Wednesday, August 22, 2018

An awful irony: Lack of a will puts the estate of privacy-loving Aretha Franklin in public spotlight

by Tom Alberts Aug 22, 2018

Summary: Legendary recording artist Aretha Franklin was outspoken about her wish for privacy, especially when it came to her health and other personal matters. The Queen of Soul, while frequently in the spotlight, preferred to maintain a low profile despite her global fame and enormous financial success. Her lack of estate planning, however, has opened the informational floodgates regarding her personal fortune. Her failure to execute a will, establish a trust and take other estate planning actions has initiated what promises to be a highly publicized effort to determine her heirs and explicitly detail the nature of her financial affairs. The Queen of Soul’s failure to execute a will and a living trust have turned her financial legacy into a matter of public inquiry – a situation she certainly would have preferred to avoid.

The Queen of Soul commanded, earned and deserved the “Respect” that she famously sang about in her signature 1967 hit that endeared her to millions of fans and admirers.

When Aretha Franklin died Aug. 16, 2018, at her home in Detroit, media reports described her as a deeply private person. Franklin purposefully kept her long battle with pancreatic cancer out of public purview. After reports of her illness surfaced in late 2010, she was quoted as saying she was “not going to even deal with” discussing issues surrounding her health.

For the Queen, privacy was king.

“Family members and friends – including Stevie Wonder and the Rev. Jesse Jackson – flocked to Franklin’s bedside to share her last moments with her, but little else was known about the star’s specific illness or prognosis prior to her death,” People magazine reports. “And though Franklin’s remarkable career drew in eyes and ears from around the world, she demanded privacy and R-E-S-P-E-C-T when it came to fiercely guarding her personal life.”

It’s no secret that Franklin, 76, spent her lifetime protecting her privacy. But now that she’s gone, a public microscope already has begun to focus on the intimate details of her family, finances, personal possessions, business dealings and a host of other matters related to her estate that some estimate to be worth $80 million.

That’s because court documents filed less than a week after Franklin’s passing indicate that the Queen of Soul died without executing a last will and testament or establishing a trust to determine how her estate would be distributed and identify her intended beneficiaries.

Franklin died intestate – which is the legal term for the condition of the estate for a person who fails to execute a valid will. In Michigan as well as the other states, when someone dies intestate the resolution of that person’s estate is left to a probate court to decide using a predetermined formula on how and to whom assets can be distributed.

Unfortunately for Franklin, because of her failure to engage in proper estate planning, her financial affairs and other closely held secrets will come to life after her death in the form of probate proceedings – which are a matter of public record and are likely to produce headlines for months and maybe years to come.

Franklin’s lifetime quest for privacy died the day she did. Her failure to engage in proper estate planning means the state of Michigan’s intestacy laws won’t respect – or protect – her well-known but undocumented intentions. In the meantime, the public can count on learning much more about Franklin’s private affairs than she had ever intended as the resolution of her estate plays out in a public forum.

Privacy isn’t the only casualty of Franklin’s estate planning failures. Because legal and administrative expenses can consume an estimated 8 percent or more of an intestate estate, her beneficiaries stand to lose millions of dollars in potential inheritance. On top of that, a lack of financial planning to avoid estate taxes will consume millions more.

So far, her four sons have filed court documents listing themselves as “interested parties,” CNN reports. A niece of Franklin has petitioned the court to appoint her as the estate’s personal representative. The stage now could be set for a drawn-out process of publicly aired disagreements over the distribution of her vast wealth. Intestacy laws in Michigan require that the assets of an unmarried parent benefit the decedent’s children, but we’ll never know about other intended beneficiaries Franklin may have considered – such as the many charities she supported in her role as civil rights activist and spokeswoman.

Franklin’s hometown newspaper, the Detroit Free Press, reports that Franklin’s attorney was aware of her lack of an estate plan but was unable to convince the legendary performer to take action.

