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Estate Planning Blog

Serving Clients Throughout North Central Missouri

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What Exactly Is Probate Court?

Probate is started when a person files a petition for probate with the state’s probate court. The petition is normally filed by the executor of the deceased’s will or by a member of the deceased’s family.

Investopedia’s recent article entitled, “What Is Probate Court?” explains that the individual filing the petition must also file the original will and a copy of the certified death certificate.

In the first hearing, the probate court appoints the executor for the deceased’s estate. The executor (or administrator, if there’s no will) is responsible for distributing the deceased’s estate to the proper beneficiaries, among other administrative duties.

The judge will provide the executor with Letters Testamentary (or Letters of Administration), which give the executor the authority to pay bills, sell assets and perform other duties.

Before accepting the Letters and performing their duty, the executor may need to post bond (to protect the estate from any adverse consequences of their actions). However, this is fairly rare.

The executor then will do the following:

  • Notify those to whom the deceased owed money (creditors)
  • Notify beneficiaries
  • Inventory the deceased’s assets
  • Pay outstanding bills
  • Sell assets if necessary to pay what’s owed; and
  • Pay taxes and file a final tax return.

Once those tasks are completed, the executor distributes the remaining assets to the beneficiaries, according to the will’s provisions.

The probate court monitors the executor’s activities and handles issues that may arise. For instance, if the executor objects to a claim, the court will hear the evidence and make a decision.

The executor must usually provide an accounting of how the estate was handled. Once the court approves this, it closes the probate process.

An informal probate process, also called summary probate that requires less court oversight can be used if it’s a small estate, the will is simple, all parties are in agreement with it and no objections are made.

When a person dies with no will—known as intestacy—the court will distribute the decedent’s property to their next of kin, according to the state probate laws.

Investopedia (Sep. 21, 2022) “What Is Probate Court?”

What Recourse Is Available if Inheritance Is Stolen?

State inheritance theft laws typically cover four distinct aspects, says Yahoo’s recent article entitled “Someone Stole My Inheritance. What Are My Options?”

The four are:

  • Who committed the inheritance theft,
  • When the theft happened,
  • What was taken, and
  • How the theft happened.

As far as the “how” goes, note that inheritance theft can take many different forms. One of the most common examples involves elder financial abuse where someone takes advantage of an elderly person’s weakened physical or mental state to steal from them.

If you think someone’s stolen your inheritance, it’s important to review inheritance theft laws in your state. Again, each state has different guidelines regarding:

  • What constitutes inheritance theft,
  • Who has the standing to bring a civil claim or file a criminal complaint concerning a stolen inheritance,
  • The legal grounds for successfully pursuing an inheritance theft claim, and
  • Penalties and remedies for inheritance theft.

Speaking with an experienced estate planning attorney can help you see if you have standing and grounds to file a claim for inheritance theft. Your attorney may advise you to take certain steps to develop a case, including:

  • Taking an inventory of the estate’s assets,
  • Reviewing estate documents, such as wills or trusts, to look for any potential signs of fraud or forgery, and
  • Verifying the validity of will or trust documents.

With a larger estate, you may need to hire a forensic accountant. They specialize in examining financial documents, which may be helpful if you’re struggling to create a paper trail to support a claim of inheritance theft.

Inheritance theft laws can help to protect your rights to an estate if you think your inheritance was stolen. You can also take actions to preserve your own estate for your heirs by drafting a valid will, creating a trust and choosing trustworthy individuals to act as your executor, trustee and power of attorney.

Reference: Yahoo (Jan. 18, 2023) “Someone Stole My Inheritance. What Are My Options?”

 

Probate

How Can I Relieve My Family’s Stress when I Die?

After losing a family member, people experience pain and grief. The situation gets worse if legal issues are involved, resulting in family conflicts. Such challenges are typically the result of a lack of planning when they could have been much easier if a good plan had been in place, says Scubby’s recent article entitled “7 Ways To Ease Your Loved Ones’ Suffering After You Die.” Let’s look at some ways to avoid problems after you pass away.

