New York Estate Planning Lawyer Blog

Estate planning attorneys frequently urge residents to be careful about creating long-term plans to avoid family feuding. Careful consideration of inheritances, open communication between families, and prudent use of tools like trusts are usually the best way to ensure that families are not torn apart after a passing.

Some seniors appreciate certain inherent conflicts within the family and work to counter those risks. However, many others assume that such feuding only affects "others" and their family members would never fall into arguments and ruin relationships over property or other end-of-life matters. The reality is that no one knows for sure how things might play out. Reactions to the loss of a relative often spur deep psychological impulses with emotions askew. That can spur problems for even the most stable families.

Estate Planning Murder Plot
The extreme lengths that some go in the heat of an inheritance feud were demonstrated in a sad case reported this week in The Chronicle. The bizarre case involved the Wolf family of two sisters and brother fighting over an inheritance. The feud began in 2006 following the death of the adult-children's parents. An estate valued at about $3 million was at stake.

Reports indicate that fighting broke out immediately as the children sought to maximize their inheritance. The brother, in particular, seemed willing to do anything to increase his share of the family fortune. All told, more than six different criminal charges were filed, several civil lawsuits were pursued, and hundreds of thousands of dollars in legal fees were racked up.

All of that peaked in 2010, when one of the sisters was seriously injured when out of nowhere a box of candy blew up in her face as she opened it. The box was filled with pieces of pipe,glass, tacks, and other explosives. The second sister was also targeted for murder. It was only later that the brother was connected to the plot. He apparently tried to hire a ex-convict to kill his sisters to secure as much of the inheritance as possible.

This week he was officially sentenced to life in prison for his actions.

In summarizing the case, an observer noted, "Just a tragic situation coming out of probate. People get so wrapped up in those things, they lose sight of what's important."

Few cases of probate feuding will end with an attempted murder conviction. However, far too many families will find relationships destroyed following disagreement spurred by the process. That is why it is critical for families to use trusts and other planning measure to avoid probate and pass on assets in a seamless process void of opportunity to spur fighting.

A recent Washington Post article discussed the lethal combination of family and finances. The author recounts how even the most close-knit families can be torn apart by disagreements about money matters. The article included one reader to wrote a letter offering an example of how his parent's will is causing tension and turmoil.

The letter was written by an adult son who was asked by his parents to assist with their estate planning. He was named executor and helped with locating financial documents. The son saw a copy of the will after it was completed, noting that it left assets to a few charities and then split the remaining estate between himself and his one sibling--a sister. This represents a pretty common situation, with families assuming that such a simple estate plan and division will not come with any disagreement.

But then a few years later the parents updated their will. Instead of splitting the assets between their two children, they decided to split it in thirds. Their two teenage grandchildren (from their daughter) will receive a third, and the two adult children will each receive a third. The son noted with shock that his share suddenly went from one half to one third.

The son noted that he is confused and frustrated by the development. As a gay man with a long-term partner, he does not intend to have children. He noted that he was financially secure, and so the frustration is not bore by a need for the inheritance. However, he can't help but feel penalized for his situation for no reason.

These sorts of tensions occur all the time. At times, the frustrated parties may not speak up when first learning about the situation, because they may not want to seem greedy or motivated by a desire to get a larger share. But the frustration can boil over after a passing, leading to will contests and permanent family drama.

There is no right or wrong answer to the decisions made in situations like the one described here. However, there are prudent steps that can be taken--no matter what the terms of the will--to lessen the chance of ruined relationships. For one thing, it may be worthwhile to bring in a neutral third party to manage the estate. Having a son act as executor in a situation where he feels resentful about the will is a recipe for disaster. Inviting a professional, perhaps an estate planning attorney, to handle the situation will ensure that even accusations of impropriety are nipped early on.

If you pass away without a will designating how you'd like your affairs to be handled, you are deemed to have died "intestate." Some of the most significant legal battles and family feuding occurs in those situation because it is essentially a free-for-all. Generic legal rules apply, but without any indication of how to handle property distribution and other matters, all interested parties may decide to pursue different legal avenues to maximize their own interests. Legal fights can still occur when a will exists (often referred to a "will contests"), but the possibility of one's wishes being completely upended are far lower when at least some documentation exists.

