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What You Need to Do with a Family Member’s Assets after they Die?

The Dallas Morning News’ recent article entitled “Three things to do on the death of a loved one” explains the steps you should take, if you are responsible for a family member’s assets after they die.

Be sure the property is secured. A deceased person’s property becomes a risk in some instances. Friends and family will help themselves to what they think they should get, including the deceased’s personal property. Once it is gone, it is hard to get it back and into the hands of the individual who’s legally entitled to receive it.

Criminals also look at the obituaries, and while everyone is at the funeral or otherwise unoccupied, burglars can break into the house and steal property. Assign security or ask someone to stay at the house to protect the property. You can also change the locks. Credit cards, debit cards, and checks need to be protected. The deceased’s mail must be collected, and cars should be locked up.

Make funeral plans. If you’re lucky, the deceased left a written Appointment of Burial Agent with detailed instructions, which can make your job much easier.

For example, Texas law lets a person appoint an agent to be in charge of funeral arrangements and to describe the arrangements. An estate planning attorney can draft this document as part of an estate plan. You should see if this document was included. If you’re listed as the agent, present the paper to the funeral home and follow the instructions. If there are no written instructions, the law will say who has the authority to make arrangements for the disposition of the body and to plan the funeral.

Talk to an experienced attorney. When a person dies, there is often a lapse in authority. The decedent’s power of attorney is no longer in effect, and the executor designated in the will doesn’t have any authority to act, until the will is admitted to probate and the executor is appointed by the probate judge and qualifies by taking the oath of office and filing a bond, if required. Direction is needed earlier rather than later, on what you’re permitted to do. The probate of a will takes time.

It is best to get started promptly, so that there’s an executor in place with power to handle the affairs of the decedent.

Reference: Dallas Morning News (April 10, 2020) “Three things to do on the death of a loved one”

 

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What’s the Problem with Actor Jeremy Renner’s Trust for His Daughter?

As some things get back to normal, some court cases are moving forward. Actor Jeremy Renner recently filed documents claiming that his ex-wife has been stealing money from their daughter’s trust fund.

Renner’s ex-wife Sonni Pacheco has already confessed to transferring money from the couple’s daughter’s trust fund more than once. An email from April 2019, which was revealed in the court documents, says that she admitted to taking money out of daughter Ava’s account to purchase gifts and keep herself afloat, after spending her own savings on legal fees.

Pacheco wrote: “The money transfers to my bank were to keep me afloat/provide [the minor] Christmas presents/birthday gift bags and essentials for her bday party – after all my savings were spent on lawyers/child custody evaluator.”

Court pleadings show that Pacheco withdrew an additional $10,701.40 to pay her property taxes, when she didn’t have the money available eight months later. In addition, the document said that she took out $20,000 on another occasion in 2019 to pay attorney’s fees. Another $12,000 was also said to have been withdrawn from the trust into her personal checking account.

In total, the court documents say that Pacheco reportedly withdrew roughly $50,000 from her daughter’s trust fund.

The way the trust fund works, is that Jeremy Renner deposits the money that is supposed to go for educational or medical expenses, as well as extracurricular activities for his seven-year-old daughter. Any amount in child support that is leftover is supposed to go into the trust fund, which Ava will be able to access in 20 years when she turns 27.

At the time of the report in March, Jeremy Renner was estimated to be paying $30,000 a month to Pacheco in child support before taxes. Pacheco said at the time that she wasn’t getting that much money from Renner and that a large portion of it was going to court bills. She now says she is being “bullied” in this situation.

The couple was first married in 2014, but they separated later that year. That split has become more contentious over time and led to additional court filings and court appearances concerning the well-being of their daughter.

Reference: Wealth Advisor (May 26, 2020) “Jeremy Renner Alleges Ex-Wife Misused Daughter’s Trust Fund In New Filing”

 

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Don’t Shrink Your Estate with Last Minute Tax Planning

In the best-case scenario, you’d start talking with your estate planning attorney early on about your overall goals and the various tools available for tax planning and transfer wealth to the next generation. Whether your estate is modest or significant, the article “A Recipe for Risk—Last-Minute Tax Planning for Estates” from The Legal Intelligencer explains how a last-minute plan failed on a grand scale. A recent memorandum opinion from the U.S. Tax Court provides a cautionary tale.

