What Happens When You Fail to Plan?: The Steve McNair Situation

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The underlying theme of the majority of my posts are why an estate plan is important for everyone, regardless of age. As I was pondering what topic I would write about next, I decided to go for a “celebrity” angle. So, I googled “celebrity estate planning fails” and found that quite a lot of celebs have made estate planning blunders that cost their estates and loved ones dearly.

Case and point: Steve McNair.

Steve McNair was a professional football player in the NFL. He played for Tennessee and the Ravens during his career and amassed a sizable estate. On July 4, 2009, at the age of 36 years old, he was shot and killed by his mistress.

To add to the tragedy of his murder, McNair had no estate planning documents. Not even a basic will. Therefore, every asset he owned at the time of his death, titled in his own name, had to be probated according to Tennessee’s intestacy laws.

According to reports, McNair’s estate was worth about $19 million. His wife had to hire a probate attorney to handle the probate process. She was named the executor of the estate.

The most notable issues surrounding the estate, according to reports are as follows:

First, his wife failed to list McNair’s two children from a prior relationship, and only listed herself and her two children with McNair has heirs. Illegitimacy does not negate a child’s claim to a share of an estate. The omission of the children meant they could contest the estate and fight to be included. Thus, dragging the probate process out longer than expected.

Second, McNair had purchased a home on a 45 acre tract of land for his mother. She lived in the home for several years with no problems, until McNair’s death. The house was only titled in McNair’s name, not his and his mother’s. Therefore, once McNair passed, the house became a part of the estate. McNair’s wife requested his mother pay rent in the amount of about $3,000.00 per month or move out. When his mother moved out, reports indicate his wife sued her for $50,000.00 worth of property she claimed his mother took from the home.

Third, McNair’s estate had several claims by creditors against it. Including, but not limited to an artist seeking payment for a family portrait, closing of his Nashville Restaurant, and expenses surrounding his farm in Mississippi. Legitimate debts against an estate have to be paid first before any distributions can be made to heirs.

These three are just a few of the issues surrounding the estate. All brought on because McNair died without any estate planning documents. If McNair had at least a basic will, the court would have known what his wishes were for his estate.

Now, a basic will would not have eliminated all of the issues, but it would have eliminated some of them. For example, if McNair intended to provide for his two children from a prior relationship, he could have included them in the will as being entitled to receive a percentage of the estate. Similarly, if he intended for his mother to keep the house she was living in, he could have specified that in his will.

Leaving behind a basic will would still mean the estate would have to be probated. Probate is a public forum, so any issue that did arise would still be public knowledge.

If McNair had created and funded a revocable living trust, however, there would be no probate process. Trusts are private documents that allow a decedent’s estate to pass outside of probate. Meaning, there would be no frozen estate assets in an account waiting for the court to okay the distribution plan. There also would probably not have been any issues at all because the beauty of trusts are they do not lend themselves too much litigation. Sure, someone could challenge a trust, but it is not has easy to do as with a will.

Bottom Line: Planning would have avoided years of heartache, headache, and family disputes.

Now, some of you are probably thinking “well that’s all well and good for a celebrity because they have a lot of money. I don’t have a lot of money, so it doesn’t apply to me.” Wrong.

Think about your estate. Think about the assets you own in just your name. What are they? A car? A House? A bank account?

Do you have a spouse? Do you have children? Do you take care of an elderly parent or support a family member? Do you have specific items you wish to pas to specific individuals? Are there specific people you wish to leave nothing?

I could go on and on with those types of questions. The point behind is, if you were to pass right now without a single document, do you know what is going to happen to your things?

I do. The state you are a resident in is going to choose who gets to administer your estate and dictate who gets what percentage of your estate. Regardless of your wishes and what your family member “knew” you wanted. Unless you expressly spell it out in a document, it is does not matter.

Sure, it might not play out on a grand of a scale as Steve McNair’s did. But, that does not guarantee it will go over smoothly.

Can You Really “Have It All”?

This post is different from my usual “evergreen” educational posts.  I attended a CLE conference this past Friday and one of the panel discussion really struck a nerve. Thus, this post was born.

The panel was comprised of three lawyers. One in her mid-thirties, one in her late sixties, and one in her middle to late forties. I was unsure what the actual topic of the panel was supposed to be, but the discussion revolved around being a lawyer and a mother. Each panelist as different ideas about what it means to be a “good lawyer” and a “good mother”.

The first panelist, Ms. Mid-Thirties, was a litigation attorney who felt that it was more important to spend time with her children than working an ungodly number of hours to make equity partner.

