Redkey Gordon P.C.

The Growing Specter of Guardian Abuse

The traditional and expected role of the court appointed guardian is to protect and look out for the best interest of the individual who they have been assigned to care for. Sadly, there are a growing number of cases where professional guardians, those who are not related to their wards, are taking advantage of their elderly wards, decimating estates and causing unnecessary hardship.

Guardianship is a fairly straightforward and basic function. A person who is not able to handle her or his own affairs, for any number of reasons, is assigned a guardian by the court, who is to act on their behalf for financial, medical and care-taking purposes. The guardian is charged with putting the interest of their ward first, and the guardian is entrusted with a great deal of responsibility.

However, as the Wall Street Journal reports, in "Abuses Plague Guardianship Systems Across the Country," the financial abuse of elderly people by guardians is rampant throughout the United States.

Court appointed guardians with no family relationship to the elderly wards too often act in their own interests and deplete the wealth of the wards.

This problem is mostly avoidable through estate planning. Part of a good estate plan is planning for end of life issues and getting a general durable power of attorney and a health care power of attorney. With those two documents, you can appoint someone you know and trust to look after your financial and medical affairs in case you are ever not competent to do so. Doing that can often make the appointment of a guardian unnecessary.

Even if a guardian is necessary, a court will likely appoint the person you have already designated as trustworthy whenever possible.

Do not fall victim to an abusive guardian.

Schedule an appointment with Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney and get the documentation that you need to make your own decisions about who should look after your affairs if you are not able to do so.

Reference: Wall Street Journal (October 30, 2015) "Abuses Plague Guardianship Systems Across the Country"

What Wealthy Estates Actually Own

It is said that the rich are different from you and me, and that is true. The assets of wealthy people can be grouped into a few categories, and trust us, they are different than regular people.

There is a lot of media coverage and discussion about the federal income tax, but despite that, the number of estates that actually pay this federal tax are proportionately small. Less than 12,000 estate tax returns were filed with the IRS in 2014, and of those, most of the estates did not even have to pay any federal estate taxes.

Thus, the estates that do pay the tax are those of the wealthiest of the wealthy in the country. By looking at the data on the returns where an estate tax was due it is possible to get an idea of what kind of assets wealthy people have.

As reported by the Wall Street Journal, in "When the Superrich Die, Here's What's in Their Wallets," the IRS has recently released that information for estate tax returns filed in 2014.

While the article breaks the data down into what the extremely wealthy few hold and what the just wealthy enough to pay the estate tax hold, there are things both groups have in common when they pass away.

Overwhelmingly, the most common asset is stock in publicly traded companies. The next most popular assets are closely held stock and bonds. Real estate, cash, retirement accounts and limited partnerships also make up a large percentage of the assets held by estates that are subject to the estate tax.

What this data reveals is that wealthy people have several different types of assets that need to be included in an estate plan.

It is important to treat each asset appropriately to limit the estate tax burden and to ensure that if any estate tax is owed, that the assets are liquid enough for the estate to pay it.

Robert A. Gordon of Redkey Gordon Law Corp, a qualified estate planning attorney can guide you through this process.

Reference: Wall Street Journal (October 30, 2015) "When the Superrich Die, Here's What's in Their Wallets"

Two Steps for Estate Planning Success

It takes two steps to succeed at estate planning, and you need to know both! The first is knowing what the most common mistakes are. Equally important is knowing what to do to avoid them, or solve them when they occur.

In many cases, knowledge is power. But in estate planning, knowledge by itself can be a dangerous thing. You need to pair knowledge of the most common estate planning mistakes with another kind of knowledge: what to DO about those mistakes. And we would even add a third thing: knowing WHO to ask for help!

For example, you might know that it is desirable to avoid probate, but that is of little use unless you also know how to create an estate plan that will keep an estate out of probate. For the same reason it is important to not only know what common estate planning mistakes are but also to know how to avoid them.