“I was after her for a number of years to do a trust. It would have expedited things and kept them out of probate, and kept things private,” Los Angeles-based attorney Don Wilson told the Free Press.

Wilson’s proposed use of a trust would have utilized a common strategy in estate planning that can ensure details of an estate’s assets remain private. All wills must go through probate to be validated. But if the bulk of a decedent’s assets are titled in the name of a probate-avoiding trust, privacy can be maintained. Franklin’s lawyer was aware of the perils of probate and how it could cast aside his client’s desire for discretion. His advice should be music to the ears of those who want their privacy respected and protected and who demand silence regarding their finances.

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life’s contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.

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Thursday, August 16, 2018

All shook up: 41 years after Elvis’ death, his financial legacy left to daughter dwindles

by Tom Alberts Aug 16, 2018

Elvis and president Nixon at the white house

During a 1970 visit to the White House by Elvis Presley, President Richard M. Nixon, left, admires cufflinks worn by the beloved celebrity. At right is presidential aide Egil “Bud” Krogh Jr., who helped coordinate the famous meeting. (Photo by White House photographer Oliver F. Atkins)

Summary: When Elvis Presley died on Aug. 16, 1977, he left a larger-than-life legacy. Considered the “King of Rock ‘n’ Roll,” Presley became an iconic figure whose earning power after his passing generated millions in additional income for his estate and his lone surviving heir, his daughter Lisa Marie Presley. In the decades since she inherited an estimated $100 million, she claims her share of her dad’s legacy has dwindled to $14,000. It was an outcome Elvis likely never envisioned for his daughter, who was 9 when her famous father died. She blames negligence by a former business manager; the former business manager claims her excessive spending is the problem.

August of 2018 marks 41 years since the death of Elvis Presley stunned and saddened millions of his faithful fans around the world. More than four decades later, many loyal admirers of the “King of Rock ‘n’ Roll” remain forever lodged in a hotel of heartbreak over his passing.

Meanwhile, his daughter and only surviving heir, Lisa Marie Presley, has been singing the blues for reasons of her own: the decimation of a $100 million inheritance amid allegations of reckless spending by her and negligence by her former business manager, according to numerous media reports that began to appear following the 40th anniversary of his passing.

In a lawsuit she filed alleging mismanagement by her former manager, Barry Siegel, Lisa Marie claimed she was down to her last $14,000.

It’s a situation that might have left her hip-swinging dad, to borrow from one of his most famous lyrics, “all shook up.”

At the time, Presley’s death was a shock but understandable, given his highly publicized history of drug abuse during his legendary career. Although his rock-star lifestyle helped lead to his eventual demise, Elvis knew he wasn’t immortal and executed a last will and testament five months before his death at age 42. The King left his estate to his father and his grandmother, but they died in 1979 and 1980, respectively. His daughter was named as his other heir.

Elvis’ will specified that once his debts were paid, the remainder of his assets were to be placed in a trust for his heirs. He also directed that Lisa Marie’s inheritance be provided to her once she reached the age of 25. In 1993, Lisa Marie, at the age of 25, became eligible to receive the assets of his estate, estimated at $100 million at the time. Elvis’ widow, Priscilla, helped grow the estate from an estimated $2 million or so at the time of his death by utilizing his Graceland mansion in Memphis, Tennessee, as a tourist attraction and engaging in other profitable business ventures. In 2005, Lisa Marie had cashed in most of her share of those ventures that had produced a steady revenue stream.

From an estate planning perspective, what could Elvis had done to prevent the financial crisis that now confronts his daughter? Short of having a crystal ball to go along with his blue suede shoes, Elvis during his lifetime could have created a special type of trust known as a spendthrift trust. Perhaps Elvis had an inkling that it would be a good idea for Lisa Marie to reach a stage of adulthood where she could act responsibly with an enormous windfall. After all, he required that her eligibility to inherit be delayed until age 25. Had the King known better, he might have made her eligible for a portion of her trust-held inheritance at subsequent intervals – age 30, 40 or 50 (Lisa’s age in 2018), for example.

