Wednesday, September 3, 2014

Young Adults and Powers of Attorney

Recently, we came across an article in a publication put out by the Troy-based Kemp Klein law firm addressing the importance of powers of attorney for young adults.  This is an issue that many people, particularly parents, may not think about.

Once your child turns 18, they are no longer considered a minor in Michigan. Many parents may not realize it, but this also means they no longer have the power to obtain medical information or manage assets and bank accounts of their children.

This can result in a very uneasy feeling for a lot of parents, especially those whose children are just about to head off to college and live on their own for the first time. Fortunately, there are steps that can be taken to alleviate this unwanted stress.

First, a parent should obtain a Durable Power of Attorney. In doing so, parents are able to make financial decisions that they would otherwise be prohibited from doing for their now-emancipated child.

In many cases, an 18 year old still lacks the maturity to make important financial decisions on their own. With a Durable Power of Attorney, parents can put their mind at ease knowing that they still have the ability to make such important decisions in the event of their child’s incapacity.

The next step is to obtain a Patient Advocate Designation.  This document designates an adult to manage the care and medical treatment decisions of the young adult.  Once a child reaches the majority age of 18, he or she can designate their parent to serve as a patient advocate. By doing so, the parents now have the ability to make sure that their child is making the best decisions for their healthcare and medical treatment in the event of an incapacity.

Like financial decisions, medical decisions can be very important and have a significant impact on an individual’s life. By keeping parents involved in this process, it not only helps the young adult, but also gives the parents peace of mind knowing that the best care and treatment will be provided should an incapacity arise unexpectedly.

Most people avoid thinking about this unpleasant topic; very few even know these types of documents and powers exist for young adults.  When parents and their young adult children educate themselves on these basic probate planning precautions, medical and financial disasters for the young adult can be avoided.

Such forethought can ease the transition of the young adult from life under the protective umbrella, to living on their own.

This is a basic overview of these types of fiduciary powers and estate planning documents.  Our law firm offers a free consultation to discuss these documents and the estate planning process. 

Saturday, August 30, 2014

Guardianship During Divorce Proceedings

Divorce is difficult to be sure.  The divorce process is sometimes further complicated by the incapacity of one of the spouses.

Here is Michigan's legal definition of an incapacitated individual as set forth in the probate code known as EPIC [Estates and Protected Individuals Code]:
Incapacitated individual means an individual who is impaired by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause, not including minority, to the extent of lacking sufficient understanding or capacity to make or communicate informed decisions.
Having a spouse with a guardian is a situation we have seen here at Clarkston Legal, both in our family law practice as well as in our probate docket.  The question is, if a spouse to a divorce proceeding needs a guardian, who should serve in that capacity?

The individual nominated to serve as guardian can be a parent, sibling, or even a trusted friend.  The nominated individual can also be selected from among the corps of active Public Administrators in the county taking direct appointments from the probate court judges.

This specific guardianship issue arose quite a while back in a 1998 divorce case from the Oakland County Family Court that was decided by the Michigan Court of Appeals in 2003.  The published thus binding case, Keller vs Keller, affirms the proposition that a spouse previously found incapacitated by the Oakland County Probate Court, can nevertheless direct her guardian to initiate, prosecute, and conclude divorce proceedings.

Although a protected individual under guardianship lacks capacity to enter into binding contracts, including a settlement agreement or consent judgment of divorce, the guardian functions as an "alternate decision maker".  Those decisions can include the myriad elections involved in the completion of a divorce proceeding.

Therefore, the guardian determines when alimony is sufficient, how long alimony should be paid, negotiates the property settlement, even determines a parenting schedule if the couple has minor children.  After the divorce, the guardian is also in charge of arranging a proper placement for the newly divorced ward.

If you know someone who is in a bad marriage, and who is not capable of managing their own affairs due to a suspected incapacity, contact  our law firm for a free consultation.

Sunday, June 22, 2014

Dead Man Standing

Dead Man Standing in Puerto Rico.
Murdered boxing champ posed by family.
This comes to us straight out of New Orleans. The story about families posing their dead at funerals was below the fold in today's Sunday NYT, yet this only-in-America tale still caught my eye.

The practice was bound to go viral at some point; leave it to the Big Easy.  The Charbonnet-Labat Funeral Home staged its second dead sit last Thursday when Miriam Burbank, deceased, was posed in her home, sitting at her kitchen table, beer glass in one hand, cigarette in the other.

New Orleans has always had a flair for funerals; think the colorful Creole funeral "parades".  But this is something altogether different; so different that the director of the 132-year old Charbonnet-Labat Funeral Home recently has been criticized for the practice by other funeral home directors who say the practice is improper, sacriligious, tasteless, immoral, and borderline illegal.

