King & Wood, P.A.

What Are My Estate Planning “Must Have’s”?

“Estate planning is not only for the wealthy—everybody can benefit from ensuring their assets and finances are properly taken care of after their death.”
Many people think that having an estate plan just means drafting a will or a trust. However, there’s much more to include in your estate planning to be sure all of your assets are transferred directly to your heirs at your death. A successful estate plan also includes provisions allowing your family members to access or control your assets, if you become incapacitated.
Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides us with a list of items every estate plan should include:
· A will and/or a trust;
· Powers of attorney;
· Beneficiary designations;
· A letter of intent; and
· Guardianship designations.
In addition to these documents and designations, a thorough estate plan also should consider the purchase of insurance, like long-term care insurance, a lifetime annuity to generate some level of income until death and life insurance to pass money to beneficiaries without probate.
Let's look at each item on this checklist to make sure you haven't left any decisions to chance.
Wills and Trusts. A will or trust should be one of the primary parts of your estate plan, even if you don't have a lot of assets. Wills make certain that your assets are distributed according to your instructions. Some trusts also help limit estate taxes or legal challenges. Talk to an experienced estate planning attorney about wills and trusts.
Power Of Attorney. A durable power of attorney (POA) allows an agent or a person you assign to act on your behalf, if you’re unable to do so yourself. A healthcare power of attorney (HCPA) designates another person to make critical healthcare decisions on your behalf in the event of incapacity.
Beneficiary Designations. Some of your assets will pass to your heirs without being mentioned in your will, such as 401(k) plan assets. Therefore, maintain a beneficiary and a contingent beneficiary on these types of accounts. Likewise, insurance plans should have a beneficiary and a contingent beneficiary, because they also pass outside of a will. Your beneficiaries should be over 21 and mentally competent.
Letter of Intent. This is simply a document for your executor or a beneficiary to define what you want done with a particular asset after your death or incapacitation. Some letters of intent also contain funeral details and other special requests. A letter of intent isn’t legally binding. It helps inform a probate judge of your intentions and may help in the distribution of your assets, if the will is declared invalid for some reason.
Guardians. If you have minor children or are considering having kids, naming a guardian is very important. Be sure the person(s) shares your views, is financially sound and willing to raise your children. You should also name a backup or contingent guardian.
Without these designations, a court could order your children to live with a family member you wouldn't have selected, or in some instances, the court could instruct that your children become wards of the state.
A will is a great place to start, but it's only the starting point.
Reference: Investopedia (July 16, 2019) “6 Estate Planning Must-Haves”

Can Charles Manson’s Heirs Get Profits from “Once Upon A Time…In Hollywood”?

“Profits from the use of a song written by notorious cult leader Charles Manson in Once Upon A Time…In Hollywood are poised to go to the killer’s grandson, against director Quentin Tarantino’s wishes…”
The Quentin Tarantino movie, starring Brad Pitt, Leonard DiCaprio, and Margot Robbie, features the Manson killings and ends with a shocking bloodbath 50 years after the grisly murders.
Wealth Advisor’s recent article, “Charles Manson’s grandson can profit off of Once Upon a Time…In Hollywood,” also notes that the movie prominently features a song called “Look at Your Game, Girl,” written by aspiring songwriter Charles Manson before his followers’ murderous spree. The tune is sung a cappella by girls in Manson’s ‘family,’ as they walk through Los Angeles and forage for food.
Tarantino said that he only used Manson’s music, after assuring himself that his family wouldn’t benefit, and that royalties and licensing fees would go to the victims’ families. However, since the movie was released, controversy has exploded and a DailyMail.com investigation has discovered the issue around Manson’s music is far more complicated and likely to wind up in court.
“Quentin told friends that he struggled with the decision to use Manson’s music, and only agreed to use it after being assured that any money from its use would go to the victims’ families,” a movie insider told DailyMail.com
Mary Ramos, music supervisor on the film, agreed, noting “Even considering using that, we wanted to find out ... what happens if this is used, where the money goes. And there was a trust set up for the victims, and no-one even associated with the Mansons and the Manson family makes money off that song.”
Manson had initially visited director Roman Polanski’s home in 1968 search of Hollywood legend Doris Day’s music producer son Terry Melcher, who had talked about giving Manson a recording deal. Manson was upset that Melcher changed his mind on the contract, and discovered that he no longer lived at the house.
On August 8, 1969, Manson ordered family devotees Charles ‘Tex’ Watson, Patricia Krenwinkel and Susan Atkins to return to the house and kill everyone inside, including actress Sharon Tate, Polanski’s wife.
Fast forward a few decades. Guns N’ Roses recorded Manson’s song “Look at Your Game, Girl” on the hit album ‘The Spaghetti Incident?’ that went platinum in 1993. Lawyer Nathaniel Friedman, who filed a 1971 wrongful death suit for one of the victim’s grandchildren, negotiated a lucrative settlement with the band.
However, that wrongful death judgment wasn’t extended, and eventually the rights to profits from Manson’s music reverted to the killer’s family, although that led to a bitter fight when Manson died in prison in 2017, at age 83. There were two men who claimed to be Manson’s biological sons. Another man said he was Manson’s biological grandson, and a friend claimed to have been bequeathed Manson’s estate in his final will.
After a long legal battle, Manson’s grandson, Jason Freeman, won and was given permission to take possession of the killer’s remains in March 2018. However, there’s still a fight ongoing over who will inherit the Manson estate. However, Freeman will most likely prevail, given his early success. As a result, any royalties, licensing fees, or profits from the use of Manson’s song in “Once Upon A Time…In Hollywood” probably will go to Manson’s grandson.
Reference: Wealth Advisor (August 27, 2019) “Charles Manson’s grandson can profit off of Once Upon a Time…In Hollywood” 

