Texas Estate Planning

Why Is a Will So Important?

A 2020 Gallup poll found that less than half of Americans have a will or have made plans regarding how they would like their money and estate handled in the case of their death. The poll also showed that Americans ages 65 and up are the most likely to have a will.

Yahoo News’ recent article entitled “How To Write A Will: The Importance Of A Will And Living Will” says that no matter your age, it’s important to have a will to be in control of what happens with your own assets. A will is a legal document that establishes a person's wishes regarding the distribution of their assets — money, real estate, etc. — and the care of any minor children.

Without a will, state law may control who gets your “probate” assets and when. Having a will can save an enormous amount of time and money in estate administration and the process of having a guardian appointed for your minor children, if needed.

There’s a big difference between a will and a living will. A living will is a document that lets you state in advance how you want to be treated under certain medical situations, if you’re unable to make those decisions for yourself at a later time.

These differ by state law. However, they generally cover end-of-life decision-making and treatment options. General medical decisions unrelated to end of life care are typically covered in a health care power of attorney. Some states combine these two documents into one directive.

Unlike a living will, which specifically provides instructions for medical care during your lifetime, a will lets you to decide in advance who you want to receive your assets upon your death, and who you want to be in charge of handling the administration of your estate. If you have minor children, a will also allows you to nominate a guardian for them.

When creating a will, think about the “what,” the “who” and the “how.” To do so, ask yourself the following questions:

• What assets do you have?
• To whom do you want to leave them?
• Who do you want to be in charge of making sure that happens?
• Who do you want to be responsible for your minor children?
• How do you want the assets transferred?

Why Did ‘The Boss’ Sell His Music Catalog?

Digital Music News’ recent article entitled “Why Did Bruce Springsteen Sell His Music Rights? A Breakdown of the Decision” looks at what could have prompted the Born to Run creator to cash in on his catalog:
Money. Cash is perhaps the leading contributor to the New Jersey-born Bruce Springsteen’s decision to sell his music intellectual property. Few would turn down a half-billion-dollar (or larger) paycheck – especially when the sum reportedly represents 30 times the annual royalty payments that the 20-time Grammy winner received.
There are a number of other artists, such as Stevie Nicks, Paul Simon and Bob Dylan, who have exchanged all or some of their song rights for massive compensation.
Estate Planning. This is another important consideration regarding Springsteen’s decision to sell his music rights. Cash, property and similar physical assets are much easier to pass on to heirs than a complex collection of music intellectual property, copyrights and licensing agreements. This may have been a part of the 72-year-old Springsteen’s decision to sell.
The estates of artists, such as James Brown, have been engaged in legal battles. In fact, Brown’s estate was in litigation for over 10 years, before finally settling over the summer.
Tax Planning. Finally, there are tax-planning advantages associated with the transaction’s timing. Right now, the federal capital gain tax rate is currently 20% (with a possible 3.8% addition under the Affordable Care Act). The White House has also proposed increasing that rate to 43.4% for those who earn more than $1 million.
Due to this potential change and other possible tax-rate hikes, as well as the fact that royalties are already taxed as “ordinary income,” at a comparatively substantial 37% federal rate, Bruce Springsteen’s deal looks to have brought with it several perks on the taxation side.
Reference: Digital Music News (Dec. 20, 2021) “Why Did Bruce Springsteen Sell His Music Rights? A Breakdown of the Decision”

Aretha Franklin’s Niece Resign as Executor

Sabrina Owens, the niece of soul singer Aretha Franklin, recently announced her resignation as executor in court filings, stating: “Given my aunt’s love of family and desire for privacy, this is not what she would have wanted for us, nor is it what I want … I hope that my departure will allow the business of the estate to continue, calm the rift in my family and allow me to return to my personal life.” 

