Archive for Areas of Practice
WASTED WEALTH: $40 MILLION AND NO WILL
Roman Blum died last year in New York at the age of 97 with $40 million worth of assets. At first glance, that sounds like a wonderful way to leave the world. However, Mr. Blum passed away without a will or any other indication of who he wanted to receive his fortune. He also was a Holocaust survivor, and it appears that his unique history died with him
Mr. Blum left behind enough assets to really make a difference in the world. If he had planned, he would have had many options to improve the lives of others by making charitable contributions or leaving money to specific individuals. Unfortunately, without a plan or any obvious heirs (Mr. Blum died without a spouse or children), the $40 million may end up going to the state of New York rather than to the causes or people Mr. Blum cared about.
Perhaps the most tragic part of Mr. Blum’s failure to plan is that he died without preserving his life wisdom. Mr. Blum’s friends and acquaintances gave the media a rough timeline of his life, but no one seemed to know his exact experience during the Holocaust. He earned his fortune buying and developing property, but it does not appear that he ever shared his secret to success.
If you know anyone who has wealth to share with the world, whether it is assets or life wisdom, encourage them to plan before it is too late. A counseling-oriented estate planning attorney can help to preserve their individual legacy and ensure their wealth passes according to their wishes and not the state’s.
For more on Mr. Blum, see: http://www.nytimes.com/2013/04/28/nyregion/holocaust-survivor-left-an-estate-worth-almost-40-million-but-no-heirs.html?pagewanted=all&_r=0
ESTATE PLANNING ISSUES FOR UNMARRIED AND SAME-SEX COUPLES
New state laws allowing same-sex marriage and two pending Supreme Court rulings on the subject have brought to mind the special estate planning issues faced by same-sex and other unmarried couples. Marriage comes with important legal rights and benefits that are not automatically provided to all romantic partners.
For example, the state of Florida has a default estate plan for every resident who dies without a will or trust. If you get married, this default plan is automatically adjusted; the primary beneficiary of your property changes immediately from your closest blood relatives to your new spouse. If you are unmarried, on the other hand, the default plan does not give your significant other any of your property, no matter how long or serious your relationship.
Another big area of concern is making sure your unmarried partner has access to you if you are hospitalized and that he or she can participate in the decision-making process if you are hurt or disabled. Again, the law does not give any automatic rights to couples unless they are married. This lack of rights can cause significant emotional distress when something happens to one partner and the other is left feeling helpless.
The good news is that the issues described above can be addressed through a comprehensive estate plan. A trust can give your unmarried partner the same benefits as, and potentially more control than, they would get as your spouse under Florida’s default estate plan. Ancillary planning documents such as powers of attorney and designations of health care surrogate will allow you to empower your significant other to make medical and financial decisions on your behalf. If you are interested in learning more about these documents, you are welcome to attend one of our Truth About Estate Planning workshops.
MAY IS ELDER LAW MONTH!!
May has been declared to be National Elder Law Month and Older Americans Month. We think that makes this the perfect time to discuss how we and other elder law attorneys can serve “older Americans” (defined as those who are at least 60 years of age).
What is Elder Law?
Elder law addresses the needs of the elderly, the disabled, and their families. This includes planning for future age- and disability-related issues, such as how to safely remain in the home or placement in a long-term care facility. Specifically, elder law attorneys help clients secure peace of mind through estate planning, disability planning, and planning involving government programs such as Medicaid and Veteran’s Administration benefits. We also handle situations where it either has become too late for planning (due to a disability or death), as is common in guardianship and probate cases, or when a plan is being challenged.
More than Documents and Litigation
Because of the many different government programs and legal options that may be available to clients, elder law attorneys take a comprehensive approach to planning. Every client will have a different situation, usually with multiple issues to be addressed and more than one set of laws and rules to consult.
As a result, elder law attorneys spend a significant amount of time with older individuals and discuss extremely personal preferences and fears. This creates an opportunity for us to be a resource to our clients. By getting to know other people in our community who provide services to older Americans, such as independent and assisted living facilities, home health care providers, hospice care providers, and even other attorneys, we can give our clients practical as well as legal guidance and counsel them every step of the way.
FIRM UPDATE: 2013 ANNUAL CLIENT MEETING
Our first Annual Client Meeting (ACM) in our new location was a huge success! The client families who attended enjoyed hors d’oeuvres, wine, and a tour of our new space. We did discuss business while sampling the food; for example, the major changes in estate tax law brought about by the American Taxpayer Relief Act of 2012. This new law was passed by Congress at the beginning of this year and will affect some of our clients’ estate plans.
The ACM is a key ingredient in our estate planning process. Every year, we meet with our client families as part of our formal estate plan maintenance program. We tell them about changes in the law and they tell us about changes in their lives. Annual Client Meetings help us do a better job and ensure that our clients have plans that work!
