Texas Estate Planning

Why Is Walt Disney’s Grandson Unable to Claim his $200 Million Inheritance?

Los Angeles County Superior Court Judge David J. Cowan recently claimed that Walt Disney’s grandson Bradford D. Lund had Down Syndrome—despite being presented with DNA evidence proving the opposite. The judge also ruled Lund to be “unfit” to receive his $200 million inheritance from Walt Disney and appointed him a temporary guardian to make all his legal decisions. This was all ordered without a hearing. Lund’s legal team is now trying to contest the rulings.

Inside the Magic’srecent article entitled “Walt Disney’s Grandson Sues Judge Claiming He Has Down Syndrome Without Evidence, Blocking $200 Million Inheritance”says that in the complaint, Lund’s attorney Lanny Davis alleges that the probate court’s action is “all too reminiscent of a perspective where facts do not matter but alternative facts do, where the constitution does not matter…”

The alternative facts Davis spoke of are from a 2016 court decision by Superior Court Judge Robert Oberbillig from a 10-day trial brought on by “disgruntled relatives” against Lund. The trial came after seven years of litigation questioning whether Lund was required to have a limited guardianship. In that trial, Lund was examined by two court-appointed physicians, one court-appointed expert and by Judge Oberbillig himself in open court.

From the investigation, Judge Oberbillig rejected the family’s claims that Lund needed guardianship and ruled that Lund was “not incapacitated.” However, Judge Cowan ignored Oberbillig’s ruling and the DNA evidence that showed Lund doesn’t have Down Syndrome. Instead, Cowan stated from the bench: “Do I want to give 200 million dollars, effectively, to someone who may suffer, on some level, from Down syndrome? The answer is no.”

From this statement, Lund’s legal team brought an additional cause of action that claims Judge Cowan and the Los Angeles Court violated an anti-discrimination law, when Judge Cowan made this “indisputably false” statement and “perception.” They claim this resulted in discrimination against Lund and his loss of freedom regarding the right to counsel and property rights without due process of law.

On Feb. 27, 2020, Lund’s counsel also filed a federal civil rights case in the U.S. District Court for the Central District of California against Judge Cowan for alleged violation of Lund's constitutional due process rights in the appointment of a limited guardian ad lit em.

Lund was supposed to have received his portion of his mother’s trust fund when he was 35, which was 15 years ago. He is now 50 years old.

Reference:  Inside the Magic(March 25, 2020) “Walt Disney’s Grandson Sues Judge Claiming He Has Down Syndrome Without Evidence, Blocking $200 Million Inheritance”

Don’t Ask Heirs to Guess What You Wanted—Have an Estate Plan

With an estate plan, you can distribute your assets according to your own wishes. Without one, your heirs may spend years and a good deal of money trying to settle your estate, reports U.S. News & World Report in the article “5 Reasons to Make an Estate Plan.”

If there is no estate plan in place, including a will, living trust, advance directives and other documents, people you love will be put in a position of guessing what you wanted for any number of things, from what your final wishes would be in a medical crisis, to what kind of a funeral would like to have. That guessing can cause strife between family members and worry, for a lifetime, that they didn’t do what you wanted.

Think of your estate plan as a love letter, showing that you care enough about those you love to do right by them.

What is estate planning? Estate planning is the process of legally documenting what you want to happen when you die. It also includes planning for your wishes in case of incapacity, that is, when you are not legally competent to make decisions for yourself because of illness or an injury. This is done through the use of wills, trusts, advance directives and beneficiary designations on accounts and life insurance policies.

Let’s face it, people don’t like to think about their passing, so they postpone making an appointment with an estate planning attorney. There’s also the fear of the unknown: will they have to share a lot of information with the attorney? Will it become complicated? Will they have to make decisions that they are not sure they can make?

Estate planning attorneys are experienced with the issues that come with planning for incapacity and death, and they are able to guide clients through the process.

The power of putting wishes down on paper can provide a great deal of relief to the people who are making the plan and to their family members. Here are five reasons why everyone should have an estate plan:

Avoid Probate. Without a will, the probate court decides how to distribute your estate. In some states, it can take at least seven months to allow creditors to put through claims. The estate is also public, with your information available to the public. Probate can also be expensive.

Minimize Taxes. There are a number of strategies that can be used to minimize taxes being imposed on your heirs. While the federal estate tax exemption is $11.4 million per individual, states have estate taxes and some states impose an inheritance taxes. An estate planning attorney can help you minimize the tax impact of your estate.

Care for Minor Children. Families with minor children need a plan for care, if both parents should pass away. Without a will that names a guardian for young children, the court will appoint a guardian to raise a child. With a will, you can prevent the scenario of relatives squabbling over who should get custody of minor children.

Distributing Assets. If you have a will, you can say who you want to get what assets. If you don’t, the laws of your state will determine who gets what. You can also use trusts to control how and when assets are distributed, in case there are heirs who are unable to manage money.

