Among all of the legal brouhaha the Penn State scandal has raised, there was one going around estate planning circles this month. In July, Joe Paterno transferred the home to his wife for $1. Journalists speculated whether this was to shield assets, therefore an indication that perhaps the coach knew that a scandal might be on the horizon.
Many Pennsylvania attorneys who practice in civil litigation quickly ended this theory, pointing out that Pennsylvania law already exempts the home from judgments. There was really no need to protect the home from creditors. So what's going on?
A simple transfer to a spouse doesn't have great estate planning consequences, unless one is having health issues and such a transfer could prevent control issues from arising or if the transfer is made to a spouse as trustee of a trust. Both appear to the the case. The New York Times had a great discussion of how a transfer to a spouse as trustee of a trust can have great tax benefits. In the end, there really isn't much to have a brouhaha about.
Wednesday, November 30, 2011
Monday, October 31, 2011
How to get an EIN.
So, you've been named a personal representative of an estate. You've found the will, met with an attorney, had them file the paperwork with the court and received your letters testamentary. You've gone to the bank to set up an account for the estate and the bank asks for an EIN number. What the heck? First of all, an EIN number, or "employer identification number" is the equivalent of social security numbers for entities, like businesses or estates. Obtaining an EIN number is free, easy and fast. The Internal Revenue Service issues EINs online at http://www.irs.gov/businesses/small/article/0,,id=102767,00.html . Upon entering the requested information, including the social security number of the decedent and your own social security number, you'll immediately be issued an EIN. Once you receive the EIN, let your probate attorney know and give them the number for their records. Unlike a lot of things with probate, this is an issue that can be resolved immediately and at no cost.
Wednesday, September 28, 2011
Repost: What is an International Will?
It's almost the end of the month and I'm spending it in Germany on vacation. Rough, huh? In honor of vacation and generally taking things easy, I reposting a blog entry from 2010, with some additional information.
What is an international will?
Just like different US states have different rules about what it takes to make a writing a valid will, different countries have different rules regarding what it takes to make a writing a will. For individuals who reside in a country other than their country of citizenship or own property in another country, these differences can create major headaches when it comes time to probate a will.
In order to prevent just those type of headaches, the 1973 Convention providing a Uniform Law on the Form of an International Will provides for unified requirements to cause a writing to be valid in any signatory country. Following these requirements allows for a one-document fits all affected jurisdictions approach to drafting a will, assuming all the jurisdictions are signatory countries. The convention is a great help for those living in an increasingly globalized society and can be found at http://www.unidroit.org/english/conventions/1973wills/1973wills-e.htm
However, because probate law is ruled by the states and not the federal government, the
benefits of this treaty only clearly apply to residents of those states which have adopted the provisions of the treaty into their probate code. Luckily for Minnesota residents, Minnesota has adopted the provisions in Minnesota Statutes 524.2-1001 et al.
Some of the major additions to a normal will that are requirement for international wills, is for each page to be numbered, for each page to be signed by the testator, and for the will to be witnessed by an "authorized person" in addition to the standard witnesses required under state law. An "authorized person" in Minnesota is anyone licensed to practice law in the state of Minnesota.
If you reside in a country and have citizenship in another or have property in other countries, speak with an attorney licensed in your jurisdiction of residence who has experience with international wills.
In order to prevent just those type of headaches, the 1973 Convention providing a Uniform Law on the Form of an International Will provides for unified requirements to cause a writing to be valid in any signatory country. Following these requirements allows for a one-document fits all affected jurisdictions approach to drafting a will, assuming all the jurisdictions are signatory countries. The convention is a great help for those living in an increasingly globalized society and can be found at http://www.unidroit.org/english/conventions/1973wills/1973wills-e.htm
However, because probate law is ruled by the states and not the federal government, the
benefits of this treaty only clearly apply to residents of those states which have adopted the provisions of the treaty into their probate code. Luckily for Minnesota residents, Minnesota has adopted the provisions in Minnesota Statutes 524.2-1001 et al.
Some of the major additions to a normal will that are requirement for international wills, is for each page to be numbered, for each page to be signed by the testator, and for the will to be witnessed by an "authorized person" in addition to the standard witnesses required under state law. An "authorized person" in Minnesota is anyone licensed to practice law in the state of Minnesota.
If you reside in a country and have citizenship in another or have property in other countries, speak with an attorney licensed in your jurisdiction of residence who has experience with international wills.
Additional information: If the country you are dealing with is not a signatory to the convention, don't be discouraged. Not all, but many jurisdictions recognize the validity of a out-of-state or out-of-country wills as long as it meets the requirements of where it was executed.
Wednesday, August 17, 2011
The Fertile Octogenarian May Exist
Yahoo news is reporting that 94 year old Zsa Zsa Gabor may be trying to be the fertile octogenarian.
http://news.yahoo.com/94-old-zsa-zsa-gabor-going-mother-153309072.html
The "fertile octogenarian" is a legal notion that causes good estate planners to plan for additional children born after the will is signed, no matter the age of the testator (person signing the will) or the likelihood that they may have biological children. Who knows, the testator could always adopt... or be Zsa Zsa.
http://news.yahoo.com/94-old-zsa-zsa-gabor-going-mother-153309072.html
The "fertile octogenarian" is a legal notion that causes good estate planners to plan for additional children born after the will is signed, no matter the age of the testator (person signing the will) or the likelihood that they may have biological children. Who knows, the testator could always adopt... or be Zsa Zsa.
