Articles Posted in Estate Planning

Once upon a time, there were these somewhat sexist laws called “dower and curtesy.” These laws applied to the specific amount of a decedent’s estate to which his or her surviving spouse would be entitled. They were usually very different; men received more than women. Over the years, these laws were abolished and made way for their modern counterparts – the elective share. Most states have enacted some variation of an elective share statute, which states that surviving spouses are automatically entitled to a specific share – usually around one-third – of their deceased spouse’s estate.

While it may seem harsh to disinherit a spouse, there are often many reasons to do so. For instance, couples that marry late in life after raising their own children may each have substantial assets from prior marriages and from their working careers. Each person may wish to provide for their own descendants rather than seeing their entire estate pass to another family line. This is just one common example.

So, is it impossible to disinherit one’s spouse? Hardly. There are several ways to limit or eliminate a spousal inheritance.

Gene Chandler (aka Eugene Dixon) was one of the more prominent figures in mid-Twentieth Century Soul and R&B. In 1962, he released his biggest hit – The Duke of Earl. Following this award winning number one billboard hit, he began to refer to himself as the Duke of Earl. However, according to court documents in Cook County, Illinois, the Duke of Earl had a very troubled life, from felony convictions for Heroine possession to fathering well over 20 children by many women. Late in life, he married a wealthy real estate mogul, Lilli Kinnard, who already had children of her own.

Just before his wealthy wife passed away from cancer, her will mysteriously was changed to entirely disinherit her children, leaving millions to the Duke. In fact, the new will made no mention of her children and instead named several of Chandler’s children from prior relationships as successor executors. Even more shocking, the attorneys who drafted the new will were the same ones that helped the Duke negotiate his prenuptial agreement with Kinnard.

Today, Chandler is still embroiled in an ongoing will contest case and several supplemental proceedings involving allegations of fraudulent transfers of business and real estate assets, unlawful attempts to defraud creditors, and undue influence. This case, however, teaches a couple invaluable lessons.

How does joint tenancy avoid probate?

Let’s use a simple example: the family home. When an aging widow places her home in joint tenancy with an adult daughter, they both immediately are entitled to possession and ownership. Each has the same rights. If the property is rented, each is entitled to the entire rent equally. Therefore, the law generally considers the widow’s action as a gift to her daughter. Likewise, upon the widow’s death, the house is immediately the sole possession of the daughter and not part of the probate estate. In other words, it passes outside of probate.

So what is wrong with joint tenancy?

Estate planning attorneys are frequently asked a troubling question: what’s the quickest, cheapest, and easiest way to just avoid probate altogether? Of course, you can never expect an attorney to provide a blanket response to that question. It is similar to asking your doctor, “What’s the quickest, easiest, and cheapest way to avoid heart disease?” The answer in both cases will undoubtedly depend on many things. For the doctor to give an informed response, he or she would need to perform blood tests, get some idea of your history, lifestyle choices, eating habits, family history, and so forth.

The same is somewhat true of offering a comprehensive estate plan. It is, after all, designed to protect you and your family later. So, your attorney will likely need to know your net worth, what real estate you own, your relationship with your children, siblings, and other relatives, your goals, career, income, and your level of health. These are just a few of the issues that go into deciding how to properly establish your estate plan. This warrants discussion, because people continue to find themselves engulfed in painful litigation against their own family, often despite good intentions.

Every year many Americans are fooled into choosing quick fixes to “avoid probate.” In many ways, a complete misunderstanding of the probate process has perpetuated this mentality. In fact, web-based “self-help” legal services are often the worst culprit. But if handled properly by an experienced attorney, probate can be a powerful and straightforward process for settling a decedent’s affairs. Some sadly choose to simply open joint bank accounts with an adult child or close friend and then place all of their money in those accounts with simple instructions regarding how they want the money spent upon death. Many people also do the same thing with their homes, automobiles, and other types of property, thereby completely avoiding probate. But this is not a wise strategy.

The Financial Industry Regulatory Authority (FINRA) issued a new alert regarding the transfer of brokerage accounts upon death. This report has important information for people who are considering using brokerage accounts as part of their estate plans. The alert informs current brokerage account holders, family members, and their other beneficiaries about the processes involved when the account holder passes away.

What is FINRA?

FINRA is the largest independent regulator in the world for all securities that do business in the United States. The organization’s main purpose is to provide investor protection and ensure market integrity through effective and efficient regulation. Some of FINRA’s responsibilities include registering and educating industry participants, examining security firms, writing and enforcing rules, and educating public participants in the market. FINRA also offers dispute resolution for security firms and participants in the securities market.

Most of the estate planning tips and tricks revolve around plans for couples; however, a single person’s estate plan is just as important. In many circumstances, the way that a single person structures their estate plan and who is named differs from an estate plan of a couple. Just as with couples, if a single person fails to properly plan there can be dire consequences for an estate.

Dying Without a Will

If a single person dies without a will, then they are considered intestate. All of the assets in their estate go into probate, and the court will disperse the assets according to state law. Because there is no spouse, typically the court will split the estate between any children, parents, and siblings. If there are no close living relatives, then all of the assets in the estate are forfeit to the state. This worst case scenario highlights the importance of titling various assets, beneficiary designations, and how an estate plan can help a single person.

Riley B. King, also known as famed blues musician B.B. King, passed away on May 14 and left behind a contentious estate battle between his children and manager. One of his daughters, Patty King, claimed in an interview that her father did well by his children and is now leading the charge against her father’s business manager, LaVerne Toney, of 39 years. Five of his eleven surviving children have all made claims of serious wrongdoing against the manager.

Accusations against the Manager

Patty King and her half-sister, Karen Williams, are leading the case against Ms. Toney. Some claims include not allowing the children to see Mr. King, providing improper medical care, and possibly even poisoning the famous musician in his final days. Because of the claims of possible homicide, the coroner conducted an autopsy and is awaiting toxicology results before rendering a final opinion. However, these types of tests could take weeks to return a result.

Recent research shows that employees still working in Generation X do not have the overwhelming desire to retire. According to a new study released by Ameriprise Financial, an overwhelming 73% of people from Generation X plan on working in some capacity after they retire. However, interestingly enough the reason is not for financial purposes but for finding fulfillment.

Results of the Study

Called the “Retirement 2.0” study, the researchers at Ameriprise Financial found out some interesting qualities about the Generation X workforce. The vice president in charge of the research said that “they don’t have an on-off switch in terms of leaving the work force and instead anticipate a gradual evolution into this new phase of life, which really sets this generation apart.”