Texas Estate Planning

Where Do You Score on Estate Planning Checklist?

Make sure that you review your estate plan at least once every few years to be certain that all the information is accurate and updated. It’s even more necessary if you experienced a significant change, such as marriage, divorce, children, a move, or a new child or grandchild. If laws have changed, or if your wishes have changed and you need to make substantial changes to the documents, you should visit an experienced estate planning attorney.
Kiplinger’s recent article “2021 Estate Planning Checkup: Is Your Estate Plan Up to Date?” gives us a few things to keep in mind when updating your estate plan:
Moving to Another State. Note that if you’ve recently moved to a new state, the estate laws vary in different states. Therefore, it’s wise to review your estate plan to make sure it complies with local laws and regulations.
Changes in Probate or Tax Laws. Review your estate plan with an experienced estate planning attorney to see if it’s been impacted by changes to any state or federal laws.
Powers of Attorney. A power of attorney is a document in which you authorize an agent to act on your behalf to make business, personal, legal, or financial decisions, if you become incapacitated. It must be accurate and up to date. You should also review and update your health care power of attorney. Make your wishes clear about do-not-resuscitate (DNR) provisions and tell your health care providers about your decisions. It is also important to affirm any clearly expressed wishes as to your end-of-life treatment options.
A Will. Review the details of your will, including your executor, the allocation of your estate and the potential estate tax burden. If you have minor children, you should also designate guardians for them.
Trusts. If you have a revocable living trust, look at the trustee and successor appointments. You should also check your estate and inheritance tax burden with an estate planning attorney. If you have an irrevocable trust, confirm that the trustee properly carries out the trustee duties like administration, management and annual tax returns.
Gifting Opportunities. The laws concerning gifts can change over time, so you should review any gifts and update them accordingly. You may also want to change specific gifts or recipients.
Regularly updating your estate plan can help you to avoid simple estate planning mistakes. You can also ensure that your estate plan is entirely up to date and in compliance with any state and federal laws.
Reference: Kiplinger (July 28, 2021) “2021 Estate Planning Checkup: Is Your Estate Plan Up to Date?”

Did Pop Entertainer Pink Change Estate Plan because of COVID-19?

Pink and her four-year-old son, Jameson, tested positive for the virus in March 2020, but her husband, Carey Hart, and daughter, 9-year-old Willow, did not contract the coronavirus.
MSN’s recent article entitled “Pink Reveals She Rewrote Her Will Because She Thought 'It Was Over' Amid COVID-19 Battle” reports that the entertainer did change her will.
"It was really, really bad, and I rewrote my will," she said. "... At the point where I thought it was over for us, I called my best friend and I said, 'I just need you to tell Willow how much I loved her.' It was really, really scary and really bad. "
The experience inspired her single, "All I Know So Far.” Pink described the song as "a letter to my daughter." The single was released May 7, and a documentary and album of the same name will follow on May 21.
"As a parent, you think about, 'What am I leaving for my kid? What am I teaching them? Are they going to make it in this world, this crazy world that we live in now? What do I need to tell them if this is the last time that I get to tell them anything?'" she said. "So, that was kind of the song."
Pink first announced that she and Jameson were fighting the coronavirus in April 2020. That same month, she described "the scariest thing" she has ever been through on The Ellen DeGeneres Show, sharing that her son was the first one to get sick.
"[It] started with a fever for him and it would come and go, and he would have stomach pains and diarrhea and chest pains and then a headache, sore throat," she said. "It sort of was just all over the place. Every day was just some new symptom. His fever stayed it did not go. It just started going up and up and up and up and then at one point it was at 103."
As for herself, Pink said, "I woke up in the middle of the night and couldn't breathe and I needed to get to a nebulizer for the first time in 30 years. I have this inhaler that I use, this rescue inhaler, and I couldn't function without it, and that's when I started to get really scared."
In a December 2020 Instagram post, Pink, whose real name is Alecia Beth Moore, called 2020 a "poop sandwich of a year." She also had a staph infection and a broken ankle.
See your estate planning attorney about changing your will based on current events.
Reference: MSN (May 4, 2021) “Pink Reveals She Rewrote Her Will Because She Thought 'It Was Over' Amid COVID-19 Battle”

