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Bloomberg.com is reporting on VERY messy battle on a probate involving a Texas oilman's estate. http://www.bloomberg.com/apps/news?pid=20601103&sid=auPHfoPfzSHA
The gist of the fight revolves around whether the deceased was manipulated into giving to charity, instead of his kids. Perhaps tellingly, only one child is arguing that the deceased was manipulated.
There are some things you can do to lessen the impact of later fights about your will. No-contest clauses and self-proving affidavits help. Also, if a messy probate court battle seems likely, a living trust (as much as I might disparage them in other contexts) may be a good idea. If a family fight sounds less than theoretical in your situation, contact a licensed attorney who can assist you in creating an estate plan that can limit or prevent those fights.
Friday, November 6, 2009
Thursday, October 22, 2009
Beware of Trust Mills
The Law.com is reporting on a bust up of a trust mill in Ohio.
http://www.law.com/jsp/article.jsp?id=1202434692692
What's a trust mill and why are they so bad? A trust mill is a derogatory term we in law land give to business who scare people into paying fees for a living trust, without correctly evaluating whether a living trust is appropriate for the clients needs. The mills overstate the problems of probate and taxes and overstate the role a living trust can have in remedying those problems. They crank out form trusts without legal review, or very cursory review. Most estates will have little to no problems with taxes and probate. In most cases, a living trust is more of a cost and hassle than benefit.
However, it should be stated that in some, specific, circumstances, a living trust may be beneficial. Don't be intimidated by salesmen into paying for an estate plan that may not be beneficial for you. Contact a licensed attorney who can meet with you, review your specific needs and craft a plan that meets them.
http://www.law.com/jsp/article.jsp?id=1202434692692
What's a trust mill and why are they so bad? A trust mill is a derogatory term we in law land give to business who scare people into paying fees for a living trust, without correctly evaluating whether a living trust is appropriate for the clients needs. The mills overstate the problems of probate and taxes and overstate the role a living trust can have in remedying those problems. They crank out form trusts without legal review, or very cursory review. Most estates will have little to no problems with taxes and probate. In most cases, a living trust is more of a cost and hassle than benefit.
However, it should be stated that in some, specific, circumstances, a living trust may be beneficial. Don't be intimidated by salesmen into paying for an estate plan that may not be beneficial for you. Contact a licensed attorney who can meet with you, review your specific needs and craft a plan that meets them.
Monday, October 12, 2009
Providing for your parent without providing for your siblings... or allegedly abusive stage dad.
TMZ is reporting that Katherine Jackson, matriarch of the Jackson family, will receive 40% of the Michael Jackson estate. However, she does not get the 40% outright. Rather, the amount is held in trust. The trustees have control of how much is distributed to Kathrine, and upon her death, any remaining funds go to Michael's children.
http://www.tmz.com/2009/10/12/michael-jackson-katherine-jackson-kids-inheritance-trust/
This actually isn't that uncommon. Although there are many reasons to structure a testamentary dispositon (gift through a will) that way, one obvious reason is to protect those assets from other family members. If Katherine received 40% outright, Katherine would have 100% control over what happens to it, both during her life and after her death. Upon Katherine's death, any remaining amount would be part of her estate and go through intestacy or by the provisions of her will. This could result in family members who were specifically excluded from Michael's will receiving assets through Katherine.
Putting estate assets going to Katherine in a testamentary trust (trust set up through provisions in the will), prevents such an occurrence and helps assure that Michael's wishes as to who exactly benefits from his estate remain intact.
If you have specific wishes as to who, and who cannot, benefit from your estate, a testamentary trust may meet your needs. Contact a licensed attorney who can craft a will and testamentary trust that can help assure your wishes also remain intact.
Monday, September 28, 2009
How controlling can I be from the grave?