Friday, July 29, 2011
Planning Can Keep a Tragedy from Turning into a Circus
Anytime someone in their twenties passes away, it's a tragedy. That's the same for Amy Winehouse, regardless of her addiction history. However, from early reports, it appears that proper planning may prevent the tragedy from turning into a legal circus.
http://money.usnews.com/money/blogs/alpha-consumer/2011/07/27/amy-winehouses-financial-legacy
Something this article points out is that her estate plan will likely prevent portions of her estate to be awarded to her ex, Blake Fielder-Civil. This is an important point. Most jurisdictions, whether in the US or in another country, have rules about how an estate will be split out when you don't have a will, what we call dying intestate. These rules use assumptions about how most people would want their estate to be dispersed. However, those assumptions may do something that you don't want to do; for example, apparently in the United Kingdom, filter assets to exes. If you know anyone in your life that you want to make sure doesn't receive your estate, meet with a licensed attorney to review the likelihood that person could receive a portion and what you can do now to prevent a circus later.
http://money.usnews.com/money/blogs/alpha-consumer/2011/07/27/amy-winehouses-financial-legacy
Something this article points out is that her estate plan will likely prevent portions of her estate to be awarded to her ex, Blake Fielder-Civil. This is an important point. Most jurisdictions, whether in the US or in another country, have rules about how an estate will be split out when you don't have a will, what we call dying intestate. These rules use assumptions about how most people would want their estate to be dispersed. However, those assumptions may do something that you don't want to do; for example, apparently in the United Kingdom, filter assets to exes. If you know anyone in your life that you want to make sure doesn't receive your estate, meet with a licensed attorney to review the likelihood that person could receive a portion and what you can do now to prevent a circus later.
Thursday, June 16, 2011
Who's in Their Right Mind Anyway.
A probate court in Pennsylvania is determining whether the heir to the DuPont fortune had the capacity to execute a valid will. http://www.philly.com/philly/news/pennsylvania/123980894.html
In Minnesota, testamentary capacity means that the person executing the will knows the "nature, situation, and extent" of their property, the claims of others on their estate, and be "able to hold theses things in their mind" long enough to make a rational decision in distributing their assets. Check out the case of In re Estate of Torgersen, 711 N.W.2d 545, for more explanation. You don't have to be a financial genius to have capacity, just need to meet those three minimum requirements.
If you are setting up your estate plan and are thinking about disinheriting someone, a good idea is to request that your attorney ask you questions to demonstrate your capacity and record that conversation. That way, if anyone questions whether you had capacity when you made the will, there will be evidence showing that you did. If you're setting up a plan that disinherits someone, speak with a licensed attorney in your area about preventing questions of capacity.
In Minnesota, testamentary capacity means that the person executing the will knows the "nature, situation, and extent" of their property, the claims of others on their estate, and be "able to hold theses things in their mind" long enough to make a rational decision in distributing their assets. Check out the case of In re Estate of Torgersen, 711 N.W.2d 545, for more explanation. You don't have to be a financial genius to have capacity, just need to meet those three minimum requirements.
If you are setting up your estate plan and are thinking about disinheriting someone, a good idea is to request that your attorney ask you questions to demonstrate your capacity and record that conversation. That way, if anyone questions whether you had capacity when you made the will, there will be evidence showing that you did. If you're setting up a plan that disinherits someone, speak with a licensed attorney in your area about preventing questions of capacity.
Tuesday, May 31, 2011
Pre-nups Have a Place in Estate Plans
There are a variety of good reasons to enter into a pre-nuptial agreement, also referred to as an ante-nuptial agreement, with your soon-to-be spouse and not all of them include divorce. A more important, and hopefully likely, scenario is that you will be happily married until one of you passes away. However, without proper planning, property could pass in a way that neither you nor your soon-to-be spouse intend.
For example, if you have family farm property, normally your interest will go to your spouse upon your death. If your spouse gets remarried and fails to properly plan, their new spouse may get an interest in your family’s property. Additionally, even if you specifically give property to someone other than your spouse in your will, there are statutory rights for the spouse that can only be waived through an ante-nuptial or post-nuptial agreement. This can especially become a concern if you have children from a prior relationship.
If you have family farm land or this will be a second marriage, a pre-nuptial can be a valuable addition to your estate planning documents. If you think a pre-nuptial or post-nuptial might be right for your circumstances, contact a licensed attorney in your state.
For example, if you have family farm property, normally your interest will go to your spouse upon your death. If your spouse gets remarried and fails to properly plan, their new spouse may get an interest in your family’s property. Additionally, even if you specifically give property to someone other than your spouse in your will, there are statutory rights for the spouse that can only be waived through an ante-nuptial or post-nuptial agreement. This can especially become a concern if you have children from a prior relationship.
If you have family farm land or this will be a second marriage, a pre-nuptial can be a valuable addition to your estate planning documents. If you think a pre-nuptial or post-nuptial might be right for your circumstances, contact a licensed attorney in your state.
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