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MOVIE REVIEW TITLED “DADDY’S DYIN’…WHO’S GOT THE WILL (1990)
In our never ending search to find good estate planning related cinema, we watched Daddy’s Dyin’, Who’s Got the Will, a 1990 comedy featuring a good cast, including Beau Bridges, Beverly D’Angelo, Tess Harper and Judge Reinhold. In this dark comedy, bickering siblings are reunited at their deep in the heart of Texas home as their father lies on his deathbed. The siblings tear apart the house looking for the Will to see who is “in” and who is “out”. They fight, argue, joke and occasionally sing. Not a great film, but some amusing moments. When the Will is finally found, no additional drama is created. This family would be dysfunctional under any circumstances, but the fact that their father did not share his estate plan with them only added to the dysfunction.
HOLIDAY GREETINGS AND ANNOUNCEMENT
All of us at Cramer Law Center wish you a most enjoyable holiday season. We are so grateful for your support which has made this a year of steady growth for our practice.
As part of that growth, Cramer Law Center is pleased to announce that we have hired Amelia Hough Henderson as an associate attorney. A double-Gator, Amelia earned her undergraduate degree in Business Administration and her Juris Doctorate with honors from the University of Florida. While in law school, she served as Chief Executive Articles Editor of the Journal of Law and Public Policy. Prior to joining us, Amelia gained experience working with probate and guardianship staff attorneys for the Eighth Judicial Circuit in Gainesville. The next time you are in the office, please take a moment to meet Amelia.
We wish everyone a healthy and prosperous New Year! Please note: our office will be closed on December 23, 26 and 30, 2011 and January 2, 2012.
MORE PERSONAL LESSONS LEARNED
As I shared with you in our last newsletter, my mother passed away recently. Although I help my clients on a daily basis with legal planning for the future, this personal experience has enlightened me as to the importance of certain legal and non-legal aspects of planning.
One non-legal aspect of planning involves your final arrangements. I strongly recommend making your wishes known to your family ahead of time. There are many potentially stressful questions to be answered after a loved one passes away. Which funeral home should we call? Would he want cremation or burial? Which cemetery would she want to be buried in? What would he want on his headstone? Where would she want the service to be held? Would he want visitation? What would she want the obituary to say? Things will run more smoothly for those you leave behind if they already have your answers to these important questions. In order to help our clients with their final arrangement decisions, we now have partnered with Hardage-Giddens Funeral Homes to provide planning workbooks.
Another area where you need to make your wishes known is with your “stuff”. By stuff we mean jewelry, collectibles, family heirlooms, etc. that your family may squabble over or that are not equally divisible among all beneficiaries. For example, if you have two valuable family heirlooms and three children to whom you have left everything “equally”, the most likely scenario will be that the family heirlooms will not remain in the family, but instead be sold and the proceeds divided among the three children. If you want family treasures to remain in the family, you need to do a written memorandum stating which family member(s) will receive each item.
Finally, I recommend against appointing all of your children as co-trustees of your Trust or co-personal representatives in your Will. Do you really want to leave everything hanging on a 2-1 vote? How you will be buried: 2-1 vote. Who will receive the treasured family heirloom: 2-1 vote. Parents must resist the urge to treat all children “equally” when it comes to naming trustees and personal representatives. Estate and trust administration decisions are generally best left to one person.
THE IMPORTANCE OF THE PRE-ARRANGED FUNERAL
The single most important benefit of estate planning is peace of mind. We often focus on the legal documents necessary for us to create an estate plan that provides such peace of mind. However, I recently had a personal experience that reminded me of the importance of one of the more practical aspects of planning.
My mother passed away a few weeks ago. Although my siblings and I had a general idea of what the funeral arrangements would be, no plans had been finalized. This lack of planning created a chaotic situation when I arrived to visit my mother in hospice care. I was immediately and less than delicately informed by the hospice caseworker that I had to make my mother’s funeral arrangements straight away. So before I could focus my attention on my mother in her final hours, I had to phone different funeral homes until I found the one I needed.
Making last-minute funeral arrangements for my mother added more stress to a situation that was already emotionally taxing. Especially after my experience, I highly recommend taking care of funeral arrangements in advance to avoid creating greater stress for your loved ones at such a difficult time.
ELDER ABUSE: SEVEN WARNING SIGNS
Many of us have elderly parents or grandparents who may be susceptible to abuse. Here are some warning signs to consider:
(1) Deliberate isolation of an older adult which results in the caregiver having total control.
(2) Sudden appearance of previously uninvolved relatives claiming their rights to an elder’s affairs and possessions.
(3) Power of Attorney given or recent changes of Will when the person is incapable of making such decision.
(4) Sudden changes in bank accounts or banking practice, including unexplained withdrawals of large sums of money by a person accompanying the elder.
(5) Abrupt changes in Real Estate Deeds or other Financial Documents.
(6) Missing personal belongings such as art, silverware or jewelry.
(7) Placement in nursing home or residential care facility which is not commensurate with alleged size of estate.