Howard Moore owned a large amount of property and ran a successful farm. He was admitted to the hospital late in 2004, was discharged to hospice and told he only had six months to live. He created an estate plan that included a family limited partnership (FLP), a living trust, a charitable lead annuity trust, a trust for the adult children, a management trust that acted as the general partner of the family limited partnership and an “Irrevocable Trust No. 1” that was created to act as a conduit for the transfer of funds from the FLP to a charitable foundation.

The primary focus of the plan was to transfer the farm to a living trust and then to transfer 80% of the farm property to the FLP. The management trust was to serve as a partner to the FLP, with the living trust owning almost all the limited partnership interests and with each of the decedent’s children owning a 1% partnership interest. The FLP was to offer protection against liabilities from the use of pesticides, potential bad marriages, creditors and the fact that the family was a bit dysfunctional and would need to work together to manage the FLP. The FLP had many transfer restrictions and the limited partners were not given any rights to participate in business management or operational decisions regarding the FLP.

The trust known as “Irrevocable Trust No. 1” was nominally funded at the time of the decedent’s death and received funding from the FLP. Those funds, in turn, were transferred to the charitable trust to gain a charitable deduction by the estate. Just before he died, Moore used FLP funds to make large transfers to his children that were designated as loans. He also made outright gifts to the children and to one grandchild.

The estate filed an estate tax return and a gift tax return after Moore’s death. The IRS issued a notice of deficiency for nearly $6.4 million and the case went to tax court. The U. S. Tax Court agreed with the IRS’ findings. The defense of the estate plan, the tax court maintained, was form over substance and the only reason for the estate plan and the numerous transactions was to save estate taxes.

There were a lot of hurdles in this case, in addition to the short time period for the estate plan to have been created. At the time of the decedent’s hospitalization, the sale of the farm to a neighbor was being negotiated. A contract to sell the farm was executed with days of transferring it to the living trust. There were numerous transfers and distributions made between trusts and the FLP, and the court concluded that all decisions about the FLP after its formation were made unilaterally by the decedent. An FLP is supposed to function as a true partnership. Many other issues and errors occurred in the rush to have this estate structured in such a short period of time.

Had Moore engaged in tax planning five or ten years earlier, there would have been time to create a plan in which both the substance and execution of the plan were sound and the family would have been able to save millions of dollars in taxes. By waiting until his death was imminent, the plan attempted to establish transfer requirements without the opportunity to execute them properly.

Reference: The Legal Intelligencer (May 18, 2020) “A Recipe for Risk—Last-Minute Tax Planning for Estates”

 

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What is a Letter Testamentary for an Estate?

Mom just passed away. You walk into the bank to get the money out mom’s bank account. But you are shocked when the bank says you are not allowed to have access to the bank account without getting a letter testamentary.

What?

The bank manager tells you: “A Letter testamentary can be gotten from a lawyer.”

You say: But I have her Last Will and Testament. I am supposed to get all the money. But still no luck convincing the banker.

So you go to the lawyer’s office and say, “I need a letter from a lawyer to get into mom’s bank account.”

Unfortunately, a letter testamentary is a court order. To get that court order you have to go through a court process called probate.

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The client answers a series of questions online, and the Probate Petition and related papers are immediately created.

But even better, a lawyer in my office then reviews it for accuracy, makes corrections and sends it to the client to sign.

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What is a Letter of Appointment for an Estate?

Mom just passed away. You walk into the bank to get the money out mom’s bank account. But you are shocked when the bank says you are not allowed to have access to the bank account without getting a letter of appointment.

What?

The bank manager tells you: “A Letter of Appointment can be gotten from a lawyer.”

You say: But I have her Last Will and Testament. I am supposed to get all the money. But still no luck convincing the banker.

So you go to the lawyer’s office and say, “I need a letter from a lawyer to get into mom’s bank account.”

Unfortunately, a letter of appointment is a court order. To get that court order you have to go through a court process called probate.