In the meantime, his financial legacy has become the subject of suspicious minds sparring in a courtroom.

Monday, August 13, 2018

When guardians go rogue | A blind trust?

When guardians go rogue | A blind trust?

by Tom Alberts Aug 13, 2018

Summary: The number of retirees continues to rise and will increase dramatically in coming decades, experts say. That means that more and more guardians will be needed to make decisions for senior citizens who become incapacitated. Numerous horror stories in the media about abusive guardianships bring to light the potential perils that families can face when a comprehensive estate plan is not in place.

Guardians have been getting some bad press lately with recent media reports shedding light on those who take advantage of unwitting senior citizens.

Guardians are court-appointed advocates who make decisions about finances, health care and other needs of individuals determined to be incapacitated. In many cases, those cared for by guardians, known in court parlance as “wards,” are retirees. They may be suffering from dementia or a physical disability and need help managing money, making medical appointments or with life’s other tasks that most people take for granted.

State and local courts give guardians sweeping powers on the premise of protecting the interests of the ward. The formation of a guardianship often is a last resort, according to the national Center for Elders and the Courts, because wards lose fundamental rights over finances, medical care, entering into contracts – even voting and getting married. The guardian gets the final say in those instances.

“For this reason, limited guardianships — in which the guardian’s powers and duties are limited so that wards retain some rights depending on their level of capacity — are preferred,” the CEC reports.

Family members and friends usually are the best options to serve in a guardianship role, experts say. When people plan their estates, they often are advised to consider someone trustworthy who could be called to serve as a guardian if needed. Who would be well-suited and able to care for them if they become incapacitated? Will they keep financial and medical issues at the forefront – and profit and selfish motives on the backburner?

In other words, a good guardian can be an angel, especially one who isn’t greedy. Foxes do a bad job guarding the chicken coop, but they know how to make a fast buck. The aging of the American population has increased the demand for guardians, giving rise to “an entire service industry of private professional guardians,” says the CEC.

Popular comedian John Oliver took on the topic of guardians during a recent “Last Week Tonight” program on HBO. The outrageous anecdotes shared by Oliver drew plenty of laughs, but on a deeper level, they might inspire his viewers to address the subject with an attorney when developing an estate plan.

Sure, many senior citizens are physically active and of sound mind. Take, for example, a 104-year-old woman interviewed by CNN who was asked about her secrets for longevity. She drinks three Dr. Peppers per day, but the doctors who told her she would die by consuming all that sugar aren’t around to tell her about it anymore. Few of us, Oliver observes, will become centenarian soda drinkers who outlive their doctors. Some of us will require a guardian to care for us compassionately and handle our affairs honestly.

Because guardians maintain control over a ward’s assets, greed can get in the way of a good deed. So-called professional guardians – not family members or loved ones – can be appointed, and that’s where many horror stories begin.

Oliver recounts the case of Rudy and Rennie North of Las Vegas, who didn’t require, request or expect a guardian’s care and had been handling their affairs just fine, according to their daughter. But one day, there was a dreaded knock on their door.

The woman at the door told the elderly couple she had a court order to remove them from their condo, and they would be taken to an assisted-living facility. Their newly appointed guardian had obtained a court order during a hearing that neither Rudy or Rennie attended, according to a New Yorker article that details their tribulations. There was no official diagnosis of dementia. Regardless, the elderly couple and their daughter embarked on a difficult two-year odyssey to get rid of a guardian who began her financial gouging right after judge’s gavel fell.

Over the next two years, the new guardian was able to drain the couple’s finances. The bilking began when the guardian charged them $24 for an eight-minute conversation during an initial discussion with their daughter. Later, $50,000 in savings was transferred to an account in the name of the guardian, who also had dozens of other wards in her “care.” In the meantime, artworks, vehicles and other valuables were liquidated.

