King & Wood, P.A.

How Do I Best Pass My Car to My Heirs?

How Do I Best Pass My Car to My Heirs?

“Steps to take so there is no delay in passing a car to your heirs.”

A recent nj.com article asks, “What is the best way to pass a car to your heirs when you die?” The article explains that, as far as estate planning is concerned, a car is considered personal property. A car can be transferred by a specific mention of it in a will or just by the general reference to “personal property.” The only exception is if it is a collectable, in which case the auto will need a specific reference.

Typically, the executor of the estate (if there’s a will) or the administrator (if there’s no will) would either:

• Execute the bill of sale and the old title to sell the car to a third party; or
• Execute the old title to transfer the car to the person who inherits it in the will.

The executor should have an original document provided by the probate court that shows the executor's authority to act on behalf of the estate. This is called Letters Testamentary. If there is an administrator, Letters of Administration will also be required and should be given to the new owner.

However, if the car is owned by both a husband and wife or by civil partners, the transfer can be made in New Jersey, for example, by sending a copy of the death certificate, the old title, and an affidavit supplied by the Motor Vehicle Commission confirming the status of ownership and the co-owner's death, without the need for Letters Testamentary or Letters of Administration.

If the estate is small, under $50,000 in the case of the car passing to a spouse/civil partner or under $20,000 where the car passes to another heir, the documents required by the New Jersey Motor Vehicle Commission will include an Affidavit of the Spouse or Next of Kin, as filed with the probate court rather than Letters Testamentary or Letters of Administration, in addition to the old title.

To complete the transfer, the transferee will also need the odometer reading on the vehicle, the transferee's driver's license, her insurance information and payment of the fee charged by the Motor Vehicle Commission.

Because it’s so easy to transfer a motor vehicle, there’s no reason to put a vehicle in a trust prior to death. That’s only going to possibly increase insurance rates. Likewise, transferring the vehicle to a different owner prior to death, again could increase insurance rates.

However, there are several things that could cause a delay in the transfer of the vehicle's ownership. For instance, there could be a lien on the vehicle for an auto loan that would have to be paid before the car could be transferred. There also could be inheritance or estate taxes or other creditor claims that would need to be addressed, before a distribution can be made.

Delays could also occur, if there is a disagreement among the beneficiaries as to whom should receive the vehicle in distribution. There could be delays, if there's difficulty obtaining a duplicate title, because the old title can't be found. Finally, a family member may not be able to address the administration of the estate or not dispose of an asset, because of grief caused by the death of their loved one.

Reference: nj.com (November 13, 2018) “What is the best way to pass a car to your heirs when you die?”

Should I Give Access to My Checking Account to My Adult Son in Case of an Emergency?

Should I Give Access to My Checking Account to My Adult Son in Case of an Emergency?

“Setting up joint accounts between parents and children may seem like an effective way to prepare in case of emergency or if people need help with finances as they get older, but it can cause some big tax and estate problems. Here's a dual strategy to consider instead.”

It's not uncommon for an elderly parent to go to the bank to add a child to his or her bank account “in case something happens to me.”

The reason why most parents do this, is to give their child access to their money during an emergency. It sounds like it should be a pretty easy process. With proper planning, it can be. However, parents should know that simply making a child the joint owner of a bank account (or investment account or safe deposit box) can have unintended consequences. Sometimes this isn’t the best solution during a family crisis.

As Kiplinger’s recent article, “The Trouble with Joint Bank Accounts 'Just in Case'” explains, the vast majority of banks set up all of their joint accounts as “Joint with Rights of Survivorship” (JWROS). This type of account ownership typically says that upon the death of either of the owners, the assets will automatically transfer to the surviving owner. However, this can create a few unexpected issues.

If Mom’s intent was for the remaining assets not spent during the family crisis to be distributed by the terms of a will, that’s not happening. That’s because the assets automatically transfer to the surviving owner. It doesn’t matter what Mom’s will says.

Remember that adding anyone other than a spouse could create a federal gift tax issue, depending on the size of the account. Anyone make a gift of up to $15,000 a year tax-free to whoever they wish, but if the gift is more than $15,000 and the beneficiary isn’t the spouse, it could trigger the need to file a gift tax return.

