Redkey Gordon P.C.

Will Battles Happen in New Zealand Too

Although the vast majority of estates aren't contested, the more money that is at stake, the more incentive a family member has to try to get some of it. 

Certain family issues in the USA are unique to our country. However, some people tend to have the same behaviors and problems everywhere in the world.  

One example is the tendency of people to fight over a wealthy estate. Whenever there is enough money involved in an estate to make it worth fighting over, people who are not happy with a distribution plan tend to fight anywhere in the world. 

A recent article in The New Zealand Herald, titled "Families at war: When wills go sour," tells accounts of three current disputes over wealthy estates that have families fighting with each other.  

While the details of the disputes make for interesting reading, there are more important lessons to be learned from the article. The key take away is that in New Zealand the likelihood that these disputes will arise can be lessened through proper estate planning. 

The same thing is true in the United States.  

Families will often fight over wealthy estates, but the likelihood of that happening can be lessened with proper estate planning. It is impossible to make the chance of family dispute zero percent, however. If you do not want your family to fight over your estate, then you should see an Sacramento estate planning attorney to lessen the probability that they will and communicate your intentions to your loved ones in advance. 

Reference: The New Zealand Herald (October 17, 2014) "Families at war: When wills go sour"

Schemers Steal Property of Deceased Neighbor with No Heirs

Six Philadelphia men forged, cheated and lied their way into collecting a dead woman's house and car, police said. 

If no heirs exist and no estate plan determines where your estate should go, it must be up for grabs. Right? Well, no. But unfortunately for one woman's estate, this scenario was all too real. 

In 2010, a Philadelphia widow named Dorothy Kennedy passed away. She did not have an estate plan or any known heirs. By law her property, including her house and car, should have become government property, assuming no heirs could ever be found. However, Kennedy's neighbor had other plans.  

He wanted the house and car for himself and he enlisted his attorney to assist him. The two came up with a scheme to have the neighbor named as administrator of the estate. They forged documents to make it appear as if the neighbor had cared for the woman. They even enlisted the assistance of two funeral directors to submit a false funeral bill. Later a realtor and a car salesman were enlisted to fraudulently transfer the house and car to the neighbor. Philadelphia police recently learned of the plot and have charged all 6 involved as reported by the New York Daily News in an article titled "Band of 6 crooks concoct elaborate plot to steal dead woman's house, car: police." 

This is obviously an unusual story and not likely to happen to anyone. It should be noted that if Kennedy had an estate plan, it is unlikely the plot would have ever been hatched. She could have decided who was to receive her property. If she had wanted, she could even have given it to the government. Keep a copy of your file at Rekey Gordon P.C. law offices and this would never happen to you.

Reference: New York Daily News (October 18, 2014) "Band of 6 crooks concoct elaborate plot to steal dead woman's house, car: police"

Art Once Stolen by Nazi's Is Subject of Lawsuits

When Christie’s auctioned off Edgar Degas’s “Danseuses” for nearly $11 million in 2009, the catalog noted that the masterpiece was being sold as part of a restitution agreement with the “heirs of Ludwig and Margret Kainer,” German Jews whose vast art collection was seized by the Nazis in the years leading up to World War II. But now a dozen relatives of the Kainers are stepping forward to object.

If valuable art is stolen, but then recovered after the original owner passed away, who gets to claim it? And how long should the person or business who recovered the art look for the rightful heirs?

When the Nazis rose to power in Germany, the wealthy Jewish couple Ludwig and Margaret Kainer fled to France. They left behind a valuable art collection that included original Monets and Degas amongst other pieces. All of their valuables were confiscated by the Nazis. After the war and before any of that property could be recovered, the Kainers passed away. They had no children. The art ended up in the trust of Swiss Banks, which at least nominally transferred them to a foundation that had previously been set up by Mrs. Kainer's father. A recent article in The New York Times, titled "Heirs Sue Bank Over Sale of Nazi-Looted Art," has the full story.

The foundation sold one piece of the art a few years ago. However, the Kainer's heirs claim that the bank and foundation did not do due diligence to track them down. The heirs are suing to recover the money from the sale. The bank, of course, claims it did enough to track down the heirs. If the bank turns out to be correct, then it will win this lawsuit.

Most of the time when heirs are filing lawsuits decades after someone passes away, the problem could have been avoided by proper estate planning. Robert A. Gordon is your Bay Area estate planning attorney at Redkey Gordon P.C.  However, this is an unusual situation because of the complications of war and looted valuables. Although the valuables can be recovered, it is a long and difficult process.

