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What if a beneficiary is not a citizen?
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What if a beneficiary is not a citizen?

When a person dies without a will, the distribution of his or her estate assets is governed by the state’s intestacy statute and the question is what if a beneficiary is not a citizen. All states have laws that instruct the court on how to disburse the intestate decedent’s property, usually according to how close in relationship they are to the person who passed away.

A recent nj.com article responded to the following question: “My ex’s new wife isn’t a citizen. Does she get an inheritance?” The article explains that under the intestacy laws of New Jersey, for example, if the deceased had children who aren’t the children of the surviving spouse, the surviving spouse is entitled to the first 25% of the estate but not less than $50,000 nor more than $200,000, plus one-half of the balance of the estate.

Also, under New Jersey law, aliens or those who are not citizens of the United States are eligible to inherit assets.

In California, if you die with children but no spouse, the children inherit everything. If you have a spouse but no children, parents, siblings, or nieces or nephews, the spouse inherits everything. If you have parents but no children, spouse, or siblings, your parents inherit everything. If you have siblings but no children, spouse, or parents, those siblings inherit everything.

Also in California, if you’re married and you die without a will, what property your spouse will receive, is based in part on how the two of you owned your property. Was it separate property or community property? California is a community property state, so your spouse will inherit your half of the community property.

In that case, an ex-husband’s wife who lives in and is a citizen of the Philippines doesn’t need to be physically present in the state to inherit assets from her husband.

If the deceased owned property in the Philippines, the distribution of those assets would be according to the laws of that country.

Reference: nj.com (August 28, 2019) “My ex’s new wife isn’t a citizen. Does she get an inheritance?”

 

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What Are My Estate Planning Checklist?

Many people think that having an estate plan just means drafting a will or a trust. However, there’s much more to include in your estate planning checklist to be sure all of your assets are transferred directly to your heirs at your death. A successful estate plan also includes provisions allowing your family members to access or control your assets, if you become incapacitated.

Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides us with a list of items every estate planning checklist should include:

  • A will and/or a trust;
  • Powers of attorney;
  • Beneficiary designations;
  • A letter of intent; and
  • Guardianship designations.

In addition to these documents and designations, a thorough estate plan also should consider the purchase of insurance, like long-term care insurance, a lifetime annuity to generate some level of income until death and life insurance to pass money to beneficiaries without probate.

Let’s look at each item on this estate planning checklist to make sure you haven’t left any decisions to chance.

Wills and Trusts. A will or trust should be one of the primary parts of your estate plan, even if you don’t have a lot of assets. Wills make certain that your assets are distributed according to your instructions. Some trusts also help limit estate taxes or legal challenges. Talk to an experienced estate planning attorney about wills and trusts.

Power Of Attorney. A durable power of attorney (POA) allows an agent or a person you assign to act on your behalf, if you’re unable to do so yourself. A healthcare power of attorney (HCPA) designates another person to make critical healthcare decisions on your behalf in the event of incapacity.

Beneficiary Designations. Some of your assets will pass to your heirs without being mentioned in your will, such as 401(k) plan assets. Therefore, maintain a beneficiary and a contingent beneficiary on these types of accounts. Likewise, insurance plans should have a beneficiary and a contingent beneficiary, because they also pass outside of a will. Your beneficiaries should be over 21 and mentally competent.

Letter of Intent. This is simply a document for your executor or a beneficiary to define what you want done with a particular asset after your death or incapacitation. Some letters of intent also contain funeral details and other special requests. A letter of intent isn’t legally binding. It helps inform a probate judge of your intentions and may help in the distribution of your assets, if the will is declared invalid for some reason.

Guardians. If you have minor children or are considering having kids, naming a guardian is very important. Be sure the person(s) shares your views, is financially sound and willing to raise your children. You should also name a backup or contingent guardian.

Without these designations, a court could order your children to live with a family member you wouldn’t have selected, or in some instances, the court could instruct that your children become wards of the state.