Don’t Forget to Update Your Estate Plan

“Are you the type of person who signs their will, sticks it in a drawer and never looks at it again? Or are you constantly updating and making small changes to your will, based on which one of your grandchildren has fallen out of favor?”
There are some people who sign their will once in their life and never change it. They may have executed their estate plan late in life, or after they were diagnosed with a serious disease. However, even if your family life and finances are pretty basic, there are still changes in the law that you may need to incorporate into your estate plan. Some of the people that you named in your will could also have died or moved away.
Forbes’ recent article, “Why You Should Change Your Will Now,” warns us that if you’ve taken the “one and done” approach to your estate plan, think again. In addition to the reasons already mentioned, your assets may have changed dramatically since you signed your will. The plan you put in place years ago, may not have considered new federal and state estate taxes. Now that you’ve accumulated significant wealth that will be passed on to your children, you might need to review your plans for that wealth for your children.
You may want to include grandchildren to help pay for their college education.
It is also not uncommon for parents to want to protect their children from themselves. This can be because of addiction issues or a lack of financial literacy. If that’s an issue, some parents elect to hold monies in trust for adult children, as a way to ensure that the funds will be there throughout the child’s lifetime.
A person’s estate plan should grow with them over time. An estate plan for a twenty-something may be very basic, but a newly-married couple will want to include provisions for their spouse. Parents need to think about providing for and protecting their children. Adult children have another set of concerns and you need prepare for the possibility of divorcing spouses, poor life choices, addiction issues and just poor money management. There are many stages in life when you may need to readjust the provisions for your children in your estate planning documents.
If you haven’t looked at your will in a while, do it now.
Reference: Forbes (August 27, 2019) “Why You Should Change Your Will Now”

How Will Jeffrey Epstein’s Estate Be Settled?

“Generally, when settling an estate, debts and expenses are paid first, charitable and spousal transfers follow and applicable estate taxes are levied afterward.”
Jeffrey Epstein’s last will and testament is dated August 8—just two days before he was found dead in a jail cell. His will shows $577 million in assets, including fine arts and collectibles that are still to be valued. It also has a trust to hold his property.
CNBC’s recent article, “Here’s why a bitter legal battle could be ahead for Jeffrey Epstein’s estate,” reports that a lengthy fight is coming as Jeffrey Epstein’s estate addressees the legal claims over the distribution of his assets. The 66-year-old was facing federal charges of sex trafficking of minors and sex trafficking conspiracy.
The time to do your will isn’t two days before you die.
Attorneys believe there will be a long legal fight, as alleged victims file claims against the money manager’s estate. The Epstein estate will be in the middle of lawsuits for a long time, until all of the plaintiffs are paid.
Let’s look at some the issues that heirs, plaintiffs and attorneys will face.
1. Creditors get paid first. Epstein’s will tells his executor to pay from the estate several costs, including funeral and burial expenses, administration costs and “all of my debts duly proven and allowed against my estate.” The will then directs the executor to give all of his property after these payments and distributions to The 1953 Trust, which was also established on August 8. The trust distributions aren’t known, because the trust document wasn’t attached to the will.
This means creditors, including plaintiffs of the many lawsuits against Epstein who receive a judgment in their favor against the estate, will be paid before property passes through to the heirs.
2. All trusts not equal. Trusts may provide creditor protection, but not all trusts offer the same level of protection. Irrevocable trusts can’t be changed by the grantor, once they’ve been established. When you transfer the assets to this trust, they’re out of your estate and you save on taxes at death. In addition, you’ve given up control of the asset—that’s why these trusts offer creditor protection. However, revocable trusts can be revised by the grantor during his or her life. Because the terms can change, the assets are still deemed to be owned by the grantor—making them subject to estate taxes and seizure from creditors.
You don’t save on estate taxes when you create a revocable trust, and Epstein’s trust is revocable. And although moving assets to an irrevocable trust may protect them from creditors, it won’t work if you’re facing legal claims.
3. Where you live is key. Epstein was a resident of St. Thomas in the U.S. Virgin Islands, but his will mentions five properties, including a mansion in New York City. The other properties, all owned by corporations of which he owns shares, are in New Mexico, Florida, Paris and the Virgin Islands. New York is known to chase down well-to-do residents who claim to live in tax-free havens. They conduct non-residency audits and hit them with taxes. Big estates can mean a lot of revenue for New York.
There is a chance New York could seek its share of state income and estate taxes. Where you live is answered by looking at facts and circumstances, including voter’s registration, driver’s license and the location of family and belongings. Just spending 183 days in your “new” state alone, isn’t sufficient to protect it from an audit from a high-tax state.
Reference: CNBC (August 24, 2019) “Here’s why a bitter legal battle could be ahead for Jeffrey Epstein’s estate”

