Saturday, November 8, 2014

Digital Assets in Estate Planning

Times have changed.  In 2014, we now live in a fully digital world; computers are literally everywhere. Technology changes faster than we can keep up with, and we may not realize how that can affect our estate.

Twenty years ago, computers were giant machines kept in ventilated rooms; there was no Facebook, Pinterest, Instagram, PayPal, or even online banking for that matter.

Today, individuals compile a significant amount of digital DNA over a lifetime.  There are 3 types of digital assets: personal, business/financial, and social media.

Below are examples of typical digital "assets" contained in an average modern person's legacy:
  • Social media profiles such as Facebook, LinkedIn, YouTube and a host of others
  • Professional profiles [Linked In]
  • Bank accounts, loan accounts, mortgage accounts
  • Investment accounts such as eTrade or Ameritrade
  • Uploaded photos
  • Uploaded articles
  • Education accounts, including alumni account profiles
  • Gaming sites
  • Email profiles and communications [Most people have at least two email accounts these days.]
  • Digital media accounts, particularly streaming accounts such as Netflix or Hulu
  • Cloud computing profiles or accounts
  • On-line store accounts, particularly those with a social media angle such as iTunes and Amazon
  • Music or movie files that were purchased and cloud-stored for on-demand downloading
So what happens to all of these digital assets -your electronic profile-  when you become incapacitated or pass away?

This is an interesting concept to think about, and one that has added a new twist to the estate planning industry. Many folks have online accounts with a plethora of websites such as PayPal, Ebay, Amazon, banks, credit unions, and on-line investment accounts.
While these electronic profiles have no value, often the accounts associated with them have significant funds on deposit.  Someone needs to be able to access these accounts in the event of a death or incapacity of the account holder.

One big red flag with this issue is Internet security. In order to protect these assets, someone has to have access to them. We are always told that our passwords should be updated frequently, and never to give them away.

So how do we safely give a spouse or family member access to these accounts without sacrificing Internet security?  It’s a tricky question to answer, but there are ways to provide this information without losing any security.

Often, a husband and wife share information, or have joint passwords or accounts. But in the event that they do not, or if someone does not have an individual they feel comfortable sharing this information with, there are websites that will assist.

There are Internet services where you can set up an account that will send you a message every month (or longer if you choose) asking you to confirm your password. By responding, you are confirming that you are still active in the account. If you don’t respond, the service will send a message to notify a person of your choice.

This notification may not give that person access to the account, but it will let them know that the account exists. This way, steps can be taken to make sure that the online accounts of the decedent do not just sit there languishing in cyber space for years.

Social media accounts can also come into play. Facebook, Instagram, Snapchat, and other similar websites have arguably become the new way of communication in this day and age. Although monetary estate issues may not arise from social media, we do share photos and videos on these websites that a family may want to obtain after the death of a loved one.

Dealing with digital assets is just one example of many complex and different areas of estate planning that are probably not taken into consideration by most people. To make sure this, and all areas of your estate are properly protected, it is imperative to seek the assistance of an attorney.

Our estate planning team offers free consultation on all estate planning matters. 

Wednesday, October 22, 2014

Proper Estate Planning is a Must

By:  Chris Kelly

We recently came across an article in New York’s Times Herald that highlighted the importance of a will, and how often the process of obtaining one is put on the back burner for many Americans. It is estimated that 65 percent of Americans do not have a will or basic estate planning documents in place. This is an alarming statistic, and the article touched on why the typical American chooses to put off such an important task.
Many individuals feel that a will or estate plan is only for the wealthy; this is simply not the case. A proper estate plan can ensure that the objects of your bounty are distributed to the right people.
This can save the headaches and confusion when an individual passes away, as well as help avoid potential feuds between family members.  No matter how big or small the estate, anyone with assets  needs to be protected; not just the wealthy.

Another common misconception is that an individual believes their finances are too meager for an estate plan.  Even the smallest of estates should be protected.  A proper estate plan will avoid the probate process which costs money and delays matters when most folks do not wish to be held up.

Furthermore, an estate plan is not all about money. If you have minor children, who will take care of them if a tragic event or unexpected death occurs? A guardian needs to be nominated for this possibility.

People do not like to think about the worst case scenario. An unexpected death can be very uncomfortable to plan for, and as a result many folks elect  to ignore it. This is a big contributing factor for  why so many Americans do not have a proper estate plan. The harsh reality is that these feelings need to be set aside in order to protect the best interests of your loved ones and your assets.
Procrastination. This seems to be the number one excuse for most people. They “haven’t had time to get to it”, or “it’s on the to-do list.” But what if that tragic event happens today? Sure, it’s morbid to think about, but the reality is everyone needs to be prepared for such a situation.
The only way to ensure that your possessions, and the well-being of your family is protected, is to be proactive and put a plan together sooner than later.

Putting together an estate plan can be very confusing, which is another reason some folks put off the task for another day that never comes.  Accordingly, it is best to seek the advice of an estate planning attorney.  

There are many different factors that need to be taken into consideration, and each estate is different. Our law firm offers free consultation discuss different estate plan options. 

Tuesday, September 30, 2014

Author Tom Clancy's Sizable Estate Demonstrates Need for Proper Estate Plan

Recently, we came across an article published by the Wall Street Journal covering the contested will of deceased author, Tom Clancy.

Well known for his best-selling spy thrillers, Mr. Clancy amassed an estate in excess of $83 million. As with many estates that size, Clancy’s estate is now the subject of probate litigation in the form of a will contest.
In this particular case, Mr. Clancy’s widow is taking legal steps to shift all state and federal estate taxes to the portion of the estate willed to the author’s four children from Mr. Clancy’s first marriage.  The estate is spread all over the country, and consists of everything from rare World War II tanks, to a 12% stake in the Baltimore Orioles, valued at $65 million.

Ms. Clancy claims that the lawyer serving as the executor of the estate wrongfully concluded that $6 million of the tax burden should be borne by a family trust of which she is the primary beneficiary. She further claims that this was not what Mr. Clancy intended, and to enforce it would be unjust.

Clancy’s widow says her husband modified his will in 2013 so her share would pay zero in estate taxes, and that the portion he willed to his four adult children was to pay the entire amount.  Mr. Clancy’s children question the validity of the recent amendment, asserting his original estate plan should control. 

A contested will is something that happens frequently, and although it occurs on a much smaller scale, it can still be a frustrating and stressful situation.  Proper estate planning can serve to minimize will contests and most other probate litigation.

The first step in forming an effective estate plan is to seek the advice of a probate lawyer.  If you are involved in probate litigation, you should seek advice from an experienced litigator. 
Not all cases are the same, and attention to detail in examining the will, and any modifications made to it over the years are essential in determining the validity of the document. Such tasks must be performed by an experienced attorney to ensure that no mistakes are made.

The Wall Street Journal article on the Tom Clancy probate litigation is a prime example of what can happen with poor estate planning, especially when a second marriage is involved.  Whether your probate issue is large or small, our law firm offers free consultations to discuss these difficult situations and can assist in all probate matters, including estate planning, or defending or prosecuting litigation if things have gone too far.   

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.