Interestingly, it is not uncommon for various documents purporting to explain one's wishes to pop up later on--in the midst of a legal dispute. For obvious reasons, these documents should be examined with much scrutiny, but they still may influence a legal case.

New Document in Lottery Winner's Estate Feud
For example, ABC News recently reported on a new document that was shared with the court in the well-known case involving a poisoned lottery winner. The estate battle gained national attention last year when a lottery winner died suddenly after being given cyanide. Authorities have yet to make any arrests, but various parties (including the man's wife and father-in-law) have been under suspicion for involvement in the matter.

The lottery winner (who also owned a small business) died intestate. Since his passing, various family members have been fighting over the remains of his estate. Most prominently the man's widow and his siblings have spent significant time in court in an attempt to argue why they should receive the bulk of his wealth.

Recently, the widow came forward claiming that she found a new document signed by her husband which purports to leave all of his assets to his wife. Mysteriously, the letter was signed only two months before his untimely death. The document was allegedly an "operating agreement" that was drafted with his business partner. The agreement was submitted to the probate court last week. The man's brother questioned the timing of the find and argued that it was illogical for the agreement to be signed only two months before his death, as if he had any idea that he would ultimately be murdered.

Adding to the complexity are the possible inheritance rights of the man's child from a previous marriage and allegations that the man did not legally marry the widow. Considering all of the complications, this situation is the prototypical example of lack of estate planning gone awry. Accusations of murder, blended families, feuding in-laws, newly discovered documents, and lottery winnings all combined without use of trusts or a will.

Feuding after a death has been common for centuries. However, observers point out that in recent years estate battles have actually grown and more frequent. The trend is noted for all families, both those with sizeable wealth and those of much smaller estates. It is a crucial reminder for residents to take action now to eliminate uncertainty and confusion and ensure in-fighting doesn't tear a family apart following a passing.

Last week the Telegraph published a story on the topic, pointing to data showing an uptick in legal battles over inheritance disputes. The most common explanation for the change is the recession which devastated many families over the past seven to eight years. One observer explained that in tough economic times, "more people are hoping to receive an inheritance and there can be a great deal of trouble if their hopes are disappointed. People are more litigious in general and more willing to assert their rights."

Undoubtedly, the recession acted as a spur, influencing some to start a legal fight in order to secure funds that they desperately needed and might assume are owed to them. However, money troubles aren't the only cause in the change. After all, financial incentives exist even in relatively prosperous times.

Alternatively, the increase in complex family structures may also be at the heart of the rise in will fights. In "traditional" families, there is more obvious expectations about an inheritance, with spouses and children receiving most or all of the property. However, with second marriages, adoptions, and other relationships, those rules do not fit. Without clear estate planning documents in place (wills and use of trusts), then the state is often set for future court battles.

Avoiding Probate Fights
Sadly, in their quest to secure what they believe is owed or protect an inheritance from another, many families find that an estate is exhausted to pay for the legal fight itself. In this way, laying out one's wishes clearly may not only ensure the right person receives the right inheritance but that there is any inheritance at all. Court costs, attorneys fees, and miscellaneous expenses in litigation is substantial, and most estates cannot afford to bear that expense.

All New Yorkers should be aware of this reality and act now to spare their family the cost and stress of a possible feud. Experienced professionals working on these matters can explain the many different options that exist to secure inheritance wishes and protect it against potential legal challenges.

Over the past few years more and more attention has been paid to the value of "digital" assets and the need to account for them in estate planning. Yet, for all the increased awareness, there is still a long way to go before all families properly plan for handing online access and property issues. A Private Wealth story recently highlighted one of the main problems: failing to provide others with access to crucial username and password details.

Extra Burden on the Family
Many of us have a myriad of usernames and passwords that we use to control our online lives. These include social media accounts (Facebook, Twitter, blogs), email addresses, online banking data, and more. Many families are plagued with administrative nightmares when a loved one dies without providing a way to access these accounts.

Those families who do not have access to digital assets are often faced with two options. On one hand they can try to guess the information, but this is often a frustrating and unsuccessful chore. On top of that, it may actually violate privacy laws.

Alternatively, the family can contact the service provider themselves (i.e Google, Yahoo, Facebook, Instagram, Blogger, Wordpress) and try to get them to provide access. Unfortunately, there is no uniform process by which these companies provide information. Their own "Terms of Service" vary significantly regarding what hoops have to be jumped through and what information will be released. After all, there are some who might want to keep information private, even after death, and so the companies are careful in what information they provide to others.

