Tuesday, July 28, 2015
Facebook likes to be at the forefront of all things social media and has continued that trend with the introduction of the ability to name an heir to an account. This feature, currently available in the UK only, allows the named person to take limited control over the account, such as the ability to accept friend request, in order to keep the profile active. However, the caretaker will not be able to remove previous post by the deceased or use the private message feature of the account. This change builds on the memorial feature, around since 2007, which allowed users to request that a deceased persons page be frozen but kept alive. This move is likely the herald of a wave of change as the issue of digital heirs moves into the forefront of estate planning challenges.
Monday, July 27, 2015
Maurice Loboz was a wealthy New York real estate investor who recently passed away. The deceased tycoon left a combined $20 million fortune to his two daughters, but in his Will he has imposed strict conditions. The daughters who are 17 and 21 years old will be able to receive their inheritance when they turn 35. Each of them would be able to receive early bonuses if they follow a number of conditions like going to a good university or waiting until marriage before having kids. The deceased millionaire’s wife, who he was in the process of divorcing before his death, is currently contesting the Will. The remainder of the estate is going to be given to charitable organizations like the Michael J Fox foundation.
See Kelly Mclaughlin, Tycoon's daughters must wait ten years to inherit his $20m fortune - but can earn early bonuses by marrying early, having children in wedlock and going to a good school, The Daily Mail, July 27, 2015.
I have previously discussed the ongoing legal dispute over the estate of Whitney Houston. The musician’s daughter, Bobbi Kristina Brown, has passed away this Sunday at the age of 22 according to a family representative. Brown had been in hospice care since June 24, she has also been in a medically induced coma. There has been a bitter legal battle between members of her family over both the estate and her medical care. Up until her death she had been cared for by her father, Bobbi Brown, who was her guardian.
See Lisa Respers France, Bobbi Christina Brown dies at 22, CNN, July 27, 2015.
A Florida appellate court has recently held that a Florida probate court cannot order the partition and sale of out-of-state real property. The Court held that the Florida probate court has no jurisdiction over out of state real property. In order to partition out-of-state property the personal representatives of the estate would have to open an ancillary action in the State of Georgia. The decision of Florida’s Fourth District Court of Appeals can be read here.
See Anya Van Veen, Florida Probate Court Has No Jurisdiction Over Out-Of-State Real Property, Clark Skatoff PA, July 24, 2015.
The son of deceased Silver Valley mining magnate Harry Magnuson is currently suing his three other siblings alleging that they conspired to have him written out of their mother’s will. When Harry Magnuson died in 2009 he left everything to his widow Colleen Magnuson. The widow passed away recently in March and now the children are engaged in this legal dispute. Thomas Magnuson alleges that his siblings coerced their mother into revising her will shortly before her passing. This dispute brings attention to the issues of will contests and undue influence. There is a good chance that whenever a presumptive heir is written out of a will that they are likely going to contest the document.
See Chad Sokol, Magnuson son sues siblings over estate, The Spokesman-Review, July 24, 2015.
- Make a plan for the distributions such as granting a trustee total discretion or creating a list of actions that, if complied with by the beneficiary, will net an additional (or any in some circumstances) distribution. The settlor will also need to determine if distributions will come from income, principle, or both.
- If the trust is set up to support a particular goal, such as attending college, then the settlor must decide if the distributions will be made directly to the beneficiary or if the trustee will pay any bills that accrue directly. This is particularly important if the beneficiary has shown signs of irresponsible use of money in the past or there are concerns that a distribution will not be used appropriately.
- The client will need to determine if the trust will continue for the life of the beneficiary or will terminate with its assets distributed at a predetermined time. Most importantly, the settlor, preferably in consultation with advisors, must determine what the future needs of the beneficiary will be and if a trust will remain useful in the distant future when circumstances change.
- Determine any penalty that will be applied if the beneficiary does not comply with the terms of the trust. For example, if the purpose of the trust is to fund an advanced degree, which the beneficiary never completes, then the trust corpus will pass to a charity.
- Always make sure that the final draft of the instrument contains all key terms and conditions. One forgotten sentence may lead to years of legal wrangling down the line and defeat the purpose of the trust.
Sunday, July 26, 2015
The British royal family has received a boost in income from its Duchy of Lancaster Estate. “The royal household will receive 16 million pounds ($34 million) this year, up 18 per cent from the previous year, according to accounts released by the duchy.” Currently the net operating income of the royal estate is the highest it has ever been. The estates strong performance has spread across all of the portfolios. Ownership of land, property, and investments is one of the many sources of income for the British royal family.
See Queen Elizabeth II to receive 18 per cent income boost from Duchy of Lancaster Estate, ABC, July 24, 2015.
People who are single often face their own set of issues when estate planning. If a single person dies intestate then their property will be distributed in accordance to the laws of that person’s state. It is usually just as important for a single person to have a will as it is for a married couple. A person making a will should put some thought into who will inherit their personal property. It is a good idea to designate who will have power of attorney to make medical and financial decisions in the event the single person loses capacity. Making sure to plan ahead for possible state and federal estate taxes is also a wise strategy. Any single person who wants to make an estate plan should speak with an Estate Attorney and Financial Planner to get professional advice.
See Douglas Rothermich, Estate Planning For Single People, Forbes, June 18, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
Saturday, July 25, 2015
When acting as a personal representative for a decedents estate there are things that you need to remember not to do. Here is a list of seven things a personal estate representative should avoid doing:
- Avoid early distribution of assets. Make sure to make a full assessment of potential claims the estate could face.
- Do not spend estate assets on personal expenses. This should be self-explanatory, but some people may need a reminder of why this would be a bad idea.
- Never ignore tax issues. Tax liabilities can pile up, so it is always important to stay on top paying them.
- Obey court orders. A personal representative has to submit to the jurisdiction of the court and disobeying court orders can open him or her up to personal liability.
- Do not distribute funds until all bills are paid. It can often be difficult to get money back from somebody once it has been paid out.
- Do not ignore any claims. It is a good idea to stay on top of any potential claims that you might face.
- Do not go forward without seeking attorney advice. Seeking out expert advice from somebody who understands probate law can be a good strategy.
See Unique Estate Law Blog, What [Not] To Do After A Death: Seven Things Personal Representatives Should Never Do, Wealth Management, June 1, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
The New York State Department of Taxation and Finance has recently issued an advisory opinion that could have an impact on single-member LLC interests. The Federal tax entity classification election could determine whether property that is owned through an LLC by an out of state person is liable for New York estate taxes. Taxation officials would want to know if the LLC interest is characterized as tax exempt intangible personal property or taxable real property. The advisory opinion ruled that if the wholly owned LLC is disregarded for Federal taxing purposes then it would also be disregarded for State purposes thus leaving any of the real in-state property open to estate taxes. More details of the opinion can be read here.
See Michael J. Cataldo and Paul T. Casas, New York State Department of Taxation and Finance To Disregard Single-Member LLC Interests For New York Estate Tax, Pillsbury Law, July 14, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.