The Latest on Aretha Franklin’s Estate

The attorneys representing two of Aretha Franklin’s sons say yet another will was found in the files of a law firm she had hired to help her with estate planning.
New York Times’ recent article entitled “Another Possible Aretha Franklin Will Surfaces in Estate Dispute” reports that the legendary singer died at 76 in 2018, and her family assumed she had no will. Then, nine months later, a few handwritten documents, which may represent two or even three wills, were found in the singer’s Detroit home. This caused a fight among her four sons over how her estate should be run, and its assets divided.
The latest chapter in the story is that a detailed document has been found that lawyers for two of Franklin’s sons say is a draft of yet another will from Franklin’s final years. The papers, filed in a Michigan court this week, include an eight-page document, titled “The Will of Aretha Franklin.” This will was said to have been drafted in 2018. The filing also includes another 23 pages that detail the terms of a trust. Both of these are stamped “draft,” and neither document has Franklin’s signature.
According to the lawyers, Franklin retained a Detroit lawyer, Henry M. Grix, to help with her estate planning. The filing includes correspondence from Grix, dated December 2017, in which he summarizes an estate plan for Franklin, asks her some questions and refers to earlier discussions between them. The filing includes further handwritten notes, said to be Franklin’s, in which she lists family members and other lawyers, along with her properties.
The filing, by attorneys for her sons Ted White Jr. and Clarence Franklin, states that the documents are evidence that their mother had been in discussions with Grix “for over two years,” and that the correspondence included her initials. After she “fell very ill,” they said, another lawyer informed Grix that she was unable to sign.
It is not known how the document would impact the ongoing negotiations over the estate, which is estimated to be worth $80 million.
The document wasn’t signed by Franklin, but under Michigan law, it could be accepted as a valid will. If the person who wants this to be Aretha Franklin’s will can prove to the court by clear and convincing evidence that she intended it to be her will, then the court could rule that it is.
Reference: New York Times (March 11, 2021) “Another Possible Aretha Franklin Will Surfaces in Estate Dispute”

Which Famous People Have Made The Greatest Estate Planning Mistakes of All Time?

The instructions for the disposition and management of one’s estate at death through the use of wills, trusts, and other devices can cover almost about any topic you can think of. While the majority of instructions in estate planning concern finances, wills and trusts frequently guide decisions regarding health care, guardianships, business, education and even which heir gets the entire Barry Manilow record collection. 

Born2Invest’s recent article entitled “The biggest estate planning blunders of all time” looks at a few colossal estate planning mistakes by the rich and famous. 

Estate planning usually conjures up thoughts of drafting a will by an attorney. Although the cost of drafting an estate plan varies significantly based on location and complexity, it can range from a few hundred dollars to several thousand. Regardless of the cost, hiring an experienced estate planning attorney will save your family time, money and anguish after your death. 

With that said, let’s take a look at some infamous estate planning errors by those who simply didn’t get around to this very important task. 

Ted Williams (Baseball Legend). When Ted died in 2002, he had one will that said his body should be cremated, and another that instructed he should be cryogenically frozen. As you can imagine, there was a fight among his children. This resulted in Ted’s decapitation (postmortem). Therefore, the Splendid Splinter, unquestionably the greatest baseball hitter of all time, had his body and head frozen in Arizona at Alcor Life Extension Foundation. 

Sonny Bono (Singer and Congressman). Sonny didn’t create a will. As a result, he passed away intestate. A lawsuit was initiated by ex-wife and singing star, Cher, to collect $1.6 million in unpaid alimony, along with a fraudulent claim by an illegitimate child (disproven by DNA testing), and Sonny’s widow, Mary. 

Heath Ledger (Actor). Heath failed to revise his will after the birth of his daughter. At his death in 2003, his entire estate was split between his parents and sisters, but they agreed to give all the money to his daughter. 

Philip Seymour Hoffman (Actor). The Oscar-winning actor also never updated his will after the birth of his two daughters. Since he wasn’t married to his then girlfriend, there was an approximate $12 million estate tax that was owed. 

Joe Robbie (the owner of the NFL Miami Dolphins). Robbie had a substandard estate plan that contained a pour-over will and revocable inter vivos trust. This was designed to defer estate taxes until after the death of his wife. However, it didn’t work as planned. She demanded her “elective share” as spouse, 30% of the husband’s illiquid estate, which created a $47 million tax bill that could only be settled by selling off his football team. His 11 children also went to court to fight over his estate. 

James Brown (Singer). The “Godfather of Soul” wasn’t around to witness the 12-year epic legal battle among several blended families over his estate. 

Barry White (Singer). White died in 2003 in the middle of divorce proceedings. Legally speaking, he was still only separated from his wife. As a result, she got it all, instead of his current girlfriend and mother of nine kids. 

There are many more famous people who posthumously became members of this dubious club. Their eligibility for membership was poor estate planning that resulted in unintended—and in some cases, tragic—consequences. Although many Americans can’t really identify with these mega-wealthy or public icons, they do have assets and families and friends.  

The club of notable stars with estate planning errors shows the rest of us the need for proactive professional planning. Be certain that you work with a qualified estate planning attorney, so that your estate plan doesn’t end up like the ones above. 

Reference: Born2Invest (January 27, 2020) “The biggest estate planning blunders of all time” 

The Executor’s Cheat Sheet

A recent Forbes article, titled“What an Executor of an Estate Needs to Do,” says that if you’re appointed to be an executor, you should work with an experienced estate planning attorney to help you through the steps in settling the estate. 

When settling an estate, an executor is in charge of these basic functions:

• Locating, collecting, and being responsible for the estate’s assets until they are distributed to the beneficiaries.
• Paying the decedent’s debts and estate administration expenses.
• Handling tax matters, including filing the decedent’s and the estate’s income tax returns and paying the income taxes, if any.
• Distributing the remaining assets in accordance with the terms of the will.

