New York Estate Planning Lawyer Blog

This week Forbes published an article that outlines the basics of how to fund an estate plan for spouses. The story is a helpful reiteration of many of the basic issues that are common for all New York couples thinking about their future and trying to create security no matter what the future holds.

Helpfully, the story explains how estate planning is not the creation of a stack of legal documents that are signed and then stored until needed. Instead, the process is far more comprehensive and involves examination of all of one's assets, wishes, legacy interests, elder care goals, and more.

As a general matter, on the estate planning side, one of the main goals is avoiding probate at all costs. That means that something like a last will and testament is inefficient. Instead, for most New York couples it is best to create a series of revocable living trusts which are far superior, allowing property to be protected and passed to others without the need for court intervention. After the trust is created spouses transfer property directly into the trust.

What goes into the trust?

Virtually everything. This includes real property (like a house), bank accounts, mutual fund accounts, stocks and bonds, and even business interests.

But it is not necessarily as simple as moving everything you own into a trust. For example, the article discusses how couples may not want to move rental property into the trusts directly. Instead for liability purposes it is usually best for rental properties or other investment real property assets to first be conveyed to a limited liability business entity. The interest in that entity should then be transferred to the individual couple's trust.

Other items may not be transferred to a trust, like life insurance policies and retirement plan accounts. That is because these items already pass automatically outside of probate. Yet, it is critical that beneficiary designations are properly identified and updated down the road if necessary. Contingency beneficiaries should also be named as an extra precaution in case the primary beneficiary is unable to take the assets.

Depending on the specifics of these assets, there may be some added complexity. For example, figuring out how to divide and transfer business assets may be tricky. In addition, when transfers involving a business different tax implications need to be consider, including those related to valuation discounts.

For help on any number of elder law estate planning issues in New York, please contact our attorneys today.

Most lists of "common estate planning mistakes" include the frequent error of failure to properly update beneficiary designations. Yet, even that mistake is deceiving, because updating is just one thing to consider with these designations. Even if the names are evaluated on a consistent basis, it is still important to ensure that the person named as the beneficiary fits in with other aspects of an overall estate plan.

Fox Business recently published a story listing ten different ways that life insurance beneficiary designation decisions are made in error. The story is worth browsing to get a feel for some common issues.

For example, it is critical to name someone who can actually receive the funds. Parents may name their minor child as the beneficiary, but the insurance company will not dispense funds directly to a child. Without a trust or similar arrangements, then this designation will cause problems. A guardian must be appointed, leading to costly and timely court proceedings being necessary.

Similarly, if proceeds may go to a relative with special needs, careful consideration must be given to how the benefit will affect government support. While it may seem counter-intuitive, giving money to a child with special needs may cause more harm than good, disqualifying them from support, like Supplemental Security Income. This is a textbook example of why the designation needs to be considered only in light of an entire estate plan.

Besides the effect on government program eligibility, taxes must also be weighed when making designation decisions. Life insurance is usually tax-free, but not always. For example, if the policy owner, insured party, and beneficiary are three different people, then gift taxes may be implicated. This occurs when a parent takes out a policy on another parent with the child named as beneficiary,.

Another common error is failing to be specific. For example, it is one thing to say that you want the policy to pay out to your children. But what happens if one child is not around, should their share go to their own children (grandkids) or be added to the surviving children's share? Also, who would count as a child? Are step-children included? Failing to be as specific as possible in these matters often results in confusion and legal challenges down the road.

Simply updating a designation and naming anyone is not the best way to handle these matters. Be sure that the designation does not cause more issues than it solves by fully integrating it with your other legal estate planning documents. A professional can provide tailored advice on these decisions.

The New York City Bar Association's "Committee on Animal Law" recently released a helpful report on the many different legal issues to consider regarding the care of your pet in an uncertain future. The document offers a comprehensive examination of a wide range of issues which many fail to consider. It is worthwhile to review the whole thing if you are interested in some of the more detailed aspects of estate planning with pets in mind. A free .pdf copy of the report can be viewed online here.

The sad reality is that most pet owners give only cursory thought to what might happen to their furry friend in the event of a death or hospitalization. In most cases the extent of the planning is when an elderly individual or one with a serious illness considers another person to take ownership. Obviously that is a good first step, but it is important to ensure those wishes are actually guaranteed via legal documents. Also, identifying a new owner is just the beginning of effective planning for pets.

