Orlando Estate & Elder Law

Bucket List? 1. Estate Plan

“Many seniors may be more focused on their bucket lists, than worrying about having their financial affairs in order.”

Seniors should be having some heart-to-heart discussions with their spouses and loved ones about their wishes concerning their assets and their final days, according to Intermountain Catholic in “Retirees Have Several Financial Issues to Consider.” After a loved one dies, family members are often left dealing with the expenses of their medical care and funeral. To be left to deal with these issues while grieving adds another layer of heartbreak. It doesn’t have to be this way.

Many people put off making a will.  This means that their property won’t be distributed as they would want. If you don’t already have a will, contact an estate planning attorney and get started right away. Without a will, your estate will be distributed according to the laws of your state.

Ask your estate planning attorney if a trust may be appropriate for your planning, so your trusted heir can succeed you as a trustee and then divide the estate, according to your wishes.

Don’t put your 401(k) or IRA savings accounts into trusts. The IRS will see that as a 100% withdrawal and you’ll be charged the taxes on it for the year the withdrawal was made. That one mistake could, and has, decimated lifetimes of savings.

You’ll want to grant a trusted family member or friend the power of attorney and medical power of attorney, so your affairs can be handled if you should become unable to do so. If you do not want “heroic measures”—CPR and other medical procedures done to bring someone back to life if they are unresponsive—then you’ll want to discuss a Do Not Resuscitate (DNR) form with your doctor. That form will need to be with you and you should tell others about it, so they can instruct medical personnel accordingly. Otherwise, EMTs and doctors are required by law to take whatever measures they deem necessary to keep you alive.

If you haven’t already applied for Social Security, you may wish to go to your local Social Security office to discuss what benefits are available to you and how to collect them.

Most seniors qualify for Medicare, but there are many different plans. It is also likely that you’ll need supplemental plans to cover costs, including prescriptions.

Your best bet: sit down with an experienced estate planning attorney who can help you create an estate plan that is best for you and your family.  You should also have conversations with your family members about tough topics, so when the time comes for them to act on your behalf, they’ll be ready.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Intermountain Catholic “Retirees Have Several Financial Issues to Consider”

No Casino Trip with Trust Dollars

When people go gambling with money that is not theirs, the results are rarely like the movies.

The 1990s movie Empire Records was not well received by film critics.  However, it has become a cult classic for fans. The movie starts with an employee of an independent music store taking money from the store safe and heading to a casino. Naturally, the employee loses big at the tables and all the money is lost.

Without that money, the store will need to be sold to a large chain. However, since this is a movie, the store employees come up with a way to raise money and save the store. The employee who gambled away the money is not punished. Everything presumably goes on as before, after the movie finishes.

When someone gambles with other people's money in real life, the results are usually different, as a story in the Sacramento Bee illustrates "Woman accused of cheating trustees, spending their money on Vegas gambling trip."

A Sacramento woman was acting as a fiduciary of a trust that owned a piece of real estate. She sold the property for $300,000. That money was supposed to go to the beneficiaries. However, she only gave the beneficiaries $30,000 and kept the rest for herself. She used the money to pay off debts and go gambling in Las Vegas.

Trustees, of course, are handled differently than fictional music store employees. Trustees have legal duties and, if they do not fulfill those duties, they can face criminal punishment. If she is convicted, the woman faces up to 20 years in prison.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Sacramento Bee (May 30, 2018) "Woman accused of cheating trustees, spending their money on Vegas gambling trip."

Are Your Heirs Prepared?

People who inherit a lot of wealth and are not ready to deal with it, can run into a lot of problems.

Everyone is aware that it is not a good idea to let minor children inherit a lot of wealth and leave them to manage it on their own. The money would likely be wasted, and the children might then lack any motivation to go to school and get a job.

This is so obvious to people that the law does not even allow it. If minors are left a large inheritance, the court will appoint someone to manage it on their behalf. However, many people assume that once a person matures, they are ready to handle large inheritances on their own.

Adults, particularly those who do not already have wealth of their own, can run into the same problems as minors when they inherit money. This a particularly timely problem. In the next few years, many adults will receive large inheritances they are not ready to manage, as Financial Advisor discusses in "Inheritors Not Prepared to Inherit, FIS Says."

In the coming decades, it is expected that 30 trillion dollars will be passed down between generations.  However, few of those who are set to receive this wealth, understand how to handle it. Almost half do not think they will need to get professional advice to handle it. If something does not change, much of that wealth could be squandered.

There are ways to fix this problem, by making sure your heirs understand how to handle their inheritances. You can also alleviate the problem, by using trusts managed by professional trustees as a tool in your estate plan.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Financial Advisor (May 16, 2018) "Inheritors Not Prepared to Inherit, FIS Says."

Trustee At Odds With Step-Mom

Alan Thicke's widow continues to fight with his two sons over the money in his estate.

Alan Thicke's sons had previously filed a motion in court requesting that their step-mother Tanya Thicke be legally barred from challenging the pre-nuptial agreement she signed with their father. The sons lost that case and Tanya Thicke has not filed any legal challenges to the pre-nuptial. However, there are still other conflicts between the family members.

