In days gone by, the distribution of assets upon a person’s death might be relatively straightforward. It is still true today that, when waiting to hear about what assets the beneficiaries of an estate might receive, there could be some hurt feelings or tension over who might receive a cherished item — a beloved grand piano, for example, or a family heirloom desk.
When the estates of today are settled, however, there are other things to take into consideration aside from pianos or desks. For many people, the paper bank statement is a relic of the past. Instead, financial matters are frequently — and sometimes exclusively — dealt with online. If a person has accounts with several different companies, then it’s likely there is a set of user names and passwords for each of them.
Making sure that this information is known to the appropriate people — and left unknown to those who might be tempted to use them for their own purposes — is crucial. Some types of accounts or investments that might have online accounts include, but aren’t limited to:
- bank accounts
- brokerage accounts
- insurance policies
- utility company accounts
- email and social media accounts
Some people might scoff at the last item on that list. However, emails can contain sensitive and confidential information. And social media platforms, such as Facebook, are these days frequently used as storage for photos that have been scanned from fading originals. Making sure that these are preserved after you are no longer around to do it yourself is a consideration worth making.
Source: USA Today, ” Estate Planning 101: Don’t forget digital assets ,” Eric McWhinnie, May 25, 2014
The reason for having an estate plan in place is to make sure that your wishes are accurately conveyed after your death. For many people, this is a bit of a guessing game: We don’t know how much time we have left. We have to make the arrangements well in advance so that when the time comes, there is no debate about our will or what our intentions might have been.
Sometimes, however — for better or worse — we get an idea of how much time we have left. Most of us would probably choose to go about our business in a private way, but sometimes, people have a public outlet that lets them notify the rest of us about what’s happening in their lives and with their health.
One such person is Richard Mellon Scaife. Observant readers might recognize his middle name; the Mellon family amassed a huge fortune in banking and industry. Scaife himself owns the Pittsburgh Tribune-Review, a daily newspaper in that city. The 81-year-old recently wrote a column in that paper revealing that he had been diagnosed with a form of cancer that is not treatable.
Scaife, whose fortune is estimated to be nearly $1.5 billion, undoubtedly has well-developed plans in place. Not everyone does, however, which can lead to battles over family members when it comes down to the distribution of assets. People who are experiencing difficulty in this area often consult with experienced attorneys, who can help guide them through what can be a difficult process.
Source: Forbes, ” Richard Scaife, Newspaper Billionaire and Andrew Mellon Heir, Has Untreatable Cancer ,” Abram Brown, May 18, 2014
Last month, in the wake of the death of actor Mickey Rooney, speculation began about the degree to which the late actor’s will would be accepted by his family. The actor’s estate was not very large, totalling only about $18,000. However, because everything was specified to go to one of the actor’s stepsons, rather than his estranged wife or any of his biological children, a dispute about the will execution seemed likely anyway.
Now, that has come to pass. Rooney’s wife, who had been separated from her husband since June 2012, officially challenged the validity of her late husband’s will. He signed the document only a few weeks before he died on April 7 at the age of 93.
In some cases, a last-minute will that leaves everything to a single person might be cause for alarm, especially if the prospective beneficiary has undue influence over a vulnerable senior citizen. That does not seem to be true in this case, though. Rooney reportedly did not include his biological children because they were already sufficiently well off. He was estranged from his wife, and his main caregiver over the last few years was the stepson he named as his beneficiary.
The deceased actor’s conservator, who is now serving as the executor of the estate, said that Rooney was of sound mind when he signed off on his updated will. He had just finished filming scenes for an upcoming movie, in fact, and the man said that Rooney had no trouble remembering his lines.
Source: CNN, ” Mickey Rooney’s widow contests late actor’s will ,” Alan Duke, May 11, 2014
Many families collapse into disarray after the death of a loved one. While much of this is due to family members trying to come to grips on the loss of a husband, brother or father, for example, after some time it often comes down to financial matters. It can be a source of conflict, for example, if a trustee is having a personal conflict with a trust beneficiary .
This is the situation playing out for a family with a famous name in our city: Modell. Modell’s is a sporting-goods institution in the city, and now the company CEO is battling with his sister-in-law over the trust set up by his late brother.
Michael Modell died in 2001 of cancer, and he set up a trust to provide for his wife Abby and their three children. He made his brother Mitchell, now the CEO of Modell’s, the trustee of his estate — an act Mitchell says was an attempt to curb Abby’s spending.
Abby, however, is suing Mitchell, saying that he is using company money to pay for unnecessary luxuries for himself, such as a $100,000 steak dinner. Mitchell, however, says that Abby has racked up hundreds of thousands of dollars in charges on company credit cards — even though she hasn’t ever been a company employee.
While this dispute is over large amounts of money, even estates involving much smaller assets can be the subject of family squabbles. It may be important to have an experienced attorney on board, maybe to act as a trustee himself or herself, to help ward off some of these issues.
Source: New York Post, ” Modell’s president hits back at sister-in-law over spending ,” Julia Marsh, May 3, 2014
Not everyone believes that having a revocable living trust is necessary. After all, the federal estate tax exemption for individuals is $5.34 million and $10.68 million for married couples. However, the purpose of such an estate planning tool concerns more than just saving upon estate taxes. A revocable living trust can allow distributions to heirs without the assets having to go through probate and can thus be an effective means for distribution of assets.
One New York estate planning attorney speaks about how revocable living trusts can prevent headaches. Creation of such a trust can prevent family squabbles and reduce difficulties concerning creditors. It can also provide a certain amount of privacy concerning the estate for family members.
In one particular instance the original will was missing. Use of the revocable trust, however, was sufficient to convince a judge that the wording in a copy of the will was proper.
We also need to remember that state tax requirements need to be taken into consideration. New York taxes on estates greater than $1 million can amount to 10 percent. Use of a revocable living trust can reduce or even eliminate state taxes that would otherwise be owed.
It’s a good idea to speak to estate planning and trust administration lawyers regarding any estate planning concerns. These attorneys may be able to provide a number of legal options to reduce taxes and expenses the estate may have to pay. These attorneys can also provide extra services for trustees or executors who are caring out their fiduciary duties concerning the trust.
Source: Palm Beach Daily News, ” Need a revocable living trust? ” Gail Liberman, April 27, 2014