For this reason, it is important to think through exactly what you want to provide digital access to others and put plans in place to make the transition easy. This might including written information on those usernames and passwords with other testamentary documents. It could also mean using certain online tools (i.e. Legacy Locker) to safeguard the information and release it appropriately.

More Than Just Paperwork
Providing access to online accounts is about much more than allowing family members to close accounts and handle administrative details. It is also about providing them access to important assets that may have immense sentimental value. Photos, videos, blog entries, emails, and other correspondence may prove to be a critical heirloom that family members use to remember their loved one. For example, nowadays traditional photo albums are becoming obsolete and replaced with online albums. It is critical to ensure loved ones have access to things items.

For help with these and many other estate planning concerns in Manhattan, Albany, White Plains, and throughout the state, please contact our NY estate planning lawyers for help.

Estate planning is a personalized affair. While there are general rules and principles that apply in all cases, at the end of the day each plan is tailored for an individual's exact situation. A one-size-fits-all approach to this work is misguided and often leads to problems down the road. For one thing, there is a world of difference between planning for married couples and singles. Failing to take those differences into account may be problematic. A recent article provides a helpful background on which to discuss those issues.

Portability Now Permanent
For example, married couples are able to take advantage of an option known as "portability." Seemingly made permanent in the law thanks to the fiscal cliff compromise bill, portability refers to one spouse's ability to use to use the other's unused estate and gift tax exemption. Essentially, this allows a spouse to transfer up to $10.5 million tax free. In the past, bypass trusts were use in order to preserve exemptions. However, with this new law, those trusts may not be necessary for that exact tax-saving feature--though they still could prove useful for other purposes.

A few caveats on portability. First, as of right now, same sex couples do not receive this benefit. Even though these couples are afforded the same protections under New York law, the same is not true according to federal law. That all may change this summer when the United States Supreme Court hears arguments in a case challenging the constitutionality of the Defense of Marriage Act. However, until that time, same sex couples need to be mindful of how the rules affect them differently. More complex estate planning is still necessary to provide full protection.

Second, portability only applies to spouses who are U.S. citizens. If the surviving spouse is not a citizen, then that spouse cannot take advantage of their spouse's remaining exemption.

Third, it is critical not to assume that portability works automatically. It doesn't. Spouses who want to take advantage of this benefit must be proactive in their efforts. Specifically, an estate tax form must be filed after the first spouse's passing--even if no tax was due. This seem like a simple affair, but without proper professional help, it is easy to forget this step and lose the ability to apply the spouse's exemption later on. Literally millions of dollars may be lost in taxes by failing to file this simple tax form.

The Daily Jeffersonian published a story recently on the bizarre details of a case involving a lottery winner's apparent murder and the subsequent estate battle. Like the plot of a Hollywood crime drama, the tale includes a mysterious death, a series of hidden family feuds, and considerable money on the line. While quite dramatic, it is a vivid example of the difference that common sense estate planning can make in the aftermath of a death.

Money & Murder
The case centers of the estate of Urooj Khan who immigrated from India in 1989 and established several successful businesses. In 2010 he hit a jackpot and won a state lottery; his actual take-home from the winnings were about $425,000. According to reports, he planned on using the windfall to pay off his mortgage, expand his business, and donate a sizeable sum to a local children's hospital.

Unfortunately, his long-term planning was for naught. A few days before he was set to collect his winnings, after a dinner with family, he became very ill. He collapsed that night and ultimately passed away. It was only later that the strange circumstances of his death became known.

According to published reports, officials at first assumed the death was due to natural causes. However, when a relative came forward with suspicions, investigators looked closer. A toxicology report was authorized and a lethal amount of cyanide was found in his system. He had been murdered.

No Estate Planning
As you might expect, the murder of a middle-aged man just after he won the lottery led to immediate speculation about who could have been involved. Authorities have yet to arrest anyone for the crime or name suspects; the man's body is set to be exhumed, indicating that authorities are still working to collect evidence.

Money is the likely motive in the murder, and speculation is rampant about who may have played a role. For one thing, Khan apparently did not conduct any estate planning before his untimely death. No trusts exist to pass on assets seamlessly, and there is no will to indicate who he wanted to have his assets.