The widow is now accusing the sons, who act as co-trustees of the trust created by their father, of squandering the money, refusing to give her any information about the accounts and not giving her what she is owed.

She is upset that the sons refused to reimburse her for a monument she purchased for Alan Thicke's burial site, while reimbursing one of the sons for a $100,000 post-funeral party. TMZ reported on this development in "Alan Thicke's Widow His Sons are Being Shady With $$$ ... Where's My Inheritance!?"

Part of the tragedy here, is that Alan Thicke likely thought he was doing the right thing in creating a trust to make sure his widow and both of his sons from a previous relationship were adequately taken care of. However, a trust is only as good as its trustees.

If the trustees do not get along with one of the beneficiaries, problems can arise. Part of the reason for using a trust may be to avoid conflicts in blended families. It is not a good idea to designate a family member as trustee, when that family member is also a beneficiary with potential conflicts of interest.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: TMZ (May 9, 2018) "Alan Thicke's Widow His Sons are Being Shady With $$$ ... Where's My Inheritance!?"

Trusts Are Not Rogue-Proof

Trusts are an excellent way to make sure that your assets are handled and distributed how you want after you pass away.  However, they are not completely foolproof.

Stanley Smith probably thought he did everything right in making his estate plan and he probably did.

Smith was a multimillionaire who gave most of his estate away to charity. He also created a trust with assets of $100 million that was to be invested for the benefit of his wife.

To make sure a trustee would not act in his or her own interests instead of Smith's wife's interests, Smith appointed three co-trustees. This trust should have been about as foolproof as a trust could be.

One of the trustees, Mark Avery, went rogue.

Avery took half of the assets in the trust and invested them in a security company. He claims this was for the benefit of Smith's wife. However, Avery was actually just building himself his own private army and navy for reasons of his own, as CNBC reported in "The American Greed Report: How to control your money even after you die."

Avery was caught and is currently in federal prison serving an 11 year sentence.

Even when everything is done right in creating a trust, things can still go very wrong.

What this means is that you need to be very careful when it comes to the party or parties you appoint to be the trustee of your trust.

It is important to remember the name of the legal instrument (“trust”) and appoint a trustworthy person who lives up to that name.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: CNBC (Sep. 2, 2017) "The American Greed Report: How to control your money even after you die."

Removed Trustee Rightfully Held Assets

If a trustee is removed from his or her duties, the former trustee usually turns over any assets he holds to the new trustee as quickly as possible. However, there are exceptions to that rule.

Marsha Sinzheimer and her late husband had created a trust for her benefit. The trust documents required that there should be co-trustees, one a corporate trustee and one an individual trustee.

Sinzheimer's son Andrew was appointed to take over as the individual trustee. However, before the former individual trustee stepped down, he exercised his authority to remove the corporate trustee and did not name another one.

When Andrew took over, he demanded that the now former corporate trustee turn over control of the trust assets to him, but he was refused.

Andrew Sinzheimer and his mother sued, according to the Wills, Trusts & Estates Prof Blog in "Removed Corporate Trustee’s Refusal to Turn Over Trust Assets to Individual Trustee Was Prudent and Appropriate."

The court determined that the former corporate trustee acted appropriately, because it had refused to turn over the assets until Andrew named another corporate trustee.

That was proper in this case, because Andrew intended to dissolve the trust and in doing so was not considering the interests of the remainder beneficiaries of the trust to whom the former corporate trustee still owed a fiduciary duty.

This case illustrates that trustees have duties to all of the beneficiaries of a trust. That includes beneficiaries who are not yet receiving any direct benefit from the trust.  Individual trustees often benefit from working with a corporate trustee, or an experienced estate and trust attorney.

For more information about estate and trust administration  in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 13, 2017) "Removed Corporate Trustee’s Refusal to Turn Over Trust Assets to Individual Trustee Was Prudent and Appropriate."

Don't Trust A Trust To Avoid Family Combat

One of the reasons people often cite for preferring to use a trust instead of a will, is the possibility of a family battle in probate court over a will. Trusts do not necessarily solve the issue of families feuding over estates.

Stories about the families of wealthy or famous people fighting over estates in probate court are easy to find. In any given month, the media is likely to report on several such battles, many of which have been going on for years.

Most of the time, the families are fighting over the will of the wealthy person, at least that is what most of the stories are written about. To avoid their own families fighting similarly over their estates, these stories lead many people to use a trust as their main estate planning tool, instead of a will.

Nevertheless, having a trust instead of a will does not preclude litigation between family members over an estate, as Barron's discusses in "Are Fiduciaries Setting Themselves Up to Be Sued?"

Most people with trusts designate a family member to be the trustee. However, if that family member does not get along with other members of the family who are the beneficiaries of the trust, then the same family dynamics that can lead to fights over a will can lead to litigation over the trust.

Trustees have a legal duty to act as fiduciaries and to manage the trust in the best interests of all beneficiaries.