LAWYER’S BEHAVIOR AT TRIAL IS NOT EVIDENCE OF ELDER ABUSE
Here is an interesting case from California that caught our attention. An 83 year old man filed for a protective order against his 56 year old daughter because of alleged abusive treatment. In the court hearing over the matter, the daughter’s attorney’s confrontational cross-examinationof the elderly gentleman was found by the trial court to be consistent with the daughter’s desire to treat her father in such a fashion. He then granted a protective order which stated that the daughter could not contact, molest, attack, strike, threaten, assault or otherwise disturb the peace of her father. The daughter appealed the case arguing that her attorney’s behavior and her lack of response to it should not be used as evidence by the trial court. The appellate court agreed and said that the trial judge was wrong to base his decision on the lawyer’s conduct.
While this decision is good news for us lawyers, it does highlight the fact that we are too often aggressive and confrontational, particularly in guardianship, probate, and other elder law cases. It is important that all lawyers recognize when in the probate court that we are not trying high profile criminal or personal injury matters. We are involved in disputes among family members where emotions are already running high and we should avoid making matters worse. We can represent our clients effectively in elder law matters without being either abusive or confrontational.
GUN TRUSTS: ANOTHER FACET OF ESTATE PLANNING
We have been getting a lot of questions about “gun trusts” lately, especially with Congress and the media focused on potential gun control legislation. Holding firearms within trusts has become necessary and desirable due to the strict rules contained in the National Firearms Act (NFA) regarding certain types of firearms.
Firearms are truly a unique type of property; they can be very valuable, whether monetarily, sentimentally, or both. They are also dangerous, as recognized by the NFA. These characteristics of guns, as well as the strict regulations they may be subject to, mean that it is essential to properly plan for their ownership and transfer.
A “gun trust” can, if done correctly, address the issues of owning firearms during your life and passing them on to your loved ones after you are gone. However, just like other types of trusts, you should beware the inexpensive, “bare bones” version from an attorney who asks you only a few questions and just fills in a form.
The actual language of the trust is very important for compliance with the NFA. Also, proper counseling is necessary so that you can consider and discuss topics such as who should act as successor trustee (he or she will have physical possession of your firearms) and whether you should require your beneficiaries (who will use or receive the firearms) to get training beforehand.
Because we believe in comprehensive estate planning, we are happy to create trusts which hold firearms for our clients. However, we will only do “gun trusts” as part of the Cramer Law Center process to ensure that we are able to provide proper counseling and draft a trust that will work for you and your family.
We have been getting a lot of questions about “gun trusts” lately, especially with Congress and the media focused on potential gun control legislation. Holding firearms within trusts has become necessary and desirable due to the strict rules contained in the National Firearms Act (NFA) regarding certain types of firearms.
Firearms are truly a unique type of property; they can be very valuable, whether monetarily, sentimentally, or both. They are also dangerous, as recognized by the NFA. These characteristics of guns, as well as the strict regulations they may be subject to, mean that it is essential to properly plan for their ownership and transfer.
A “gun trust” can, if done correctly, address the issues of owning firearms during your life and passing them on to your loved ones after you are gone. However, just like other types of trusts, you should beware the inexpensive, “bare bones” version from an attorney who asks you only a few questions and just fills in a form.
The actual language of the trust is very important for compliance with the NFA. Also, proper counseling is necessary so that you can consider and discuss topics such as who should act as successor trustee (he or she will have physical possession of your firearms) and whether you should require your beneficiaries (who will use or receive the firearms) to get training beforehand.
Because we believe in comprehensive estate planning, we are happy to create trusts which hold firearms for our clients. However, we will only do “gun trusts” as part of the Cramer Law Center process to ensure that we are able to provide proper counseling and draft a trust that will work for you and your family.
DPOA DANGER: YOU CAN’T EVEN TRUST YOUR GRANDCHILDREN
A general durable power of attorney (“DPOA”) is a document that gives a person you name (your “agent”) the authority to manage your affairs and do almost anything you could do personally. Your agent is supposed to act for your benefit, doing things such as using your money to pay your bills. Unfortunately, it is easy for an untrustworthy agent to abuse the power you give him under a DPOA.
A recent news story from Colorado is a perfect illustration of a DPOA gone wrong. An elderly couple gave their grandson, a married adult man, a DPOA. They had moved into an assisted living facility and presumably just wanted someone they trusted to help out with their finances. We see this all the time with our aging clients.
Although the couple’s grandson may have been their most trusted relative, he did not deserve their confidence. The grandson and his wife, in just eighteen months, spent all of the couple’s money and ran up bills on their credit cards. They used the stolen funds, not to take care of the couple, but to pay for their own living expenses, travel, and shopping.
Similar abuses of authority are possible in Florida due to the lack of supervision over agents acting under a DPOA. Unlike the trustee of a trust or the guardian of an incapacitated person, an agent under a DPOA does not have to account to anyone. This creates an opportunity for agents to exploit their often elderly and usually unaware victims.