Another example shared by Oliver is a CBS news report in which a ward was charged more than $1,000 – money extracted directly from the person’s bank account – to attend an NBA game. Of course, a limo was required for transportation, and the event was described by the guardian as necessary to conduct research on the game’s effect on the ward’s mood. There was no mention of whether a Phoenix Suns victory boosted her morale or improved her outlook on life.

Numerous other absurd abuses were mentioned in Oliver’s report – like the more than 100 hours of services that were billed for a 24-hour period. But they point to a central message: Take precautions ahead of time to protect yourself during retirement as part of your estate planning efforts.

State and local courts decide who needs a guardian and whom to appoint. The qualifications of judges vary from state to state, but Texas is particularly vulnerable to bad decisions. County judges in the Lone Star State are elected, but fewer than 30 elected judges in the more than 200 counties are attorneys. More than likely, a county judge in Texas has experience as a rancher, police officer or businessman and less likely training in the legal profession.

Indeed, the potential for abuse is no secret. Consider the thoughts of a guy holding a gavel and wearing a black robe. One Texas judge, who himself appoints guardians, had harsh words for the system when interviewed recently by CNN, calling guardianship “a massive intrusion into a person’s life. … They lose more rights than someone who goes to prison.”

Making matters worse, only a dozen states require guardians to have any type of certification or training, and fiduciary responsibilities are not a top priority. In many cases, a guardian only needs to be free of felony convictions, bankruptcy and his own incompetence to receive a court appointment.

Oliver cites a CNN report on a Government Accountability Office study that found that guardians control vast sums of money without undergoing criminal background or credit checks.

“It’s like putting the fox in charge of the chicken coop, and of course they are going to steal money,” a GAO investigator told CNN.

The number of potential victims is alarming. The National Disability Council is an independent federal agency that focuses on shaping policy. In March 2018, the NDC reported in its “Beyond Guardianship” study that an estimated 1.3 million people in America are subject to guardianship and predatory behavior.

The study also had some troubling findings about how courts make decisions and how evidence is presented.

One of the NDC’s key assertions is that “guardianship is often imposed when not warranted by facts or circumstances, because guardianship proceedings often operate under erroneous assumptions that people with disabilities lack capability to make autonomous decisions.” The council suggests that decisions about incapacity “often lack sufficient scientific or evidentiary basis.” Courts also lack resources to monitor guardianships and hold guardians accountable who exploit wards, the council found.

Offering a similar cautionary conclusion is a 2017 study published by the American Bar Association. The ABA found that “an unknown number of adults languish under guardianship” when they no longer need it or never did. The authors wrote that guardianship is generally “permanent, leaving no way out — ‘until death do us part.’”

Some good news is that there are effective ways to defend against abuses of the guardianship system, and the best weapons are found in estate planning documents. Power of attorney provisions enable individuals to protect themselves from an unwitting arrangement with an unscrupulous guardian. People can choose a beloved family member or a trustworthy friend as their own agent, or attorney in fact, to manage decisions about finances and health care.

An additional step to protect assets is to establish and fund a revocable living trust that appoints a successor trustee – a person you choose when creating the trust – who can assume management of your assets and medical care upon incapacitation. If assets are held in a trust, only your successor trustee can make spending decisions. If for some reason a guardian or conservator is appointed, they can access funds only in your own name, not funds protected by a trust.

Thursday, August 9, 2018

Separation anxiety: Two celebrity deaths reveal issues to consider in estate planning

anxiety of a man shown by a photo that displays hisself dissipating

Separation anxiety: Two celebrity deaths reveal issues to consider in estate planning

by Tom Alberts Aug 9, 2018

Summary: The recent deaths of celebrity chef Anthony Bourdain and fashion mogul Kate Spade, who were both parents and separated from their spouses, reveal estate planning issues couples face when marital relationships change and an unexpected death occurs.