Reference: The New York Times (October 17, 2014) "Heirs Sue Bank Over Sale of Nazi-Looted Art"

Beneficiary Designations 101

The decision about how to designate beneficiaries for your company retirement plan, life insurance policies, and other assets might seem like a no-brainer. Chances are you would like those near and dear to you to inherit any money you've accumulated during your lifetime, so making sure that happens should be as simple as writing their names on the appropriate forms, right? Not so fast. 

Have you designated beneficiaries on the appropriate accounts? Are you sure you did it right? 

A good estate plan uses a wide-variety of vehicles to distribute the estate. Today, that normally means that retirement accounts and life insurance are used to help quickly distribute assets to heirs after someone passes away. Because of this importance, you need to know how to go about designating beneficiaries to receive the assets.  

A recent article in Morningstar, titled "How to Handle Beneficiary Designations," provides a list of things you should consider, to include: 

• Know the basics - It is important to know what documents you can use to designate assets to beneficiaries and know that the assets will automatically pass to the beneficiaries after you pass away. 

• Keep Designations Current - You should review your designations regularly and make changes as appropriate. 

• Consider Tax Consequences - Your beneficiaries might have to pay taxes on the assets. 

• Be Specific - If you want a beneficiary to distribute the assets to other heirs, you need to state how specifically. 

• Give special consideration to special needs loved ones - Consider how heirs with special needs will inherit and handle the assets. 

• Know about other estate planning tools - You need to know what else you can do to plan your estate. 

The list is a good one and the last item is perhaps the most important. You cannot use beneficiary designations in this way for all of your property, so visiting with an Sierra Foothill estate planning attorney about what else you need in an estate plan is a must. 

Reference: Morningstar (October 10, 2014) "How to Handle Beneficiary Designations"

Suspicions Arise When Doctor Is Added to Will

Donna Spears, a longtime friend of centenarian Helen Schlesinger, claims in her Manhattan civil suit that New York-Presbyterian physician Dr. Lawson Moyer has broken the law by both treating the 470 Park Ave. resident and appointing himself as her power of attorney. 

Can you trust your doctor with your will? 

A recent article in The New York Post, titled "Doctor wrote himself into 102-year-old patient's will: suit," tells the story of a lawsuit recently filed in New York. Helen Schlesinger is 102 years old and has assets worth millions of dollars. In 2003, she wrote a will leaving the bulk of her estate to her friend, Donna Spears, and an unnamed family member. Spears has filed a lawsuit against Dr. Lawson Moyer. She alleges that after he began caring for Schlesinger, Moyer rewrote her will. The new will allegedly gives Spears only $25,000. It also leaves $100,000 to Moyer with the remainder to be distributed to charities. 

Beyond the headline-catching parts this is a very common scenario, if not the most common scenario, in disputes over estates.  

It is often alleged that the caregiver of an elderly person has induced the elderly person to rewrite his or her estate plan in the caregiver's favor. Sometimes, that turns out to be exactly what happened. However, it is also not uncommon for an elderly person to want to rewrite his or her estate plan to leave money to a caregiver without any wrongdoing having been done. The issue is a difficult one for courts to sort out. 

Anytime that you rewrite your estate plan, you should have the advice of an independent estate planning attorney. That will lessen the likelihood that someone will be able to dispute it successfully in the future.  Please contact your local Sacramento estate planning attorney, Robert A. Gordon to seek advice on drafting your will or trust.

Reference: New York Post (October 16, 2014) "Doctor wrote himself into 102-year-old patient's will: suit"

Supreme Court Ruling Says IRAs Not Protected from Bankruptcy

As a result, financial advisers and families are taking steps to shield IRA assets for children and other beneficiaries in case those heirs ever find themselves in bankruptcy proceedings.

Is your IRA protected from creditors in the event of bankruptcy? Not anymore. Because of the recent unanimous high court decision, experts and families are taking steps to protect IRA assets for beneficiaries in the event those heirs declare bankruptcy.

A recent Wall Street Journalarticle, "Court Ruling Sparks Rush to Shield IRAs," finds that many advisers are urging clients to create a trust as the IRA’s beneficiary, or to set up an IRA as a trust account while the owner is still alive. Either way, the original owner has access to the money before he or she dies. Depending on the type and terms, trusts can shield assets (including an IRA) against creditors.

According to the original article, the challenge is identifying and employing the right kind of trust—this can be really tough as these issues are complex. The type of trust you should use will depend on a bunch of factors, such as the number of beneficiaries, the tax goals, and asset-protection goals.

But what if I already own an inherited IRA?

Based on where you live and how long you have been living there, the assets might yet fall under bankruptcy protection. Alaska, Arizona, Florida, Missouri, North Carolina, Ohio, South Carolina, and Texas all have laws that give this protection in some circumstances, even after the Supreme Court's decision.