The second panelist, Ms. Sixties, also a litigation attorney, felt that she missed out on certain success in her career because she was so focused on her kids. She mentioned she wished she shifted her focus to her career when her kids were in high school and did not need her as much, than waiting until they were in college.

The third panelist, Ms. Mid-Forties, was a family law attorney. She owned her own firm and has two young teenagers at home. She said she works full time and is home every night for dinner, and she does not work on the weekends. She said she employs all women at her firm and expects them to be there full time. However, being a mother, she understands that life happens and when an employee needs to tend to child or sick relative, all they have to do is ask. For her, she believes she is balancing being both a good lawyer and a good mom.

Each panelist presented an interesting view about the topic. My initial reaction was “wow” how interesting to see three different perspectives on motherhood and lawyer-hood. It made stop and think, “Where do I fall in this spectrum of women?”

As I was pondering this thought, the audience was asked if they had any questions for the panelists.

One women, considerably older than all three panelists, asked the first panelist “if you don’t want to be equity partner and value spending time with your kids more, why don’t you just work part-time?”.

Ummm what? Why does her wanting to be involved in her young children’s lives mean she has to be a part time lawyer? Working part time as a lawyer is not where you want to be early in your career. Why does a desire to be home more mean she isn’t ambitious and want to further her career? The first panelist looked just as shocked as I was at the question. Her answer was basically a defense of motherhood and the importance of being around her young children.

I was quite mad at the women who asked her that question. If she is being the best lawyer she can be, what does it matter if she is content with her status within the firm. Who says that a successful female lawyer means being an equity partner?

The next question asked by audience was to the second panelist. The question was “if you would have focused on your career earlier, don’t you think you would have regretted missing your children’s high school years? And don’t you think you are better suited now to be a partner than when you had younger children?”

Again .. .Ummm what!? Age does not have anything to do with when a women is better suited to be a partner. She DID NOT miss out on her children’s high school years, but so what if she did? So what is she worked a bit more when her kids were in high school and she missed a couple of sports games or parent teacher conferences? I remember when I was in high school, I was concerned with my own life. My parents were there when I needed something and for the big moments. Both of my parents worked and couldn’t make everything, and I turned out just fine.

Furthermore, who says a mother with children isn’t suited to be a partner? There is no correlation between the age of your children and your ability to be a good lawyer. Just like there is no correlation between a woman’s age and her ability to be a good lawyer.

Another question that sparked my anger was directed at the third panelist. A women asked “If you come home in time for dinner, who does the grocery shopping and the cooking?”

Actively shaking my head in disbelief at this point at these questions. The third panelist handled this question extremely well. She said “My husband is retired, he cooks when needed and handles the grocery shopping. I also meal prep on the weekends and have help that handles those things if necessary.”

Brava. Because really, when did grocery shopping and cooking equate to being a good mother? Being home for dinner is what is important.

The panel ended and I felt like the feminist and traditionalist in me had been simultaneously offended. Yes, everyone has a different idea about what it means to be a good mother. Yes, everyone has a different idea about how a women should conduct her legal career. However, no two women are the same, have the same ideals, or have the same career goals. Each woman on that panel operated under a system that worked best for them and their priorities.

How dare any woman say anything negative against another woman trying to balance work and motherhood. How dare any woman insinuate there should be a choice between being successful at both.

What happened to having it all? What happened to the idea that I could be anything I want to be including having a career and being a mother? And who are you to sit and judge how good of an attorney or mother someone is based upon their choices on how to balance those roles?

I am unmarried with no children. I am just starting out in my legal career. I have a plan for where I want my career to go and how far I want to succeed. I also see myself achieving those goals as a wife and mother. It never occurred to me that I would have to choose between the two. It never occurred to me that I would not able to balance being a mother and a lawyer. I expect my choices to be respected, especially by another woman lawyer.

I realized during this conference that the stereotypical ideals that we are fighting so hard to change are not falling away as quickly because women, as a whole, are not ready to break them. There are those out there who believe being a lawyer is more important than being a mother and vise versa. Instead of acknowledging “hey this is my opinion, but good for you for trying to do both”, they tear down those who believe differently.

Well, shame on them. I was quite upset after this panel ended. One of the main reasons I was looking forward to this conference was because I was going to get to meet and be around women who had already been where I am now. Who had careers and families and had “made it” in my opinion. Instead, I saw a bunch of women split into factions and wagging fingers that those who they believed were “doing it wrong.”

Bottom Line: Success is measured differently by each individual person. What works for one person might not work for another.

Instead of passing judgment on a woman because she prefers to be  mother over a lawyer, a lawyer over a mother, or is trying to do both, we should be boosting each other up. We should be heralding each others strengths and give aid to help overcome weakness.

Rant Complete.