As often happens in these cases, a court battle ensued. Intestacy laws in the state suggest that the man's wife and daughter (from a different relationship) would split the assets. However, Khan's siblings have voiced concerns about the inheritance and have suggested that their brother's wife might not properly protect Khan's daughter's share of the money. Khan's ex-wife has also come forward claiming that she did not even know that Khan or her daughter was still in the country, as she assumed they had moved back to India.

Considering that Khan's wife is set to inherit, many have questioned whether she played a role in his passing. For example, reports indicate that Khan's wife previously claimed that she, her husband, her daughter, and her own father ate the same meal the night before his passing. However, the meal was lamb curry, which the wife would not have eaten on account of her vegetarianism. In addition, her own father has come under suspicion, as he owes over $124,000 in federal tax liens.

The saga truly has the makings of who-done-it murder mystery. One can only hope that authorities are able to get to the bottom of the situation to ensure justice and fairness.

Like the monster from a horror movie that will not stay still no matter what is thrown at it, there are already suggestions that the apparent "final" decisions related to the estate tax may not actually be all that final.

As we previously explained, as part of the fiscal cliff compromise bill certain estate tax issues were seemingly made permanent. The exemption level was kept at $5.12 million and indexed to inflation. The top rate was set at 40%. Both of these figures were less intrusive than that original proposals from the White House and far less severe than those mandated by the fiscal cliff itself. Many observers were happy with the outcome, no matter what their personal preferences, for the fact that it at least offered some stability. Having an uncertain tax rate is never a welcome prospect when planning for the future.

Also, as pointed out in a recent article discussed the estate tax components of the bill, the tax will continue to be "portable." This means that one spouse may use their deceased spouse's "unused" portion of the exemption level. This is a very helpful tool which allows more assets to pass tax-free without the need for more complex estate planning techniques.

Not Over?
However, that actual permanence of that estate tax situation is in doubt. For one thing, there is actually never any assurance that any current tax will remain indefinitely. That is because Congress always retains the ability to pass new legislation to alter things. In practical terms, "permanent" is usually used to refer to tax rates that have no sunset date (like the current one).

But there are already some concerns that the estate tax is not necessarily out of the woods. That is because this compromise bill does nothing about the possible spending cuts. Congress and the White House will again have yet another showdown in the coming months to hash out agreement over those cuts and possible need to raise the debt ceiling. Anytime that the parties are in negotiation over these large budget issues, virtually all taxes are theoretically on the table. That means that it is not out of the question that the estate tax rate or exemption level may be edited in some way as part of those future deals.

At the end of the day, none of this alters the inescapable fact that estate planning should be done now. As the last year has demonstrated explicitly, there will never be complete certainty about these issues. But planning by experienced professionals is able to adapt to those permanent uncertainties to provide the security you need.

Medical and technological breakthroughs in recent decades have impacted virtually every facet of life--estate planning is no exception. For example, many rules in the field hinge on definitions of legal heirs. In the past, it was pretty clear who those heirs were, typically biological or legally adopted children. When an indiviual dies intestate (without a will), then each state has specific default rules regarding what to do with the individual's assets. Often the biological or legally adopted children receive part or all of those assets.

But it doesn't end with inheritance rules. Many state and federal programs also use these definitions to make decisions about who qualifies for certain benefits. This includes the federal Social Security program. In many cases, when a parent dies, a family eligible for Social Security assistance for the minor children that remain following their parent's passing. In the past there as little confusion over when a child did or did not qualify for those survivor benefits.

No longer. As recent of improvements in medical research have changed reproductive technology, the line between when a child is considered an heir and when they are not is blurred. That is perhaps best evidenced by a new case that is slated to go before one state court.

In Mattison v. Commissioner of Social Security, the plaintiff in the case is a mother who gave birth to twin boys several years ago. She is seeking Social Security benefits for the children because her late-husband (and the twins biological father) died in 2001. In the past there would have been little controversy surrounding the case, as the boys would typically qualify for support. However, the unique aspect in this case is that the children were conceived after the father's death. The man had battled health problems for some time, and before his death he had his sperm frozen. It wasn't until a few days after his passing that his wife used the frozen sperm to conceive the children. This is unique, because while parents often die before their children are born (when they are in the womb), it is rare to have the children actually conceived after the death.