Rolling Stone’s recent article entitled “Aretha Franklin’s Niece Resigns as Estate Executor” reminds us that Franklin died in August of 2018, and, because she reportedly was intestate, Michigan law states that her assets are to be distributed equally among her four sons. Her sons agreed upon Owens as executor, but new family politics came up last May after three wills allegedly authored by Franklin were discovered in a notebook under some couch cushions. 

“That is when relationships began to deteriorate with the heirs,” Owens wrote of the discovery of the wills. She added that she accepted the executor role on the condition that “no fractured relationships develop within the family” and that the family “did not end up in court disputes over disagreements with the Estate.” Both, Owens wrote, have happened. 

Owens’ resignation, however, will not become effective immediately. Instead, she will keep serving as executor for the immediate future. It’s also unknown who will be appointed executor after she does leave. 

Franklin’s youngest son, Kecalf, has attempted to gain control, since one of the documents from 2014 appears to state that Franklin wanted him to take on that role (in August, a probate judge approved Kecalf’s request to have a handwriting expert analyze the documents that were found). 

Although Kecalf has the support of his brother Edward, his plan is opposed by Franklin’s third son, Ted White, as well as the guardian for her eldest son, Clarence, who has special needs. 

A hearing on the future of the estate is scheduled for early this spring. 

The ongoing battles surrounding Franklin’s estate continue, as it gets ready for two significant posthumous projects: one is a biopic movie starring Jennifer Hudson, “Respect.” The other is an installment in the biographical anthology series, “Genius,” with Cynthia Erivo playing Franklin (both are currently in production). 

In the last year, Owens, as executor, oversaw the release of the documentary, ‘Amazing Grace,” while at the same time managing the estate’s complicated finances, including $6.3 million owed to the IRS in back taxes. 

Reference: Rolling Stone (Feb. 3, 2020) “Aretha Franklin’s Niece Resigns as Estate Executor” 

You Can Complete Your Estate Plan During the Coronavirus Quarantine

The coronavirus lockdown is happening in many states, following the lead of California, Illinois, Florida and New York. Kiplinger’srecent article entitled “How to Get Your Estate Plan Done While Under Coronavirus Quarantine”says that these isolation orders create unique issues with your ability to effectively establish or modify your estate plan.

The core documents for an estate plan are intended to oversee the management and distribution of your assets, after you pass or in the event you are incapacitated. Each document has requirements that must be met to be legally effective. Let’s look at some of these documents. Note that there’s proposed federal legislation that would permit remote online notarization, and Illinois and New York have passed orders to allow notarization utilizing audio visual technology.

Will. Every state has its own legal requirements for a will to be valid, and most require disinterested witnesses. Some states, like California, permit a will, otherwise requiring the signature of witnesses, to be valid with clear and convincing evidence of your intent for the will to be valid. An affidavit indicating that the will was signed as a result of the emergency conditions caused by the COVID-19 virus should satisfy this requirement.

Power of Attorney. This document designates an individual to make financial decisions regarding your assets and financial responsibilities, if you’re unable to do so. This can include issues regarding retirement benefits, life and medical insurance and the ability to continue payments to persons financially dependent on you. The durable general power of attorney is typically notarized.

Advance Health Care Directive. This document states whether you want your life extended by life support systems and if you want extraordinary measures to be taken. It may state that you wish to have a DNR (Do Not resuscitate) in place.

HIPAA Authorization. Some states have their own medical privacy laws with separate requirements, and most powers of attorney provide that the designated persons can act, if you’re unable to do so. Financial institutions typically require confirming letters from your doctor that you’re unable to act on your own behalf. To be certain that this agent can act on your behalf if needed, they should be given written access to see your medical information.

With the pandemic, these requirements can be fluid and may change quickly. Be sure to work with an experienced estate planning attorney.

Reference:Kiplinger (March 30, 2020) “How to Get Your Estate Plan Done While Under Coronavirus Quarantine”

Holden Caulfield's Heir

Lamont Buchanan was never a well-known figure during his lifetime. He was a little known writer and magazine editor who lived a reclusive life.

However, as a fictional character he might have been the inspiration for a character that is known by most Americans.