  1. Create an Estate Plan. This is the first step you can take in making your family’s life easier. Your heirs will inherit your estate after you die. If you don’t have a written estate plan, it can be more difficult.
  2. Maintain a Binder for Documents. Store all of your important documents and information in a master document binder or some other system. Include important documents and information about your bank accounts, credit cards, investment accounts and information about your digital assets, such as emails, online banking, social media accounts and any other digital assets that you own. You should also give information that your family will need to access these documents and information.
  3. Buy Life Insurance. It’s smart to purchase life insurance as part of your basic estate plan. The loss of a family member can result in confusion, worry and anxiety regarding finances. Those left behind can sometimes wonder how to pay for necessities after a family member dies, so an insurance policy can solve that problem. This will give your family a financial cushion that will provide them with some breathing room.
  4. Write An Instruction Letter. A last letter of instructions for your family is smart, in addition to your estate plan. This gives you the chance to express your love and affection to each of your family members. You can also state where you want to be buried or if you’d like to be cremated, and what kind of memorial service you would like. Your testament doesn’t appear in this document. It only lets you state your final wishes about each of these matters. It has no real legal significance.
  5. Prepare Them Emotionally. It’s hard to comprehend the truth of death for you and your family. They’ll go through the grieving period without you, and to help them emotionally, you can honor the people in your life who matter most; offer an apology to those you have hurt; and/or forgive your loved ones, if they have hurt you.
  6. Pre-plan Your Funeral. To ease the burden on your family at your death, pre-plan your funeral. This means you’ve made your funeral arrangements and chosen what you want as part of your funeral services.
  7. Collect Important Documents and Contact Information. Organize important documents in a folder. This should include info on bank accounts, mortgages, insurance policies, employer contact information, estate planning, safe combinations and Social Security information. Make a list of close friends and family members, including their contact info, for your loved ones to contact in the event of your death.

This list of things you can do to ease the burden on your family isn’t exhaustive. However, it’s certainly helpful.

Reference: Scubby “7 Ways To Ease Your Loved Ones’ Suffering After You Die”

 

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Beneficiary Battle over Presley Estate Reveals Possible Problems in Estate Planning

This is the situation facing the estate of Lisa Marie Presley, whose estate is being challenged by her mother, Priscilla Presley, as described in a recent article, “Presley beneficiary battle sets example of poor estate planning practices” from Insurance NewsNet. These situations are not uncommon, especially when there’s a lot of money involved. They serve as a teachable moment of things to avoid and things to absolutely insist upon in estate planning.

Lisa Marie’s estate is being challenged because of an amendment to the trust, which surfaced after she died. The amendment cut out two trustees and named Lisa Marie’s children as executors and trustees.

At stake is as much as $35 million from three life insurance policies, with at least $4 million needed to settle Lisa Marie’s debts, including $2.5 million owed to the IRS.

When this type of wealth is involved, it makes sense to have professional trustees hired, rather than appointing family members who may not have the skills needed to navigate family dynamics or manage significant assets.

A request to change a will by codicil or a trust by amendment happens fairly often. However, some estate planning attorneys reject their use and insist clients sign a new will or restate a trust to make sure their interests are protected. In the case of Lisa Marie, the amendment might be the result of someone trying to make changes without benefit of an estate planning attorney to make the change correctly.

The origins of the estate issues here may go back to Elvis’ estate plan. His estate was worth $5 million at the time of this death, $20 million if adjusted for inflation. His father was appointed as the executor and a trustee of the estate. His grandmother, father and Lisa Marie were beneficiaries of the trust. Lisa Marie was just nine when her famous father died, and her inheritance was held until she turned 25.

When his father died, Priscilla was named as one of three trustees. When his grandmother died, Lisa Marie was the only surviving beneficiary. She inherited the entire amount on her 25th birthday—worth about $100 million largely at the time because of Priscilla’s skilled management.

Terminating such a large trust and handing $100 million to a 25 year old is seen by many estate planning attorneys as a big mistake. Distribution at an older age or over the course of the beneficiary’s lifetime could have been a smarter move. Lisa Marie reportedly blew through $100 million as an adult and was millions of dollars in debt, despite the estate having plenty of cash because of two large life insurance policies.

In 1993, Lisa Marie established a trust naming her mother and former business manager as trustees. The amendment in question seems to have been written in 2016, removing Priscilla and business manager Siegel as trustees, appointing Lisa Marie’s daughter and son as trustees, and naming her son and her fourteen year old twin sons as beneficiaries.