The DPOA is not entirely evil; it can be useful as part of a comprehensive estate and disability plan. However, we at Cramer Law Center do not let our clients sign a DPOA without proper consideration and counseling. We may also recommend safeguards, such as holding the DPOA in escrow until it is needed, to deter potential abuse.
ANOTHER ESTATE PLANNING HORROR STORY FROM THE REAL WORLD – SECOND MARRIAGE MISTAKE
We recently had a client inquire about challenging his stepmother’s will. Our first thought, and perhaps yours, was that the desire to challenge came from a history of animosity between the client and his stepparent, something we see all too frequently. However, in this case, the client was actually fond of his stepmother – that is, until she died with a will that left all of his father’s assets, including the family home, to her children.
Our client’s father (we’ll call him “Bill”) made a classic second marriage planning mistake: his only estate plan was a simple “I Love You” Will that left everything to his second wife, if she survived him, and then to his children. Bill’s intent, according to our client, was to take care of his wife first, and then his kids. His plan may have worked in a first marriage where Bill and his wife only had children with each other (but even then, only if the wife did not remarry before her death and had an identical will).
However, what actually happened is that when Bill died before his second wife, she received his assets with no strings attached. She could have made an estate plan that included Bill’s children as well as her own, but she was under no legal obligation to do so. Therefore, we had to advise our client that a will challenge would be fruitless because he and his siblings had no legal right to their family home or to any of the other property their stepmother received from their father.
We were truly sorry to have to deliver such bad news to our client. But what makes it worse is that Bill easily could have achieved his true objective of taking care of his wife for the rest of her life, and then leaving an inheritance for his children, with proper trust planning. Unfortunately, in second marriage situations, what an “I Love You” Will really says is: “I Don’t Care About My Kids.”
“I LOVE YOU” WILLS – THE PERFECT PLAN FOR COUPLES?
Still looking for that perfect gift for your valentine? If so, you may be thinking an “I Love You” Will – really anything with those three little words in it – might do the trick. But what exactly is an “I Love You” Will?
When wills and trusts lawyers talk about “I Love You” Wills, we are referring to a simple will that leaves everything first to your significant other and then to your children. The name comes from the fact that we usually design these wills in pairs for happy couples who love each other and the responsible adult children that they had together. If you are lucky enough to lead such an idyllic life, an “I Love You” Will might be a suitable estate plan for you.
However, there are many issues common to the rest of us that are not adequately addressed by an “I Love You” Will. For example, such a will does not make any plan for the possibility that your significant other or one of your children will be disabled and/or receiving government benefits at the time of your death. An “I Love You” Will also does not address who will care for your minor children, or how that care will be paid for, should something happen to you. In fact, it doesn’t even address how you would like to be taken care of if you were to become mentally disabled.
Planning your estate can be a wonderful gift to your loved ones – and yourself – but you should consult an attorney to make sure you are getting true peace of mind and not a false sense of security. If you would like more information on “I Love You” Wills or any other type of estate plan, we are here to help.
SUMMARY ADMINISTRATION: AN EASY AND INEXPENSIVE SOLUTION? OR NOT?
Formal estate administration (the most common form of probate) is a detailed process set out by Florida law which can be expensive and time-consuming. As you might imagine, there are some situations where formal administration does not make sense, economically or otherwise. Florida statutes recognize this and set out an alternative process when the decedent either (1) has been dead for more than two years or (2) left less than $75,000 of assets that need to go through probate.
This alternative process, called “Summary Administration,” is supposed to be simpler, shorter, and less expensive than formal administration. Theoretically, summary administration allows for an estate to be opened and closed, and the assets distributed, with only a few documents filed and no court hearing. The law even says that summary administration may be done without an attorney. However, our experience has been that many summary administrations have legal and procedural issues that even attorneys cannot entirely solve.
For example, summary administration quickly becomes more complicated when the decedent left unpaid bills or other debts because summary administration does not use the streamlined process for creditors’ claims that formal administration offers. Formal administration allows a Notice to Creditors to be published in a local newspaper as soon as the estate is open. This publication of notice gives creditors a maximum of three months to file their claims; if they fail to do so, their claims are barred and the estate does not have to pay them. The estate also has a right to object to any creditor claim that is filed.
In summary administration, however, the estate cannot publish a Notice to Creditors until after the Order of Summary Administration is entered. Any Order of Summary Administration (the order closing the estate and listing the persons who will receive the estate assets) entered by the court must provide for the payment of creditors “to the extent that assets are available.” This is true even though creditors may be unknown.
The result is that beneficiaries may suffer in summary administration because there is no clear way for estates to object to and avoid paying creditor claims. New creditors may pop up after the Notice to Creditors is published, which may diminish the amount each beneficiary receives. Another danger is that no Notice to Creditors is published, because it is not required by law, creating the possibility that unknown and unpaid creditors may be able to come after the estate beneficiaries years later
Although summary administration may be a viable solution in some situations, we recommend that our clients take advantage of the formal administration process if there is any possibility that a decedent left unpaid creditors. We would also recommend at least consulting an attorney before pursuing a summary administration.