A will is a great place to start, but it’s only the starting point follow your estate planning checklist.

Reference: Investopedia (July 16, 2019) “6 Estate Planning Must-Haves”

 

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Can Charles Manson’s Heirs Get Profits from the manson killing?

The Quentin Tarantino movie, starring Brad Pitt, Leonard DiCaprio, and Margot Robbie, features the Manson killings and ends with a shocking bloodbath 50 years after the grisly murders.

Wealth Advisor’s recent article, “Charles Manson’s grandson can profit off of Once Upon a Time…In Hollywood,” also notes that the movie prominently features a song called “Look at Your Game, Girl,” written by aspiring songwriter Charles Manson before his followers’ murderous spree. The tune is sung a cappella by girls in Manson’s ‘family,’ as they walk through Los Angeles and forage for food.

Tarantino said that he only used Manson’s music, after assuring himself that his family wouldn’t benefit, and that royalties and licensing fees would go to the victims’ families. However, since the movie was released, controversy has exploded and a DailyMail.com investigation has discovered the issue around Manson’s music is far more complicated and likely to wind up in court.

“Quentin told friends that he struggled with the decision to use Manson’s music, and only agreed to use it after being assured that any money from its use would go to the victims’ families,” a movie insider told DailyMail.com

Mary Ramos, music supervisor on the film, agreed, noting “Even considering using that, we wanted to find out … what happens if this is used, where the money goes. And there was a trust set up for the victims, and no-one even associated with the Mansons and the Manson family makes money off that song.”

Manson had initially visited director Roman Polanski’s home in 1968 search of Hollywood legend Doris Day’s music producer son Terry Melcher, who had talked about giving Manson a recording deal. Manson was upset that Melcher changed his mind on the contract, and discovered that he no longer lived at the house.

On August 8, 1969, Manson ordered family devotees Charles ‘Tex’ Watson, Patricia Krenwinkel and Susan Atkins to return to the house and kill everyone inside, including actress Sharon Tate, Polanski’s wife.

Fast forward a few decades. Guns N’ Roses recorded Manson’s song “Look at Your Game, Girl” on the hit album ‘The Spaghetti Incident?’ that went platinum in 1993. Lawyer Nathaniel Friedman, who filed a 1971 wrongful death suit for one of the victim’s grandchildren, negotiated a lucrative settlement with the band.

However, that wrongful death judgment wasn’t extended, and eventually the rights to profits from Manson’s music reverted to the killer’s family, although that led to a bitter fight when Manson died in prison in 2017, at age 83. There were two men who claimed to be Manson’s biological sons. Another man said he was Manson’s biological grandson, and a friend claimed to have been bequeathed Manson’s estate in his final will.

After a long legal battle, Manson’s grandson, Jason Freeman, won and was given permission to take possession of the killer’s remains in March 2018. However, there’s still a fight ongoing over who will inherit the Manson estate. However, Freeman will most likely prevail, given his early success. As a result, any royalties, licensing fees, or profits from the use of Manson’s song in “Once Upon A Time…In Hollywood” probably will go to Manson’s grandson.

Reference: Wealth Advisor (August 27, 2019) “Charles Manson’s grandson can profit off of Once Upon a Time…In Hollywood”

 

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Does My Business Need a Succession Plan?

Succession plans are typically created to prepare for the owner’s retirement or untimely disability or death. Research shows that 78% of small business owners responded that they plan to use the sale of their business to fund their retirement. However, just 25% of private business owners say they have a succession plan in place.

The Houston Business Journal’s recent article, “Three tips to employing establishing a strong succession plan,” takes up this matter for discussion.

Applying a proactive succession plan may help your business successfully move to new leadership and keep operations running smoothly. Here are a few tips for establishing your succession plan.

