Sometimes I have clients who have very specific requests that they want honored upon their death. Sometimes it has to do with charitable gifts, sometimes it relates to specific children, sometimes even to pets. When there are specific or unusual instructions, the question is “Will this be upheld?”
A general proposition is that a person’s assets are his to distribute as he wishes. If I own a diamond ring, and I want to leave it to my favorite waitress, I can do that. Even if my daughter gets angry about it. Or if I have a large life insurance policy and I want the beneficiary to be the local conservation organization and not my grandchildren, I can do this. Often parents will treat their children differently because they have different needs. One child may receive assets in trust due to a special needs situation, while the other will inherit outright. Some children who are in a superior financial situation may not inherit at all. It’s important to realize that just because you disagree with a decision, or find it impractical or infuriating, does not make it illegal or invalid. In order for a will provision to be struck down, the plaintiff usually needs to show that the will was made under duress, that the person who made the will was incompetent, or that the will is invalid for some other reason. Simply not liking the provision, thinking it’s not fair, or disagreeing with the provision is not enough to have it declared invalid.
There are some cases instructions that if a provision is “void for public policy reasons” will not be upheld. For example, a person may not be prevented from marrying someone – “I leave $100,000 to my son, in trust, so long as he does not marry”. A person may not be encouraged to commit illegal acts. Usually, depending on state law, a person may not entirely disinherit his spouse. And interestingly, probate courts will often not enforce an instruction to put down a pet. See Boots is Saved. However, most gifts, even if they happen at death, are just that. And usually the one making the gift gets to decide who gets it.
What happens to your on-line information if you can’t access it because of illness, incapacity, or death? Can someone easily access your email account, banking information, or social media accounts? If you are a parent, do you know how to access children’s accounts?
Some of this info should be kept accessible, although we all worry about security. It may be more likely that someone needs this information and can’t get it than that someone breaks into your home or office and steals the list…Here are some of the things you should keep track of — I have a checklist in PDF format, if you’d like a copy, just send me an email and I’ll get one out to you. firstname.lastname@example.org
Statistically, women outlive men. That means that the estate plan, or lack of estate plan, will often be played out by us. If there is no will, no power of attorney, no trust protecting our assets, women are often left holding the bag, with no good results. Often women do not manage the money side of things, and when pushed into that role by the illness or death of a spouse, all the grief and dislocation can be magnified by a sense of panic – needing to deal immediately with complex legal and financial concepts which can have long term consequences – sometimes impacting the rest of our lives.
Educate yourself, find an estate planning lawyer that you trust, and who can explain your options. Find a financial planner, again, someone you trust, who will take the time to explain things until they really make sense. Know who you want to call when you need them; don’t be in the position of having to find an advisor when you are desperate. Put a plan in place. This can be easier than you think, and while there will be some costs involved, consider what could happen without any planning. An old plan (you know the one you did when the kids were little) may not work now that you are 62 and thinking about retirement.
Start planning now, before there is a crisis, and save yourself money, stress and time.
Manchester by the Sea has a new-ish public body that will be considering one of our perennial hot button issues. DOGS ON THE BEACH! The Animal Control Board will meet on Tuesday 1/24/2012 at 5pm at Seaside 1 and will discuss animal control rules, the animal control officer’s job description, dog parks, and the potential prohibition of dogs on Singing Beach year round. I have to, at this point, tell you that my version of the agenda is based almost entirely on hearsay and a quick read of the last meeting’s minutes as there does not seem to be an agenda published on the town website. However, I know that this issue is one that is important to people on both sides, and that perhaps some public input at the meeting would be helpful to our town officials…
In Massachusetts, we are on the cusp of enacting the Massachusetts Uniform Probate Code (MUPC). While this has the advantage of streamlining many probate practices, and will bring our systems more into line with many other UPC states, it also provides stiff challenges for attorneys, court personnel, and regular people trying to deal with the death of loved ones. Changes to probate will be extensive, ranging from who gets what if you die without a will to how and when an estate is subject to formal probate.
The MUPC was supposed to go into effect last July, but has been postponed, first until January and now until the beginning of the second quarter. The postponements will hopefully allow all the new forms to be created, rules to be written, and any last minute corrections and changes to be put into place. It also gives the many attorneys who help with probate law a final chance to get into training classes and seminars. So if your attorney disappears for days or weeks at a time, rest assured that they are off somewhere memorizing the new intestacy laws, and not cruising in the Bahamas…
Happy Holidays and best wishes for a happy, healthy and prosperous 2012. Usually an estate planning blog is filled with doom, gloom, cautions about what could happen if you don’t … fill in the blank. I’m taking a small break from death, disability and divorce. I hope you each can take some time to think about meaningful things that happened this year, and things you’d like to have happen in the coming year. May your holidays be merry and bright, and I promise, I will be back to my regular topics in the New Year. Oh, and don’t forget to add “update estate plan” to your New Year’s resolutions!