An excellent way to protect against potential abuse is to have strong estate planning documents in place and open communication about the elder’s wishes and the contents of those documents with close family members. If you have a concern about a family member or close friend, call us for a confidential consultation.
PERILS OF “DO IT YOURSELF” ESTATE PLANNING
How many times have I heard the following: “I only have ‘a few thousand dollars.’ Why should I pay a lawyer to help me prepare an estate plan? I’ll just add my “son/daughter/grandchild to my accounts.” Let’s see how that works out.
Marginally senile great-grandfather places all his possessions – “a few thousand dollars” into a joint bank account with ne’er-do-well, 18 year old great grandson. Great grandson takes all the money and buys a nice new Corvette. Did that work?
Mom puts all her possessions – “a few thousand dollars’” into a joint bank account with loving daughter. A few months later, mom needs to be placed into a nursing home due to physical disabilities. Daughter, fearing all mom’s money will be “seized by Medicaid” or “taken by the nursing home” withdraws all the money and puts it into an account in her own name, then applies for Medicaid without mentioning the transfer. Did that work?
Man puts all his possessions – “a few thousand dollars” into a joint bank account with brother. Brother has a drinking problem, causes a car accident while driving drunk, and is sued. He has no insurance, and all his assets, including Man’s accounts, are taken to satisfy judgment. Did that work?
Dad puts all his possessions – “a few thousand dollars” into a joint bank account with son. Dad is in a car accident and suffers brain trauma. Who has authority to care for dad? Moreover, son is only 16. Who has authority to pay dad’s bills? Did that work?
Grandmother puts all her possessions – “a few thousand dollars” into a joint bank account with grandson whom she cherishes. Grandson is blind. Grandson was eligible for government medical assistance and work programs because of his financial need, but won’t be when grandma dies. Did that work?
Need I go on? These things cannot be discovered, or appropriately planned for, by an on-line “form.” Discovering these critical issues takes counseling. Creatively planning solutions that are acceptable to the client takes additional counseling. It is for that counseling that we are paid.
PRICELESS CONVERSATIONS
In keeping with the theme of August as “What Will Be Your Legacy?” month, we would like to introduce you to “Priceless Conversations”. Share the meaning of your life, the events that shaped your decisions and which causes and people have significance. Thoughtful reflection gives heirs a sense of the wholeness of your wealth and the financial decisions you make. We have a tool for sharing your life story with future generations called “Priceless Conversations” – a precious gift that integrates legacy building into your estate planning.
Recording a “Priceless Conversation” is a way for us to make tangible the “non-financial” dimensions of your wealth for you and your loved ones. Using a handful of interesting questions and a digital recorder, we help you share and save the lessons and experiences of your life. There is no homework, no tedious research, no writing, and no camera. We help you turn a simple chat into a touching and lasting treasure. The process is simple, practical and fun. “Priceless Conversations” can be individual, family, or group events.
Leaving a legacy involves more than just dollars and “cents”. Help future generations have a “sense” of who you are.
When you’re gone, how will you be remembered?
At the end of the day, how will your life have made a difference?
When all is said and done, what will those you love say about what you’ve done?
What have you accomplished with your wealth?
Not just your money, but all the wealth – the real wealth – you have at your disposal?
Whose lives have been touched by your life?
Let us know if you wish to explore how recording “Priceless Conversations” can benefit you.
MOVIE REVIEW: “LIFE AS WE KNOW IT” (Bad Estate Planning Makes for an Awful Film)
This surely predictable attempt at romantic comedy is awkwardly wrapped in a tragic incident. The thin plot involves a married couple, Allison and Peter, trying to set up each of their best friends, Holly and Messer, on a blind date. It proves to be a disaster. Over time, Allison and Peter have a baby; Holly and Messer dutifully attend birthday parties and remain antagonistic toward each other. Suddenly, Peter and Allison are killed in an automobile accident and, …surprise…, they have named Holly and Messer as co-guardians for their child. The remainder of the movie involves Holly and Messer trying to care for the baby and ending up falling in love. A predictable, and unbelievable, affair.
The best aspect of the film for me, is that it provides an opportunity to point out the estate planning errors of Allison and Peter (the married couple). Although they had a lawyer and a Will naming co-guardians, their first mistake was that they did not prepare emergency temporary guardianship documents which would have enabled Holly and Messer to pick up the baby the night of the accident. Instead, the baby was placed in the care of child protective services and it was several agonizing and scary days of working through red tape before the screen couple was able to retrieve the child. Depending upon the age of the child, even a few days in foster care can be quite shocking.
The child was with a babysitter on the night of the accident, but the babysitter was a minor. We generally recommend that someone within a five to ten minute drive of your home be appointed emergency temporary guardian of your minor children. In the event that such a tragedy occurs, that person can keep the child until the permanent guardians can arrive. The babysitter must be aware of the names of these emergency guardians so that the police can notify them to come pick up the children before they are taken away to foster care. We believe this to be an extremely important and overlooked part of estate planning.