Celebrity chef Anthony Bourdain and fashion mogul Kate Spade had a terrible burden in common – depression – when they committed suicide within days of each other in June 2018.

Their deaths left their large, loyal followings saddened and dismayed. But Bourdain, 61, and Spade, 55, did share a blessing in common. Both were parents of daughters (ages 11 and 13, respectively). Bourdain, like Spade, was married but separated.

From an estate planning perspective, their mutual marital status serves as a reminder that difficulties may loom for separated couples who are not legally divorced when an unexpected death occurs. Intentions about one’s legacy and priorities change with life’s situations, which is why estate planning documents need to keep pace with a family’s ever-changing framework.

In these modern times, it’s not unusual for spouses to decide to remain married, but separated, to preserve the family unit in the best interest of their minor children. Estranged spouses may reason that staying married provides a sense of stability for a child whose parents are in a shaky relationship. This appears to be the case for Bourdain and his estranged wife, a former celebrity MMA athlete. They reportedly had an amicable relationship and remained “together,” despite their separation, for their young daughter. Their careers and frequent travel led the couple to splinter yet remain united in terms of caring for their child.

“As a family, I think we’ve done a really good job and we’re doing a really good job and would like to keep it that way,” Bourdain told People magazine after their split in 2016. “As a marriage, clearly it’s not ideal, but there’s no injured party here, nobody’s angry, nobody feels like the injured party, nobody feels like a victim. So, we’ll proceed like that.”

Similarly, in the case of Spade and her spouse, the estranged couple was motivated by the interests of their daughter. Spade and her business-partner husband, although living apart from one another, remained close, according to media reports. Spade’s husband, Andy, released a statement to The New York Times, saying their daughter “was our priority” and they were “co-parenting” her. Mr. Spade said they were not legally separated and had not discussed divorce.

Details about Spade’s estate have not been reported, but provisions in Bourdain’s will have raised some eyebrows. Bourdain’s probate estate is valued at about $1.2 million, and he’s leaving most of those assets to his daughter. The host of CNN’s “Parts Unknown” named his estranged wife as executor of his estate, and he left his wife his personal and household effects – and his frequent-flyer miles. Bourdain also did not name a guardian to oversee his daughter’s inheritance; it’s a role his estranged wife likely will assume.

When Bourdain named his spouse as executor of his estate, it meant his estranged wife was responsible for handling funeral arrangements and other sensitive details surrounding Bourdain’s legacy as part of her duties administering his estate. Fortunately for Bourdain, their relationship was considered to be amicable.

WHAT TO DO WHEN A MARRIAGE IS A MESS?

About 45 percent of married couples in the United States divorce, according to the American Psychological Association. Before taking the ultimate step, couples in many cases decide to separate but remain married for a variety of reasons. Spade and Bourdain, for example, stayed married in the best interests of their daughters but lived apart from their spouses.

When marriages are in meltdown mode, one option for couples without a prenuptial agreement is a postnuptial agreement. A postnuptial agreement can define ahead of time how property would be distributed in the event of a divorce and keep the matter out of often messy dissolution proceedings.

Being separated or simply living apart, however, does not terminate spousal rights. Legal separations are like divorces in that a court approves the division of finances and marital assets and makes decisions on child custody and support. The key difference is that legal separations, like informal separations, don’t impact spousal inheritance rights; only divorce and a dissolution decree signed by a judge will end those obligations. Also, separations can be reversed, but divorces cannot.

For Bourdain and Spade, they remained unhappily married, and their estranged spouses retained their rights to their shares of the estates. In many states, the surviving spouse is entitled to half or more of the assets and cannot be disinherited.

Proper estate planning, however, can give estranged couples some immediate independence in certain areas before a divorce is finalized. Having a will is a key first step; otherwise, intestacy laws automatically will require that at least half your estate goes to your spouse. Because divorces can take years to resolve, it’s suggested you revise your estate planning documents in case you die before the divorce is finalized. Trusts also may require revision, especially if members of an estranged spouse’s family are designated as successor trustees.