For example, many problems arise in the time period between an owner's death and the admission of a Will to probate. Even if a Will includes specifics about new ownership and the providing of provisions, the intermediary time may be left open. This can cause serious problems, which provide immense stress on the animal as well as those working to handle affairs in the aftermath of the passing. Similarly, the provisions of a Will are of little use if an owner is hospitalized and alternative pet care needs to be arranged.

Solving these issues is not necessarily straightforward, and there is not a one-size-fits-all solution. The NYC Bar report, however, provides a helpful list of options to fill these estate planning gaps and ensure your pet's care is not compromised. For example, the journal explores the ways to use shelters or charitable organizations if friends/relatives are not available. It also discusses the need for emergency instructions to provide short-term care in the event of hospitalization or illness.

The bottom line: There is much more to planning for one's pets than talking to a friend casually or even including certain provisions in a Will. A more comprehensive plan may bring more peace of mind to many NY residents.

For assistance with any number of estate planning concerns in New York City or throughout the state, please contact our legal team today.

Earlier this month we discussed the unique estate issues connected to the murder of a wealthy investor named Raveesh Kumra. Mr. Kumra was murdered during a robbery late last year. It has since been learned that the suspects include several men with connections to alleged prostitutes with whom Kumra apparently was connected. It is a tragic situations all the way around, and the man's family was understandably blindsided by the situation.

Making matters worse, a significant battle over Kumra's estate has been waged by various parties since the death. It is an example of the unique court challenges that often result when comprehensive estate planning is not conducted and all possible issues are not analyzed as part of that plan.

Out-of-Wedlock Children
As discussed in a new Mercury News story, the main estate issue centers on other women whom Mr. Kumra apparently had relationships, including the possibility of various children born from those relationships. Earlier this year a court already ordered that two children alleged to have been fathered by Kumra were entitled to a monthly allowance from the estate. A judge ordered several thousand dollars to be paid to those children per month until the remaining estate issues were decided.

The man's ex-wife (with whom he he still lived at the time of his death) and his two adult children from that marriage have refused to acknowledge that those other children are related. They refused a paternity test, but the court in the case found that paternity existed anyway from other evidence.

Now, the family has voiced concerns that they fear other women may come forward with similar claims. They are challenging the validity of the claims, but suggest that the mere possibility of gaining funds may allow the estate to be "fleeced" by false claims. One family member argued, "We are also hearing that there are other women waiting in the wings so they can claim the same thing. So we're very concerned about the larger plot at hand to defraud the estate."

All of this is on top of the fact that the same judge is still deliberating to determine if the other two children should inherit an equal share of the estate with the children born to his ex-wife.

The lesson: Even if it is impossible prevent all claims on an estate, taking account of the most likely legal challenges is crucial. Also, using more sophisticated tools, like trusts, that pass on assets automatically, outside of the court, ensure that the intended beneficiaries are forced to jump through far fewer hoops before finalizing the property transfers and ending the matter.

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.

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.

One common excuse for putting off basic estate planning is the assumption that others--spouse, children, siblings, close friends--already know exactly what you want, and so there is little need to go through the legal hoops to solidify it. Sadly, in the aftermath of a passing, there is no way to know exactly what those in control of a situation might do unless there is legal backing to it. That obviously applies with distribution of property, but it also applies to more ceremonial aspects to a passing, like funeral and burial wishes.

Don't Leave it to Chance
For many, their faith dictates how they chose to have their passing honored (or not honored). From deciding what to do with remains or where to be buried, it is critical that desires be set forth clearly. It is a mistake to underestimate the significance of these details or the in-fighting that may bubble up where there is disagreement about how to handle these matters.

To illustrate the significance of burial decisions, one need look no further than the morning newspapers where disagreement is brewing over what to do with the remains of former English King, Richard III. In a scene that seemed pulled from pop fiction, the remains of RIchard III--immortalized as villain by Shakespeare--were recently found buried beneath a parking lot.

The unceremonious burial took place over 500 years ago and no one alive today has any personal connection to the former king. However, that has not stopped a feud from brewing over where the monarch's final resting place should actually be, as recently highlighted in a Times story. Initially, the town where the bones were found--Leicester--took steps to bury the king in the city's cathedral.

However, the nearby city of York is objecting. Representatives for the town argue that York was Richard's home town (he was once known as Richard of York), and that his connection to the city is far more important than where his bones were found. Historians note that he was buried in Liecester only because he died in a battle nearby.