The next mistake Allison and Peter made was to select two single people who hated each other and had no parental experience as co-guardians. This was compounded by the fact that neither Holly nor Messer was informed prior to the couple’s death that they had been named guardians. It is unlikely that real life would work out as smoothly as the scripted movie. Considering who should raise your children in the event of a tragedy requires substantial thought as well as making the people you choose aware of the possible responsibility. Their agreement to serve should be discussed, agreed upon and secured at the time of the preparation of the estate planning documents.
Finally, Allison and Peter did not leave sufficient funds to raise the child. Apparently, there was no life insurance or other savings, just enough insurance to cover the mortgage on a large house. This led to financial difficulties for Holly and Messer. It is your responsibility to provide the financial resources for raising your child. That should not be the responsibility of the guardians.
The movie is not an enjoyable experience, but it does offer a platform for discussing how to come to terms with the tragedy of a young couple dying and leaving their only child without a temporary guardian or confirmed permanent guardian, and for how to make sure their child will be financially secure upon their death.
Please call my office if any of these issues apply to you or anyone you know. Properly naming guardians is an extremely important part of being a parent.
NEW LEGISLATION (Good News for a Change!)
The busy beavers in the Florida Legislature have passed several bills this year which affect our clients in the estate planning and asset protection areas. This newsletter will be our first report on new legislation and focuses on two new bills which were passed to either overturn or clarify recent decisions of the appellate courts. Both of these new laws became effective on May 31, 2011 and contain good news.
First is an act relating to individual retirement accounts (IRAs), amending Florida Statute Section 222.21. This new law provides that inherited IRAs are exempt from claims of creditors. An individual’s IRA (to which he/she has contributed) clearly has been exempt from claims of creditors. However, once the IRA accountholder died and passed those assets to a spouse or children, even if the assets remained in a “rollover” or inherited IRA, they no longer were exempt from creditor’s claims. This law overturns the court case which decided that inherited IRAs were not exempt from the beneficiaries’ creditors and has retroactive application to all inherited individual retirement accounts without regard to the date such account was created.
The second bill relates to limited liability companies (LLCs), amends Florida Statute Section 608.433 and provides that a charging order against a member’s limited liability company interest is the sole and exclusive remedy available to enforce a judgment against a member of a multi-member LLC. This new law clarifies the primary asset protection benefit of an LLC.
This new law was passed because in 2010, the Florida Supreme Court held in the case of Olmstead v. Federal Trade Commission, 44 So.3d 76 (Fla., 2010), that a charging order is not the exclusive remedy available to a creditor holding a judgment against the sole member of a Florida single-member limited liability company. This ruling caused uncertainty in the business community about its breadth and questions arose as to whether businesses were better off organizing LLCs under the law of other jurisdictions where a charging order is clearly the exclusive remedy available to a judgment creditor. The legislature has now made it clear that the major asset protection benefit of organizing as an LLC remains intact, so long as there is more than one member of that LLC.
In the case of a single-member LLC, the ability to protect that member’s assets is not as strong. A charging order is not the sole and exclusive remedy by which a judgment creditor may satisfy the judgment against a judgment debtor who is the sole member of an LLC. If a judgment creditor establishes to the satisfaction of a court of competent jurisdiction that distributions under a charging order will not satisfy the judgment within a reasonable time, then, upon such showing, the Court may order the sale of that member’s interest in the LLC pursuant to a foreclosure sale. Accordingly, the asset protection benefits of a single-member LLC in Florida remain limited. However, if an LLC can be established with multiple members, the asset protection benefits of an LLC are much stronger.
This newsletter is only intended to provide a general overview of these two new laws. As always, if you have any specific questions or concerns about these laws, please do not hesitate to contact me.
ESTATE PLANNING THOUGHT FOR THE DAY: “I Ieave everything to my children in equal shares.” Why it might not always be the best idea.
It is understandable that parents typically want to treat all of their children equally when preparing an estate plan. However, all children are not created equal. One may be self-sufficient, even wealthy, and not need an inheritance. Another may not be able to manage money for one reason or another. Another child might have a drug or other addiction problems. In such examples, parents need to work with their estate planning attorney to create a plan that takes care of each individual child according to his or her needs.
Another common problem is the large family. If you have seven (7) children and leave your house to them equally in your estate planning documents, heartache is likely to follow. How can seven (7) people own a house? Is it likely that all seven (7) will agree on how to maintain or sell the property? Well, if you do not leave the house to specific individuals with specific instructions in a Will or Trust, then, in Florida, (without a Will or Trust) your assets will be left equally to your children. This can turn a house the children used to love into a house of tears. Even if you want to have all of the children benefit equally from the sale of your house, you would be wise to consider leaving the house in trust, with one of the children in charge, with instructions to distribute the proceeds equally. If seven (7) children have to unanimously decide to sell a house (or do most anything to maintain it), you are asking for trouble. So, please stop and think before saying “I want to leave everything to my children equally.”
