Thursday, April 28, 2016
It is common for people to put off making important estate planning decisions. “A 2015 survey by CNBC showed that 38 percent of individuals with investable assets of $1 million or more have not consulted with a financial professional to establish an estate plan.” This article discusses some of the common reasons why people avoid estate planning. Advisers should convince clients to set up an estate planning by outlining the benefits to them. There are a myriad of issues that the financial adviser will need to go over with the client which are discussed in this article. It discusses some of the key elements of the estate plan that the adviser should help their clients identify. This article also describes the process of creating and updating an estate plan. An estate plan is a good way to make sure that clients are able to fulfill their wishes and provide for their loved ones.
See Robert Warner, A Guide To Helping Clients Complete Their Estate Plans, Wealth Management, April 28, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
One difficult situation that a financial adviser might face is watching a client pass away and then seeing the beneficiaries of the estate undo years of financial planning. This article discusses why it is important for advisers to establish relationships with their client’s beneficiaries. Estate planning involves more than just the transfer of money or management of assets. It involves personal connections with clients and beneficiaries. In this column the author recounts his own experience with losing an account after a client passed away. He discusses some of the changes he made to the way he does business after his experience with losing business. Building relationships with beneficiaries is a good way to promote the long term success of an adviser.
See Scott Huff, Rethinking Estate Planning as Building Beneficiary Relationships, Wealth Management, April 27, 2016.
A California judge ruled on Wednesday that the trial over Sumner Redstone’s advance healthcare directive will remain open to the public. The lawsuit brought by Mr. Redstone’s ex-girlfriend, Manuela Herzer, centers around the 92-year-old billionaire’s mental competency. Herzer claims that Mr. Redstone lacked the mental capacity to remove her from his advance healthcare directive, and she is asking to be reinstated as the person in charge of the media mogul’s healthcare. This case is set to be tried on May 6. Los Angeles Superior Court Judge David Cowan did leave open the possibility that some testimony could still be shielded from the public. Mr. Redstone’s medical records will have to be carefully examined and the information entered into evidence will be limited.
See Lisa Richwine, Judge rejects Redstone bid to close part of competency trial, Mediacorp News Group, April 28, 2016.
Lately, the subject of access to digital accounts after the death of the owner has been in the news due, in no small part, to the fact that a number of states have adopted legislation addressing the matter. However, Germany just got it's first bit of law on the subject after a Berlin regional court ruled that the parents of the deceased minor had the right to access their child's Facebook account including all private messages. The court reasoned that the digital messages were the same as inheriting letters and other documents under normal estate law. In addition, the court addressed the privacy issue, an important aspect under German law, along the same lines saying a third party sender had no special right to privacy online than they would have with physical messages that were inherited. This ruling was vigorously fought by Facebook which severely limits the ability of non account holders to access the account of a deceased user. Currently an appeal is pending although no trial date has yet been set.
See Jabeen Bhatti, German Parents Can Inherit Child's Online Profiles, BNA, April 20, 2016.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
Wednesday, April 27, 2016
In this modern social media age a large number of people have developed online identities. This article discusses the issue of “cyber intestacy,” which is the failure of a person to plan for their online presence after death. It is a good idea for advisers to ask their clients if their wills contain digital asset clauses. Clients should take an inventory of all the digital assets that they own. It is a good idea for people to plan ahead so that family members do not get stuck in a bad situation of trying to access their digital accounts. “Automatic bill payments and good-until-cancelled orders continue after death, while electronic bills may go unpaid, and heirs may struggle to access photographs.” Digital asset planning can help clients maintain control over their digital legacy.
See Anne Tergesen, Wealth Adviser Daily Briefing: Help Clients Avoid ‘Cyber Intestacy,’ The Wall Street Journal, April 26, 2016.
High-deductible health insurance plans can be a double edged sword for consumers. There are many consumers who enjoy the lower premiums, but might get into a difficult bind if hit with a serious illness. The insurance industry has been offering critical illness insurance to allay fears about the financial impact of having a serious illness. The coverage limits of these policies can vary tremendously and many consumers are attracted to the affordability of a lot of these policies. These policies are growing in popularity though there are some health industry experts who express skepticism about what they offer. It is a good idea to do careful research into any policy that is being considered. This article also mentions alternative options that consumers can consider when planning for health care expenses related to a serious illness.
See Daniel Kurt, What Is Critical Illness Insurance?, Investopedia, April 27, 2016.
Members of a Jury that will be deciding on a copyright claim against Led Zeppelin will be barred from hearing details about band member’s pasts. “U.S. District Judge Robert Gary Klausner, who is presiding over a trial which will decide whether the rock group’s hit Stairway To Heaven was plagiarized from Taurus, a 1967 instrumental by the band Spirit, ruled certain evidence about the rock group’s past could not be heard in court.” The Jury members will not be able to hear testimony that relates to allegations of past drug use by the band members as well as accusations of plagiarism. “The ongoing lawsuit against the rock legends was brought by Michael Skidmore, a trustee for the late Randy Wolfe, also known as Randy California, who was Spirit’s guitarist and the composer of Taurus.”
See Judge In Ledd Zeppelin Copyright Case Rules Out Evidence, WENN, April 27, 2016.
I have previously discussed the fact that Prince passed away without a will and that his estate will pass via Minnesota intestacy laws. Prince’s sister Tyka Nelson recently filed an emergency motion in the Carver County District Court to appoint special administrator to gather and protect the legendary musician’s assets. Lawyers and intellectual property and estate planning experts predict that it will take years to determine the value of Prince’s massive estate. Prince’s estate includes physical assets like land and equipment, and it also includes the intellectual property he owned from his lyrics and songs as well as trademarks that relate to his image and brand. These assets could be worth up to $100 million dollars and could pay out for many years to come. The full text of the petition filed by Tyka Nelson in the Carver County District Court can be read here.
See Dan Browning,Without a will, it could take years to estimate Prince’s estate, Star Tribune, April 27, 2016.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
Danaya C. Wright (University of Florida Levin College of Law) recently published an article entitled, Inheritance Equity: Reforming the Inheritance Penalties Facing Children in Non-Traditional Families, 36 Cornell J. of L. & Pub. Pol'y 1 (2015). Provided below is an abstract of the article:
In the minds of many, estate planning is all about making sure all the big ticket items like a house, stock, or cash are properly distributed in a way that will avoid conflict. While that is exactly what needs to be done, it is not necessarily the last step in the process when it comes to deciding who gets what. Items of little monetary value can have the biggest significance when they have special sentimentality to more than one person. An old collection of records or knickknacks picked up over the years can cause much conflict when competing claims are made among friends and family. When working with a client, always ask about any sentimental items that might need special dispositions. While it is easy to assume that heirs can work out the seemingly minor details on their own, it is always better to err on the side of caution and make sure than any potential kerfuffles are resolved in advance.
See Paul Sullivan, When Dividing Assets, the Little Things Matter, The New York Times, April 15, 2016.
Special thanks to Naomi Cahn for bringing this article to my attention.