What Will Happen to Jeffrey Epstein’s Estate?

“Two days before he died in what was ruled a suicide in a Manhattan jail cell, Jeffrey Epstein signed a will that put all of his holdings into a trust.”

Jeffrey Epstein’s will was filed in the U.S. Virgin Islands. It’s a "pour-over will" that transfers all of his assets into a trust. The trust is secret, not open to the public, and is administered by trustees. Epstein's will, which is a public document, claimed assets of more than $577 million.

However, none of that money can be moved into Epstein's trust until a probate court decides what to do with the numerous claims made against the convicted sex offender and his estate.

CBS News’ recent article, “What we know about Jeffrey Epstein's will, and what happens next with his estate,” provides a list of questions that can help explain what happens next with Epstein's estate. His estate will be overseen by the two executors named in the will, attorneys Darren K. Indyke and Richard D. Kahn.

The terms of the trust are not public, because they’re not part of the will itself. Epstein's creation of the trust is commonly done by those who desire privacy. Of course, there is some surprise because the will and the trust were created just two days before he died. One of the most intriguing parts of Epstein's will is that it lists his domicile (his permanent residence) as the U.S. Virgin Islands. Domicile is important in determining which jurisdiction controls the estate. Domicile must be proven in a probate court, and is usually accomplished with tax returns, a driver’s license, or documented time spent in the jurisdiction.

Another question about Epstein's will, is whether it will even be declared valid. His will, and thus his entire trust, can be held invalid, if the will wasn’t properly executed and if it wasn't properly witnessed or signed. There can’t be any fraud, undue influence, or duress. Since the will was made right before his suicide, there’s no certainty of his mental capacity.

His testamentary capacity, which means his mental ability make a valid will or estate, will probably be decided by a probate judge. If his estate planning documents are voided, the assets would transfer to the beneficiary of the estate, which is his brother Mark Epstein. However, Mark would still be liable for creditors' claims and any alleged victims' lawsuits.

Epstein's $577 million in assets will not pass from his estate into his private trust, until all creditors' claims have been satisfied in a probate court.

Legal experts expect a long, drawn-out, and complex process for deciding the future of Epstein's wealth.

Reference: CBS News (August 21, 2019) “What we know about Jeffrey Epstein's will, and what happens next with his estate”

How Do I Plan My Estate With a Disabled Child?

“As our children with disabilities grow older, and we ourselves grow older, the future can seem daunting. The future can be overwhelming. Taking steps to plan for the future can seem way too complicated, especially when you don’t know where to start.”

Yahoo News’ recent article, “4 Tips for Estate Planning When Your Child Has a Disability” gives us four simple steps to take, if you have children with disabilities.

1. Draft a letter of intent. This is a letter of instruction that includes instructions that your family and friends will need, if you die or for any reason become incapacitated. This letter should list the passwords to your online financial accounts and personal information someone would need to efficiently step into your life, your home and care for child with a disability. It can include medications, daily routine, strategies you use for calming, therapists’ contact info and other daily living items someone not living in your home may not know about your life.
2. See an estate planning lawyer. Ask an attorney to help you build a vision for what you want your child’s future to look like. Have the attorney create a will and a special needs trust. A special needs trust lets you to distribute funds and property in a way that doesn’t interfere with government program benefits.
3. Create a power of attorney or guardianship. A power of attorney for financial and medical issues may be a viable solution. Supported decision-making is an alternative that empowers those with intellectual disabilities to make choices with support and while preserving their rights. If guardianship is your objective, talk to an attorney before your child reaches age 17.
4. Create an ABLE account. This account can hold funds to ensure your child’s regular account never has more than $2000, which would jeopardize government program benefits, like Medicaid.