Regardless of whether you’re going with a family member to succeed you or bringing in someone from the outside to take over, it’s important that the plan is communicated beforehand. You don’t want workers speculating or feeling blindsided by the decision.

Be sure that you have legal documents in place and clear expectations, guidelines, and rules, so there aren’t any gray areas when the time of transition comes.

If you are appointing a family member, set out details on how other family members will contribute to the company if they are interested. You could have more than one family member run the company, but it may be best to have one clear decision maker.

If you want to have an outside party come in to run the company or have a longtime employee assume leadership, be open to ideas. Don’t overlook someone who may be a good leader and a good fit for the position. As business climates shift, technologies advance and workplace skills change, make a selection of a leader who can adapt to those changes.

As you create your succession plan, leverage a team of experts, such as an estate planning lawyer and an accountant. You should also work with a business broker who can provide a realistic valuation of your company.

Reference: Houston Business Journal (September 3, 2019) “Three tips to employing establishing a strong succession plan”

 

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Can Multi-Generational Living or the Golden Girls Model Work for Families?

Multi-generational living is not exactly new, and as people are living longer, it may start becoming more common. Shared households bring many benefits, including convenience. Why should a nurse daughter travel 20 miles a day to take her mom’s blood pressure, asks The Mercury’s article “Do shared living arrangements make sense?”

There’s also the benefit of increased financial security. Two households merged into one can share expenses, including mortgages, property taxes, utilities and more.

Whether this works in each case, depends upon the situation and the relationships of the individuals involved. If there is flexibility and relationships are good, it can be a blessing. Imagine grandparents and grandchildren who are part of each other’s lives on a daily basis, rather than a twice-a-year visit. Multi-generational living or shared households bring many benefits, including convenience. arrangement needs to start with a lot of discussions and understanding the wants and needs of each participant. It needs to be based on reasonable expectations. A happy joint living arrangement can swiftly be derailed, if parents assume that grandparents are willing to be 24/7 babysitters, or if grandparents consider household chores something for their children and grandchildren to do.

Multi-generational living or Joining living arrangements must also address financial considerations, estate planning and everyone’s personal experiences and convictions. What works for one family may not work at all for another. Each family must work through their own details.

Here are some examples where a joint living arrangement works.

Parents and children buy a house together. When parents and children live too far away, and the parent’s house would require too much modification for them to continue to live there, both sell their homes and buy a much bigger home that can be made handicapped accessible. The parents make most of the down payment. The house is titled in joint names. Titling is critical. One half is owned by the father and mother, the other half is owned by the spouse and adult child. Each half would be tenants by entireties (in states where that form of ownership between spouses is available) as between the spouses, but joint tenants with rights of survivorship as to the whole.

Parent moves in with adult child. A widow or widower comes to live with a son or daughter and their family. The parent makes contributions to the monthly expenses. There is a written agreement, which is very important for Medicaid rules regarding gifting. If modifications need to be made to the house—a mother-in-law suite—a written agreement details who contributed what, so that it is not considered a “gift” by Medicaid.

Adult child moves in with parent. This is a “buy-in,” where an adult child obtains a home equity line of credit to purchase an interest as joint tenant with right of survivorship. The house can be inherited by paying one-half of the value.

None of these strategies for Multi-generational living should be done without the help of an elder law attorney who is knowledgeable about Medicaid, estate planning and real estate ownership. When it works, this arrangement can benefit everyone in the family.

Reference: The Mercury (AuG. 28, 2019) “Do shared living arrangements make sense?”

 

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What You Need to Know About Continuing Care Retirement Communities

With all the different types of residential options for seniors today, it is easy to get confused by the terminology. If you are trying to decide which choice is right for you or your loved one, you need to evaluate several kinds of arrangements. Here is what you need to know about continuing care retirement communities.

A continuing care retirement community offers a continuum of care, from independent living for people who need no assistance, to assisted living that offers some services, to nursing home care that provides skilled nursing care. A person or couple usually move into the level they need, with the option to move to either more independence or more services as their needs change.