A few years ago, an elderly woman claimed that when she was 18, Buchanan set up an interview for her with J.D. Salinger before he became famous. She said that during the interview, Salinger told her Buchanan was, in part, the inspiration for Holden Caulfield, the iconic protagonist of the Catcher in the Rye.

Two years ago, Buchanan passed away with an estate worth about $15 million, although it is not known how he got that much money.

He did not have a will or any known living relatives, so the assets are currently being held by the City of New York.

A woman has now come forward who claims to be Buchanan's aunt, as the Daily Mail reports in "California woman claims she is only living heir to $15million fortune of writer who 'served as inspiration for J. D. Salinger's Holden Caulfield character in Catcher in the Rye'."

It is not yet known whether the woman's claim to be the last living relative of the possible inspiration for Holden Caulfield is true.

Buchanan does have other relatives, but they are relatives by marriage and do not count for intestate succession purposes in New York.

If Buchanan had wanted them to inherit his assets, he would have needed to prepare a will.

Reference: Daily Mail (Sep. 30, 2017) "California woman claims she is only living heir to $15million fortune of writer who 'served as inspiration for J. D. Salinger's Holden Caulfield character in Catcher in the Rye'."

Things Prince Can Teach You about Estate Planning

Despite a net worth of millions of dollars the musician Prince never had a will drafted or any other form of estate planning documents that anyone knows about. His fans can learn a lot about estate planning from that failure to plan, as Forbes discusses in "5 Things Prince's Family, And You, Should Know About Estate Planning."

The important lessons to be learned include:

• Intestate – People who pass away without having a will are called "intestate," which means the court has to appoint someone to oversee the estate and then all assets will be divided according to a statutory scheme.
• Public – Not having an estate plan means the estate will be open to the public and details about the deceased's assets will also be public.
• Costs – Normally, not having a will leads to extra costs and fees as experts need to be hired to shepherd the estate through the probate process.
• No Choice – If a person has an estate plan, he or she can determine how the assets of the estate are divided and distributed to loved ones. However, in the absence of a will the court has no choice but to divide the assets according to what the statute books mandate.
• Plan Now – Prince most likely did not expect to pass away when he did. Perhaps he thought he had plenty of time to get an estate plan at a later date. However, as his death illustrates, you never know when you will pass away. For that reason it is important to plan for your estate now even if you do not think you need to.

Contact a qualified estate planning attorney and do not make the same mistake.

Reference: Forbes (May 18, 2016) "5 Things Prince's Family, And You, Should Know About Estate Planning."

Celebrities without Estate Plans

With Prince's estate in the news the public is getting a close look at what happens when a celebrity passes away without having created a will. Prince, however, is not the first star to lack an estate plan. It has happened several times before.

The Telegraph has compiled a list of some other recent celebrities who did not have estate plans and the problems caused for their heirs in "10 famous people who died without a will - and the problems it caused."

Some of the highlights on the list are:

• Jimi Hendrix – His entire estate went to his father who subsequently left it to his own adopted daughter and cut his biological son out of the estate. The son and daughter have faced off in court several times.
• Billie Holiday – When she passed away she was broke. What little she had became the property of her estranged husband. That entitled him to receive royalties from her work.
• Bob Marley – The singer passed away leaving behind a widow and nine children. The family has engaged in a series of lawsuits over the estate.
• Amy Winehouse – Her parents inherited her entire estate. They later had to take out loans to deal with the expenses of handling her complicated finances.
• Martin Luther King – Decades after his assassination his three surviving children have gone to court several times to settle their many disputes over their father's legacy.
• Tupac - After his death the rapper's mother and father fought over the right to inherit his estate. Eventually, his mother set up a trust that manages his legacy.

Reference: Telegraph (May 17, 2016) "10 famous people who died without a will - and the problems it caused."