This may seem like a gigantic task, so take it one step at a time. Do one thing at a time. Begin the process with the letter of intent and think about the vision you have for your child. Then speak with an estate planning attorney, who is experienced in helping special needs families.

Reference: Yahoo News (August 26, 2019) “4 Tips for Estate Planning When Your Child Has a Disability”

How Do I Discuss My Parents’ Long-Term Financial Goals With Them?

“If you haven’t discussed your parents’ long-term financial goals with them, you aren’t alone.”
A recent study by Ameriprise Financial found that more than one-third of adult children say they haven’t had a conversation about their parents’ long-term financial goals. Even though discussing this delicate topic may seem uncomfortable, addressing it now can help avoid challenges and uncertainty in the future. To that end, the Ameriprise Family Wealth Checkup study found that those who talk about money matters, feel more confident about their financial future.
The Enterprise’s recent article, “Four financial questions to ask your parents,” provides some questions that can help you start the dialogue.
“What do you want to achieve in the next five or 10 years?” Understand your parents’ aspirations for the next few years. This includes their personal and financial goals and when they plan to retire (if they haven’t already). Do they want to move closer to their grandchildren or to warmer weather? Getting an idea of how they want to spend their time, will help you know what to expect in the years ahead.
“Where is your financial information located in case of an emergency?” An incident can happen at any time, so it’s essential that you know how to access key personal, financial and estate planning documents. You should have the contact info for their financial adviser, tax professional and estate planning attorney, and be sure your parents have the right permissions set, so you can step in when the need arises. You should also ask your parents to share the passwords for their primary accounts or let you know where you can find a password list.
“How do you see your legacy?” Talk to your parents about how they want to be remembered and their plans for making that happen. These components can be essential to the discussion:
• Ask them if they have an updated will or trust, and if there’s anything they’d like to disclose about how the assets will be distributed.
• Health care choices and expenses are often a big source of stress for retirees. Talk to your parents about their current health priorities and the future and have them formalize their wishes in a health-care directive, which lets them name a loved one to make medical decisions, if they’re unable to do so.
“How can I help?” Proactively offering to help, may get rid of some of the frustrations or relieve stress for even the most independent and well-prepared parents. The assistance may be non-financial, like doing house projects or giving them more time with their grandchildren. You should also look into including an attorney in the discussion, if your parents have estate planning questions.
Retirement and legacy planning can be complex. However, taking the time to have frequent conversations with your parents, can help you all prepare for the future.
Reference: The Enterprise (August 19, 2019) “Four financial questions to ask your parents”

How Do I Get an Executor to Sell My Mom’s Home?

“If the will does not specifically provide a bequest of the home and the will says everything goes 50/50 to you and your sister, then the executor has the right and responsibility to sell the home to carry out the bequest.”
It’s not uncommon for a parent to leave his or her home to their children in equal shares.
Let’s assume that two sisters are both equal beneficiaries of their mother’s estate in New Jersey. Each adult child has retained an attorney. The executor, who’s a family friend, is moving slowly with the probate process, and it’s been more than a year of waiting. The executor of estate is the individual who is specifically designated in the deceased’s will to manage the estate.
In this case, the glacier-like progress of the executor is causing a strain on the sisters’ relationship. This results in the sisters fighting over the estate. One sister is in no hurry to sell the house, and the other feels frustrated and may have to just give her everything and walk away to save her sanity.
nj.com’s recent article on this topic asks “My mom’s executor won’t sell the house. What can I do about it?” The article says that these sisters probably tried to negotiate a resolution. However, there’s no reason to think the only way to resolve this is for you to “give her everything and walk away.”
The executor should sell the home and distribute the proceeds to the sisters.
If one of the children, her attorney, or the executor object to the sale of the home, a judge may need to intervene.
If there’s no issue, and the executor won’t act, a beneficiary can apply to the court to remove the executor. The judge may then name the two sisters as co-executors, so they can sell the home.
Although there would be legal fees and costs to go to court to get some action, if the executor won’t move, there may not be any other choice.
In addition, the sisters could ask the judge to decrease any executor commission that would be owed to the original slow-moving executor to cover the legal fees, if the judge agrees that the executor was acting improperly.
Reference: nj.com (August 10, 2019) “My mom’s executor won’t sell the house. What can I do about it?”