One more thing: the Supreme Court did not directly address surviving spouses who inherit an IRA. Their status is far from certain, but some experts suggest that they roll over an inherited IRA into one under their own name.

Talk with your Bay Area estate planning attorney at Redkey Gordon and see what the new Supreme Court decision on IRAs means for your assets and your plans.

Reference: Wall Street Journal (Oct. 12, 2014) "Court Ruling Sparks Rush to Shield IRAs"

Pass the Pie: Use Holiday Time to Discuss Estate Planning

Thanksgiving weekend is a time to reflect, visit family, and of course, eat your fair share of pie. And while we may be thankful for the people and the wealth in our lives, not enough of us have planned to protect all that we have.

Pass the pie please! And not just the pumpkin pie. How about my slice of the estate? Probably not something you'd really say at your Thanksgiving dinner, but maybe you should.

CBC News in Toronto recently cited a survey that 40% of Canadians aged 65 and older felt unprepared about their estate plan. It seems that our good friends to the north are unfortunately much like those of us here in the States.

The article, titled "Estate planning: Talking with family about dividing the pie," states that families are not perfect and that many of us have relatives more akin to Bart and the Simpsons than the Brady Bunch.

What about your family? Is it always fun and laughter or are there a few of Homer's Doh!'s mixed in?

It is easy for emotions to run high during estate planning. Siblings can feel slighted, or the trust-level between siblings or even the executor can erode. That is why it is so very important to entertain these types of conversations early and often. After all, as the original article asks, who do you want deciding what is best for your family: you, or a stranger?

Unexpected events happen, and it is smart to start your early planning now to alleviate headaches and heartaches in the future. Discussions about your estate may be a bit uncomfortable, but it is important and necessary. If you are having a hard time with this, the original article suggests that you use a celebrity death or a messy estate story in the headlines to spring into this personal topic.

Also here are some more pointers:

• Have a family meeting, which can be a great way to get everyone together, ask questions, and make your wishes known.
• Update your estate plan, as your life and assets can change in just a few years—as can your wishes.
• Do not forget about personal items, which are often very important to loved ones.

Wherever you are in North America … north of the border or south, do not put this off. Speak to an experienced and qualified Gold Country estate planning attorney, Robert A. Gordon and start making your plans today.

Reference: CBC News (Oct 12, 2014) "Estate planning: Talking with family about dividing the pie"

Are Online Estate Planning Forms Worth the Risk?

The online forms you come across may or may not work. These forms tend to not be state specific which means your will may or may not be valid. If you are going to take the time to draft a will or any other estate planning document (which you should), you definitely want to ensure that it is valid. Visiting an attorney in your state will ensure that it is valid and properly executed so that your interests are protected.

Just like fixing up your house, there are jobs you can handle yourself and those that require the assistance of an expert.

A recent article in ABA Law Technology Today, titled "3 Reasons to Avoid Online Forms for Wills and Estate Planning,"points out some glaring problems with trying to DIY your estate plan.

Are they state specific? Online forms may or may not work. These forms typically are not state-specific, which means your will may or may not be valid. Just like your house being "up to code," the code may differ from one location to the next. And just like doing the job right with a home improvement project, if you are investing the time to draft a will or any other estate planning document (which you should!), you want to make sure it is valid. An experienced estate planning attorney in your state can help make certain your will is valid and properly executed and your interests are protected.

You are missing out on valuable legal advice. Do you ever start an unfamiliar project on your home without doing any homework? Just run to the hardware store, grab some supplies and get going? That probably has a low chance of success. Websites may say that wills and other estate planning documents are quick and easy to create. However, you are missing out on valuable legal advice and experience. When you talk to an experienced estate planning attorney, you will become informed and educated on the details of your plan. You and your attorney will discuss if a will or a trust is better for you (or perhaps both), and how to apply these to your specific circumstances (e.g., step-children, special needs, college savings, or aging parents). The original article reminds us that an attorney does much more than draft the documents—he or she gives you legal advice on why you should have your document drafted in a certain way.

Websites don’t inform you of changes in the law in the future. What? There's a new tool that saves me time or a product that makes my house safer? A website will not call you when an important law changes that impacts the provisions of your will, but an experienced relationship-oriented attorney will. You can be sure that the laws are always being amended, updated, and repealed. A competent estate planning attorney keeps up-to-date on those changes and communicates them to his or her clients. Many individuals ask their attorneys to contact them annually to see if there are changes to the laws and to be certain their wills are valid and still reflect their wishes and their circumstances.

The original closes with the reminder that you get what you pay for—whether that is a weekend warrior fixing the plumbing or an experienced Sacramento professional at Redkey Gordon P.C. who is educated in estate planning. Using a form you discover on the Internet will most undoubtedly be less expensive and perhaps less time consuming than partnering with an attorney to draft your will or other estate planning documents—but is it worth it? Remember, these are important issues concerning you and your loved ones. You want to make sure that everything is legal and you have the best strategies in place.