Announcing ProbateZip™ Uncontested Probate anywhere in New York for $500 flat fee

I have developed a new web based probate system that allows an individual client to go through probate at home, online, but with a lawyer. This is not a Do It Yourself system.

The client answers a series of questions online, and the Probate Petition and related papers are immediately created. But even better, a lawyer in my office then reviews it for accuracy, makes corrections and sends it to the client to sign.

We file the paperwork and we are the attorney of record. It’s perfect for
• family friendly situations
• personal injury cases
• bank managers dealing with customers who need to go through probate for one bank account.

Click here to get started: ProbateZip

Simple – Fast – Online

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Why Is Blue Cross and Blue Shield Waiving Cost-Sharing Fees ?

Blue Cross announced that it is waiving cost-sharing fees for in-network primary care, mental health, and substance-use office visits.

Star Tribune’s recent article entitled “Blue Cross waives more fees for Medicare Advantage customers” reports this change will impact roughly 100,000 Minnesotans who access Medicare through the company’s Medicare Advantage products. Blue Cross is Minnesota’s largest health insurer and a leading provider of Medicare services in the state.

The elderly are especially at risk to the worst effects of COVID-19. Of the more than 700 deaths from the virus in Minnesota, about 80% have been residents of long-term care facilities, mostly nursing homes and senior apartments. These numbers are similar in other states.

“In the midst of this crisis, seniors have been greatly impacted and are at disproportionate risk,” Dr. Craig Samitt, chief executive of Blue Cross, said in a statement. “With our hope to keep our senior members safe and assure that they receive the preventive care they need, Blue Cross is both expanding coverage and proactively reaching out to help them navigate options to get the care they need.”

Blue Cross and Blue Shield announced that it will begin calling its Medicare Advantage customers next month to make them aware of new benefits and to ask about other medical needs.

Blue Cross previously said it was waiving cost-sharing fees such as all in-network fees to customers who were checking on COVID-19 symptoms or seeking treatment for the illness.

Blue Cross and Blue Shield also waived limits on early refills of medications.

The insurance company also bolstered its coverage for telemedicine services, including the use of video chat apps for patients to interact with doctors.

Medical offices have experienced a big decrease in patient visits of all kinds. In response, many are promoting more telemedicine to continue providing care and treatment.

Two weeks ago, Minnetonka-based UnitedHealth waived copays and other fees through September for Medicare Advantage beneficiaries. This change was partially to recognize that many seniors are delaying certain treatments and procedures to help prevent the spread of coronavirus.

Reference: Star Tribune (May 18, 2020) “Blue Cross waives more fees for Medicare Advantage customers”

Suggested Key Terms: Elder Law Attorney, Medicare, Long-Term Care

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How Can Estate Planning Protect Me from COVID-19 ?

There are several things you need to consider, when it comes to estate planning, like can Estate Planning Protect Me from COVID-19. This is explained in WFMY.com in the recent article “A different kind of coronavirus protection: Wills & Power of Attorney documents.”

A financial power of attorney is first on the list of things to consider. This essential legal document gives a trusted agent the authority to make financial decisions on your behalf, if you become incapacitated. A financial power of attorney can go into effect whenever you want. However, most people have their estate planning attorney draft the POA to go into effect, once the principal or the person who’s giving the authority can no longer make decisions for themselves.

In addition, if you become ill and fall into a coma, you need someone to be able to also make medical decisions. A health care power of attorney permits your agent to make medical decisions on your behalf. You can also sign a living will, which can state your wishes about healthcare decisions, especially end of life decisions.

A will can state your decisions for the distribution of your assets when you die. However, your property will stay in your name until that occurs. Another option is a living trust, which places your property in a trust for the benefit of a charity, your loved ones, or both. A trust may distribute the property more efficiently.

While the terms in your will and trust are important, you should also have a discussion with your family and let them know what you’re thinking. This will help avoid hard feelings after you’re gone.

It’s important to speak with an experienced estate planning attorney and talk to the people you want to be your POA attorney-in-fact, executor of your will and your trustee. Talk to your attorney about what happens when one of these key persons included in your planning dies.