For example, if a parent adds a child to their $500,000 savings account, and the child predeceases the parent, half of the account value could be includable in the child’s estate for state inheritance tax purposes, like in Pennsylvania. The assets would transfer back to the parent, and, depending on the deceased’s state of residence, state inheritance tax could be due on 50% of the account value. In Pennsylvania, the tax would be 4.5%, which would mean a state inheritance tax bill of more than $11,000.

However, if Mom’s intent in adding a joint owner to her account is to give her son access to her assets at her death, there’s a better way to do it. Most banks let you structure an account with a “Transfer on Death,” or TOD. With a TOD, if the beneficiary passes before the account owner, nothing happens. There’s no possibility of a state inheritance tax on 50% of the account value. When the account owner dies, the beneficiary has to supply a death certificate to the bank, and the assets will be transferred. These assets are transferred to a named beneficiary, so the time and expense of probating the will are also avoided, because named beneficiary designations supersede the will. This is the same for pensions, IRAs and life insurance policies.

Setting up an account as TOD doesn’t give the beneficiary access to the account, until the death of the account owner. Therefore, the change in titling isn’t considered a gift by the IRS, which eliminates the potential federal gift tax issue.

There’s no such thing as a joint retirement account because IRAs, 401(k)s, annuities, and the like can only have one owner—it’s not possible to make someone a joint owner. However, if a parent becomes incapacitated, they still often would like their child to have access to all their assets, in addition to their bank accounts. The answer for these is a financial power of attorney. This is a document that lets one or more people make financial decisions on your behalf. This document should be drafted by a qualified estate planning attorney.

It is important to understand that many financial institutions require a review process of a financial power of attorney appointment. The bank’s legal department may want to review the document before allowing the designated person to make transactions. This can take several weeks, so be sure that all financial institutions where you have accounts have a copy of your executed financial power of attorney. Have it in place before it’s needed.

Talk to your estate planning attorney about what you’re trying to do and let her guide you. Planning in advance will make things much easy for your loved ones, in case of an emergency.

Reference: Kiplinger (November 14, 2018) “The Trouble with Joint Bank Accounts 'Just in Case'”

What Estate Planning Mistakes Should I Avoid After a Divorce?

What Estate Planning Mistakes Should I Avoid After a Divorce?

“According to a report from UBS Global Wealth Management, 56% of married women leave control of major financial planning and investing decisions to their spouses.”

Divorce can be a very difficult time and a big change for most people. However, women, in particular, often realize that they’re impacted most by the financial aspects of divorce. As a result, it’s no shock that many women find themselves financially overwhelmed when divorcing.

Forbes’s recent article, “The Top Estate Planning Mistakes Divorcing Women Make,” notes that even though you may be dealing with a lot of emotion at the start of a divorce, it's important to focus on certain issues, like your inevitably changing financial situation. This is especially important, if you have children. You may be busy taking care of many aspects of your immediate financial needs, but this is also the time to consider your future as well. It's never too early to address this often-overlooked task and learn how to protect yourself (and your children), while avoiding these estate planning mistakes that divorcing women commonly commit.

Reviewing Your Will. When you divorce, your will should be reevaluated and updated. If your spouse was named as a beneficiary on any accounts, you may want to make changes to those.

Reviewing the Children's Guardianship. If you don’t name a guardian, there's no knowing who gets custody of your children if you were to die. If you and your spouse already created a guardianship plan before you divorced, and you now have custody, review this plan. That’s because the appointed guardian may be one of your former spouse's family members. This may be someone with whom you’re no longer comfortable.

Failing to Plan for All Assets. You may be entitled to some of your former spouse's deferred savings plans, like a 401(k), IRA or other eligible savings plan. After you've claimed your share, be sure to designate beneficiaries (such as your children) for these plans.

Failing To Incorporate Trusts Into Your Estate Plan. A trust can help to protect your assets (and have them distributed according to your wishes) in certain circumstances. Creating a trust can ensure that your money still goes to whom you want after you pass. Trusts can also be used to defer asset distributions, until your minor children are legal adults.

No Planning Whatsoever. The biggest estate planning mistake a person can make is not having a plan at all. When someone dies without a will or estate plan, their assets go through probate. Your children, grieving your loss, will have to spend a great deal of time and money on this process. State law will determine who inherits assets, when there is no will or estate plan in place. The final decision may also end up being against your wishes. Estate planning may be the last thing on your mind right after a divorce, but it's important to make it a priority.