If a vengeful spouse is something to fear – like one who has the power to “pull the plug” – there are other estate planning factors to consider. An advance health care directive can designate who has authority to make decisions about your medical care and in the event of your incapacity as well as funeral arrangements (or lack thereof) at your death. A power of attorney for financial matters also can be appointed, and that person does not have to be a spouse. Also, an individual’s living will can control who would serve as one’s guardian if incapacity is declared. Those estate planning documents can limit the control of a warring spouse.

Divorcesource.com considers durable powers of attorney to be potential “loaded guns” in the context of spousal discord, and there are numerous instances where estranged spouses have used the authority “to transfer their spouse’s assets to them, take out loans in the name of their spouse, etc. If you have given your spouse a durable power of attorney, you should consider revoking it immediately so that it cannot be used in an unintended fashion.”

Another consideration is beneficiary designations. Spouses typically designate their other half to receive proceeds from life insurance and retirement plans. Federal law requires that spouses are sole beneficiaries of company pension and 401(k) plans unless a written waiver has been signed by the survivor. Laws vary, but all states grant spouses a share of the estate, regardless of what the other spouse’s will dictates. Prenuptial and postnuptial agreements, of course, can alter those inheritance rights.

When couples split and divorce proceedings are underway, experts suggest drafting a formal separation agreement regarding property, debts, child custody and support and other issues that include estate planning. One part of the agreement may include a provision to waive rights to a share of the other’s estate if one spouse dies before the divorce is finalized. Spouses who stand to inherit from their parents or other family members also may want to take action. If a parent or relative leaves an inheritance to an heir whose divorce isn’t finalized, the estranged spouse still would be entitled to a share of the proceeds. The parent or relative may choose to utilize a trust to distribute assets directly to the recipient’s intended beneficiaries, such as children or new paramour, and bypass the estranged spouse in the event the recipient dies before a divorce is final.

When a divorce is finalized, entire estate plans should be reviewed and updated to reflect new priorities for your legacy. Items that may require revisions are numerous and include: wills; revocable trusts; power-of-attorney designations; advance directives for health care; real estate deeds; titles for vehicles and other assets; beneficiary declarations for life insurance policies, retirement accounts, annuities, payable-on-death accounts and transfer-on-death deeds; and online account information including usernames, passwords and social media access.

Monday, August 6, 2018

Powers of attorney provide parents a say in key decisions for their college-age kids

Woman reviewing bills to afford college for her child

Powers of attorney provide parents a say in key decisions for their college-age kids

by Tom Alberts Aug 6, 2018

Summary: Before heading to begin that freshman year of college, young adults approaching the age of majority – 18 in most states – are encouraged to get three important documents in place. The first is a power of attorney for health care in which a proxy, usually a parent, is appointed to make treatment decisions for a young adult in the event of incapacity. The second is a HIPAA release form that allows access to medical information and the ability to discuss treatment plans with caregivers, regardless of incapacity. The third is a power of attorney for financial and legal matters. When children reach the age of majority, the ability of parents to make health care and financial decisions on their behalf is significantly limited.

When young adults prepare to attend college, they discover many decisions need to be made: where to attend school; where to live; what subjects to study; and what trendy fashions must hang in their closets.

Parents also have numerous considerations. Among them: how to pay for all of this; how to utilize the new empty bedroom; and, more importantly, what happens when Junior turns the age of majority.

For estate planning purposes, the issue of children making the legal transition into adulthood looms large. In most states, 18 is the age of majority (it’s 19 in Alabama and Nebraska and 21 in Mississippi). The age of majority is a milestone that legally divides childhood from adulthood. It’s also a measurement of time that marks the end of authority by parents to exert control over important decisions made on a young adult’s behalf.