A recent Illinois Supreme Court case upheld a will provision which disinherited descendants if they did not marry a fellow Jew.
http://www.google.com/hostednews/ap/article/ALeqM5j8QwP4ZvRjh-5EDghmS7q9wwP_DgD9ATRI300
As in this case, most American jurisdictions follow the general rule that a testator, or one writing the will, has (almost) free reign to dictate how their assets are disposed of upon their death. However, most jurisdictions limit this free reign by allowing courts to strike provisions that are "against public policy". That was the argument in the Illinois case. The descendants argued that the provision amounted to religious intolerance, which they argued is against public policy. The Court demonstrated just how much leeway a testator can be given, stating that the Court was not in a position to ensure that a grandparent treats "grandchildren who reject his religious beliefs and customs in the same manner as he treats those who conform to his traditions".
Minnesota courts have not spoken on whether such religious clauses would be upheld. However, two cases give guidance on how a Minnesota court might evaluate a questionable clause. In its 2008 ruling, In re The Estate of Peka, the Minnesota Court of Appeals upheld a provision that prohibited an ex-wife from living in the testator's house, which was placed in trust for the benefit of the parties' minor child, rejecting an argument that the provision was against public policy in promoting separation between parent and child.
The Minnesota Supreme Court, all the way back in 1897, showed that they are willing to strike down a provision as being against public policy. In Morse v. Blood, the testator stated in his will that his spouse would inherit his estate, but that she would be prevented from giving, either during her life or through her will, "one cent" to either her relatives or his. Among the issues created by this clause, the Court pointed out that if the spouse invited her family over for dinner, she would run the risk that the entire estate would be forfeited. The Court called the provision "mischievous and technical" and struck it down as against public policy.
If you're thinking of putting a ... creative... provision into your will or trust. Remember that, although you will enjoy a certain amount of leeway, you run the risk that a court could strike the provision. Make sure that you meet with a licensed attorney who can draft the provision, which could increase the chances that it would later be upheld by a court.
http://www.google.com/hostednews/ap/article/ALeqM5j8QwP4ZvRjh-5EDghmS7q9wwP_DgD9ATRI300
As in this case, most American jurisdictions follow the general rule that a testator, or one writing the will, has (almost) free reign to dictate how their assets are disposed of upon their death. However, most jurisdictions limit this free reign by allowing courts to strike provisions that are "against public policy". That was the argument in the Illinois case. The descendants argued that the provision amounted to religious intolerance, which they argued is against public policy. The Court demonstrated just how much leeway a testator can be given, stating that the Court was not in a position to ensure that a grandparent treats "grandchildren who reject his religious beliefs and customs in the same manner as he treats those who conform to his traditions".
Minnesota courts have not spoken on whether such religious clauses would be upheld. However, two cases give guidance on how a Minnesota court might evaluate a questionable clause. In its 2008 ruling, In re The Estate of Peka, the Minnesota Court of Appeals upheld a provision that prohibited an ex-wife from living in the testator's house, which was placed in trust for the benefit of the parties' minor child, rejecting an argument that the provision was against public policy in promoting separation between parent and child.
The Minnesota Supreme Court, all the way back in 1897, showed that they are willing to strike down a provision as being against public policy. In Morse v. Blood, the testator stated in his will that his spouse would inherit his estate, but that she would be prevented from giving, either during her life or through her will, "one cent" to either her relatives or his. Among the issues created by this clause, the Court pointed out that if the spouse invited her family over for dinner, she would run the risk that the entire estate would be forfeited. The Court called the provision "mischievous and technical" and struck it down as against public policy.
If you're thinking of putting a ... creative... provision into your will or trust. Remember that, although you will enjoy a certain amount of leeway, you run the risk that a court could strike the provision. Make sure that you meet with a licensed attorney who can draft the provision, which could increase the chances that it would later be upheld by a court.
Tuesday, September 1, 2009
For a good chuckle....