Not Using an Estate Planning Attorney. Many women new to the estate-planning process make the mistake of going at it alone. It’s critical to get the help of an experienced estate planning attorney. Without the help of a professional, you may overlook important aspects of the estate-planning process.

Reference: Forbes (November 8, 2018) “The Top Estate Planning Mistakes Divorcing Women Make”

How Do I Protect the Identity of my Deceased Spouse?

How Do I Protect the Identity of my Deceased Spouse?

“After someone dies, there's a lot to do in order to with finances and making sure that no one steals the dead person's identity.”

When a senior passes away, there are frequently questions about the type of benefits from Social Security that are available to her husband (especially when the wife’s benefit was larger than his).

Along with this, questions arise about the protective measures to take to protect her identity from being stolen and other legal measures that are needed after the death of a spouse.

nj.com’s recent article, “A to-do list for widows, and how to protect the identity of a dead loved one,” says that when a loved one dies, there’s a lot you can do to protect their identity.

As to the widower’s Social Security benefits, he’s entitled to the greater of his benefit or her benefit, whichever is higher. It’s good reason to plan your Social Security benefits for when you retire.

While some say it doesn't matter if a deceased person's identity is stolen, it can be an issue. There are several things you should do when someone dies.

First, the executor should contact Social Security and inform the agency of the wife’s death. Next, contact the three credit bureaus to also tell them, and ask that they put a freeze on her credit. To do this (and most of the other actions here), the executor will need copies of the death certificate and letters testamentary to wrap up the finances. The executor should then inform the wife’s attorney and/or tax preparer, as well as all her investment custodians and financial institutions.

If she had a non-qualified (non-retirement) account, there should be a step-up in basis on at least 50% of the account and possibly 100%, depending on the circumstances. In either case, the executor should obtain the fair market value of each of the investments as to the date of death right away. This should be immediately mentioned to both the accountant and the attorney. Make certain that the investment custodians increase the cost basis, as needed. If there’s an IRA, there are options, and for a spouse, the account can be treated as a rollover IRA or an inherited IRA. Note that an inherited IRA requires minimum distributions annually but doesn’t impose a 10% penalty on withdrawals.

Another step is to look at any life insurance policies. If the deceased had a will and trust, the executor should talk to an estate planning attorney to understand where the assets are going. Taxes should be estimated to determine if any changes need to be made to withholding or estimated tax payments.

Last, the surviving spouse/beneficiary should sign proper forms for all brokerage accounts and new account forms to indicate the new ownership and title.

Reference: nj.com (November 6, 2018) “A to-do list for widows, and how to protect the identity of a dead loved one”

How Do I Include Heirlooms in My Estate Plan?

“Splitting up money is easy. Splitting up an antique car or a vacation home isn't. Unless you plan ahead by answering these three questions, your family could be in for some strife.”

With baby boomers now starting one of the largest transfers of wealth in U.S. history, many people are looking at how to facilitate the flow of their assets to their children, grandchildren and great-grandchildren. It’s pretty straightforward to pass along liquid assets like stocks, bonds and cash. However, “hard” assets like property, art, and jewelry can present some problems. Most families don’t maintain a good inventory of these assets, the value of the assets may be outdated or unknown and family members may have different ideas of how to handle them.

To make matters worse, individuals are often reticent to discuss the issue with their heirs. Because of this, hard assets can be totally overlooked, despite discussions about their potential value. Similar to liquid assets, illiquid assets must have a formal plan that starts with a dialog between the family decision-makers, estate planning attorneys and perhaps an appraiser. To get the illiquid assets distribution discussion going, consider these three key questions:

What’s it worth? Begin with its fair market value, which is the first step for any plan. That’s because it attaches an actual, current dollar figure to an item that has probably changed in value over time.

When getting an appraisal for an asset, look for an experienced, certified appraiser—especially for artwork. The reason is that there’s a big financial risk of mispricing your assets. Don’t rely on online art price guides, advice from your brother who used to be a painter, or even the original seller (who may have a conflict of interest). The appraiser should be certified by one of the main accrediting bodies, like The Appraisers Association of America or the International Society of Appraisers. For a large collection, the cost of the appraisal is well worth it, so you will know its true value and how that value will impact your estate.

Which heir(s) want it? Along with the actual monetary value, consider the emotional or sentimental value of your hard assets. Your children may have strong attachments to specific assets. This should be taken into account.