Others are arguing that, wherever he be laid to rest, it should be in a cathedral used by Catholics. Catholicism was the national faith during Richard's time. However, not long after his passing Henry VIII broke ranks and created the Church of England. Many cathedrals formerly used by Catholics were converted to the Anglican faith.Consequently, some observers are arguing that it would be inappropriate to interr the former king in a cathedral used by a faith that was, presumably, not his own.

It remains unclear how the matter will ultimately be resolved. Both the town of Liecester and York have asked the royal family for support, and each are circulated petitions to influence the decision. Even then, it is unclear exactly where the bones will lie, even after the city is chosen.

Obviously, the remains of a former king of England half who died half a millenia ago presents a somewhat unique case. But the same emotions that are tied up in this battle for burial rights applies to similar decisions today. It is critical to contact a NY estate planning attorney to ensure your wishes are not up for dispute.

Drafting a will can be a delicate process, because various legal requirements must be met before the document will have any legal effect. Cases abound of wills which were thrown out because they did not conform to the technical requirements. Ensuring that everything will be done pursuant to legal rules is one key reason to have the aid of an estate planning attorney.

Beyond that, when planning professionals are not involved in these matters, there is a far greater chance that fraudulent and illegal practices might be undertaken. When money is on the line, sometimes the worst characteristics in everyone seeps out. For one thing, it is not uncommon for entire wills to be forged, and when outside observers to the planning are few and far between, those forgeries sometimes even work.

Forged Will
Recently, RTE News published a story of this nature, as several men stand accused of trying to create fake papers following the passing of an 82-year old farmer. It is a cautionary tale, and an important reminder not to leaves loose ends when it comes to ensuring your inheritance wishes are locked in.

The man in this case died over fourteen years ago, on Christmas Day in 1998. At the time of his passing he owned 162 acres of land, property, and assets in various accounts. When he died a Last Will and Testament was produced which suggested that the man left everything that he owned to a distant relative. The will was allegedly signed about four month before the man's passing. The executors of the will happened to be the distant relative's best friend and the friend's brother.

Little did the authorities know at the time, but the will was apparently a fake--forged via agreement between the distant relative and two executors.

The crimes were only uncovered years later when one of the executors, for reasons that are not clear, felt guilty and confessed his crimes to local authorities. He explained how the distant relative was the instigator, convincing the other two men to participate with promises to pay money.

The three men involved in this case will face jail time and significant fines. However, it is impossible to know how many similar crimes are committed every year that never result in accountability. It is important for New York families to act prudently to forestall any chance of another using their passing as an opportunity to become unjustly enriched. You cannot speak for yourself after you are gone, so it is vital to ensure your voice is heard loud and clear via preparations made early on.

Timing is of critical importance with estate planning matters. Obviously, a plan must be in place early enough to be of use before one falls ill or suffers from mental issues. For example, creating a will or trust may be impossible after one suffers a stroke or succumbs to serious effects of Alzheimers. This is why we continue to encourage residents to make plans early and consistently update them.

Time also factors into matters after a death. Many beneficiaries may face hardship if they are forced to wait months (or even years) to have an estate settled. One of the key benefits of an inheritance plan is to minimize the risk of a long delay between the actual passing on of assets, often focused on avoiding probate and preventing feuding.

Celebrity Example
The latest developments in the estate battle of Huguette Clark offers an example of the consequences of a drawn-out legal battle. Ms. Clark was the reclusive daughter of Guilded Age baron Senator William Andrews Clark. He amassed a fortune in the copper and railroad industries and is known as the founder of the city of Las Vegas. An intensely private individual, Huguette spent the last three and a half decades in Manhattan hospitals, even though she was not actually ill. In the several decades before that she rarely left her Fifth Avenue apartment.

Ms. Clark died over a year and a half ago, in May of 2011. However, her assets--valued between $300 and $400 million--have yet to be distributed. That is because a dispute arose between the woman's extended family and others close to her. Two wills were apparently found, signed by the heiress six weeks apart. The first will gave most of the fortune to her extended family while the most recent will left them nothing. The extended family contested the second will, as they have concerns about the undue influence her network of nurses and doctors may have had over the elderly woman. There are claims of coercion related to gifts totaling tens of millions of dollars that were given to some of those individuals.

The legal battle is still unresolved. However, according to a Huffington Post story from this week, one of the potential heirs recently died. A 60-year old great nephew of the heiress was found last week under a bridge in Wyoming. The man was apparently homeless and died as a result of exposure to the elements on the cold winter's night. Had he survived he may have stood to gain nearly $20 million as a result of the inheritance. His cut of the inheritance will now go to his other relatives.