The rite of sitting or posing the dead began only very recently with a little Caribbean influence from San Juan, Puerto Rico in the Greater Antillies.  While the first cadaver poses took place at wakes around San Juan in 2008, by 2012, a law was passed in Puerto Rico formally legalizing the rite, provided the pose does not depict "immoral" conduct.  Well, we here at the electronic probate attorney find that qualification refreshing.

Whether the practice is legal here in Michigan or other states is questionable. If the rite catches on, or goes viral like Ms. Burbank in her kitchen, with her beer and cigarette, then the law will catch-up with it.

Defenders of the practice within the funeral industry point out they only execute "poses" at the very specific direction of the deceased's family; apparently the pose is what the deceased wanted, and perhaps made his or her wishes known.

As a matter of good probate estate planning, it is a "best practice" to include a specific clause in your will expressing whether, for example, you wish to be cremated, buried, or, posed before internment.

Here are some examples of rites of sitting the dead featured in the NYT article:
  • A paramedic posed behind the wheel of his beloved ambulance; 
  • A man sitting Indian-style, dressed like Che Guevara, with a cigar in hand; 
  • A gambler posed at the wheel of his beloved Cadillac Seville, deck of cards in hand; 
  • An elderly deceased woman greeted guests to her wake from the comfort of her rocking chair; 
  • A 20-something murder victim was bolted to the wall, overseeing his wake; 
  • Big Easy band leader Lionel Batiste stood with his cane, hat tipped to one side.
Death is in the eye of the beholder.  Should a family respect the decedent's wishes, even when they careen out of the bounds of decency?

Sunday, May 25, 2014

Dad's Memo Prevents Daughters From Getting Disinherited by Step-Mom

A secret memorandum that a concerned father passed to his daughters some 13-years prior to his death may have saved their sizable inheritance.  The memo was a key piece of evidence in resolving a trust dispute where the step-mother had exercised undue influence to claim her wealthy husband's entire estate, worth an estimated $5 million.

The identities of the parties to the case were kept private by the Michigan Lawyers Weekly, a newspaper that this Blog subscribes to in order to keep-up with probate legal trends and changes in the probate laws.  Some of the facts, however, are known, and they are instructive in combating this type of overreaching greed.

Apparently, the decedent knew what type of woman he married, taking steps to warn his two daughters that their step-mother may try to get him to sign away his estate from them to her when he was in a physically weakened state.  And this is just what the step-mother set out to do; we've seen this movie before here at this probate blog.

In this case, evidence surfaced in the probate court that step-mom exerted undue influence to re-write the decedent's trust such that half of his estate was transferred into her trust, with the decedent's daughters being only contingent beneficiaries on the other half; the step-mom was in control of the entire estate and could leave the decedent's daughters with nothing.

Our friend, probate attorney Alan May, uncovered a paper-trail of evidence on behalf of the decedent's daughters that demonstrated step-mom knew her husband, "could be pressured to sign things."  The paper-trail also yielded documentation between step-mom and her lawyers, plotting to defend against the inevitable "undue influence" challenge.

Perhaps the most significant and compelling evidence produced by Mr. May was a manipulated version of a keep estate planning document that was changed after the fact [i.e. after its execution] that modified significant terms in step-mother's favor.  When the document was compared to the original, the special pagination that probate lawyers use was not present, although it was on the original.  Busted...

The result of Mr. May's fine effort was a settlement that put $2.6 million into the daughter's coffers; an amount equal to able one-half of the decedent's estate.

If you are concerned that a loved one or family member may have fallen victim to undue influence, it is best to seek the advice of a probate attorney as soon as possible.  That way, preventative steps can be deployed or, as in this case, evidence can be brought to bear to expose the malfeasor, preventing unjust enrichment and producing a more favorable and just outcome.

A decedent's wishes must be honored, and another family member's greed should not affect the outcome of an estate plan.

Monday, April 28, 2014

Decedent's Second Wife Forges Will and Revocation of Prenuptial Agreement

In a recent East-side case from Macomb County, two sons challenged the claims of their deceased father's second wife.  The case was sufficiently contentious to wind-up being tried before a jury in Macomb County Probate Judge Carl Marlinga's courtroom.

The couple had been married only five years and had executed a prenuptial agreement prior to their nuptials.  Wife claimed her deceased husband revoked the prenuptial agreement, and changed his will to favor his wife over his sons, but the jury found that she forged the revocation and exercised fraud and undue influence in the execution of the revised will and estate plan.

The sons' claims were that following a debilitating heart attack in 2007, their father's sizable estate was systematically depleted by his second wife.  The sons demonstrated that wife wire-transferred over $340,000 to her family in the Ukraine without her husband's knowledge.