If several heirs want the same asset, look at whether and how it can be divided. If it can’t be divided equally, think about how you can equitably divide other assets. If some, but not all, of your heirs want to keep the asset, look into an equitable buyout situation that transfers ownership to the heirs who’d like to keep it.

How do I pass on? There are several ways to pass on illiquid assets. Typically, it’s best to let an heir inherit the asset itself. Illiquid assets get a step-up in cost basis that reduces or eliminates the capital gains tax, even if the heirs decide to sell it. You can also place the asset in a trust, family partnership, or LLC and formalize the transfer of ownership in a tax-efficient way, at the same time saving on future estate taxes. Finally, if you don’t think your heirs understand the asset enough to sell it for a fair price, you can sell it yourself, pay the appropriate taxes and give them the cash.

While discussions about illiquid assets can be emotional, don’t delay talking about how certain items will be passed down.

Reference: Kiplinger (November 5, 2018) “Estate Planning Answers for 'Hard' Assets Like Art, Heirlooms”

 

How Do I Draft an Advance Directive in Oregon?

“When it comes to estate planning and making preparations for the end of your life, you may benefit a great deal from creating an advance directive.”

An advance directive, also called an advance health care directive or a living will, is a legal document that states what health care decisions should be made on your behalf, if you are unable to make your own decisions. KRBK’s recent article, “How to Create an Advance Directive in Oregon,” offers some tips on creating this document for its citizens.

In serious or life-threatening medical situations, there are frequently many decisions to make. They include life-support and a feeding tube, if you’re unlikely to recover. An advance directive helps answer many of the medical questions, when physicians are unable to ask patients how they want to be treated.

Advance directives in the state of Oregon require you to complete a form provided by the Oregon state government (or a close substitute) to create an advance directive.

There are four primary parts to this form, and you can limit the scope of the document to a certain period of time. Otherwise, it will be effective, until either you revoke it in writing or you pass away.

The first section concerns the appointment of a health care representative, sometimes called a health care surrogate or a designated agent. By appointing an individual as your health care representative, you’re transferring decision-making power to her, in the event you cannot direct your own health care. The second part is the health care instructions. This section is the part that relates most closely to a conventional living will. Here, you can specify any unique wishes you want your healthcare providers to honor, if you become incapacitated.

You also need to state, if you want life support and/or tube feeding in four different circumstances:

• if you’re near death;
• if you’re permanently unconscious;
• if you have an advanced progressive illness; or
• if you’re under extraordinary suffering.

You can say yes to any and all of these, or you can also choose to leave those specific judgments up to your doctor.

The form’s third section is for your witnesses to sign. To be binding, you’ll need two different witnesses to sign the document with you. They need to either see you sign the document or see you acknowledge that you signed. By signing, your witnesses are stating that you are who you say you are, and that you’re of sound mind and not under duress. When selecting your witnesses, you can’t choose the person you named as your health care representative, and you also can’t choose your doctor. One of your witnesses also can’t be a spouse or a blood relative.

The last section is for your health care representative and your alternate representative (if you want to name one). Your representative, by signing, is saying that she’ll act in good faith on your behalf and acknowledges that you can revoke the directive at any time.

Advance directives are also sometimes known as living wills. This can make things confusing, especially with living trusts and last wills. All three can have to do with end-of-life situations, but each is different.

A living trust transfers control of assets to a trustee. This is different from a will, because it happens while you’re still alive. The trustee manages the assets for you and can continue to do so after you die. If you create a revocable trust, you’ll be able to transfer assets in and out if you want; but an irrevocable trust doesn’t allow you to do that. You can also say if or when you want the trustee to dissolve the trust and transfer assets to your beneficiaries.

A will, or a last will and testament, outlines what you would like done with your assets after your death. After you die, an executor will carry out your wishes through a court process called probate.

Contrast this to a living will: it doesn’t have anything to do with your estates or your assets. A living will relates to the way in which you want to receive or not receive medical care, once you can no longer make those decisions for yourself.

Preparing for end-of-life situations can be a difficult task, but it’s extremely important. You can eliminate ambiguity for your doctors and family by clarifying your wishes ahead of time. Work with an estate planning attorney for all of these documents.

Reference: KRBK (October 31, 2018) “How to Create an Advance Directive in Oregon”

Why Does Stormy Daniels Have a Nuncupative Will?