Can I Insulate My Will From Challenges After I’m Gone?

“You’ve probably seen it in the movies or on TV hundreds of times: A close-knit family gathers for the reading of the will of a wealthy patriarch or matriarch. When the terms are revealed, someone benefits at the expense of someone else, causing a ruckus. It may even come to blows.”

When the details of a will are announced, “bad blood” can continue to boil between estranged family members, who won’t even speak to one another.

Wealth Advisor’s recent article, “How to Protect Your Will From Legal Challenges,” explains that unfortunately, a similar scene can also play out in real life, if you fail to make proper provisions.

However, with some planning, you can avoid these kinds of disputes—or at least minimize the risk of your will being contested by your loved ones.

Before you (and your spouse, if married) consider your will and your comprehensive estate plan, discuss estate matters with close family members who likely will be impacted. Give them a rough outline of your plans for the disposition of your assets and other important topics. These types of conversations can eliminate potential problems and better prepare your heirs. It will also avoid a dramatic “shocker,” like those seen on the big and small screen.

While there are no guarantees, review these ways to bulletproof your will from a legal challenge:

A no-contest clause. This is also known as an “in terrorem clause.” It says that if anyone named in your will challenges it, he or she is excluded from your estate.

Witnesses. Use witnesses who know you well, like close friends or business associates because they can state convincingly that you were of sound mind when you made out the will. You should also select witnesses in good health, preferably younger than you are, and easily located. You can also add extra witnesses for more protection.

A physician’s note. A doctor’s note about your health status is recommended, if you’re extremely ill or elderly. This can declare that you have the requisite mental capacity to make estate planning decisions, which can be useful in addressing legal challenges. Get the physician’s note near to the time that the will is signed.

In addition, you can protect your will from legal challenges, by recording it. State laws may have something to say about this, so speak with your estate planning attorney.

Reference: Wealth Advisor (August 12, 2019) “How to Protect Your Will From Legal Challenges”

Is it Worth it to Contest a Will?

You never expected your mother to leave you a fortune, but you thought that she’d leave you something when she passed. Did a sneaky cousin have something to do with it? What do you do now?

If it helps, and it might not, this happens more frequently than you’d think. The response is sometimes shock, other times, it’s anger. However, according to this recent article from Forbes, “5 Things You Should Know About Contesting A Will,” before you start making revenge plans or hiring the most tenacious attorney in town, take a deep breath. You need to consider some cold hard facts:

1. Litigation is expensive. Many people will ask if an attorney will take the case on a contingency fee basis—typically a third of what you receive, and he or she only gets paid if you do. Most probate attorney won’t take a will contest on a contingency fee, because there’s a risk they won’t get paid. If they do, be certain that you have an experienced estate planning attorney with experience in estate battles.
2. Have lots of Rolaids on hand. You’re gonna need them. It’s a rough journey, one that can be full of lies, misrepresentations and accusations. There may also be a counter lawsuit against you. You’ll probably be deposed in a deposition, where the opposing lawyer will ask you questions about the case. You may be portrayed as greedy, and you might have to testify in court.
3. Snap decisions are required. Once you hire your attorney, he or she will work with you to develop a strategy for the case. Your attorney may recommend that you file suit immediately and be the first one into the courthouse. On the other hand, your counsel may think it best to send a letter to the attorney representing the person you’re suing with a request for information. Depending the response, you may decide to file suit. In most cases, you’ll have a limited time to contest the will. If you don’t do so within that time period, you can’t bring a lawsuit. Talk to an experienced attorney shortly after the death.
4. You’ll probably reach a settlement. Once the litigation has begun, and the attorneys have had time to exchange information and do some fact finding (in what is known as the discovery process), your attorney will talk to you about the strengths and weaknesses of your case. It may be appropriate at that juncture for one side to present the other with a settlement offer. This would end the litigation without the time and expense of trial. This may be a wise option, if you’re tired of fighting and willing to consider a settlement instead of going to trial. Your attorney may also point out weaknesses in your case and advise you to be happy with getting a settlement. That way you can move on with your life. You should approach the settlement like a business decision, and try to keep emotion out of it.
5. Expect emotional pain. While you may get some satisfaction if you win, you will may lose any connection with the people you bring to court. If you lose, well, that’s a lose-lose proposition. No matter how big the win, any underlying emotional issues will still be with you. Be prepared to be very businesslike about any estate battle.

Reference: Forbes (May 21, 2018) “5 Things You Should Know About Contesting A Will”