Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Saturday, July 26, 2014

Man Charged With Wife’s Murder Loses His House, All Three of Them

JailAfter Donna Honaker was murdered in her home in Ohio, her estate brought suit to collect the assets that her husband would have inherited under more normal circumstances. The husband, Royce Honaker, has been charged with Donna’s murder, partly based on the 911 call he placed telling authorities he had just killed his wife. Royce did not fight the estate, but rather stated from the beginning that he wanted his portion to go to his four children. A county probate judge has given Royce’s court appointed guardian settlement authority in the case. Donna’s estate includes three real estate properties, a $105,000 life-insurance policy, and two bank accounts. Royce will maintain ownership of his pension and four vehicles.

See Ed Runyan,  Estate of Killed Woman Finalized in Trumbull Probate Court, Vindy, July 23, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

July 26, 2014 in Estate Administration, Estate Planning - Generally, Guardianship | Permalink | Comments (0) | TrackBack (0)

Friday, July 25, 2014

Samsung Heirs Faced with a $6 Billion Inheritance Tax

Samsung heirs

As I have previously discussed, heirs of Samsung Electronics Group’s founder face a $6 billion inheritance tax bill.  Samsung Group chairman Lee Kun Hee, 72, is a legendary figure who turned Samsung Electronics into a powerful conglomerate.  Yet for the last three months, Lee has been in the hospital since suffering a serious heart attack. 

Under Korean inheritance law, an heir must pay fifty percent in tax when inheriting such wealth.  Tax attorney Kim Hyeon Jin says avoiding the bill may be possible if the money is placed in a foundation, however, that will cause the Lee family to lose control of some of their assets. 

Reports claim that in order to pay for the hefty bill, the Lees plan to open two additional Samsung businesses: Cheil Industries Inc. and Samsung SDS Co.

See Ren Benavidez, Samsung Heirs Could Pay a Massive US $6 Billion Inheritance Tax, China Topix, July 32, 2014.

July 25, 2014 in Estate Administration, Estate Planning - Generally, Estate Tax, Wills | Permalink | Comments (0) | TrackBack (0)

When Death Occurs Mid-Divorce

Divorce 2

A scenario commonly encountered within estate planning is when an individual dies while negotiating a separation agreement with their spouse, or when in the midst of divorce proceedings.  While a divorce order will void specific bequests to a spouse, merely initiating negotiations or proceedings will not.

In these circumstances, most lawyers will advise their clients to draft a new will and consequently discover whether title to the matrimonial home is held as joint tenants, tenants in common, or individually.  Differentiating between these is very important.

When more than one person owns the same property, they can hold title as joint tenants or tenants in common.  The main difference is that when a joint tenant passes, title passes to the other owner by right of survivorship.  Contrastingly, when a tenant in common dies, their share passes to their heirs.

Since assets held jointly do not pass through the estate, this means that executing a new will excluding a spouse will not disentitle them to their right of survivorship over property held jointly.  To effect a disinheritance, it is necessary to sever the joint tenancy. 

See Suzana Popovic-Montag and Ian M. Hull, When a Spouse Dies Mid-Divorce, Huff Post Business, July 24, 2014.

July 25, 2014 in Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Estate Planning Lessons From Three Famous Estates

Movie Star2Many famous estates are full of drama, family feuds, and numerous opportunities to learn from others’ estate planning mistakes. Here are three that provide helpful lessons:

  1. Walt Disney: The trust created by Walt Disney teaches the importance of choosing trustees wisely. The trustees for the trust have allegedly used their discretion to withhold principal distributions from some of Disney’s grandchildren, because they would not keep the funds with the financial firm of one of the trustees.
  2.  Johnny Unitas: Unitas’ story teaches how important it is to choose the right executor. Unitas’ son had to endure a lengthy court battle to be able to buy a company he shared with his father, due to his father’s second wife refusing to sell to him.
  3. Casey Kasem: Kasem’s tale of his wife moving him away from his children and now both sides feuding over the will, highlights the importance making smart choices with who gets powers of attorney.

See Bob Carlson, Key Estate Planning Mistakes You Need to Avoid, Investing Daily, July 24, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

July 25, 2014 in Disability Planning - Health Care, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (1) | TrackBack (0)

Thursday, July 24, 2014

A Proposal for the Future of Digital Estate Planning

Ipad

Last week, the Uniform Law Commission drafted the Uniform Fiduciary Access to Digital Assets Act, which is a model law that would let relatives access the social media accounts of the deceased.  Because so many of us live more of our lives online, more of what used to be tangible turns digital.  “Where you used to have a shoebox full of family photos, now those photos are often posted to a website.”

The goal of the Uniform Fiduciary Access to Digital Assets aims to make the digital shoebox equally accessible to family members.  “This is the concept of ‘media neutrality’ . . . . The law gives the executor of your estate access to digital assets in the same way he had access to your tangible assets in the old world.  It doesn’t matter if they’re on paper or on a website.” 

The ULC’s proposed law would override terms-of-service agreements that specify the user alone can only access his or her account. 