A recent article by The Street entitled "How to Avoid the Most Common Estate Planning Mistake" discusses the most common mistakes and how to avoid them. Tips from the article include:

• Updating Beneficiary Designations – People often fail to update the beneficiaries of their retirement accounts and life insurance policies, which leads to the wrong people getting the assets. Avoiding this mistake is as simple as filling out a form.
• Communicating With Heirs – When your heirs do not know what to expect from your estate plan, it can lead to hurt feelings and anger. This can be avoided by telling people what to expect.
• Creating Your Own Will – If you create your own will, you are likely to make mistakes in it. To avoid this problem, seek the assistance of an estate planning attorney.
• Failing to Account for the Estate Tax – If you do not plan for the estate tax, then your estate might face a hefty bill that could have been avoided.

Fortunately, these potential miscues can be avoided by contacting Robert A. Gordon of Redkey Gordon Law Corp, a qualified estate planning attorney to guide you.

Reference: The Street (October 31, 2015) "How to Avoid the Most Common Estate Planning Mistake"

Robin Williams Will Continue to Delight Us, But Not for 25 years

Through the use of technology, we will still be able to enjoy the brilliance of comedian and actor Robin Williams in a number of different formats, even though he has passed away. But it will be 25 years before his likeness is resurrected, in keeping with his own wishes, which were clearly expressed and planned for in his will.

Certain celebrities continue to earn phenomenal amounts of money, even though they are deceased. Using advanced technology, audiences enjoy what appear to be live performances and new material from actors and singers who have been gone for decades. Holograms are good enough to convince stadiums filled with fans that they are seeing the real deal.

For the estates that hold the rights to the likenesses of celebrities this can earn millions of dollars a year. Such is the case with the likenesses of Michael Jackson, James Dean, Betty Page and many others.

Not every celebrity, however, is comfortable with the idea of their name and likeness being used after they pass away to make money.

That appears to have been the case for Robin Williams.

Forbes reports that a trust agreement bars Williams' name or likeness from being used for 25 years in an article entitled "Why Robin Williams Won't Be Making Millions Beyond The Grave."

As the article points out, many celebrities might consider doing the same thing as Williams to avoid complicated tax issues.

However, in Williams' case there was no need to limit the use of his name and likeness for tax purposes as the rights to use his name and likeness are held by a charitable foundation.

Apparently, Williams was uncomfortable with the idea of someone else deciding how his name and likeness could be used in the years shortly after his death. For example, he may not have wanted someone else deciding that he should endorse a product that he himself would not have.

Reference: Forbes (October 27, 2015) "Why Robin Williams Won't Be Making Millions Beyond The Grave."

What You Need to Know About Escheatment

Escheatment is not as well known as its distant real estate cousin, eminent domain. Escheatment refers to the right and process of a state government to claim ownership of accounts of a person who has passed away and has no known heirs or beneficiaries. However, there are instances when accounts are seized when people are still alive. There are several simple steps to take to prevent this from happening.

A state government has the legal right to claim the property of a person who has passed away and has no heirs or beneficiaries. Here's the problem: almost all state governments today are experiencing significant shortfalls in revenues. As a result, some states have become a little too eager and too aggressive about claiming property through escheatment.

What often happens is that an account holder has not stayed in contact with a brokerage or financial institute for a long time. The financial institute then reports the assets in an account as unclaimed property. Rather than making any effort to locate the person who owns the account, the government claims the property as its own. This can create issues for people who have long term investments as part of their retirement and estate plans.

Recently, Investopedia listed how you can avoid this happening to your stock accounts in "4 Ways to Avoid Escheatment of a Stock Account."

The tips include:

• Make regular contact with the brokerage even if it is just to speak to a representative.
• Cash all dividend checks. Even if you think the amount of the dividend is too small to bother with, cash the check so that the brokerage knows a living person is receiving the checks.
• Complete any proxy voting paperwork even if you do not care about it, as this will show that you are still alive.
• Update contact information when it changes so that the brokerage knows how to get in touch with you.

If you follow the above steps, then your estate will not find itself in the position of the government having already claimed your assets through escheatment before the assets could be distributed to your heirs.

Robert A. Gordon of Redkey Gordon Law Corp, an experience estate planning attorney help you avoid escheatment by having appropriate default heirs listed in your estate plan.

Reference: Investopedia (October 29, 2015) "4 Ways to Avoid Escheatment of a Stock Account."