Articles Posted in Estate Planning

The Securities and Exchange Commission (SEC) released a statement last week announcing a multi-year targeted review of investment advisors and broker dealers’ retirement planning sales practices. This review serves to fulfill the promise that the SEC made to protect retirement savers and protect them against predatory sales practices that could do more harm than good to workers that have been saving up for retirement for decades.

Purpose of the Review

Now more than ever, many people saving for retirement are dependent on their investments for retirement income. Because this industry is incredibly complex and ever-changing, it is important to have an advisor explain and manage your retirement accounts. However, the complexity of the industry also allows for some advisors to take advantage of the system and invest retirees’ money for their own best interests, and not their clients’. This is where the SEC plans to step in.

The Supreme Court of South Dakota recently ruled on whether an estate should be probated intestate despite the existence of a copy of a will. This case is interesting because unlike most cases of lost wills, in this instance the spouse of the deceased wanted the copy revoked and the estate probated as if a will never existed, and relatives wanted the copy of will to stand on its own.

Facts of the Case

In the case In re Estate of Deutsch, Delbert Deutsch died on August 23, 2012. After an exhaustive search, his wife Marcelina found a copy of his 2001 will but could not locate the original. Despite finding the copy, Mrs. Deutsch petitioned the probate court to rule that the estate was intestate and apply the state laws regarding inheritance of an intestate estate.

The daughter of the late iconic radio DJ, Casey Kasem, is fighting for new guardianship laws that would prevent future instances of elder abuse and neglect similar to what her father endured in his final days. Kerri Kasem has gone on record as saying that she feels like her father’s death could have been prevented if she and her siblings were able to see their father and better monitor his care. Unfortunately, at the time that they needed it there was no law in place to help.

Case of Casey Kasem

When Casey Kasem’s health deteriorated, his current wife and stepmother to his adult children decided to move him from the assisted living facility where he was being cared for to an undisclosed location. When his children finally got the court to compel her to release his location, he was found on an Indian reservation in poor health. He was suffering from bed sores, a urinary tract infection, and sepsis.

The Supreme Court of North Dakota recently ruled on the issue of a fiduciary self-dealing when he was one of the heirs inheriting from an estate. The case highlights the importance of creating clear boundaries when delineating responsibilities of an estate as well as ensuring that all of the proper documents are processed in any type of real property or estate dealings.

Facts of the Case

In the case of Broten v. Broten, James Broten, Louise Broten, and Linda Shuler were all children of Olaf and Helen Broten. The parents owned around 480 acres of farmland, and in 1979 they executed a quitclaim deed that gave Olaf Broten sole ownership in the real estate. He then entered into a contract for deed with his son, James, agreeing to convey the farmland for $200,000 plus six percent interest paid through 2006. The contract was prepared by James’ attorney but never recorded. At the same time, the parents executed a will that placed the farmland in trust, with the mother receiving income for life, and the principal to be distributed to the children equally upon her death.

A California Court of Appeals recent ruling may provide a way to fund a revocable trust that could provide for easy probate avoidance. Although this case applies specifically to California law, it does also give a template for other states to apply a similar probate avoidance technique for the revocable trusts under their law. By using broad conveyance language in a trust instrument to avoid probate on the trust settlor’s assets, this process can work even if trust funding process was not set up perfectly.

Facts of the Case

In the case of Ukkestad v. RBS Asset Finance, Inc., Larry Mabee executed a trust in December 2012 and died about two weeks later. He had appointed himself as trustee and also enacted a will that which contains a pour-over provision that gave the residue of the estate to the trustees of the trust. At the time of his death, Mr. Mabee owned two parcels of real estate that were titled in his own name.

One common estate planning tool for people entering retirement is the use of an annuity for their retirement funds; however, recently a product has emerged on the scene. A retirement spending account has now become an alternative to an annuity by controlling the amount of distributions and simultaneously providing a degree of control over the retirement funds. It is a new way for people to continue to save in retirement while also controlling the amount that they spend.

What is a Retirement Spending Account?

The purpose of a retirement spending account is to combine the benefits of both an annuity and savings account while also minimizing the disadvantages of both. It seeks to resolve the issue of not outliving your retirement savings while not constricting a person’s power over their own money like in an annuity. A retirement spending account is a fund that is managed by an asset management firm. The firm invests the retirement money, manages the account, and provides the retiree with a monthly distribution.

The Supreme Court of Connecticut recently ruled on a case involving a statutory share of an estate. Every state has laws regarding how much of an estate must be given to close family members, which is known as the statutory share. A person must petition for a statutory share of an estate when their spouse, child, parent, or other loved one leaves them nothing in the estate either through the will or by dying intestate.

Facts of the Case

In the case of Dinan v. Patten, et al, Althea Dinan was married to Albert Garofalo. He passed away in 2000 and left behind a will for his estate. The will left everything to his daughter, Anne Patten, and her three children Nicole, Aaron, and Alexis while leaving nothing for Ms. Dinan. After his death, Ms. Dinan petitioned the court for her statutory share of the estate pursuant to Connecticut law. In 2008, after years of being unable to agree upon the proper amount of her share, the executor of the estate asked the court to render a ruling on the issue.

The Supreme Court of Virginia recently ruled on a case involving the question of whether a copy of a will passed muster for probate. Typically, the law provides that the original will must be submitted in order to probate an estate, but exceptions to the rule do exist. The case highlights the importance of keeping an original will as well as what must be proven in order to have a copy allowed for probate.

Facts of the Case

In the case of Edmonds v. Edmonds, et al, James Edmonds passed away in 2013 and left behind his wife, Elizabeth Edmonds, daughter Kelly, and Christopher, a son from a previous relationship. It is undisputed that in 2002, Mr. Edmonds executed a will that left all of his personal property to his wife and the remainder to a revocable living trust. The will stated that if Elizabeth passed away first, the property would go to Kelly and specifically stated that Christopher was omitted from the estate.

A few decades ago, one of the most popular estate planning tools was the irrevocable trust. The assets in this type of trust pass along to the beneficiaries free from estate taxes; however, once the trust is created the settlor of the trust no longer has control. As such, the trust is considered irrevocable even if life changes and other events make the initial purposes of the trust less effective. Thankfully, there are now options available for the creator of an irrevocable trust to amend the provisions without the need for court involvement.

Reasons for Amending an Irrevocable Trust

There are many reasons why the creator of an irrevocable trust would want to amend the initial provisions of the instrument. The settlor may wish to amend the beneficiaries if death, divorce, or other situations arise that would affect who would inherit the assets. In addition, state laws may change over time that would make the trust more effective if it was administered in a different state. Finally, some settlors simply do not like the original provisions of the trust because it does not suit the purposes of the settlor any longer or the trustee is no longer fulfilling the responsibilities of the role.