Yet companies such as Facebook see a downside to the proposed law.  “The bill takes no account of minimizing intrusions into the privacy of third parties who communicated with the deceased . . . This would include highly confidential communications from third parties who are still alive---doctors, psychiatrists, and clergy.”

See Molly Roberts, A Plan To Untangle Our Digital Lives After We’re Gone, All Tech Considered, July 23, 2014. 

July 24, 2014 in Estate Administration, Estate Planning - Generally, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Leaving a Death File Behind

BundleNot having the necessary paperwork in order when you die can cost your family time, court fees, and delays in receiving inheritance. The first step is making a list of all the documents and information your family will need to settle your affairs, and either putting it in an electronic file or in one physical location. The location needs to be easily accessible, labeled, and well organized. Items that need to be included in the document bundle include:

  • Your will, trust documents, and contact information for the drafting attorney and listed executor
  • A list of and the account information for all financial accounts and reoccurring bills
  • Policy information for all insurance and benefits plans

See Beth Pinsker, What Should be in Your ‘Death’ File, Reuters, July 15, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

July 24, 2014 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 23, 2014

Dying Man's Will Rejected

Will On Tuesday, a Sacramento Superior Court judge refused to validate a will that a lawyer claimed to be the last wishes of a dying friend.  The will would have given all but a small portion of Joseph Herb O’Brien’s estate to a mutual friend. 

Judge Christopher Krueger said the will filed on behalf of local veterinarian Kenneth Pawlowski did not meet the standard of “clear and convincing evidence” that O’Brien was of a sound mental state when he signed his testament.  “Indeed, the evidence points to the conclusion that Mr. O’Brien was extremely weak and actually in the process of dying,” Krueger wrote.  The judge said there was significant evidence that O’Brien wanted to modify the will that he had left in a trust that provided for a stepson with drug problems.  However, the judge expressed there was a “very significant doubt on Mr. O’Brien’s capacity at the time of execution.”

Although no one exercised undue influence upon Mr. O’Brien, the proponent of the will was unable to show that the will in this case was intended by the decedent to be his will at the time he put his mark on it. 

See Andy Furillo, Sacramento Judge Rejects Dying Man’s Last-Minute Will, The Sacramento Bee, July 23, 2014.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

July 23, 2014 in Elder Law, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Monday, July 21, 2014

Death and Debt

Debt

When someone dies, their assets become the property of their estate.  Before an estate can distribute assets to beneficiaries, each estate is obligated to pay all debts, costs, taxes and other liabilities due. 

Yet who manages this?  When writing wills, it is usual to appoint an executor to handle the tasks associated with an estate.  Under “fiduciary duty,” executors are legally required to act with complete and transparent good faith while carrying out the deceased’s wishes. 

If no will is written, a state’s probate court can appoint an administrator, who has the same powers as an executor.  While there is a hierarchy of people who are asked to take on the role, nobody can be forced to be an executor or administrator unless they want to be. 

When debt is passed on there are two key things to understand: (1) The debt does not die with the decedent, and must usually be paid; (2) nobody can inherit debt.  If the estate does not have enough money to cover debt, lenders will write off their losses.  With some rare exceptions, heirs are not liable for the deceased's debts.  These exceptions include: surviving spouses in community property states, adult children of a late parent who could not pay for his or her long term care, and heirs legally responsible for managing the estate.

See Peter Andrew, What Happens to Card Debt When Someone Dies, Desert News, July 18, 2014.

July 21, 2014 in Estate Administration, Estate Planning - Generally, Intestate Succession, Wills | Permalink | Comments (1) | TrackBack (0)

James Brown’s Estate Hopes for High Movie Sales

James BrownJames Brown’s estate has been through numerous court battles through the years and still faces unresolved legal issues, such as whether he was legally married to Tomi Rae Hynei. Over the years, the estate went from owing $14 million on a loan to having a $2 million cushion. Today, a movie about Brown titled “Get on Up” will premiere at The Apollo Theater and will be released nationally on August 1. The estate hopes to gain significant revenue from the movie, which would come in part from royalties for Brown’s recordings that are featured in the film.

See Joey Holleman, Take a Look Inside James Brown’s Mansion in Beech Island, S.C., Charlotte Observer, July 20, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

July 21, 2014 in Estate Administration, Film, Music | Permalink | Comments (0) | TrackBack (0)

Friday, July 18, 2014

When a Personal Representative Refuses to File Estate Tax Return

Question3The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, allows unused estate tax exclusion amounts to be transferred to the surviving spouse. The transferred exclusion is then added to the estate tax exclusion amount when that spouse dies. The transfer requires an election by the personal representative of the estate. A potential problem arises if the personal representative refuses to make the election. One possible solution is to negotiate with the personal representative of the estate, as the reason for not making the election may be based on the high cost of filing an estate tax return. Another possible remedy would be to ask the probate court for help.

See Jeffrey Skatoff, Personal Representative Required to File Estate Tax Return to Claim Portability?, Clark Skatoff, July 16, 2014.

July 18, 2014 in Estate Administration, Estate Tax | Permalink | Comments (0) | TrackBack (0)