Priscilla’s attorneys say they had no prior knowledge of the change. Certain changes in estate plans require written notification of people with interest in the estate, which did not occur. They are also challenging the amendment’s authenticity, saying it was neither witnessed nor notarized. Priscilla’s name is misspelled and Lisa Marie’s signature is not consistent with other signatures of hers.

The estate is being contested, with a preliminary hearing on the matter scheduled for April 13.

Any changes to an estate plan, particularly those involving changes to the will, trusts or beneficiaries, should be done with the help of an experienced estate planning attorney. When large changes are made, or large assets are involved, a simple codicil or amendment could lead to complicated problems.

Reference: Insurance NewsNet (Feb. 17, 2023) “Presley beneficiary battle sets example of poor estate planning practices”

 

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Why Is Lisa Marie Presley’s Mom Fighting Her Daughter’s Estate Plan?

A recent filing in Los Angeles Superior Court questions the validity of a 2016 amendment to Lisa Marie Presley’s living trust that ousted her mother Priscilla and a former business manager as trustees and replaced them with Lisa Marie Presley’s two oldest children, Riley Keough and Benjamin Keough, if she died or became incapacitated. Benjamin died in 2020.

The National News’ recent article entitled “Priscilla Presley in dispute over late daughter Lisa Marie’s estate” explains that a living trust is a form of estate planning that lets an individual control his or her assets while they’re alive—but have them distributed without probate when they pass away. A living trust serves the function of a will if a separate one isn’t filed. This looks to be the case with Lisa Marie.

Lisa Marie, who was the only child of Elvis Presley, died at a California hospital at age 54 on January 12, after paramedics answered a 911 call reporting a woman in cardiac arrest. The LA County coroner is investigating and has not yet revealed a cause of death. She was laid to rest at her family home in Graceland on Jan 22.

The court filing from Lisa Marie’s mom says there are a number of issues that cause the living trust amendment’s authenticity to be questioned. This includes a failure to notify Priscilla of the change as required, a misspelling of Priscilla’s name in a document supposedly signed by her daughter, an atypical signature from Lisa Marie and a lack of a witness or notarization. It asks a judge to declare the amendment invalid. Another claim in the filing states that the business manager, Barry Siegel, intended to resign, which according to the prior terms of the trust would leave Priscilla and Riley Keough as co-trustees.

Lisa Marie left three surviving children. In addition to Riley Keough, her daughter with first husband Danny Keough, she had 14-year-old twin daughters with her fourth husband, Michael Lockwood. Lisa Marie divorced Lockwood in 2021, but the two were still disputing finances in family court when she passed away.

Priscilla’s filing is one of the first of what are likely to be numerous legal claims concerning the estate of Lisa Marie, the only heir to Elvis Presley.

The estate’s worth is unclear

A lawsuit Lisa Marie filed in 2018, alleging Siegel had mismanaged the trust, said it had been worth in excess of $100 million, but most of that had been depleted.

Reference: The National News (Jan. 30, 2023) “Priscilla Presley in dispute over late daughter Lisa Marie’s estate”

 

Michael OLoughlin

What are Some Best Practices for a Trustee?

Forbes’ recent article entitled “How To Be An Effective Trustee” provides some great best practices for those asked to be a trustee.

  1. Make a team. No one person can have all the necessary skills and experience to be an effective trustee. Work with an experienced estate planning attorney, an investment advisor and a tax accountant knowledgeable about the taxation of trusts. It’s a good practice for the trustee to have regular meetings with the team of advisors, both as a team and individually.
  2. Understand the key trust terms. Understand what the trust document says and what the key terms mean. When you are named as trustee, a best practice is to read the entire trust document and go through the document with an attorney and have them explain the key terms. Some of these key terms may involve the following:
  • Distribution standards
  • Special provisions for investing, particularly direction to sell or not to sell certain assets
  • Provisions the trustee should act upon, like the power to appoint a successor; and
  • Knowing whether the beneficiary’s age will trigger distributions or any other actions.
  1. Work productively with beneficiaries. Dealing with beneficiaries is frequently the most challenging part of being a trustee. There can be differences of opinion over distribution amounts, investment strategy, or other matters relating to the management of the trust which can lead to disagreement. To avoid potential issues with beneficiaries and facilitate a productive relationship, trustees should try to practice following:
  • Communication
  • Transparency
  • Education
  • Clear Distributions; and
  • Providing Required Information.
  1. Documentation is Crucial. Although trustees can’t guarantee perfect results, they must act with care, skill and impartiality. They must have rational reasons for their decisions and documenting them is critical because it substantiates the trustee’s decision-making. Some examples of decisions that should be thoroughly documented include:
  • Distribution Decisions
  • Decisions That Set Investment Policy
  • Initiation or Termination of Investments and Hiring and Firing Investment Managers/Funds
  • Principal and Income Allocations;
  • Verbal Communications with Beneficiaries; And
  • Decisions to Hire Experts or Agents, like an attorney or an accountant.