Why Does Stormy Daniels Have a Nuncupative Will?
“Daniels’s recording is an oral will, also known in the law as a nuncupative will.”
Stormy Daniels recently released her memoir, Full Disclosure. The book delivers Daniels’s vivid narrative of her 2006 Lake Tahoe meeting with President Trump and the drama that ensued from her signing of a Non-Disclosure Agreement before the 2016 election.
Daniels’ book unintentionally provides a lesson in trusts and estates, says Above the Law’s recent article, “Stormy Daniels’s Oral Will: Nuncupative Wills Make For Risky Estate Planning.”
The final chapters of her book tell of her great fears after The Wall Street Journal’s January 2018 reporting of a Non-Disclosure Agreement that she later argued in federal court was invalid. She appeared on news shows and many articles were written about her relationship with the President.
After she received threats against her and her daughter, Daniels made her friend record a video in which she directs the disposition of her estate at her death. She refers to the recording as her last will and testament, writing that she was “never so direct about anything” in her life and that she had “the clear-eyed vision of a person about to die.” The recording shows detailed information about her life insurance policy and specific distribution instructions. She also gives instructions for the care of her horses—Daniels directs the sale of one horse, so that the proceeds can be used for the care of her daughter.
The recording she made is an oral will—also known as a nuncupative will. An oral will is rarely enforceable in a court of law, but there are a few specific exceptions. One is when a written will is nearly impossible to execute. Oral wills create issues, because they raise questions as to authenticity and fraud. In California and Texas, where Daniels lives, oral wills aren’t admissible for probate. In New York, these wills are permissible in some situations, like when it’s made by a member of the armed services in active duty during a war or a seaman at sea.
Wills, as opposed to many other legal documents that can be valid with an e-signature, must have original signatures and in-person witnesses. A handwritten will, also called a holographic will, is generally unacceptable, except in certain limited circumstances.
When executing a will, each state has a list of specific requirements, including that the testatrix (testator) makes certain statements as she signs the document, and witnesses attest to her ability to execute the document. Validity issues frequently are dependent on the disposition of a testatrix, the testimony of the witnesses and the strength and character of the testatrix’s signature. To offer a will for probate, the original document with a real signature must be filed with the probate court.
Daniels, as an artist, opted to record her final disclosure, even though her imminent fear of danger prompted the recording. Her actions show us that we shouldn’t wait until an emergency to think about estate planning. With her many irons in the fire and court cases, Daniels should properly prepare and execute her last will and testament, this time, on paper and with the help of an experienced estate planning attorney.

Reference: Above the Law Advisor (October 10, 2018) “Stormy Daniels’s Oral Will: Nuncupative Wills Make For Risky Estate Planning”

How to Pass Heirloom Real Estate to Your Heirs

“Some assets require special estate planning strategies and a lot of thought. One such asset is what I sometimes call heirloom real estate, or family real estate.”

Heirloom real estate is a property that’s been in the family for some time and that one may want to keep in the family. This includes vacation homes or other second homes, farms, a longtime residence, but not business or investment properties.

Forbes’ recent article, “How To Transfer Heirloom Real Estate,” notes that, as the senior generation ages, heirloom real estate can be the place where many generations get together at least once a year, usually around a holiday. As families spread around the country or world, the family real estate can become the one tie or source of stability and continuity for the family.

To maximize the chances that the property will stay in the family and help keep the family together, you have to give the details some thought and work with your family members and an estate planning attorney. Most people think to leave the real estate in their wills to their children jointly, much as they do with the rest of their estate. However, that is usually not a wise strategy for heirloom real estate.

If the property is in a different state than where you reside, your estate will have to be probated in two states. The state where you reside will control the probate of most of your estate. However, the real estate is probated in the state where it is located. You can avoid that second probate by having the property owned through a trust, limited liability company (LLC), or other entity.

Maintenance and other routine expenses often become problems, because each sibling has to agree to pay a share of these expenses. Some expenses are mandatory, like real estate taxes, but other expenses can be discretionary.

Typically, at least one sibling will want to sell the property, while others don’t. In some instances, when the other siblings don’t want to sell but aren’t able to buy the other sibling’s share, one of the siblings will try to sell her share to an unrelated person. Joint ownership also creates issues, when one of the owners divorces or passes away, because the death of a co-owner raises the issues of whether that owner’s share goes to the surviving co-owners or the heirs of the deceased.