More Potential Prince Heirs Come Forward

When news broke that the musician Prince did not have an estate plan experts were quick to predict that there would be multiple claims made for a share of his fortune by people claiming to be related to the musician. It appears that claimants are wasting little time in proving the experts right.

The Daily Mail reports that two more people have now submitted claims in "Two more ‘relatives' stake their claim to a share of Prince's fortune: Family of singer's late half-brother say birth certificate proves they are rightful heirs."

Both new claimants say they are the child of Prince's deceased half-brother Duane Nelson who passed away in 2011. One woman claims to be Nelson's daughter and his only living heir. However, the other claim was submitted by a woman who states that she is the mother of Nelson's 11 year old child.

If the claims can be proven, both would receive a share of Prince's estate unless someone else can prove he or she is Prince's child.

Many people might wonder whether the media coverage of Prince's estate is worth following. It should be.

Rarely do we get the opportunity to see what happens when a wealthy person dies intestate. The multiple claims of the musician's would-be heirs and the expected estate tax bill the estate pay should lead to valuable lessons about the importance of getting estate plans signed without delay.

Reference: Daily Mail (May 19, 2016) "Two more ‘relatives' stake their claim to a share of Prince's fortune: Family of singer's late half-brother say birth certificate proves they are rightful heirs ."

Prince Estate Moves Forward with Special Administrator

In a short hearing on May 2, 2016, a Minnesota judge appointed the Bremer Trust to oversee the late musician Prince's estate. It looks like the group will have their work cut out for them as the Star Tribune reports in "Judge confirms appointment of special administrator on Prince's estate."

So far it appears that Prince did not make a will, as one has not been found although his family claims to still be searching for one. If one is not found, then the estate would be divided under Minnesota law between Prince's six siblings and half-siblings unless other claims to the estate are found to be valid.

Five of those siblings or half-siblings were present in court when the special administrator was appointed.

During the same hearing one early claim to Prince's estate was dismissed by the judge. A California man claimed that an implied agreement gave him the copyrights to all of Prince's musical works. The family called the claim frivolous and the judge apparently agreed.

Other claims, more potentially threatening to the known siblings and half-siblings, are starting to appear.

An Illinois woman appeared at the hearing though an attorney with a claim that she is a previously unknown half-sibling. If true, she would have a claim to an equal share of the estate as the other siblings and half-siblings. It is also possible that Prince had a previously unknown child who would have a claim to the entire estate.

At least one man has claimed to be such a child.                                                                                              

Reference: Star Tribune (May 3, 2016) "Judge confirms appointment of special administrator on Prince's estate."

Search on for Missing Irish Heir

Kathleen Hilda Ryan passed away in Greenwhich, United Kingdom in 2013 with an estate valued at $788,000. She had inherited the bulk of it from her sister, Joan. No will or other estate planning documents could be found. 

Kathleen had no children of her own and no living siblings. 

In fact, as far as anyone knows, she had no living relatives at all. However, it is believed that her aunt, Lizzie, emigrated from Ireland to New York at some point. 

Thus, the search is on for what happened to Lizzie and whether she had any children. 

If any of Lizzie's children are found, then they would inherit the estate. If no one is found in 30 years, then the estate will become the property of the British Crown. 

Many people have submitted claims to being the descendants of Lizzie, but thus far no one has been able to prove it. 

Irish Central reported the story in an article titled "Is your ancestor Lizzie Ryan from Westmeath? You could inherit $788,000."

In the United States, the law is basically the same with one big exception. If no relative is found the estate does not go to the British Crown, but rather it passes to the state in which the estate property is located. 

Thus, unless you want your estate to become the property of state government, it is very important that you have some kind of estate plan, especially if you do not have any close relatives who can be easily found.

Of course, if you are descended from a Lizzie Ryan who emigrated from Ireland to New York in the mid-1900s, you might want to stake a claim to the estate of Kathleen Hilda Ryan while you can.

Reference: Irish Central (May 16, 2015) "Is your ancestor Lizzie Ryan from Westmeath? You could inherit $788,000."