds for the animal's care, designating a trustee and guardian is crucial in the pet trust process. One animal advocate explained that, "much like an adoption, the goal is to make sure it will be a good match. You may love your best friend or family member, but they may not be a dog person." If necessary one individual can assume the role of the trustee while a different person can become the pet's actual guardian. As with all planning documents, proper review is important to ensure that the plan is updated and can help your animal at the moment needed.

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High-Profile Example Highlights Need for Clarity in the Estate Planning Process

New York Estate Planning is Much More than Wills & Trusts

Instructions Should Help Family Find the Information They Need

July 11, 2011,

This weekend the Wall Street Journal published a helpful article discussing some important aspects of New York estate planning that many residents overlook. Besides creating documents like wills and trusts, the best preparation also includes clear instructions that help family members understand where and how they can access the information they need when a loved one passes on.

As our New York estate planning lawyers frequently advise, "letters of instruction" are often forgotten components of the process. These letters can include information such as online user names, passwords, military discharge papers, PIN numbers, and similar material. They are often kept in a safe-deposit box or with an attorney so that family members have access to bank accounts, can keep up with online payments, and perform similar tasks if necessary.

In today's high-tech world, residents may also want to leave information related to their wishes regarding their online presence. This may involve social networks like Facebook and Twitter, blogs, or other internet sites in their control.

Veterans need to ensure that their military discharge forms are left behind and accessible so that family members will be entitled to funeral and burial reimbursement. Combinations to locks, storage closets, cars, and other relevant areas should also be easily accessible for those handling affairs. Many residents still have access to documents that are important to their children, such as birth and adoption certificates. It is helpful if the location of those materials is clearly identified.

In addition, those who own valuable intellectual property rights should let their family know of the holdings. Trademarks and patents in particular are often held in the name of a corporation, so family members may be unaware of the specific ownership. Of course, a will or trust should also specify how those rights should be passed on at death.

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Many Forget to Include "Letter of Instruction" As Part of Estate Plan

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Celeste Holm's Family Feud Highlights Importance of New York Inheritance Planning

July 6, 2011,

This weekend the New York Times reported on the sad legal battles of 94-year-old actress and Broadway star, Celeste Holm. Ms. Holm gained famed as a leading film actress in the 1940s, starring in All About Eve and winning an Oscar for her performance in Gentleman's Agreement. Now, however, Ms. Holm is making headlines for her 5-year legal battle with her sons over her estate. The story notes the potential for drama surrounded a New York inheritance and, as the author writes, is "a cautionary tale for families trying to manage one of our age's emblematic conflicts, between elderly parents who want to live autonomously and adult children who want to protect them."

The trouble for the family began when Ms. Holm (then 87 years old) began dating a man who was 46 years younger. When the man moved into Ms. Holm's large Central Park West apartment her two sons became worried that the relationship would have ramifications on their inheritance. Shortly after, Ms. Holm's son transferred her investments and apartment into limited partnerships and then arranged for the partnerships to be held in an irrevocable trust, naming himself as the trustee. The trust was scheduled to pay Ms. Holm $300,000 a year to cover her expenses.

These living trusts are popular legal entities than help families transfer assets at death while avoiding the time and expense of probate proceedings. However, it is imperative that the decisions are made in good-faith with the consent of those involved. That is where Ms. Holm's family situation went awry. Following a family meltdown over the relationship with the younger man, Ms. Holm sued her son to overturn the irrevocable trust. The legal battle eventually lasted five years and consumed millions of dollars--taken from the very estate that was at issue. The two parties eventually settled, but the expenses of the fight had placed Ms. Holm in a tough financial situation. Ms. Holm and her now-husband remain in debt and they are unsure if they will be forced to move out of their apartment.

Continue reading "Celeste Holm's Family Feud Highlights Importance of New York Inheritance Planning " »

Reducing Family Infighting with Estate Plan

July 1, 2011,

One important goal of a New York estate plan is to provide a degree of certainty when it comes to family property issues. Each family is different. Deaths, marriages, divorces, children, and other events create various relationship dynamics within every family. Those relationships are often changing. When it comes to estate planning, each relative may have different expectations about how a loved one's property and affairs will be handled. A death is often a trigger point that allows those different expectations to create conflict. Some families have been ripped apart as a consequence.

An article yesterday in Home Town Life highlighted the inherent conflict that exists noting that, "family infighting happens across the board, whether it's a large estate, small estate, or even sometimes where there's no money involved." It is an issue of which all residents need be aware. No amount of planning can completely eliminate the chance of disagreement. However, a proper New York estate plan has the potential to drastically minimize the loose ends that will be left to loved ones. In this way, they have fewer issues to deal which could damage their relationships with one another.

Many residents fail to appreciate the possibility of infighting if they die without having conducted necessary planning. This risk exists even in families with no history of disagreement. Deaths are incredibly stressful times, and so the rules so often change after a passing. Thus, a proper estate plan is important to benefit those left behind. It offers welcome relief to those that matter at the time that they need it most.

Continue reading "Reducing Family Infighting with Estate Plan " »