In a previous U.S. Supreme Court hearing, the high court ruled that the children were not automatically guaranteed the Social Security benefit. Instead, the Court determined that the specific definition of heir in each individual state determines whether the benefits accrue or not. In other words, it is a matter for the states to decide. As such, the case was returned to the state court where, according to a recent MLive article on the matter, a hearing is soon scheduled. However, those familiar with the situation argue that the state court is unlikely to rule in the woman's favor because the law as currently written requires conception before death to be deemed an heir.

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Questions Remain Regarding Rights of Posthumously Conceived Children

Planning for Your Digital Life After Death

Life insurance is an important piece of long-term financial security for local families. It is entirely reasonable for parents and family breadwinners to wish to provide some security to their loved ones in case the unthinkable happens. However, with money tight and uncertainty about financial security remaining, some are unsure about the benefits of life insurance. Those in the life insurance industry have argued recently that their market is shrinking and returns are dropping. To jump-start the industry, some are now turning to a new product to sell to more community members.

A recent story in "The Motley Fool" provides some context for the product that may or may not be a good fit for some local families. This unique insurance option is actually a prepaid life insurance policy. It has been called the "marvel of simplicity." The product, spearheaded by a unique collaboration between MetLife and retail giant WalMart, is essentially a short-term one year life insurance policy that provides up to $25,000 in coverage. These are not huge sums, but the idea is to open the insurance up to a much larger market. MetLife likely sought out the arrangment so that they could tap into Walmart's large consumer base while saving costs of middlemen broker fees.

Interstingly, this approach is not the first of its kind. In the past Canadian insurer Manulife offered life insurance products through the U.S.-based big retailer Costco. In addition, in the past Walmart has sold customer various financial products, even including things like mortgages.

The article argues that MetLife is engaging in this somewhat unique life insurance marketing tool as a way to bolster sales in a slagging market. This latest move seems targeted at the less affluent and perhaps less financially aware community members. Selling financial products to this base--like prepaid debit cards--has proved lucrative in the past, and so MetLife may see long-term benefit down the road.

But is this sort of very short time prepaid life insurance plan right for you?

It is impossible to make any specific pronouncements about the merit of these financial tools. However, it must be noted that these one-year agreements are far different than long-term plans that provided security well into the future. As always, it is critical to seek out the help of financial experts, estate planning lawyers, and others who can explain what issues to consider and how any financial move might affect long-term plans.

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Deal Reached in Estate vs. Museum Feud

Too Much Inheritance Too Soon

The New York Times published an fascinating story this week on a foreign court ruling that is a testament to the way that estate wishes sometimes have ripples effects for decades and generations into the future. Of course, it is critical to note that the legal rules underlying this case are far different than what a New York court might determine. However, the principles of needing to think about estate plans and personal property distribution for many years into the future still holds.

The Kakfa Papers Inheritance
Franz Kakfka, the well-known and incrediby influential author of the early 20th century, wrote a number of books, short stories, and letters in his shortened life. One of Kakfa's closest friends (and the executor of his estate) was the journalist Max Brod. Kafka died in 1924. When Mr. Brod fled from Europe in 1939 ( to avoid the Nazi invasion) he took with him a suitcase full of Kakfa papers. Mr. Brod died in 1968, leaving behind his own and Mr. Kafka's papers as an inheritance to his secretary, Esther Hoffe. Ms. Hoffe lived in Tel Aviv where she kept the incredibly valuable documents. In 1988 Ms. Hoffe sold the manuscript for a Kafka story, "The Trial" for $2 million. However, scholars have not been able to view the rest of the materials since the 1980s.

Ms. Hoffe herself died in 2007. Her daughter then inherited the papers. However, a legal fight soon ensued between the Israeli government and Ms. Hoffe's reclusive daughter. The daughter claimed that she is destitute and the papers were her only asset. The government contended that Mr. Brod did not actuallyy give the papers to Ms. Hoffe as a gift. Instead, they suggested that the secretary was simply given the papers in trust to be managed per his wishes. Mr. Brod's will did say, according to the latest court judgment, that "his archives" should go to a "public Jewish library or archive in Palestine." The story notes that the man was more specific later, suggesting that his documents should go to Hebrew University, where Israel's national library is located.