Plan for Pets. In many states, you can create a Pet Trust and name a trustee to manage the money, while naming someone in your will who will be in charge of caring for your pet. Seniors are often reluctant to get a pet, because they are concerned that they will die before the pet. However, with an estate plan that includes a pet trust, you can protect your pet.

Reference: U.S. News & World Report (October 18, 2019) “5 Reasons to Make an Estate Plan”

It’s Like Going to the Dentist: You Need to Get Your Estate Plan Ready

This is one of those things that you know you should do, but you keep finding reasons not to. After all, says the article “Estate planning: How to quit stalling and write your will” from The Orange County Register, none of us likes to think about dying or what might occur that would require someone else to raise our children.

What do you need to get motivated and stop procrastinating?

Remember who you are creating a will for. Think of it as a love letter to those you leave behind. You want to provide specific instructions for the people you love about what you want to happen to your minor children, beloved pets and possessions. You are saving them the worries of trying to guess what you would have wanted, and the cost of having to pay attorneys to clean up a mess after you have died.

Legal visualization. Think about what will happen in the absence of a will. Without an estate plan, a court will decide who will raise your children. State law determines who inherits your possessions, and maybe the laws won’t follow your wishes. Every estate planning attorney has stories of people who die without planning. A spendthrift heir can easily spend a lifetime’s work in less than two years. A trust can be used to control how and when money is distributed.

Simple works. Don’t let the term “estate plan” throw you. A basic estate plan is not as complicated or as expensive as you might think. An experienced estate planning attorney will guide you through the process. You should also think about the short-term: what do you want to happen, if you die sometime in the next five years? You can always update the plan, if things change.

Give yourself a realistic timeline. Setting specific dates for tasks to be done and breaking the project out into smaller parts, can make this easier to address. Start by getting an appointment with an attorney on your calendar. Then, set a date to have a conversation with your family members about guardians, charities and other intentions for your legacy. That might take place around Thanksgiving, when families have extended time together. By December 1, clarify and confirm your documents, and get them signed before the holidays. You should also make sure to retitle any assets that are being moved into trusts.

If you were to start today, you could be done by New Year’s Day, 2020. Wouldn’t that feel great?

Reference: The Orange County Register (October 1, 2019) “Estate planning: How to quit stalling and write your will”

The Right Documents for Estate Planning

Having a properly prepared estate plan, that includes all the important documents, including a will and power of attorney, is one of the most important ways to protect your family and yourself. Despite this fact, many adults still neglect to take care of this important task, reports Consumer Reports in its article “8 Essential Steps for Estate Planning.”

A survey from Caring.com showed that as many as 60% of adults don’t have estate planning documents. When they asked families with young children, fewer than one in ten have even designated a guardian to take care of their children, if both parents should die.

What happens when there’s no planning in place? Even the simplest things become more complicated, and complicated things become financial and legal nightmares. When there’s an emergency and decisions need to be made, the entire family is subjected to more stress and costs than would otherwise be necessary.

Here are the eight steps you need to take, right now, to protect your family:

1. Get the professional help you need. The change to the tax law may or may not impact your family and your estate plan, but you won’t know until you sit down with an estate planning attorney. Trying to do this online, may seem like a simpler way, but you will not have the same peace of mind as when you sit down with an experienced attorney—and one who knows your state’s laws.
2. Create a will. This is a legal document that explains how you want your assets to be distributed after you die. It names an executor to carry out your instructions. If you have minor children, this is an especially important document, since it is used to name their guardian. If you have no will when you die (called dying “intestate”), then the laws of your state determine how your assets are distributed and who rears your children. Depending on where you live, your spouse might not automatically inherit everything. 
3. Discuss whether you need a Revocable Living Trust. In most states, when you pass away, your estate goes through a process called “probate.” The courts basically review your estate plan and determine whether everything looks right. The problem is that your will becomes a public document—and so does information about your assets. Some people prefer to keep their lives private by transferring assets to a revocable living trust, which distributes assets according to your instructions at your death. Titles to the assets must be changed, so they are “owned” by the trust. This is known as “funding” the trust. You still retain complete control of your assets, since you are the trustee. However, if you fail to retitle assets, the estate goes through probate. You will also still need a will to protect your minor children.
4. Review your beneficiaries. Whether you remember it or not, when you open many different kinds of accounts—banking, investment—you assign a beneficiary to receive the assets upon your death. Your will does not override the beneficiary designation. Therefore, if you haven’t changed your life insurance beneficiary, for instance, and your ex-wife is still named on the document, she’ll get the entire proceeds of the life insurance policy when you die. This is a very important task. 
5. Have a Durable Power of Attorney (DPOA) created. This is something that protects you, while you are living. If you should become incapacitated, having a durable power of attorney in place will allow that person to manage your financial affairs. Make sure the institutions that have your accounts accept your attorneys’ POA form; you may need to get the one that the institution uses.
6. Don’t forget the Advance Directive. This is also known as a Living Will. It explains your wishes for medical procedures, if you are unable to communicate and explains what you want for end-of-life care. Make sure that your family members know that you have such a document and keep it accessible in case of an emergency.
7. Pick a Healthcare Proxy. The Healthcare Proxy, also known as the Durable Power of Attorney for Healthcare, names someone to convey your healthcare wishes. It should include a HIPAA release clause. This allows medical personnel to release your medical records and speak with the named person about your care.
8. Get it all organized. Think of this step as creating a user’s manual for yourself. All these plans won’t do any good, unless your loved ones know they exist and know where to locate them. Don’t put your estate planning documents and records in a bank safe deposit box, in case it is sealed on death. Your attorney will likely have an original, and you should have your original in a fire-proof safe in a secure location in your home. 