As parents relinquish control, they suddenly lack carte blanche in matters they’ve dealt with for the past 18 years or so – making decisions about health care and finances for their children. Once a person is the age of majority, laws require that doctors, hospitals, banks, universities and the like no longer treat them like children. Suddenly, unfettered access to medical records and information about treatment options is no longer the purview of parents because of the federal Health Insurance Portability and Accountability
Act, or HIPAA.

This is a big deal, for example, if your child is away at college and has a medical emergency and becomes incapacitated. Parents want immediate answers about the health of their children. They want to provide input to health care providers and expect candid answers from doctors and nurses.

The same is true when it comes to finances. Many parents who are paying the bills – and tuition – want access to bank accounts in their children’s names to obtain balances, track spending and make sure the checks won’t bounce. In the event of an emergency, parents want the ability to manage their children’s accounts and pay the rent, car loan, taxes and credit cards to ensure their finances are in order. They also may need access to digital assets – such as online banking and social media and email accounts.

If continued control is what parents desire, they’ll need their adult-age children to sign power-of-attorney documents that provide authority over health care and financial and legal matters. The assignment of powers of attorney for health care and finances are common “living will” elements of estate plans for older folks, but they have important implications for young adults and their parents.

Consider what would happen if a young adult away at college has an accident and becomes incapacitated. Without a medical power of attorney, also referred to as a health care proxy or an advance health care directive, a parent might be forced to seek a court-appointed guardianship – which can be time consuming and expensive – to make decisions on a child’s behalf. Medical professionals in a far-away hospital may cite privacy concerns and refuse to discuss treatment options without proper authorization from their patient.

Similarly, parents who attempt to deal with financial and legal matters involving children who have reached adulthood may face roadblocks unless a power of attorney for financial and legal matters is executed. Otherwise, parents may find themselves seeking a court-appointed conservatorship – another costly and time-consuming endeavor.

Once signed and notarized, power-of-attorney designations can be in force immediately and “durable,” meaning they remain in effect after the principal becomes incapacitated. A “springing” power of attorney that takes effect only upon specific circumstances – incapacity, for example – is another option that maintains some independence for the young adult but allows the parents to assume control in case of an emergency. That independence can be important to a student who is concerned about overprotective parents having easy access to their grades and other personal data. The Family Education Rights and Privacy Act (FERPA) limits access to educational records of students age 18 and older unless they provide written consent. This may be an issue, for example, if a parent would need to contact professors regarding their child’s situation. A FERPA waiver can be included as part of a durable power-of-attorney document.

Another key document – a HIPAA medical release signed by the young adult – is recommended to supplement the powers of the health proxy and give access to medical information to others, regardless of incapacity. The release, which can be signed ahead of an actual emergency, designates who can be privy to medical records and receive information about health care. The release can be worded to protect certain information the young adult may want to keep private – such as medical information about drug use, mental health, sexually transmitted diseases and other sensitive subjects.

The National Law Review lists some important considerations regarding the three critical documents.

The documents should be updated every few years. “This is especially critical for powers of attorney. The institutions where you would be most likely to use these documents – such as hospitals and banks – might refuse to honor them if they perceive them to be outdated,” according to the NLR.
The adult child has the right to revoke or amend the documents at any time. That would include adding any limitations on the authorities granted by the documents.
When attending an out-of-state institution, young adults should execute documents in both their home state as well as the state where the school is located.

Discussions about potential family emergencies aren’t as popular as chats about dorm room decorations, but they are necessary to prepare for life’s unexpected events in which parents still play a pivotal role, experts say.

Friday, August 3, 2018

End around: Some wield wills as a weapon to leave eternal message

Children looking upset at the reading of a will.

End around: Some wield wills as a weapon to leave eternal message

by Tom Alberts Aug 3, 2018

Summary: Wills are usually rooted in kindness and compassion and intended to pass along assets to loved ones and friends. In some cases, the end-of-life documents are utilized as a final twist of the knife resulting from greed, betrayal, family discord and spite.