Think about it? Do you really want to take on this important project alone?

Reference: ABA Law Technology Today (October 7, 2014) "3 Reasons to Avoid Online Forms for Wills and Estate Planning"

Trustee, Co-Trustee ... What Is the Best Scenario?

Whichever you select, consider ways you can structure the trustee’s duties and relationships to increase the probability of achieving your estate planning goals.

Selecting an executor or trustee of  your estate plan is a very important decision that requires much thought. A recent Investing Daily article, titled "Making Your Most Important Decision," has some strategies to consider when selecting the financial fiduciaries for your estate.

The first is co-trustees. Both professional trustees and individual trustees each have advantages and disadvantages. You can try to get the best of both by naming co-trustees. There are different ways to structure a co-trusteeship, so ask your estate planning attorney about which way to go. Typically, the trust company could be the primary trustee. It would take care of the record-keeping, administration, and investments. Your trusted friend or family member serving as a co-trustee would have access to all the records, and he or she would be able to reviews them and spot any issues. The original article suggests giving the non-professional co-trustee the power to veto fees, investment decisions, and other key actions.

If the trustee has the power to decide the timing and amount of distributions, it can be a source of problems, disagreement, and headaches. One idea the original article suggests is to give the non-professional trustee sole authority over distributions. Another option is to have several co-trustees who determine the schedule and amount of distributions. They can also be required to make unanimous decisions. With a trust, you have the ability to set things up the way you think will be best. However, you might have a tough time getting a professional trustee to go along with a position that is full of limitations.

Another option in trying to get the best of both worlds without some of the issues involved with co-trustees is to split trustee duties. You could have several trustees, each given the responsibility for a specific function, or you can have just one trustee who employs several professionals to conduct some of the duties. There are many ways to split the trustee duties. In general, there are three main areas of trustee duties: (i) Administration; (ii) Asset management; and (iii) Distributions.  For example, you could choose a team that looks like this:

• A corporate trustee to keep the records, prepare taxes, and keep custody of the assets.
• An investment manager to serve as co-trustee handling only the investment decisions.
• A friend, family member, or professional advisor to be a third co-trustee who decides how much to distribute and makes any other decisions.

The original article suggests that what may be the simplest approach to splitting trustee duties is to name one or more individuals as co-trustees and then specifically empower them, and perhaps encourage them, to hire professionals under them for administration, tax reporting, and investing. In this scenario, the professionals technically would not be trustees. They would be employed by the trustee. The person appointed trustee would be responsible for distributions and other matters.

These are only a few ideas. Check out this article and then speak with your Northern California estate planning attorney at Redkey Gordon P.C.  about trustees.

Reference: Investing Daily (October 10, 2014) "Making Your Most Important Decision"

Early Planning before Alzheimer's Strikes

Medical research confirms one of the first things people have trouble with in the very early stages of dementia is managing personal finances. This means people can make very expensive financial mistakes, often before anyone notices there is a problem. I have seen this happen, and it is heartbreaking.

You never know what the future holds, so early planning for late-in-life health issues is essential.

For instance, you may notice that a loved one seems more disorganized than usual. Bills may pile up. The loved one may have difficulty remembering names and fumble for the right words. See a doctor if there are concerns. Alzheimer's and most forms of dementia are progressive. This means it will get worse over a few years.

Even before a diagnosis, it is important for people to discuss with their families how they would like to be helped. This includes who will be the primary caregiver and who will help with finances. According to a recent USA TODAY article, titled "Financial planning for dementia," a person with dementia often feels insecure that he or she will lose control and everyone else will tell him what to do, but conversations can help a person feel more independent and help families avoid misunderstandings.

Everyone should have a will, power of attorney and medical directive, and some find it helpful to have revocable living trust. Without these documents, a court may be required to appoint someone. This can be expensive, frustrating, and time-consuming.

In the course of the disease, a person may need help with a few acts of daily living and may have trouble communicating. At this point, someone else should take care of all financial matters, and it might be time to look at assisted living as the next step.

Healthcare costs for dementia patients can be substantial. It is very important to provide for the financial security of a healthy spouse. That is why it is a good idea to speak to an elder law attorney—he or she may be able to help a family protect some assets and income for the healthy spouse.

You should also consider the financial challenges associated with Alzheimer's disease and dementia, which can be substantial. Also, the choices for care can be overwhelming. An Sacramento elder law attorney is a helpful resource to help you and your families manage costs and find the right care for your parent or relative.

Reference: USA TODAY (October 11, 2014) "Financial planning for dementia"