A fiduciary is someone who is placed in a position of trust, some examples are attorney in fact (under a power of attorney), trustees, conservators, guardians, executors, or attorneys representing clients. When someone asks you to act as their power of attorney or executor of their will, you are taking on a fiduciary role, and the responsibility that goes along with it.
“Relatives of Heiress Huguette Clark Accuse Lawyer and Accountant of ‘Plundering’ Her Fortune; “Attorney Suspended over Will Bequest, Loan”; Northampton Executor Jailed
These cases, a high profile national story, a local disciplinary action, and a British story, have lessons for clients and attorneys working in the estate planning area. The first is that your actions may well be scrutinized by those who are not favorably inclined towards you, so if you have done nothing wrong, be sure that your record keeping is precise, up to date, and accurate. If you are acting as a fiduciary (executor, power of attorney, guardian or conservator) keeping accurate records is a DUTY, not something that you can do or not do as the spirit moves you. A fiduciary’s duties are taken seriously, and if you are not a good record keeper, decline to act as a fiduciary for someone else.
The other lesson, and perhaps the more obvious one, is that you have an ethical and legal DUTY to act in the best interest of your client (or of the protected person or the heirs), regardless of whether or not it is in YOUR best interest. Again, this is not optional; if your actions could be misconstrued as not being in the client’s best interest, be meticulous in documenting, bringing in third parties, and recording the set of circumstances that led to such an outcome. If you are simply a family member trying to do the right thing, get some professional assistance so you don’t wind up in a contentious law suit – or worse.
I know that neither of these topics is particularly cheery, but in some cases they do go hand in hand. If your marriage is going downhill, and you anticipate a divorce, or are in the process of getting divorced, it makes sense to take two immediate steps:
Name someone other than your spouse as your healthcare proxy; and
Revoke any durable power of attorney that allows your spouse to sign papers on your behalf, and designate a new power of attorney to act for you if you are incapacitated.
These two steps should be taken right away. As long as you are still legally married, these documents generally continue to be in effect, and as you probably know, a divorce can take a long time to finalize.
Comprehensive estate planning is important, but it is unrealistic to think that most couples can deal with it while going through a separation or divorce. Estate planning can wait a bit, but these other steps cannot wait. My office is happy to assist you with this, and credit the amount towards an estate plan, or if you are working with a family law attorney, he or she should be able to assist you with a new health care proxy and power of attorney.
But I made it two spouses, three children, and two businesses ago. When your life changes, your estate plan should ideally keep up with those changes. You do not need to revise a will every time something changes in your life –many documents are drafted to take some changes into account. However, as part of your financial planning, you should revisit your estate plan every 3-5 years, and definitely in the case of a divorce or marriage.
Divorce: In some states marriage or divorce nullifies a will, health care proxy or power of attorney. In other cases it may not. If you and your spouse are on good terms and you want him or her to make the decisions about your medical care, it is best to revise your health care proxy to make it clear that this is your desire. Similarly, you may not want your soon to be former spouse to have the ability to write checks from your bank account, but even if divorce nullifies a power of attorney, simply being in the process of divorcing will not. Revoke or change your health care proxy, will, and power of attorney if you realize that your spouse is no longer a trusted partner and you are heading your separate ways.
Wills, trusts, health care proxies and powers of attorney are powerful documents; take a look at them from time to time and be sure they are still relevant to your life.
Usually when you visit an estate planning attorney, there is a LONG form to fill out describing family, last wishes, assets and liabilities, and who should be your executor, trustee, or guardian of minor children. There are often conversations about health care choices, nursing homes, and how the primary residence should be owned.
When was the last time your attorney asked you to write down your Facebook username? Probably never. In our rapidly changing relationship with technology, what we own and how we own it is also changing. I heard on the radio this morning that 60% of bills are paid on-line now (this is why the U.S. Post Office needs to shrink).
Think about how that will affect the person who probates your estate…We used to hope that there would be an organized file with bills and account numbers, we’d count on the mail coming with statements and other account numbers. How do we find the electronic accounts that “Aunt Edna” kept on her office computer? How will we find the beautiful photo albums that mom kept in her Flickr account? What about the software that has three years left on its license – who owns that, and what is it worth? How on earth do you cancel the monthly Xbox Live account? (Anyone who can provide this information to currently living mothers will also score some major points!)
Let’s get started on our digital asset planning. I’ve got another long form that I’m happy to e-mail to anyone who requests one. Please put “digital asset planning” in the subject line and send a request to email@example.com.