Recently, an Israeli judge found in favor of the government, rejecting the claim that the papers were a gift. Instead, the judge accepted with the trust argument and ordered that the materials be sent to Hebrew University. Tangentially there has been much disagreement between literary scholars as to whether the papers should be housed in Israel or Germany (where Kakfa lived most of his life). If the latest ruling is upheld then it is likely that the documents will all go to the Israeli national library.

Local residents might not have documents from well-known writers or thinkers. However, the same battles over personal property are not at all uncommon among family members. Many physical objects have immense value to certain individuals, and it is never prudent to leave out decision-making about where those items should go after one's passing. A full estate plan takes all obects into account so that there is little to no room for disagreement or feuding down the road.

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Deal Reached in Estate vs. Museum Feud

Too Much Inheritance Too Soon

Unfortunately, there is a tendancy to assume that so long as end-of-life affairs are reasonably spelled out, then everything will go as planned. The reality is that when making estate plans it is usually best to reiterate Murphy's Law: "Everything that can go wrong, will go wrong." It is only with that comprehensive planning, taking into account all possible scenarios, that true peace of mind is afforded. This need to be clear about taking into account all contingencies is even more prudent when larger estate are invovled. That is because money often brings out that most aggressive side of others. Even wishes that seem straight-forward might be complicated in the heat of a feud involving money or valuable proeprty.

The Kevorkian Example
Take, for example, a recent story on the estate of controversial doctor Jack Kevorkian. Shortly before the assisted-suicide proponent was to serve his stint in federal prison, he loaned at least 17 paintings to a museum. He ended up serving eight years before being paroled in 2007. He died about three years later at age 83. The executor of Kevorkian's estate explained that it was his wish for the paintings to be returned to his estate and used to supplement the inheritance for his neice.

However, following the doctor's passing, a dispute arose between the estate (managed by the executor) and the museum which had received the paintings. The museum argued that they owned the paintings. All of this led to a federal lawsuit being filed by the executor and a countersuit by the museum. Of course, one assumes that it was not the doctor's plan to have this situation delve into a legal mess.

Fortunately, according to a story this week in Detroit News, the two sides have finally reached a settlement which should end the legal cases. The majority of paintings (which in totality are estimated to be worth $2 million) will go back to the neice. However, four of the paintings will remain in the musuem. This resolution may not have been the doctor's exact wishes but, when estate planning is not as iron-clad as possible, the final resolution of these matters is often less than ideal.

The lesson: permanent gifts and temporary use of objects must be clearly spelled out in effecive, strong legal documents. Estate planning efforts must take all contingencies into account so that this sort of feuding it stamped out as early as possible.

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Court Battle Set to Begin in Fight Over Huguette Clark's Estate

Creating a Trust and Funding It Are Different

The importance of selecting a trustee to manage a trust or otherwise handle the affairs of an estate is hard to underestimate. There is a misconception that this task is always a "one-time" affair, with the individual (or individuals) taking care of various paperwork details after a death, and then being done. That is often not the case. Depending on the circumstances of one's estate planning, the role of a trustee or others involved in these matters can last for years--or even decades.

One situation where that is vividly displayed is with celebrity estates--or those with extensive intellectual property rights. For example, the Hollywood Reporter discussed a legal fight this week involving Madonna and the estate of Marlon Brando. The disagreement stems from royalties that the estate claims it is owed after Madonna used images of Marlon Brando during her concerts. The images are a staple of Madonna's performance of the song "Vogue" in which the lyrics include Brando's name.

According to the story, Madonna planned to pay $3,750 to the estate every time that the image was used (once per concert). This fee was the same paid to the estate of a few other celebrities mentioned in the act--James Dean, Greta Garbo, and more.

However, shortly before the start of her latest tour, there was a disagreement--the company managing the Brando estate allegedly wanted to increase the fee to $20,000. A lawsuit was filed by the company representing the singer's interests, seeking to clarify the issue. A breach of contract claims was made. In addition, the Brando estate is claiming that the actor's image was exploited in at least 90 previous concert performances without any royalties being paid.

As this one example emphasizes, certain estates will continue to make money even after one's passing. Celebrities are the obvious example, as many are paid for all uses of their image. But it is not just celebrities. Many pieces of intellectual property will continue to rake in income even after the original owner of the asset passes away. Patents, copyrights, and trademarks are not reserved only to famous singers, actors, and athletes. Many community members have the same underlying issues to deal with when conducting their long-planning.