Reference: Consumer Reports (Oct. 24, 2018) “8 Essential Steps for Estate Planning”

New Movie Brings Estate Planning to Light

Imagine that your brother has recently passed away and you are notified that you have been named as the guardian of your brother's teenage son. Acting as the guardian of the teenager, will not cost you anything as the estate will supply all of the funds.  However, you will need to relocate to care for the child.

None of this was communicated to you by your brother beforehand.

This is the actual beginning of the plot in an Oscar nominated movie that is currently in theaters, Manchester By the Sea. While this might make for great Hollywood drama, it does not make for the best estate planning, as The Spectator points out in "'Who gets the kids if we die?' Planning for the unthinkable."

Planning to nominate the guardians for your minor child should something to happen to you, must be undertaken carefully. For obvious reasons, it is very important that you consider your options.

The guardian you choose should be emotionally and financially secure, so he or she can handle the difficulties of suddenly rearing an orphan.

It is also extremely important that the guardian not be surprised by your decision after you pass away. You need to choose someone who is willing to take on the responsibility.

Talk to your first choice for a guardian and make sure that he or she is ready to act in the role.

In the movies things might work out well when that is not done, but that is not always the case in real life.

Reference: The Spectator (Jan. 31, 2017) "'Who gets the kids if we die?' Planning for the unthinkable."

Senate Committee Addresses Elder Financial Abuse

 

 

Elder law attorneys have been aware that elderly people are sometimes abused by guardians who receive inadequate court oversight. Despite the best efforts of attorneys and other elder law advocates, it has been difficult to curb the problem. Much of the evidence was derived anecdotally based on individual cases.

This has served to mask the overall scope of the problem in many states and in the U.S. as a whole. The General Accountability Office recently issued a report on the problem and offered some suggestions.

The report was the subject of hearings by the Senate Special Committee on Aging according to Financial Advisor in "Senators, GAO, Decry Elder Financial Abuse By Guardians, Complicit Courts."

One of the key recommendations is that courts should more carefully consider whether a guardian is necessary or if the elderly person could adequately be taken care of by a caregiver. If a guardian is appointed, then it is advised that the court should oversee the guardian’s actions and make assessments in the future about whether the guardian is still needed.

It was also recommended that guardians receive mandatory training on their responsibilities.

The government should have a better idea of the scope of this problem in the future. Next year, the Department of Health and Human Services will launch a National Adult Maltreatment Reporting System that will collect data from state agencies about elder abuse.

Reference: Financial Advisor (Dec. 1, 2016) "Senators, GAO, Decry Elder Financial Abuse By Guardians, Complicit Courts."

 

 

New IRS Policy on Identity Theft

Imagine receiving a letter from the IRS that the tax return you filed could not be processed because one had already been filed under your name and Social Security number. This is an increasing problem for many people. 

Identity thieves who are able to get some basic information about a person will rush to file a fraudulent tax return before the victim does in the hopes that the IRS will send a refund to the thief. The victim then has a mess to sort out and needs to figure out what happened. This can be exceedingly difficult for the victim and even more difficult for those filing returns on the behalf of others, such as executors and guardians.

In the past, the IRS has not helped matters too much as the victim was not able to get a copy of the fraudulent tax return. However, as reported by the Wills, Trusts & Estates Prof Blog in "IRS Will Now Offer A Copy Of Fraudulently Filed Tax Returns To Identity Theft Victims," the IRS has changed its policy. 

Now victims and their authorized representatives can get a copy of the return, which should help in figuring out what happened. The fraudulent return will be redacted pursuant to federal privacy laws, but not to an extent that would make viewing the return worthless.

Of course, if you are a victim of this tax scam, you should not attempt to handle it on your own, especially if you are an executor or guardian. Seek the services of a professional to make sure that you are doing things correctly.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 30, 2015) "IRS Will Now Offer A Copy Of Fraudulently Filed Tax Returns To Identity Theft Victims"