A limited liability company (LLC) may be the best choice. It provides the liability shield of a corporation with the operating and tax flexibility of a partnership. If you chose an LLC or other entity as the best option, the parents who currently own the property should create the entity right away: they’ll be the original owners of the LLC and set up its operating rules. They then can give or sell ownership interests to the children, or they can hold the LLC for life and leave its ownership to the children through their estates. The parents set up rules for sharing and maintaining the property that can be implemented on a trial basis, while the parents are alive. Changes can be made as needed.

An important feature of the LLC is that it can keep the property from being sold outside of the family. The LLC bylaws can prohibit any owner from selling her shares to someone not in the family. The bylaws can also create a process for one member, or other owners, to sell to the LLC and provide a formula for determining the price and payment terms.

The LLC won’t resolve all of the cash flow and money issues. The co-owners must still be willing and able to finance continuing ownership of the property. One way to address money problems is for the parents to leave a cash fund or a life insurance policy to the LLC that will cover some or all of the ownership costs for a period of time. It might also provide a way for the other owners to buy out the interest of anyone who wants to sell.

This can also be a great tax planning tool, when an estate is possibly subject to federal, state, or inheritance taxes. Giving shares of the LLC and establishing minority ownership interests can decrease the value of the property for tax purposes.

You can take these actions to make sure your family property remains heirloom real estate but have frank discussions with the next generation, so it understands the full picture and its members are interested in retaining the property. Seek the counsel of a qualified estate planning attorney, when you’re ready to create the LLC or other entity.

Reference: Forbes (August 19, 2018) “How To Transfer Heirloom Real Estate”

James Brown Estate Still Up for Grabs, 12 Years Later

“The Godfather of Soul married a woman who was married to another man, who in turn was married to three other women. It's up to a federal court to decide who gets millions in song royalties in a case with major implications for artists and families.”

When James Brown, the "Godfather of Soul," passed away at 73 in 2006, he left behind quite a legacy and quite a mess. The musician gave us some wonderful music. At the time of his death, he was married to Tomi Rae Hynie. Or was he? The two had a child named James Brown II. Or did they?

The Hollywood Reporter’s recent article, “James Brown Family Feud: Inside a 12-Year Fight Over Bigamy, DNA Tests and Copyright Law,” reports that in the 12 years since Brown's death, these questions still plague a South Carolina probate court that must determine how to divide Brown's assets. So far, Hynie and James II have succeeded in overcoming challenges to their assertion of being the surviving spouse and legitimate son, respectively. That puts them in position to collect a large part of Brown’s estimated $100 million estate.

However, there’s more to the story and the fighting. Nine children and grandchildren from Brown's previous marriages recently filed a lawsuit alleging dishonesty on the part of Hynie and the administrators of the estate. This new case deals with Brown's copyrights and may move the estate battles to a federal court, which usually has exclusive jurisdiction over copyright matters.

Tomi Rae Hynie is a former Janis Joplin impersonator in Las Vegas. She became a backup singer for Brown and eventually, in 2001, his fourth wife. However, when she married Brown, she was already married to Javed Ahmed and had been since 1997. In turn, Ahmed had his own secret: when he married Hynie, he already was married to at least three other women in Pakistan. Ahmed told her about his wives after the ceremony and disappeared without consummating the marriage. He really was only looking for U.S. citizenship.

Hynie had her marriage to Ahmed annulled in 2004, but by that point her relationship with Brown had become tumultuous. Hynie and Brown got into a physical altercation, and he was arrested for domestic assault, which led to a separation. Brown then sought his own annulment, and she countersued for divorce. The question of whether the two were truly legally married wasn’t resolved at the time. Right after the separation, the couple told a court, of a settlement wherein she would waive any claim of a common law marriage. Hynie says she then reconciled with Brown, and they lived together until he died. However, Hynie was included in Brown's will because he never updated it during their relationship. She asked to correct this at his death.

James II also wasn't included in Brown's will. The questions regarding his lineage arise from the notion that in the 1980s, Brown had a vasectomy specifically to avoid paternity suits. James II was Brown's only child born after that. But James II proved himself to be Brown’s son after taking not one but two DNA tests.

The nine heirs of James Brown filed their case in California and accused Hynie of having "embarked on a series of duplicitous business machinations calculated to deprive Brown's children of their rightful interests in Brown's music under the Copyright Act."