The benefit of a continuing care retirement community (CCRC) is you do not have to move to a different facility when you need more medical attention or if your health improves. You would have to move to a different part of the community, that is usually in a separate building. However, all levels of care are at one campus or physical location.

The drawbacks of CCRC include:

  • These facilities tend to be more expensive than stand-alone centers. There is usually a sizeable entrance fee, ranging from $10,000 to $500,000.
  • The monthly expenses of living in a CCRC make these facilities out of range for low-income and most middle-income seniors. On top of the rent, there is a monthly maintenance fee that can range from $200 to more than $2,000.
  • There might not be a vacancy in the section to which you want to move, so you might have to go on a waiting list or move out of the CCRC to get the level of care you need. If you move out, you can lose the entrance fee you paid.
  • Usually, you do not own the place where you live, even though you might pay more than the market value of the building.

On the other hand, CCRCs have advantages, like:

  • A broader range of activities and services than stand-alone facilities.
  • Getting to stay close to the friends you have at the CCRC, when your needs change.
  • More options for independent living, like apartments, houses, duplexes and townhomes.
  • The CCRC arrangement creates a social network and helps residents get through grief when a spouse passes. Residents of CCRCs tend to have less social isolation and higher activity levels as widows or widowers, than people who live in single-family homes that are not part of a CCRC.
  • Because CCRCs have so many ongoing activities and the facilities include a range of opportunities for physical exercise, like swimming, yoga, tennis, golf, walking and dance, seniors in these communities tend to stay healthy and socially engaged.
  • Many CCRCs have barbers, hairdressers, grocery stores, coffee shops and retail shops onsite for the convenience of residents.
  • You can tailor your services to your desires. One resident might only want lawn care and snow removal. Another person might want housekeeping, meal preparation and transportation.

Make sure that you get detailed written information about all the costs for each service the CCRC offers and for all levels of care. Get the facility to tell you in writing what happens to your entrance fee, if you move from the facility. Compare at least three CCRC developments, if you decide that a CCRC is the option you prefer and can afford.

References:

A Place for Mom. “Continuing Care Retirement Communities.” (accessed August 21, 2019) https://www.aplaceformom.com/planning-and-advice/articles/continuing-care-retirement-communities

 

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Can I Keep a Loved One’s Inheritance From Their Spouse?
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Can I Keep a Loved One’s Inheritance From Their Spouse?

A recent nj.com article asks, “How do I protect my niece’s inheritance from her husband?” The article says that in a scenario where someone plans to leave most of her estate to her niece but doesn’t want her estranged husband to get his hands on the money, she must be proactive to make sure the funds go where she intends them to go. One option is to use what is often referred to as a bloodline trust.

If this happens in New Jersey, the niece’s inheritance will be subject to the New Jersey inheritance tax. The tax is levied based on the relationship of the deceased to the beneficiary. In this case, the niece’s inheritance would be subject to an inheritance tax of 15 to 16%.

This inheritance tax is assessed, because the aunt is a New Jersey resident. It doesn’t matter where the beneficiary resides.

One option is for the aunt to leave the assets to the niece outright or in a bloodline trust.

The laws in many states, like Missouri, South Carolina, and New Jersey, say that unless the parties otherwise agree, upon divorce there will be equitable distribution of their marital property. Marital property generally doesn’t include the property received by gift or inheritance, as long as that person didn’t co-mingle it with the marital property.

Therefore, the most economical way to transfer property to the niece, is to leave it to her in the testator’s will, with instructions for her to keep it separate and apart from her marital property.

An outright bequest may not be the best way to leave property to the niece, even though it’s probably the most economical method for the aunt.

However, if the aunt leaves the inheritance in a bloodline trust, she’ll make certain the property isn’t commingled with marital assets.