Reference: Forbes (May 31, 2022) “How To Be An Effective Trustee”

 

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What Should I Know About Probate Costs?

The cost of probate depends on several factors. One of the most important is the state where the decedent lived. The cost of probate varies from state to state, depending on the general cost of living in the state and state probate laws. Other factors also impact the cost of probate.

Nasdaq.com’s recent article entitled “How Much Does Probate Cost?” provides a breakdown of fees associated with probate. The process of probating an estate will settle the estate after the decedent’s death and following their last will and testament. It’s also used for those who die without a will or intestate. Assets owned only by the decedent are usually addressed in the will and are distributed according to the decedent’s wishes. An executor is usually named in the will, and an administrator of the estate is appointed in the case of a decedent dying intestate. The executor takes an inventory of the decedent’s assets, pays the decedent’s outstanding debts and presents the inventoried estate to the court for settlement. If there are no objections to the will, the estate is closed. If there are objections, the probate judge is responsible for settling them. The longer the probate process drags on, the more expensive it will be.

Probate can be a time-consuming process. A modest estate may take six to 24 months to settle. Larger estates can take even longer, if they’re complex.  It also necessary to add in more time if the will’s contested or beneficiaries can’t be found. The longer the process, the more expensive it becomes. Probate costs in 2021 run about 3% to 8% of the value of the estate. Let’s look at the key costs of probate:

Court Costs. This includes filing fees. Some states require the same filing fee for all estates, while others have a graduated scale depending on the size and complexity of the estate. The more complex the estate, the higher the court costs.

Executor Costs. The executor of a will is typically paid at least a nominal fee. Fees are mandated by state law, unless the decedent specifies in his or her will what the executor should be paid. Some states permit a flat and “reasonable” fee which may be determined by the court. Other states require a graduated fee, such as a certain percent of the estate for the first $100,000 and so on. If the will doesn’t state the executor’s fee or if the decedent dies intestate, the court determines the executor’s fee.

Accounting Fees. Accounting costs can be high with more complex estates. If the decedent has complicated business affairs to sort out or owns many stocks and other securities, the complexity will require higher accounting fees. The accountant will also have to file federal and state taxes in the form of a final return.

Attorney Fees. When the executor believes an attorney is needed, the attorney is paid out of the estate. Attorney’s fees can be state-mandated, determined by the court, or set by the attorney depending on the anticipated workload.

Estate Administration Fees. The executor will often incur significant costs of administering the estate, such as property appraisals, and a real estate agent may have to be hired and paid to dispose of property or businesses. A property may also have to be managed until it’s sold or the estate is closed.

Reference: Nasdaq.com (Feb. 2, 2023) “How Much Does Probate Cost?”

 

Is Estate Planning for Everyone?

Does Will Have an Expiration Date?

Nj.com’s recent article entitled “Do I need to change my will if it’s about 10 years old?” explains that there’s no expiration date on a will.

However, as your family and financial situations change, let alone as laws change, wills may need to be updated to reflect these changes and better reflect your intent.

If the changes are minor, they can be reflected in a codicil. That’s a separate document changing the will.

Codicils can be used to keep a will current and up to date. They’re separate documents from wills—and serve as an addendum to the will.

The use of a codicil dates back to ancient times when, for instance, an heir needed to be named.

The requirements for a codicil vary in each state, and like a will, most states require two witness signatures for codicils, while some states allow the document to be notarized.

In contrast, significant changes should be done by having a new will prepared and executed.

Sometimes, even minor changes may involve preparation of a new will.

For instance, in the original will you may have excluded a beneficiary who you now want to include. However, don’t want the beneficiary to find out they were originally excluded.