What many families end up seeing is that a beneficiary who does not get along with the trustee, for whatever reason or no reason at all, will look for a way to sue the trustee for breach of his or her duty.

There are ways to make these sorts of lawsuits less likely.

The key step is to make sure that any trust is created with the advice of an estate planning attorney and not from forms downloaded from the Internet.

For more information about trusts and estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Barron's (June 6, 2017) "Are Fiduciaries Setting Themselves Up to Be Sued?"

The Earl and the Pop Star

A British lord is connected to a pop star who is notorious for partying uncontrollably. However, it is probably not in the way that you might think.

Upon hearing that the Earl of Cardigan, whose ancestor led the famed Charge of the Light Brigade, has a connection to a pop star best known for partying hard, your first thought would probably be that an older aristocrat had started dating or married a much younger woman. Your opinion probably would not change, if you learned that the connection between the Earl and the pop star had led to three separate trustees of the Earl's estate stepping down.

However, in this case, your thought would not even be close to the truth, as the Telegraph reported in "Earl of Cardigan's lawyer quit in latest storm to hit troubled estate."

It appears that a trustee of the estate rented a house on the Earl's estate to the British pop star Pete Doherty, who is notorious for throwing parties and causing large amounts of damage.  It is not surprising that is exactly what Doherty is alleged to have done at the estate.

The Earl of Cardigan was not happy. As a result, two estate trustees stepped down three years ago. The Earl sued them last year. The latest bit of news is that another attorney acting as a trustee for the estate, has also stepped down and has been vague about the reasons for doing so.

It is not clear what will eventually happen with this estate.

If the Earl cannot get along with his attorneys, he might find it much harder to get new ones to work as trustees for his estate.

For more information about  estate planning and trust administration in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Telegraph (March 13, 2017) "Earl of Cardigan's lawyer quit in latest storm to hit troubled estate."

Don't Let A Trustee Outfox You

One of the reasons that trusts are an effective estate planning tool is that the trustee is legally required to act in the best interests of the beneficiaries. However, it is increasingly difficult to hold trustees liable when they do not do so.

Trustees have tremendous power. Depending on the specific language of the trust documents, trustees can have wide latitude in deciding how trust assets will be invested and distributed. Giving trustees this power is important to make sure that the trust is operated in such a way as to maximize their value for beneficiaries.

With that power can also be the temptation for the trustee to act in his or her own interests instead of the beneficiaries. If that happens, then the trustee can be held liable.

That is the way everything is supposed to work, but as the Wills, Trusts & Estates Prof Blog explains in “The Many Ways Trustees Escape Liability” it can often be difficult to actually hold trustees to account.

Many people often waive their rights to hold a trustee liable either by consenting to a transaction before it is made or by signing a release from liability form. In both cases beneficiaries are supposed to be given full disclosure before waiving any rights. However, opinions about what constitutes full disclosure can vary.

Some trust documents themselves also limit the ability to hold trustees liable and courts always have the right to excuse a breach of duty by a trustee if the court finds it equitable to do so.

If you have a conflict with a trustee, make sure you receive expert legal advice about how to proceed. That will give you the best chance of holding the trustee liable for any abuse of power.

I help people choose the right trustee every week in my practice.  If I can assist with your choice or help with administration of a trust, please get in touch.

Reference: Wills, Trusts & Estates Prof Blog (Aug. 11, 2016) “The Many Ways Trustees Escape Liability”

Tom Benson Claims Daughter and Grandchildren Tried to Kill Him

The ongoing battle between Tom Benson, his daughter and his grandchildren took an interesting turn when excerpts from a deposition were filed in federal court. In them, Benson claims the daughter and grandchildren tried to kill him.

For the last year Tom Benson, the owner of the New Orleans Saints and Pelicans, has been in a bitter fight with his daughter and grandchildren. The fight began when Benson announced in January 2015 that he was planning to leave his entire estate to his third wife and cut the daughter and grandchildren out completely. Their response was to file a lawsuit in Louisiana state court alleging that Benson was incompetent.

They lost that case. However, they have also been pursuing another lawsuit against Benson in federal court, which was triggered when Benson transferred ownership shares of his professional sports teams out of a trust set up for the benefit of the daughter and grandchildren. Benson is allowed to transfer the shares as long as he substitutes assets of equal value for them. So far, he has allegedly only offered to replace the shares with promissory notes.

ESPN reports that the case has taken a new turn in "Saints/Pelicans owner Tom Benson wants 'zero' left in trust to daughter, grandchildren."

A deposition taken of Benson in the state court case was supposed to be under seal, but portions of it have been leaked to the public as the trustee attached them to court filings in the federal case. In the deposition Benson stated that he wants to leave nothing in the trust.

The reason he gave for this was that his daughter and grandchildren tried to kill him. When asked how they did that Benson claimed that they picked on his wife when he was not feeling well.

This case is likely to get even more interesting over time.

Even if your family life is not like a TV movie, advance planning is a must.

Reference: ESPN (May 20, 2016) "Saints/Pelicans owner Tom Benson wants 'zero' left in trust to daughter, grandchildren."