CNN recently posted a collection of odd will provisions. Take a look at it when you need a good laugh.
http://www.cnn.com/2009/LIVING/wayoflife/08/31/bizarre.will.stipulations/index.html?iref=mpstoryview
If you're contemplating a will, including if you're thinking of leaving your fortune to your dog Gunter or want to leave your birthday to your friend... as always, talk to a licensed attorney.
http://www.cnn.com/2009/LIVING/wayoflife/08/31/bizarre.will.stipulations/index.html?iref=mpstoryview
If you're contemplating a will, including if you're thinking of leaving your fortune to your dog Gunter or want to leave your birthday to your friend... as always, talk to a licensed attorney.
Wednesday, August 19, 2009
Comment Moderation Policy
This blog is implementing a policy regarding comments... which I'm taking as a sign that at least someone out there is looking at the blog.
Comments will be reviewed before being posted to the blog. Any comments that attach links to commercial sites or are otherwise off topic will not be posted. Comments and links to facillate the sharing of information will be welcomed and appreciated.
Comments will be reviewed before being posted to the blog. Any comments that attach links to commercial sites or are otherwise off topic will not be posted. Comments and links to facillate the sharing of information will be welcomed and appreciated.
I got what? From who? From where??
Every once in a great while you may find yourself on the receiving end on an estate. Whether it's your beloved grandmother's doll collection or an interest in property worth millions from your distant bachelor farmer great-uncle, there are certain things to keep in mind.
First, you likely do not need to worry about taxes. Taxes on the transfer of the property would have been dealt with through the estate tax, paid before you received the property. If you receive an inheritance that doesn't create income, you will not need to include it in your personal income taxes. However, if your inheritance generates income, for example if your uncle's farm is rented and you receive monthly checks, or if you sell that doll collection, you may have personal tax liability. In that case, you should work with an accountant to properly report that income or gain.
Second, you likely do not need to worry about debt from the estate. In the United States, debt cannot be inherited. Additionally, if the estate was administered through a probate process, debts should have been taken care of through that process. However, if a lien or other debt exists on the property and it wasn't paid off by the estate, you could run the risk of taking the property subject to that debt. If you believe this is the case, you should contact a licensed attorney in order to explore the possibility of disclaiming, or declining, that inheritance.
Finally, and this doesn't come up often but when it does it's extremely important, if you inherit from a distant relative in the old country, you need to contact a licensed attorney who is familiar with international estate planning. Unlike the United States, some other countries allow debts to be inherited. Most countries allow for a limited period to disclaim that debt, but only for a LIMITED period. You need to act quickly in determining whether you are inheriting debt and to disclaim that inheritance. If you don't, what you think will be a golden egg from Opa Fritz could turn out to be a major liability.
If you have received an inheritance and have any questions, including whether you will have a tax liability or whether you should disclaim the inheritance, contact a licensed attorney.
First, you likely do not need to worry about taxes. Taxes on the transfer of the property would have been dealt with through the estate tax, paid before you received the property. If you receive an inheritance that doesn't create income, you will not need to include it in your personal income taxes. However, if your inheritance generates income, for example if your uncle's farm is rented and you receive monthly checks, or if you sell that doll collection, you may have personal tax liability. In that case, you should work with an accountant to properly report that income or gain.
Second, you likely do not need to worry about debt from the estate. In the United States, debt cannot be inherited. Additionally, if the estate was administered through a probate process, debts should have been taken care of through that process. However, if a lien or other debt exists on the property and it wasn't paid off by the estate, you could run the risk of taking the property subject to that debt. If you believe this is the case, you should contact a licensed attorney in order to explore the possibility of disclaiming, or declining, that inheritance.
Finally, and this doesn't come up often but when it does it's extremely important, if you inherit from a distant relative in the old country, you need to contact a licensed attorney who is familiar with international estate planning. Unlike the United States, some other countries allow debts to be inherited. Most countries allow for a limited period to disclaim that debt, but only for a LIMITED period. You need to act quickly in determining whether you are inheriting debt and to disclaim that inheritance. If you don't, what you think will be a golden egg from Opa Fritz could turn out to be a major liability.
If you have received an inheritance and have any questions, including whether you will have a tax liability or whether you should disclaim the inheritance, contact a licensed attorney.
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