Will Preparation tips

USA Today has a nice article on points to consider when preparing a will.  The most salient is that beneficiary designations over-ride  will provisions.  If a parent's will divides all assets equally between 3 children, but an account is owned jointly with  one child, that child will inherit the entire account negating the parent's wishes.

Personally, the other key point is that people are discouraged from preparing their own wills. My children's school seconds that advice.

Planning for College Age Children

This post is a month late.  Before kids departed for college, parents should have had their children execute a simple set of health care directives so that parents can receive medical information about, and make medical decisions for, their college age children.  This is especially important for children from divorced families where it is unclear which parent is the decision maker.  

The recommended documents are a health care power of attorney (to make the medical decisions) and a HIPAA disclosure so a parent can receive information about their child's health status after a bad Ecstasy trip or injury while car surfing.       

Smart Rider

The late Dennis Hopper made several wise estate planning moves late in his life. First, he had a pre-nuptial agreement when he married his fifth wife. Second, when he was dying and was in the midst of an acrimonious divorce with her, he created a trust for their then 7 year old daughter to which he left nearly $3 million. The then estranged spouse/now widow has no control over the trust assets.  

Two points. When a couple is divorced with minor children, I always advise my client to create a trust to hold assets for the children upon the death of the client. Otherwise, the former spouse will control the assets until the child turns 18 and may benefit from the assets. Second, when marrying for the 5th time, I am glad to see that Mr. Hopper had learned enough from his 4 previous failed marriages to execute a pre-nup. Old dogs can learn new tricks.   

There Is Gold in the Walls!

After an unmarried Nevada man died, authorities discovered $7 million of gold bars and coins stashed in his house.  The man had lived alone since his mother's death in 1992.  He was apparently dead for a month before neighbors reported a smell emanating from the house.  His left no will so his first cousin, whose phone had been disconnected, will inherit the estate as his closest relative.

I am uncertain about what lessons can be learned from this story but I will suggest a few.

1.  It is always best to leave a will instead of relying on the intestacy statute to determine where assets where go after death.

2.  People should check on their "crazy neighbors" because they, instead of cousins with disconnected phones, might inherit assets at death.

3.  Living isolated and alone without visiting doctors can lead to a premature death.

4.  Gold has been an incredible investment the past several years.        

Beneficiary Designations and Asset Titling

The best estate plan will not work if beneficiary designations and asset titling are not coordinated with the provisions of the will and trust. Common mistakes include adding a child's name to a house deed, adding one child as the transfer on death beneficiary of a financial account to the exclusion of the other children, or not avoiding the probate process by transferring the asset to a trust or adding a transfer on death designation.

I always provide my clients with a list of how to address beneficiary designations and asset titling issues. If the issues are not handled properly, one child can inadvertently inherit most of the estate to the chagrin, and lasting contempt and hostility, of the other children.

Digital Assets (Heavy Sigh Version)

At the risk of beating the dead horse about digital assets, some articles need to be mocked.  This recent WSJ article deserves derision for making a simple topic - how to access on-line accounts of a deceased person - stupidly complex. 

Suggestions include the creation of a social media will with a review of each web site's policies, the nomination of a digital or social media executor, and creation of digital asset trust to avoid those assets going through the probate process.  My responses to these ideas, in order are:  a standard will suffices, the executor should be able to address on-line issues and if he can not he should not be the executor dealing with assets with a monetary value, and only an idiot would list a digital account as a probate asset to be disposed of.  I suspect that some people think that there is money to be made from that idiot by selling him a trust that he does not need. 

My advice remains creating a list of passwords accessible at death by the executor.  Simple is better and often times less expensive.

Choice of Trustee

Who should serve as trustee of a trust?  Choices are usually family members or a corporate trustee from a bank or investment company. 

I usually advise clients to look at their family members first, then use a corporate trustee if there is no one suitable.  However, I always try to dissuade my clients from naming one child as trustee of another child's trust as a means of preserving family relationships post-death.  Grandparents can serve as trustee for the short term.  However, if the parents or grandparents are Michael and Dina Lohan, I always advise that the client use a corporate trustee.      

Closing On-Line Accounts

Returning to post-death digital assets.  The web site Deceased Account assists families with closing on-line accounts of deceased family members.   The site summarizes the procedures of most major (and many minor or unheard of) on-line services.

If a surviving spouse discovers that the deceased spouse belonged to eHarmony, the account can be closed by a family member by simply stopping payment. Thankfully.  And indignantly.      

Bruce Willis vs. iTunes

Continuing the recent unintended theme of celebrity posts while dovetailing with last week's post about iTunes.  Bruce Willis is rumored to be contemplating a lawsuit against Apple over his desire to leave his iTunes account to his children upon his death.  As mentioned last week, he (nor anyone) currently does not have that right under Apple's end user license agreement. 

Presumably he does have the right to leave his children his rights to "Return of Bruno."   There is no word on whether they actually want it though.