The issue of Brown’s music deals with an increasingly important part of copyright law known as termination rights. In the 1970s, Congress extended the copyright term, and lawmakers elected to recognize that many who had created works at the early stage of their careers had assigned rights to publishers without much bargaining power. Therefore, these songwriters or their heirs were allowed to terminate those deals 35 years after their work was published and reclaim rights during the later years of the copyright term.

As a surviving spouse, Hynie would be entitled to 50% of the termination interest, with the other 50% shared by the surviving children (or grandchildren if the child is deceased). Because of her large stake, Hynie is in position to veto any effort to reclaim song rights. If there's no termination, under the existing song publishing agreements, the song royalties go to the estate. Those monies would then be distributed in accordance with Brown's will and any court-ordered alterations. Before he passed, Brown earmarked some of his estate to go to charity. The estate stipulated that the motive was to donate money for scholarships to needy children, however, "to date not one penny has been available for those scholarships, because the probate litigation has continued."

The complaint says that starting in 2013, a consultant for the estate tried to get the children to sign away their copyright termination interests for cash. "Defendants deliberately concealed the underhanded nature of these proposals by orchestrating their pressure campaign through go-betweens, who falsely professed to be working in Plaintiffs’ best interests," the complaint alleges.

At the same time, Hynie and James II served notice on Warner/Chappell Music, the publisher and rights holder of James Brown's back catalog, that they were exercising termination rights on 138 of Brown's compositions. They failed to inform the other heirs.

The complaint further states that Hynie reached a $1.875 million deal with Warner/Chappell in 2015 to transfer back rights to five of the songs. The suing children say the deal was written in a way that leaves a royalty structure intact that favored the estate to the disadvantage of Brown's children. Hynie is, in effect, being accused of trading away the family's copyright termination powers. The children and grandchildren are upset by the deal, which leaves them out of the money.

Hynie and the estate administrators argue that the litigation doesn't belong in federal court, and that copyright law doesn’t provide a remedy to invalidate the types of agreements at issue.

Reference: The Hollywood Reporter (October 3, 2018) “James Brown Family Feud: Inside a 12-Year Fight Over Bigamy, DNA Tests and Copyright Law”

Estate Planning Basics

“Most people likely know there are some basic documents they need for their estate plan. Those include a will, living wills or medical directives, durable powers of attorney for health care or property and side letters.”

USA Today’s recent article, “Preparing a will: What you need to know about estate planning documents, laws,” says that, technically, a will is called a “Last Will and Testament.” It’s a document designed to assure the integrity of the disposition process, declare the heirs of the estate and name the individual (the executor) who will manage the disposition process. A will is just one component of the estate planning process. The decedent’s will generally designates an executor or personal representative to coordinate the probate process.

A person must have testamentary capacity or sufficient capacity to execute a will. Adults are usually presumed to have that capacity. A person challenging a will must show that the person lacked sufficient capacity.

There are two types of wills. A holographic will is one that is self-written and doesn’t meet the requirements of state law. In some states, this makes the will unenforceable, but other states allow holographic wills, if certain conditions are satisfied. A nuncupative will is an oral will, and most states don’t recognize these wills as enforceable (but there are exceptions).

If you are said to die intestate, it means that you passed away without a valid will in place before your death. With no will, state intestacy statutes dictate who receives what portion of your assets and property that does not otherwise have a surviving joint owner or a designated beneficiary.

You may have heard of the term “codicil.” That’s an amendment of an existing will.

It’s smart to work with an experienced estate planning attorney, because there are plenty of state-specific wrinkles and tax ramifications that may not be apparent.

For instance, if you get divorced and remarry years later, and your intent is to have all of your assets pass to your children from your first marriage, you might think that since your will doesn’t name your new spouse, he or she can’t inherit from you. That’ wrong. You need a new will.

Some state laws say that a “pretermitted spouse” (a spouse not named in the will) is entitled to a share of the estate—unless the will expressly states that he or she isn’t to inherit. Nonetheless, even where the spouse is disinherited by the will, almost every state provides that a surviving spouse has the right to take a statutory share of the deceased spouse’s estate.

Speak with an experienced estate planning attorney, especially if your life has included second marriages, to make sure that your wishes are followed, and your family is protected.

Reference: USA Today (October 3, 2018) “Preparing a will: What you need to know about estate planning documents, laws”