If you sign a codicil, the previous exclusion will be obvious. However, with a new will, the old will and previous exclusion will remain undisclosed.

Don’t mark up or hand-edit an original will because that will make it hard or impossible to probate. It will probably require a court proceeding to have the will accepted for probate.

Finally, some financial institutions have problems with older wills, so you may want to inquire about their policies to make sure there won’t be trouble after you pass away.

Reference: nj.com (Oct. 22, 2022) “Do I need to change my will if it’s about 10 years old?”

 

estate planning

What Was in Ivana Trump’s Estate Plan?

Newsweek’s recent article entitled “Ivana Trump Gives Nanny Who Raised Kids $1 Million as Donald Gets Nothing” reports that Dorothy Curry worked for the Trump family for decades. Ivana Trump left her a Florida condo estimated to be worth over $1 million, Forbes reported. Ivana left behind assets worth a total of $34 million.

Ivana, who died in July at the age of 73, wrote about Curry in her 2017 book Raising Trump and said that she started as a nanny “with a sparkle in her eye and plenty of nervous energy.” Curry reportedly taught the Trump kids prayers Ivana didn’t know in English.

The former nanny is also expected to receive Ivana’s dog, a Yorkshire named Tiger Trump.

The Trump family appeared to have thought greatly of Curry, who later worked as Ivana’s assistant for years. Eric Trump said in his mother’s book that he thought of Curry as his “second mother” and recalled the time they spent together in her native Ireland.

“She’s raised me since I was a baby, and we are incredibly close—inseparable. I love her immensely. She’s a big, and very important, part of our family,” he said in the book, according to The Federalist.

Ivana died from an accidental fall at her Manhattan house, according to the New York City Office of Chief Medical Examiner. The death was ruled was accidental. First responders found her unresponsive at the bottom of a staircase at her house and she was pronounced dead at the scene, according to ABC News.

Her ex-husband expressed his sadness over the death of his ex-wife. “A very sad day, but at the same time a celebration of a wonderful and beautiful life,” he wrote at the time.

“I will be leaving shortly for the funeral service of Ivana. She will be laid to rest today. This will not be easy.”

“She had brains; she had beauty. She was the embodiment of the American dream… she was a force of nature, could beat any man down the slopes, any woman on the runway,” Eric Trump said during the service, according to a Mail Online report.

“She ruled the three of us [kids] with an iron fist but also a heart of gold,” he said.

Reference: Newsweek (Jan. 16, 2023) “Ivana Trump Gives Nanny Who Raised Kids $1 Million as Donald Gets Nothing”

 

estate planning and elder law blog

What Is Inheritance Theft?

Inheritance theft is sometimes a very real issue for those who inherit money, property, or other assets. Inheritance theft laws exist to protect heirs and beneficiaries. If you’re going to receive an inheritance or have received one that was stolen from you, it’s important to know your legal rights and how to get those assets back.

Yahoo’s recent article entitled “Someone Stole My Inheritance. What Are My Options?” says inheritance theft can take different forms, and some are more obvious than others. Some common examples of inheritance theft or inheritance hijacking include:

  • An executor of a will who steals or attempts to conceal assets from the estate inventory
  • A trustee who diverts assets from a trust for their own use or benefit
  • Executors who charge excessive fees for their services
  • Abuse of power of attorney status
  • Use of coercion or undue influence to force a will-maker or trust grantor to change the terms of their will or trust; and
  • Fraud or forgery related to the will or trust document or the destruction of the documents.

Inheritance theft can also occur on a more personal level. Perhaps your sister and you share caregiving duties for your aging mother. Your sister has access to your mother’s bank accounts and—without your knowledge—takes out a large sum while your mother is still living. Your mother then names you as the executor of her will. When she dies, you create an inventory of her assets, as required. While doing so, you discover the missing funds from her bank accounts. If you and your sister were supposed to have inherited those assets jointly, this could be a violation of state inheritance theft laws.

People who commit inheritance theft may be subject to both criminal and civil penalties. A caregiver who steals money from someone’s bank accounts or coerces them into signing over other assets could also be charged with a felony or misdemeanor crime.

The injured heirs or beneficiaries may also opt to pursue a civil claim against someone they believe has stolen their inheritance.

Reference: Yahoo (Jan. 18, 2023) “Someone Stole My Inheritance. What Are My Options?”