You should also think about your parents and if they have an estate plan. You should know what will happen, if they become ill and need care. What happens if they get Alzheimer’s or another type of dementia?

You should make certain that you and those you love, have legal estate planning documents in place prepared by an experienced estate planning attorney.

From there, review your plan every few years with your attorney, because things change.

Reference: WFMY.com (April 22, 2020) “A different kind of coronavirus protection: Wills & Power of Attorney documents”

Suggested Key Terms: Elder Law Attorney, Estate Planning Attorney, Will, Executor, Trust, Trustee, Probate Court, Living Will, Power of Attorney

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Will Paris Hilton See Her Dad’s Wealth?

Barron Hilton’s father, hotel magnate Conrad, purchased his first hotel in Texas in 1919. His timing was perfect, as the oil boom ensured rooms were fully booked and could sometimes be turned over three times in a day. He then built the Dallas Hilton in 1925 and three more Hiltons in the state in the next five years. He eventually expanded his holding to create the world’s first international hotel chain. By 1966, his son, Barron, replaced him as president of Hilton Hotels.

In 1979, at the age of 91, Conrad Hilton died of natural causes, leaving $10,000 each to his nephews, nieces, and daughter, and $500,000 to his two siblings. The remainder of the estate was bequeathed to the Conrad N. Hilton Foundation, which he had founded in 1944.

Celebrity Net Worth’s recent article entitled “Barron Hilton Fulfilled His Promise To Not Leave Any Money To Paris Hilton,” notes that Barron contested his father’s will and ended up settling for four million shares of the company. Years later, Barron watched in horror as his granddaughter Paris tarnished the Hilton name. Barron sent a message. He made an estate plan that excluded Paris’ father and her siblings. His entire fortune would be donated to charity through the family’s foundation, because he felt Paris’ and Nicky’s sex tapes, reality shows, DUIs and other embarrassments sullied the family name.

At Christmas 2007, Barron announced to his family that he was making a major change to his will. Instead of leaving his $4.5 billion fortune to his family, he was leaving the bulk of his estate to the Conrad N. Hilton Foundation. He left 97% to the foundation and split the remaining 3% ($135 million) between about 24 members of his family. So rather than inheriting about $181 million each, the Hilton family members would get $5.6 million each.

It looks like Paris Hilton was entirely cut out of her dad’s will, and she didn’t get a penny from her grandfather. Barron died in 2019, and his will instructed 97% of his fortune to be given to the Conrad N. Hilton Foundation for disaster relief, treating children with HIV and AIDS, poverty alleviation and helping homeless shelters.

Barron Hilton continues to reinforce his message to Paris Hilton and his family from the grave. He was the second-largest philanthropist in U.S. last year with the $2.4 billion he donated to charity. He’ll probably be up there again, as one of the most generous Americans in 2020 since he still has $2 billion to donate.

Reference: Celebrity Net Worth (March 2, 2020) “Barron Hilton Fulfilled His Promise To Not Leave Any Money To Paris Hilton”

Suggested Key Terms: Estate Planning Lawyer, Wills, Intestacy, Inheritance, Asset Protection, Will Changes, Will Contest, Charitable Donation

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Did Kirk Douglas Leave His Wealth to His Son Michael?

Kirk Douglas, who died in March at the age of 103, made sure that he gave $50 million away via the Douglas Foundation at his death.

Wealth Advisor’s recent article entitled “Kirk Douglas’ $61M fortune given mostly to charity, none went to son Michael Douglas” reports that the beneficiaries included St Lawrence University, Westwood’s Sinai Temple, Culver City’s Kirk Douglas Theatre and Children’s Hospital Los Angeles.

Kirk’s Oscar-winning actor Michael is not listed as a beneficiary. That is okay, because he’s worth about $300 million on his own.

Michael announced the death of his father on February 5 in an Instagram post. He included several photos of his famous father and family members.

“It is with tremendous sadness that my brothers and I announce that Kirk Douglas left us today at the age of 103. To the world he was a legend, an actor from the golden age of movies who lived well into his golden years, a humanitarian whose commitment to justice and the causes he believed in set a standard for all of us to aspire to.”

