Kids Do Not Have to Be Treated Equally

There are good reasons for not treating children equally in a will.  Among them are :

1.   A child may be wealthier than his siblings

2.   A child may be a poor money manager

3.  A child may have a failed or poor marriage

4.  A child may have a disability

Generally, instead of disinheriting a child, or leaving one less money, a client can incorporate a trust into her estate planning.  A trust can hold money for the child who can not manage money, who faces an ex-spouse, or who has a disability and can not own money if she were to qualify for government assistance.  Similarly, a generation skipping trust can own funds for a wealthy child so the child is not taxed on the inherited funds at his death. 

Trusts are like beer, chocolate, and coffee in that there is not anything they can not do.    

Caution With Organ Donation

A 19 year old woman in Denmark was declared brain dead and her family was advised to remove her respirator.  The family agreed to donate her organs.  When the respirator was removed, she did not die and instead recovered, causing a small national controversy.

The primary lesson is that one's health care proxy should be someone who exercises caution and does not make impetuous decisions, especially for younger individuals.  Secondarily, I am surprised that the victim was not a U.S. tourist.  After having spent $9 on a Starbucks latte and $22 for a hamburger in Copenhagen this summer, I found their cost of living to be breathtaking if not nearly coma inducing due to shock.            

Probate in Perpetuity?

For those who fear the probate process and think that it takes years, the below case will not quell their fears.  A trust subject to probate administration in Cincinnati is being terminated after 160 years.  Most probate matters are concluded in 1/160th of that time.    

10 Celebrity Estate Planning Mistakes

To finish Estate Planning Awareness Week, Forbes has linked an oft repeated story of celebrity estate planning mistakes of varying degrees.  There are some lessons to be gleaned, but I take exception to the Chief Justice Burger inclusion.   Every version of this link I have seen repeats ad nauseam that he made a mistake by drafting his own will and not creating a trust.  What no one explains is that the Chief Justice drafted his will after his wife had died.  Once she was gone, a trust would not have provided any estate tax benefits.  Just as one  should not rely on the "fact checkers" during this election season, one should not trust writers who endlessly cycle the same point of view on a story without objectively thinking about it.  They might be as credible as Candy Crawley.

To Tell or Not to Tell?

Quick disclaimers.  I am late to the news that Chuck Klosterman was designated the Ethicist for the NYT in June.  Also, this post is only tangential to estate planning.  However, in the interest of posting every day during Estate Planning Awareness Week, and in showing some love for Klosterman (one of my favorite contemporary writers), I thought I would mention one of his columns.

The question he addressed is whether a family should tell their mom whose greatest fear is suffering from Alzheimer's that she has the disease.  Her doctor has only told her she has mild dementia but has told the family the true diagnosis.  Klosterman answered yes so that she can have final meaningful conversations with family members before the disease advances,  the same as she would if she were dying from cancer.  I concur with Klosterman.  

In a piece of irony, in a recent Grantland column, he wrote that he  certainly would not be comfortable in a world where his worldview dictated reality.  Now, with his current position, he has the opportunity to make his worldview reality (and presumably increase his level of discomfort).         

Gilded Age Fortune Will Dispute

I mentioned this last year.  Huguette Clark was the reclusive Gilded Age heiress who lived the last 20 years of her life in a hospital under a fake name even though she owned various houses and apartments worth $150 million.  She also owned personal property (i.e. jewelry, art, furnishings) worth $75 million.  The story is noteworthy because at the age of 98, she finally executed a will which left most of her fortune to her distant relatives who she referred to as her heirs.  Once on a will signing roll, she executed another will six weeks later which left most of her fortune to charity. The distant relatives, who did not know where she lived, are contesting the second will.       

Several points:

1.  The most recent will is presumed to be the valid will.

2.  The will can be challenged on the grounds of undue influence or her lack of mental capacity.  The mental capacity argument is probably a losing argument   If she were incompetent when she signed the second will, one would think that she was incompetent six weeks prior, too.  

3.  A funded trust would have provided her privacy and kept Cincinnati estate planning attorneys/bloggers and the general public from knowing that she was worth $300 million.

4.  When a distant relative is a Gilded Age heiress, a Christmas card and occasional phone call provide a great return on investment.         

Who Controls End of Life Decisions?

Sad case that I intended to link last week.  A young woman was diagnosed with terminal brain cancer and eventually received a breathing tube. When she requested that the tube be removed so she could die, her parents sought guardianship of her.  A court found her competent to make her own decision and denied her parents' request. In an odd turn of events, she changed her mind and kept the tube in place to preserve peace with her parents.

A few points:

1.  The case was correctly decided.  The parents had no right to interfere in the decisions of their adult child.

2.  If she had not been found competent, she would have been best served by having a health care power of attorney which designated someone who shared her beliefs to make her decisions. 

3.  We all should have conversations with our family members so they know our wishes and how we wish they would respond to specific medical situations.  As tempting as it might be to get all potentially controversial topics on the table at once, save the conversation about differing views on religion, political candidates, and gay marriage for a different time