Redkey Gordon P.C.

Bitcoins – New Currency Requires Special Treatment

To the digerati – the elite of the technology world - Bitcoins are as valuable as the dollar or any other state-sponsored currency. But the rules are still under development for estate planning purposes, and planning for an estate that includes Bitcoins must take this into account.

Most people know what Bitcoins are, even if they don’t use the digital currency that has become popular in the online world. The theory behind Bitcoins was that the world was ready for digital currency, an electronic peer to peer cash system that would eliminate the use of money created by countries.

Bitcoins were to be untraceable and uncontrollable by any government.

That original premise has not entirely come to pass, but many people do have large amounts of Bitcoins either for use as a type of currency or as investments.

Recently the Wills, Trusts & Estates Prof Blog pointed out that Bitcoins need to be planned for differently in an estate plan in an article titled "Some Tips On How To Plan For An Estate Containing Bitcoin."

The tips include:

• Although many people think of Bitcoins as currency, the IRS does not and has ruled that Bitcoins are property. The difference has potential tax consequences and must be planned for accordingly.
• An estate planner needs to know specifically about any Bitcoins owned to ensure that they are planned for and not lost.
• Bitcoins often require an encryption key and password for access. Consequently, those need to be passed on to the appropriate parties or transferring them to the intended beneficiary might not be possible.
• A power of attorney should specifically state that the attorney in fact has the authority to manage the Bitcoins.
• If Bitcoins are part of the assets of a trust, the prudent investor rule might require that they be diversified into other investments.

If Bitcoins are part of your estate, then contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney to ensure that they are identified and distributed as you intend.

Reference: Wills, Trusts & Estates Prof Blog (July 29, 2015) "Some Tips On How To Plan For An Estate Containing Bitcoin."

Brother Sues News York Psychiatrist, Accused of Seducing Ill Sister to Gain Estate

The classic story of a vulnerable wealthy elderly person being influenced by a caretaker who seeks to enrich him or herself has been updated in a dispute between a disinherited brother and psychiatrist/girlfriend of a Texas woman who is alleged to have been manipulated out of millions.

A successful and wealthy attorney with undisclosed medial health problems took a medical leave of absence from her law practice and travel to New York City for treatment by a psychiatrist. Five months after treatment began, according to a statement submitted in court, things got complicated.

Several years later, the heavily-medicated attorney, Amy Blumenthal, passed away. What is alleged to have happened during those years might shock some people.

Amy's brother, Randy Blumenthal, has filed a lawsuit alleging that just a few months into therapy Dr. Turner demanded that Amy begin a sexual relationship with her or get a new therapist. Amy complied and began having a relationship with her psychiatrist.

Not too long after that, Amy slowly began rewriting her estate plan.

By the time she passed away all of her estate was designated to pass to Dr. Turner instead of her family.

Randy Blumenthal alleges that the doctor unduly influenced his mentally ill and vulnerable sister into giving up her estate. The doctor denies the allegations.

The New York Post reported this story in an article titled "Shrink convinced patient to be her lover, write her into $7M will: docs."

You might be wondering why this is not an open and shut case.

Is a therapist entering into a sexual relationship with her patient unethical? The answer is that of course it is, and that will undoubtedly weigh heavily in this case.

However, that fact alone does not necessarily mean that Blumenthal was not competent at the time she changed her estate plan in favor of Turner.

An inappropriate doctor/patient sexual relationship will be used as strong evidence in favor of undue influence, but it might not be the end of the inquiry.

Find out what you can do by contacting Robert A. Gordon of Redkey Gordon Law Corp, and experience estate planning attorney.

Reference: New York Post (July 29, 2015) "Shrink convinced patient to be her lover, write her into $7M will: docs."

Unusual Case Points to Importance of Making Beneficiary Designations

For many Americans, the majority of non-real estate assets are their retirement accounts and life insurance policies. However, a large number of people forget to update their designated beneficiaries, which can lead to key assets going to unintended beneficiaries. An unusual fact pattern cited here reminds us of the importance of keeping beneficiary designations up-to-date.

Like millions of hardworking Americans, Austin Hardy's employer managed his retirement plan. Hardy may have been absent on the date that the HR department explained the importance of naming a death beneficiary for his plan; he either forgot or neglected to designate a beneficiary.

When he passed away, Hardy’s employer did the right thing: it followed the default rules of the plan. Those rules stated that if no surviving spouse or partner existed, then the plan should pass to a surviving child, whether biological or adopted.

Thus, the company transferred the plan contents to Hardy's biological daughter.