The jury trial in this case took 3-weeks and resulted in a verdict for the estate of nearly $500,000.  With human nature being what it is, you just can never be too careful when a stranger links up with a beloved and well endowed family member.

There is indeed a fine-line between meddling in an elderly family members financial and private affairs, and protecting the loved one from financial abuse, greed and graft.  Keep a close eye on your loved ones folks.

Wednesday, April 2, 2014

Michigan Legislature Addresses Digital Estates

It's a start.  The Michigan legislature now has a raft of bills assigned to the all-encompassing Judiciary Committee that would amend our current probate code to provide for handling of a deceased person's so-called digital assets.

Digital assets would include electronically stored photos, Facebook, iTunes, eTrade, data collections of any type, even including a person's email accounts.  If the bills pass, a personal representative could petition a county probate court for assess to these accounts.

Some legal experts, however, see problems with a conflict of laws.  Even if our state probate code, the Estates and Protected Individuals Code, is amended to provide for a personal representative's access to digital assets, federal laws prohibit such access by anyone other than the account holder.

In addition to complications from the federal Stored Communications Act, many of the specific terms-of-service for accounts prohibit access to a particular account by anyone other than the original account holder. There are also concerns arising from user consent to such disclosures in the privacy law context.  So the experts smell complicated litigation arising from the effects of these digital asset bills.

The proposed legislation also contains a provision that allows an interested party to file a petition seeking to limit or eliminate the power of the personal representative over the digital assets.  If the decedent has implicated family members in some of the electronically stored data, the situation is certainly ripe for some digital probate litigation.

So we will site back and see just where this legislation goes.  Stay tuned for future developments.

Sunday, March 2, 2014

Recently Deceased Celebrities Demonstrate Importance of Estate Planning

Paul Walker: Died too young, but with a trust.
Over the past few months, Paul Walker and Philip Seymour Hoffman both died in sudden and unexpected ways.  The latter, from an apparent overdose of heroin in January after decades of straight living; the former, ironically, in a flaming high-speed car crash last November.

At the time of his death, Walker had just turned 40; Hoffman was 46.  The untimeliness of the men's deaths left their respective movie projects incomplete.  Walker will appear posthumously in a futuristic thriller, Brick Mansions, set in Detroit, but his Fast and Furious sequel #7 scenes had not been completed at the time of his death. Hoffman will have to be written-out of the Hunger Games trilogy.

The untimeliness of the stars' deaths also highlights the importance of proper estate planning.  A comparison of the actors' estates -each worth well over $30 million- is instructive with regard to basic estate planning principles.

Last Will versus a Revocable Living Trust.
A proper estate plan, even for persons with a modest estate should include both a trust and what is known as a "pour over" will.  A trust is a private instrument while a will is a public instrument.  A trust, if funded properly, avoids a public probate process.

Walker had the foresight to execute a trust way back in 2001, when he was starting to hit it big in Hollywood in his break out role in the Fast and Furious series.  Hoffman, on the other hand, did not have a trust; merely a simple will.  Therefore, his entire estate will need to be probated because he died with a will and not a trust.  Hoffman's assets cannot be disbursed until they are probated; this process will cost money through probate and attorney fees, and will take time.

Funding the Trust.
When a trust is executed, it is simply a piece of paper unless properly funded.  Think of your trust as an empty bucket.  To fill that bucket with the assets from your estate, each asset must be re-titled in the name of your trust; otherwise, they will be probated in accord with your "pour-over" will; a document designed to catch any asset in your estate that may have been inadvertently left outside the trust.

An estate planning lawyer can help with timely funding your trust.  To be most effective, a trust should be fully funded during your life.

A warranty deed can be executed to transfer the ownership of your home, for example, from you as an individual, to you as the trustee of your revocable living trust.  Your financial advisor can assist you with re-titling your brokerage accounts into the trust with a medallion certificate.

Updating Your Estate Plan.
After important life-events, it is critical to update your estate plan.  For example, when you have additional children that were not born at the time you initially executed your estate plan, you should update.  Or when you become married, and your estate plan was executed when you were single.  The death of a spouse is another crucial time when an estate plan should be re-examined.

In Hoffman's case, his will was nearly a decade old and only referenced the oldest of his three children.  Similarly, in Walker's case, his trust was over a decade old.  Hoffman's oversight will now cause his oldest son to be treated differently than his two younger children to the extent that the oldest inherits his share through his mother, while the younger children will receive a direct inheritance.

Probably not what the actor intended; his younger children, still minors, take a direct inheritance while his oldest, also a minor, gets his money through his mother.

These are just some of the basics.  In order to properly plan your estate, you should make an appointment with an estate planning attorney.