For example, many business owners may own a stake in certain programs or technologies that are used by others. Perhaps they receive a royalty or licensing fee each time that asset is used by another. In those cases, the estate's value will continue to increase even after one's death. In may not be as simple as divvying everything up and moving on. Long-term management may be necessary. These details must be considered when meeting with lawyers and accountants to discuss these issues.

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It May Not Be As Simple As Updating a Will

Broken Estate Plans May Need to be Fixed

It is a common TV and fiction fantasy: your life changes in the blink of an eye when you discover that you've inherited a fortune from an unknown relative who passed away. While the dream is far-fetched and rarely based on true-life, it is not entirely without precedent. Every once in awhile a story breaks involving an individual who inherits a significant sum of money due to state intestacy rules from someone to which they were related but did not really know.

Latest Case
For example, the Las Vegas Sun reported this week on the latest developments in a case where a substitute teacher found, to her surprise, that she was slated to inherit upwards of $10 million from a distance relative.

According to the story, a reclusive Carson City man died earlier this year. He had few friends, and even though he died in May in his home, his body was not discovered until the following month. After his passing work was done to clean out his home. The man only had $200 in his bank account. However, during the cleaning the workers discovered something quite remarkable--a huge collection of very valuable gold coins. Much of the gold was minted in different places across the world--and some were quite old. There was so much gold that it had to be hauled out in wheelbarrows. It is likely worth between $7 million to $10 million.

The man had no will and no known relatives. It was only after the county clerk's office examined records from the funeral of the man's mother (who died in 1992) that a distant first cousin was found. The cousin knew the man, but had not communicated with him in quite some time. And she had no idea that he was hoarding gold.

This week a district court authorized experts to confirm that the substitute teacher is in fact the closest relative and correct beneficiary under state intestacy succession rules. The International Genealogical Society is slated to take about 30 days to complete the search. In addition, a local expert was retained to determine the exact value of the coins. That value will affect the taxes ultimately owed on the inheritance.

While this story might give hope to those holding out for an unexpected windfall, the reality is that these events are few and far between. That is because the vast majority of individuals who have any amount of wealth--even just a house--are prudent in planning so that they know where their assets are going after they are gone. Many do not do as much as they can--like utilize trusts--but most either create a will or have relatives who they know will inherit (often children).

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Should You Take Advantage of Tax Situation Now?

Protecting Assets When Facing Uncertainty

When an individual uses only a will (instead of a trust) and does not have professional advice, there is a greater chance that the intended beneficiaries will not receive the property that the testator (the person who creates a will) wanted them to receive. For one thing, the will itself may not be executed properly. At other times, the beneficiary may pass away before the testator's death without the will being updated. At still other times there may be unique complications with the ability to give in certain ways. Take, for example, political gifts.

Leaving Money to a Political Party in a NYC Will
Many community members have strong attachments to a political party and may want to leave part of their estate to that party. However, this presents some complications, because there are special rules--campaign finance laws--that often apply to what gifts can be given to these parties (or candidates). It is crucial to take those rules into account. Otherwise, the final decision is left up to the court, with extreme uncertainty as to where the money will actually go.

This issue made headlines this week after a lawsuit was filed by the Libertarian Party National Committee.

Libertarian Party Lawsuit
As summarized by Ballot Access News, The Libertarian Party National Committee sued the Federal Election Commission (FEC) over the FEC's refusal to give the party a bequest. The testator died in 2007, leaving over $217,000 to the party. However, this presented a challenge, because there are laws which limit the amount of money anyone can give to a party in a single year. In particular, the FEC determined that the party can only receive $30,000 per year--and so the party was forced to wait year after year to receive all of the funds.

The FEC claims that any holding which allows the deceased individual to pass on property beyond the campaign limit would circumnavigate the law. The Commission argues that the wealthy may try to curry favor unfairly by promising to leave large bequests.

The legal battle has been waging for over a year, in part because of jurisdictional issues. It is unclear if the case should be heard by an en banc U.S. Appeals Court panel (all judges on the court) or a single U.S. District Court judge. The federal campaign law at issue suggests that the appropriate court depends on whether the issue at hand is "substantial."

Whatever the court decides, it is essential to have professional advice with these issues ahead of time from a NY estate planning lawyer so that there is increased certainty that your property will go exactly where you want it to after your passing.

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