Michael went on to add, “But to me and my brothers Joel and Peter he was simply Dad, to Catherine, a wonderful father-in-law, to his grandchildren and great grandchild their loving grandfather, and to his wife Anne, a wonderful husband.”

Michael finished his Instagram message by writing, “Kirk’s life was well lived, and he leaves a legacy in film that will endure for generations to come, and a history as a renowned philanthropist who worked to aid the public and bring peace to the planet. Let me end with the words I told him on his last birthday, and which will always remain true. Dad – I love you so much and I am so proud to be your son.”

Kirk Douglas was a three-time Oscar nominee, known for his roles in “Spartacus” and “Ace in the Hole.”

He was buried at the Pierce Brothers Westwood Village Memorial Park and Mortuary. In addition to Michael, some of the mourners were Kirk’s wife of 65 years, Anne Buydens, and his other sons Peter and Joel.

Reference: Wealth Advisor (March 3, 2020) “Kirk Douglas’ $61M fortune given mostly to charity, none went to son Michael Douglas”

 

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Alzheimer’s patient, Dementia and other Brain Diseases Require Special Estate Planning Steps

Alzheimer’s patient – There are certain steps that can be taken by individuals, loved ones and family members to make this challenging time safer and smarter, advises an article “Financial And Estate Planning Steps To Take Now: Special Considerations For Those With Brain Disease” from Forbes.

Anyone living with a neurologic condition needs to be sure their planning reflects not only their condition but their personal experience of the condition. The variability of each person’s experience of a brain disease, from symptoms and severity to the progression rate and future prognosis to the possibility of any recovery, affects how they need to plan.

For an Alzheimer’s patient, in early stages there may be no problems in signing legal documents and putting legal safeguards in place to protect finances. Most people are not aware that the degree of competency to sign legal documents varies, depending upon the complexity of the documents to be signed and the circumstances. A relatively low level of competency is required to sign a will. This is known as “testamentary capacity.” A higher level of competency is required to sign something like a revocable trust, investment policy statement, etc. Therefore, a person who may be legally able to sign a will may not have the legal capacity to sign other documents. Alzheimer’s patients need to get their entire estate plan in order, as soon as a diagnosis is received. Safeguards are extremely important, including having an independent person, like a CPA or trusted family member, receive copies of all monthly bank and brokerage statements, in case abilities decline faster than anticipated.

Patients living with peripheral neuropathy may experience issues with balance, burning sensations, dizziness, hypersensitive skin and pain that make wearing socks or shoes impossible. If the condition becomes so severe that the person becomes homebound, they need to make changes: set up accounts, so bills can be paid online, have income streams set to automatic deposit and simplify and consolidate accounts. It is important to have a Power of Attorney (POA) that is effective immediately or a revocable living trust with a co-trustee. In this way, you do not have to leave home to conduct your business.

Parkinson’s disease may not be well understood by professional advisors. You’ll need to explain that your facial expression—Parkinsonian masked face—does not mean that you are not responding to a conversation. They need to know that your handwriting may change, becoming small and cramped. This can result in a bank or other financial institution refusing to accept your signature on documents. Your attorney can prepare a document that confirms you are living with Parkinson’s disease and that micrographia is one of your symptoms. The document should include three or four different signatures to reflect the variations. Have each signature witnessed and notarized.

People living with MS (multiple sclerosis) face the possibility of an exacerbation that could leave them incapacitated at any time. A revocable trust to coordinate financial management, with trusted individuals as co-trustees should be in place.

For people with these and other brain illnesses, an emergency financial and legal road map needs to be prepared. It should include monthly recurring bills, non-recurring bills like life insurance, property taxes, etc. Contact information for key advisors, your estate planning attorney, CPA, financial advisor, banker, insurance agent, etc., needs to be shared. Your estate plan should be updated, if you haven’t reviewed it in three or four years. If you don’t have an estate plan in place, now is the time to have one created.

Reference: Forbes (May 17, 2020) “Financial And Estate Planning Steps To Take Now: Special Considerations For Those With Brain Disease”

 

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