Further, if the trust is properly prepared by an experienced estate planning attorney, the income from the bloodline trust will likely not be used to decrease any support to which the niece may otherwise be entitled from her spouse, in the event that they divorce down the road. The bloodline trust can also protect against other events, by instructing to whom funds should be paid upon the premature death of the niece. That would further prevent her estranged husband from ever being able to make a claim against the funds.

Reference: nj.com (August 21, 2019) “How do I protect my niece’s inheritance from her husband?”

 

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Did Groucho Marx Have Estate Planning and Elder Abuse Problems?

PBS News Hours’ recent article, “How Groucho Marx fell prey to elder abuse” reports that the legal battles over Groucho’s money and possessions went on long after he died. The unrest of his last few years is familiar to adult children concerned with the well-being of their elderly parents.

Julius Henry Marx, better known as Groucho, died 42 years ago on Aug. 19, 1977, at age 86. Groucho teamed with three of his four brothers—Harpo, Chico, and Zeppo—to become stars of vaudeville, Broadway, film, radio and television. (A fifth brother, Gummo, wasn’t part of the act).

Groucho’s companion, Erin Fleming, was accused of elder abuse. His relationships with his son Arthur and daughter Miriam (children from his first marriage) were strained for various reasons. Arthur wrote several books based on life in the Marx family, and his father threatened litigation over his portrayal in one of Arthur’s memoirs.

Fleming was Groucho’s secretary-manager and was responsible for his popular comeback in the early 1970s. However, some of Groucho’s friends thought that Fleming was pushing him too hard to perform, given his age and memory loss. Fleming successfully campaigned for the Marx Brothers to receive a special Academy Award in 1974. In his acceptance speech, Groucho thanked “Erin Fleming, who makes my life worth living and who understands all my jokes.”

In 1974, Fleming was appointed his guardian and temporary conservator of an estate worth an estimated $2-$4 million. In 1975, he even tried to adopt her, until a psychologist said he was not mentally competent.

Arthur Marx, Groucho’s son, sued Fleming for having a harmful and destructive influence on his father, including threatening his well-being and being abusive. He also claimed that she pushed Groucho to perform, whether he was able or not, for her own financial gain. In Groucho’s final days, a judge appointed the 72-year-old Nat Perrin, a close pal of Groucho’s and co-writer of the Marx Brothers’ 1933 film, “Duck Soup,” as temporary conservator of Groucho’s well-being and estate. Later, his grandson, Andrew, was named permanent conservator.

The litigation concerning Groucho’s estate went on long after he died and into the early 1980s. Groucho left most of his estate to his children, but gave control of his name, image and movie rights to Fleming—another issue of dispute.

The court found in favor of Groucho’s children and ordered Fleming to pay $472,000, which she bilked from Groucho’s bank accounts, while she worked for him. Fleming committed suicide in 2003 at the age of 61.

In the 1970s, the term “elder abuse” had not been used, even though it existed. Today, elder abuse is a growing problem. There’s a long list of harmful activities, including physical, sexual, emotional, and psychological forms of abuse and neglect, as well as the theft or withholding of financial assets needed to live.

The risk factors are functional dependence or disability, poor physical health, cognitive impairment and dementia, low income, financial dependence, race or ethnicity, gender and age.

The risk factors for perpetrators include mental illness, substance abuse, relationship status (spouse/partners are often the most common perpetrators of emotional and physical elder abuse), and the abuser’s potential dependency on their victims for emotional support, financial help, housing and other forms of assistance.

Get some expert legal and medical advice on estate planning and the creation of a living will so that your wishes are known, and you and your estate are protected properly.

Reference: PBS News Hour (August 19, 2019) “How Groucho Marx fell prey to elder abuse”

 

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Joint Tenancy? How Should I Title My Property in My Estate Plan?

Pauls Valley Democrat’s recent article, “Considerations in how to title your property,” says that there are several types of “automatic” transfer of property methods that don’t require probate such as joint tenancy.