The case is a sad reminder of the many ancillary consequences of not having detailed estate plans in place to handle matters as efficiently as possible.

One of the many goals of proper estate planning is to prevent family feuding. This is obviously to ensure that the worry, stress, and cost of these legal battles is avoided. But on top of that, done right, avoiding costly disputes saves an immense amount of time. It is well known that the legal system often does not act swiftly. It is important not to underestimate the simple benefit of having property matter resolved right away after a passing, instead of making surviving loved ones wait months or even years--preventing them from obtaining necessary funds and moving on with their lives.

The prolonged nature of the resolution exists anytime there is no estate planning (probate takes time). But the delay is especially pronounced where there is feuding and legal battles are fought.

For example, the Patch recently reported on a delay in a hearing for one high-profile estate fight over the property of painter Thomas Kinkade. We have previously blogged about the legal fight between Kinkade's estranged wife, four children, and live-in girlfriend. The girlfriend has produced two handwritten wills which seem to leave Kinkade's house to her while establishing a museum. The wife and children contest the wills.

Yet, before even getting to the legal challenge on the authenticity of the wills, ancillary arguments have broken out on the need for the girlfriend to pay rent on the home--she is currently living in it. The sides have disputed the living situation and argued about the safety of the belonging within the home valued at millions. Thus far the wife and children have had no access to that property, even though Kinkade died nearly nine months ago. A hearing was schedule to resolve the personal property matter earlier this month. However, that was postponed until this week.

Even then, once the personal property issue is resolved, that won't end the matter as it still does not resolve the merit of the holographic wills. The fate of the home and the rest of the estate (valued at over $60 million) remains undecided.

The take-away lesson is a reminder of the fact that disputes often drag out for years. Beyond avoiding the stress and uncertainty of a legal battle, proper estate planning also ensures timeliness. No matter how complex one's situation, there is nothing to gain from leaving matters in such a mess that survivors are forced to wait years before having things resolved. Be sure to avoid this in your own situation by visiting a legal professional as soon as possible.

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Confusion, Disagreement Regarding Thomas Kinkade's Wishes

The heirs of art dealer Illena Sonnabend faced a very unique problem after the woman's death in 2007. One the most valuable pieces of her estate was a work by Robert Rauschenbeg known as "Canyon." The 1959 piece of art is a collage that include various three dimensional materials, including a stuffed bald eagle. Canyon would prove to be a sticking point in the heir's attempt to settle the estate--a process which ultimately dragged on for five years.

Taxes Always Due
For estate tax purposes, the value of artwork in an estate is appraised and the tax is owed based on the total appraisal value. Sonnabend's estate had a significant number of pieces and the artwork taken together was valued at over $1 billion. According to a Wall Street Journal story on the case, this led to an estate tax bill of about $471 million. The two heirs to the estate sold about $600 million of the artwork to pay for that bill.

However, the Canyon piece was a different story. Because the work featured a stuffed bald eagle, it could not be sold under U.S. law. That is because the 1940 Bald and Golden Eagle Protection Act as well as the 1918 Migratory Bird Treaty Act prohibited sale of the items. Since Canyon could not be sold, the three appraisers for the estate gave the artwork a value of zero for estate tax purposes.

But the IRS disagreed.

The IRS sent the family a report valuing the artwork at $15 million-even though it couldn't be sold for $5, let alone $15 million. The family rejected the IRS valuation. This drew the ire of the government tax collectors who responded by re-appraising the art as worth $65 million. On top of that, they claimed that the intial appraisal by the family of zero dollars triggered an "undervaluation penalty" of 40%. All told, the family was being asked to pay $40.4 million in taxes on an object that they could not make a dime from selling.

Few Options
Confused logic aside, the family had few options. Eventually, they chose to donate the piece to the New York Museum of Modern Art. This allowed them get around having to pay the hefty estate tax--charitable donations (like inheritances to spouses) generally fall outside the purview of the estate tax. Unfortuantely, however, the family was unable to use the gift for charitable deduction purposes as happens in most cases. That is because, even though the gift was made to get around estate taxes, at the end of the day it still had no value because it could not be sold.

This bizarre case is a testament to the lengths that the IRS may go to collect what it deems it is owed, even when logic suggests otherwise. It's a reminder that local residents should never try to plan for these details or handle long-term financial affairs without experienced professional assistance.

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Forbes Estate Tax Article Catches Fire on Social Media

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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