The financial responsibilities of an executor mean that he or she must make an investment analysis of all assets in the estate to determine which to sell and how the estate’s cash needs will be met. The majority of the administrative work in handling an estate is recordkeeping. 

The executor must first arrange for his or her court appointment in probate court to obtain “Letters Testamentary,” which permits the executor to represent the estate to third parties such as banks and financial companies to collect, liquidate and distribute assets and other tasks. The executor must compile information about the decedent’s finances and then sell or divide certain assets among those named to receive them in the will or to pay taxes.

In addition, the executor must cancel the decedent’s credit cards, have utilities turned off and pay expenses such as rent, taxes and insurance premiums. Home repairs or maintenance may also be needed. The executor will also need to open an estate bank account to hold the collected assets. These funds are used to pay the bills. 

An estate planning attorney can be a huge help with this process to ensure that everything is done right and that the decedent’s estate is settled in an efficient manner.

Reference: Forbes (August 26, 2015) “What an Executor of an Estate Needs To Do”

 

Check Out This Estate Sale!

The one thing that’s lacking in this story is a legally recognized beneficiary, according to The Orange County Register. “A Buena Park plumber's death left behind 69 cars and one big mystery,” tells the story of the cars’ owner, who created three wills which all disinherited his only child, Melinda Willits Sanchez, a resident of Hawaii.

The most recent will designates a California charity as the beneficiary. However, this one isn’t considered valid because it’s a copy, which leaves the 1996 will in play. That one has the estate going to his parents, who were already deceased. As a result, the county is trying to settle an estate that is basically “up for grabs.” Several people are making claims. 

Gerald Willits was a plumber and, in addition to all of the vehicles, he also owned four homes that together are worth at least $1.2 million. Willits was a pack rat who was cited for trash, overgrown trees, peeling paint, a lack of running water, and housing inoperative vehicles on his property. He was eccentric and a very private person.

The auto auction is scheduled for September 1 and is expected to net $60,000 to $150,000 from 110 “lots.” This sale includes a 1930 Ford Model A Roadster and a 1965 Volkswagen van. There will be dozens of Fords, Chevys, rusted flathead V8s, as well as an experimental aircraft.

Many people believe that the Public Administrator is trying to get the estate, but that never happens. That office is entitled to a maximum of 4% of the estate’s value under California law.

Don’t have your loved ones fighting over your massive collection of cars or other assets of your estate. Talk to an experienced estate planning attorney. He or she can help you draft a legal will and other estate planning documents to ensure that your wishes are carried out properly.

Reference: The Orange County Register (August 17, 2015) “A Buena Park plumber's death left behind 69 cars and one big mystery”

Tips on Transferring Your Parents’ Brokerage Accounts After They Die

“It’s important to get the word out about this helpline because it’s such a valuable resource,” Ong said in an article by ThinkAdvisor, “4 Steps to Transfer Deceased Parents’ Brokerage Assets: FINRA.”

Beneficiaries should talk to the deceased’s financial advisor if available. The typical procedure for brokerages is to attempt to put beneficiaries in touch with the financial advisor right away. Advisors will be familiar with the parents’ investments and portfolio.

The article also points out that even though there are many seniors who share their estate planning strategies with their children, they may forget about the transfer of securities that are in a non-retirement brokerage account. Family members and other beneficiaries need to be prepared. These four tasks are recommended:

1. Find All of the Right Documents. Brokerages will need a death certificate, the court’s letter of appointment naming the executor, a “stock power” of attorney, a state tax inheritance waiver, an affidavit of domicile, as well as a trustee certification for accounts that are held in trust.

2. Call the Broker ASAP. When an account holder (the parent) dies, you need to contact the brokerage right away. Watch for account statements—you may not even be aware that an account exists!

3. Know How The Holdings Work. It’s best to have a candid conversation before a death to know the account holders’ assets, review account statements, and trade confirmations. The ownership structure is also something to think about, as asset transfers are impacted based on whether an account is for an individual owner or joint tenants.

4. Be Ready To Open a New Account. After a death, a new account is typically opened for the beneficiary or estate. Any transactions or transfers within the account can’t be completed until everything is legal, and the new account gets set up. It’s also the perfect time to see if the current firm and broker are a good fit.

Depending on the size of the brokerage accounts and its value, state law may provide for a Small Estate Affidavit to transfer the account without opening a probate.

The article urges beneficiaries to explore if there’s a transfer on death plan (TOD) available through the brokerage. If you create a TOD arrangement for your account, then you keep control of the brokerage account assets during your lifetime, and when you pass away, the ownership goes to the named beneficiaries without probate.

Be sure to discuss your options regarding brokerage accounts with your estate planning attorney.

Reference: ThinkAdvisor (June 26, 2015) “4 Steps to Transfer Deceased Parents’ Brokerage Assets: FINRA”