The first is Joint Tenancy with Right of Survivorship. This form of ownership passes title to the survivor immediately upon death and avoids probate. The transfer to the survivor happens automatically at the death of one of the joint owners.

To complete the transfer, one must confirm the death in the county records and effectively give notice that one joint tenant has died, and that the ownership is now in the survivor(s) name. This is usually accomplished, by having the survivor complete an Affidavit of Surviving Joint Tenant. The affidavit affirms the death of one party (in many cases a spouse), and the survivorship to title of the other party. This affidavit and a certified copy of the death certificate are filed with the county.

The survivor now owns the property as an individual. He or she can now sell or deed the property to others, including children, without a probate action to clear the title.

Next is Tenancy in Common. Ownership as a tenant in common gives an undivided interest in the whole property (like a third), which stands on its own and can be bought and sold. Tenancy in Common is used when two or more people want to keep their title separate from the other at death. Therefore, an undivided one-half owner has the right to use the entire property, including the right to benefit from one-half of the rent, lease or crop share. However, if several people own an undivided interest, control, usage and management can become complicated.

If, for some reason, a husband and wife own their property as tenants in common, and one spouse dies, his undivided interest remains as a part of his estate. In that case, his estate must be probated to provide a clear transfer of title to the surviving spouse or to other heirs.

It’s an added expense for the survivor that can be avoided, if another form of ownership is used.

Thinking through these factors is a critical component of successful estate planning. Plan in advance with the help of a seasoned estate planning attorney. Don’t create bigger problems for yourself or your heirs, by trying to avoid upfront costs.

Reference: Pauls Valley (OK) Democrat (August 21, 2019) “Considerations in how to title your property”

 

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What Will Happen to Jeffrey Epstein’s Will?

Jeffrey Epstein’s will was filed in the U.S. Virgin Islands. It’s a “pour-over will” that transfers all of his assets into a trust. The trust is secret, not open to the public, and is administered by trustees. Epstein’s will, which is a public document, claimed assets of more than $577 million.

However, none of that money can be moved into Epstein’s trust until a probate court decides what to do with the numerous claims made against the convicted sex offender and his estate.

CBS News’ recent article, “What we know about Jeffrey Epstein’s will, and what happens next with his estate,” provides a list of questions that can help explain what happens next with Epstein’s estate. His estate will be overseen by the two executors named in the will, attorneys Darren K. Indyke and Richard D. Kahn.

The terms of the trust are not public, because they’re not part of the will itself. Epstein’s creation of the trust is commonly done by those who desire privacy. Of course, there is some surprise because the will and the trust were created just two days before he died. One of the most intriguing parts of Epstein’s will is that it lists his domicile (his permanent residence) as the U.S. Virgin Islands. Domicile is important in determining which jurisdiction controls the estate. Domicile must be proven in a probate court, and is usually accomplished with tax returns, a driver’s license, or documented time spent in the jurisdiction.

Another question about Epstein’s will, is whether it will even be declared valid. His will, and thus his entire trust, can be held invalid, if the will wasn’t properly executed and if it wasn’t properly witnessed or signed. There can’t be any fraud, undue influence, or duress. Since the will was made right before his suicide, there’s no certainty of his mental capacity.

His testamentary capacity, which means his mental ability make a valid will or estate, will probably be decided by a probate judge. If his estate planning documents are voided, the assets would transfer to the beneficiary of the estate, which is his brother Mark Epstein. However, Mark would still be liable for creditors’ claims and any alleged victims’ lawsuits.

Epstein’s $577 million in assets will not pass from his estate into his private trust, until all creditors’ claims have been satisfied in a probate court.

Legal experts expect a long, drawn-out, and complex process for deciding the future of Epstein’s wealth.

Reference: CBS News (August 21, 2019) “What we know about Jeffrey Epstein’s will, and what happens next with his estate”

 

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