People utilize a will as their last opportunity to distribute assets and property among loved ones and friends and provide some solace during a time of grief. Most folks of sound mind are motivated by gratitude, kindness and compassion when they make their end-of-life wishes known.

But a will also affords the living one last chance to twist a financial knife, achieve sweet revenge or make a deadly serious point. The motivations behind negative provisions in a will are many – greed, betrayal, resentment, jealousy, spite – and a major divergence from typically altruistic intentions.

Life goes on for stocks and bonds, diamonds and pearls, stamp and record collections, fancy cars and other heirlooms and assets. But their deprivation from survivors, usually because of family squabbles and bitter feelings, can assure that a measure of pain is inflicted far into the future.

Two lawyers with decades of experience have no shortage of stories about wills that are bitter pills to swallow. Barry M. Fish and Les Kotzer have served hundreds of will-writing clients from all walks of life. They’ve shared dozens of anecdotes in their 2014 book “The Will Lawyers: Their Stories of Money, Inheritance, Greed, Family and Betrayal.”

Their experience shows that being a loving family member can serve you well, but selfish progeny with a penchant for parental handouts can be stung badly as beneficiaries. Death-bed vindication can crawl out from under the covers for those slighted by sons, daughters and other ingrates.

"You get nothing!"

“We mortgaged our lives for our ungrateful son. We were heading for the poorhouse,” Nelson, an elderly father, told the authors. Nelson’s son, who lived in a far-away town, for years claimed he had no job, had a child with special needs and required the ongoing financial support of his generous parents.

Upon a surprise visit to the son’s home, Nelson arrived at an opulent apartment and was greeted by a nanny. His son, wife and grandson were vacationing on a tropical island. It was a costly revelation.

“He obviously couldn’t wait for us to die,” Nelson fumed. “He wanted his inheritance now and lied to us to get it. Well, all he is going to get is a letter from us telling him that he milked us enough. He won’t get a nickel from our wills!”

Ouch.

For Maureen, an aging mother who decided to revise her will, second thoughts about three of her four children led to a substantial “heir cut.”

Daughter Chelsea missed her stepdad’s funeral. “I tried to forgive her, but I can’t,” Maureen reasoned. Son Brahm never visited Maureen at the hospital during her serious operation. Same reaction: “I tried to forgive him, but I can’t.” And daughter Crystal “never lifted a finger” to help with the move to a retirement home. “I tried to forgive her, but I can’t.”

Daughter Amy, the youngest, was there for the funeral, the hospital stay and retirement home move. “She deserves to get everything that I own,” Maureen said. “After I die, I don’t care if people look at me as a bad mother. Yes, I do love all my kids. But I just don’t like three of them.”

In the case of Mary, the bogus will that the widowed mother gave to her daughter was medicine needed to cure years of financial pressure. One day, the daughter wanted to “have a talk” with her 85-year-old mom. Mary’s generosity with cash and sharing her home with the daughter weren’t adequate. The daughter wanted the house to be given to her, mortgage-free, now or after Mary’s passing. Mary balked. She had a son who deserved his share.

To keep peace in the home, Mary executed a will that left the house to the daughter. A while later, the daughter left for a week. That’s when Mary took the law in her own hands and invited a lawyer over to execute a new will, nullifying the one in the daughter’s possession.

“I pacified my bullying daughter for the rest of my life with the fake will which had left my home to her, before I revoked the fake,” Mary said. “My real will is leaving everything I own to my son, which is going to punish my daughter long after I am gone.”

In their book, the authors say that most wills don’t fall into the vindictive category, and the previous examples stand out in their practice. But just like a fingerprint, a last will and testament is unique to the person who created it, and there are few limits on human creativity.

Keep in mind, however, that whatever your intentions, a properly executed and updated will as part of an estate plan is an important way to ensure your wishes are followed – good, bad or otherwise.

This article written and published by:
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