The problem was that she was not Hardy's legal daughter. She had been adopted by her stepfather. For all legal purposes, she was not Hardy's daughter and he had no legal responsibility for her.

His sisters sued, claiming that the plan assets should have gone to them, not the daughter. The court, however, disagreed with the sisters' position.

In the court's view the daughter, despite the stepfather's adoption of her, was still Hardy's daughter and thus the plan policy was appropriately followed.

The Wills, Trusts & Estates Prof Blog reported on this case in a recent article titled "Girl Adopted By Stepfather Entitled to Biological Father's Retirement Plan."

This case is obviously a bit unusual. The fact pattern – someone passed away with a retirement plan with no death beneficiary who had a biological daughter who was subsequently adopted by another man – is not one that is likely to repeat on a regular basis. However, there are still lessons to be learned.

As unusual as that is, not keeping beneficiary designations up-to-date or neglecting to make them in the first place is all too common in estate planning.

As illustrated by this case, when you fail to designate a beneficiary of your retirement plan you unnecessarily lose control over who the beneficiary is and that means that it might be someone you would not have wanted to receive the money.

Be sure to review all of your beneficiary designations with Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.

Reference: Wills, Trusts & Estates Prof Blog (August 4, 2015) "Girl Adopted By Stepfather Entitled to Biological Father's Retirement Plan."

UK Court Rules Daughter’s Disinheritance is "Unreasonable" and Reverses Mother’s Will

In most cases, as long as basic principles are followed, a person is entitled by law to leave whatever he or she wishes to their heirs. There are no requirements to leave assets to adult children, but a recent ruling in a London Court of Appeals may change this.

When Thomas Jackson passed away in an industrial accident, he left behind a wife and a daughter who was only two months old. He left a small estate from his earnings and compensation for his death that went to Melita Jackson, the mother of his daughter, Heather Ilott.

At the age of 17, Ilott eloped with her teenage boyfriend. Despite the fact that the relationship continued for well over 40 years and the couple had five children, Melita Jackson never forgave her daughter and spurned all attempts at reconciliation.

Many years later, Ilott was impoverished and her mother passed away still having a portion of the father's estate left. Despite her daughter's financial needs, Jackson, still upset at the elopement, left her entire estate to charity. Normally, that would be the end of the story, but Ilott decided to sue for her mother's estate.

Over a decade later the United Kingdom court system has ruled in Ilott's favor. The court ruled that Jackson acted cruelly and unreasonably in disinheriting her daughter.

Ilott was awarded a portion of the estate, most of which will go towards purchasing the house in which she lives.

The Guardian reported this story in "Daughter wins £164,000 after decade-long legal battle with will over charities."

Whether this is a new trend in resolving disinheritance disputes that might someday make its way to the United States remains to be seen. If you are considering a “disinheritance” as part of your estate plan, be sure to engage the services of Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.

Reference: The Guardian (July 27, 2015) "Daughter wins £164,000 after decade-long legal battle with will over charities."

Want to Help Your Heirs Travel More?

Most of us never look twice at the fine print of the frequent flier rewards program’s terms and conditions. The type is so small and there’s so much of it … but if you did, you’d probably see language stating that any accumulated points are not transferrable on death. Some heirs have found that having the right documents and asking nicely can lead to an unexpected result.

If you fly the same route frequently, it pays to use the same airline and sign up for the airline’s rewards program. The accrued points can lead to great deals, reduce your airfare costs and for the real road warrior, generate enough rewards for free trips. There’s real value in these kinds of programs for the frequent flier.

Nevertheless, not everyone uses his or her accumulated point balance before passing away. Since the accumulated points do have a real market value, the question then becomes whether or not they are part of a decedent's estate.

The answer to that turns out to be no, unless an airline decides to make an exception.

Time recently reported on this issue in an article titled "What Happens to Your Airline Miles When You Die?"

It turns out that while most rewards programs have an official written policy that points are not transferrable on death, in reality most airlines will make exceptions to that policy on a case-by-case basis.

If the points are bequeathed to someone, most airlines are willing to transfer the points upon receiving proof of death and proof that the person asking is the appropriate beneficiary.

This practice is totally discretionary, however, and the real key to getting the rewards transferred appears to be to ask nicely.

Airline employees are not required to transfer the points, but if the beneficiary is nice they normally will.

Find out more by contacting Robert A. Gordon of Redkey Gordon Law Corp.

Reference: Time (July 31, 2015) "What Happens to Your Airline Miles When You Die?"