 

 

Blended Families and Estate Planning 101

The next few posts are going to be dedicated to the topic of “Blended Families and Estate Planning”.  A blended family presents unique challenges in the world of estate planning.

The most common marital status today is neither “married”, “single”, nor “divorced”, it is “Remarried”.  With so many re-marries, there is a higher chance a client is going to be part of a blended family. Blended family meaning each spouse has children from a previous marriage.

Children of a prior marriage can be an integral and loving part of the new family relationship and treated by both spouses as if all are their natural offspring. The challenges that arise in a blended family when trying to establish an estate plan revolves around a conflict of interest in the desire to provide for the other spouse’s children. 

A common and informal way of addressing the issue within the family unit is to exchange oral promises between spouses.  What I see most often is a couple having only simple wills, meaning the estate is left to the survivor of them, and a promise that the surviving spouse would divide the estate equally between the children of both spouses.

These oral promises are often problematic and raise issues as to enforceability. Even with harmonious blended families, lack of planning may lead to unforeseen difficulties.  

 For example, if all assets are left to the new spouse, the prior children may not be provided for as the deceased spouse would have wished. As I the situation stated above, the surviving spouse will inherit all of the estate in accordance with the will. The surviving spouse is now the sole owner of the estate and is not legally obligated to give any share of that estate to the decedent’s spouse children. The oral promises made between spouses, does not have to be honored.

 On the other hand, if arrangements are made so that one spouse leaves assets for children of a prior marriage, therefore bypassing the surviving spouse, there may not be sufficient assets remaining to provide for the surviving spouse.

As long as there is no animosity between the blended families, the thought of one’s children not being provided for, are never considered. The key to estate planning is to prepare for the “what ifs”. It is unclear as to what everyone’s situations will be five, ten, twenty years down the road. For example, a spouse that had every intention of sharing the estate with step-children, could find one of his/her own children desperately needs money. Instead of splitting the estate evenly, he/she leaves it to the struggling child and not to the step-children.

There are several estate planning tools blended families can use to achieve their respective goals. With careful consideration, estate planning for the blended family can provide orderly, equitable and compassionate distribution of estate assets, while also minimizing or eliminating potential animosity between the surviving beneficiaries.

The next series of posts will be dedicated to this topic of blended family planning. If you are part of blended family and are interested in having an estate plan suited for a blended family, contact a local estate planning attorney today.

 

 

 

 

DIY Estate Planning: A Disaster Waiting to Happen

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An abundance of information is at our fingertips. Any question we have can be answered by a few strokes on a keyboard. With all of that information readily available, it is no surprise that the DIY movement has exploded.

I personally am a huge fan of do-it-yourself crafts. My pinterest board is full of wreaths and how to repurpose furniture. While I will try my hand at a craft in a heartbeat, I would never follow a DIY on something that requires a professional, like plumbing or electrical. Everyday though, somebody somewhere thinks instead of hiring a professional, they can handle the job.

Including DIY legal documents.

People tell themselves, “How hard can it really be to get a will?” I can print it off the internet, have it signed and notarized, and BOOM, I’m covered. Cheap, Quick, and Easy.

Cheap, quick, and easy does not always equate to “legal and binding”.

The heirs of Anthony J. Ferrantino found that out the hard way:

LegalZoom was the target of a class action lawsuit in California, charging that the company engages in deceptive business practices and is practicing law without a license. The lawsuit was filed in California by Katherine Webster, the niece of the late Anthony J. Ferrantino, and the executor of his estate.

Knowing that he had only a few months to live, Mr. Ferrantino asked Webster to help him use LegalZoom to execute a Will and Living Trust. Based on LegalZoom’s advertising, Webster says she believed the documents would be legally binding and if they encountered problems, the customer service department would resolve them.

But after the Trust documents were signed, Webster could not transfer any assets into the trust because the bank that held his money refused to accept the documents as valid. Webster tried to get help from LegalZoom, with no success. The trust was still not funded when Mr. Ferrantino died in November 2007.

Webster was forced to hire a probate attorney to ask the court to allow the post-death funding of the trust. The attorney then had to convince the banks to transfer the funds — a more difficult task following Mr. Ferrantino’s death. The attorney also discovered that the Will had not been properly witnessed. All this cost Mr. Ferrantino’s estate thousands of dollars.

Can’t happen to you? Know about South Carolina and Witnesses? 

Under a SC probate law “purging statute” a person who acts as a witness to a Will’s execution and who is also named as beneficiary in that will, may have his bequest reduced and possibly disallowed. How many people who use their own form Wills downloaded from legal Zoom (or bought in packaged software) will be aware of that? How many people, will innocently ask other family members who are listed beneficiaries to be a witness to the signing?

I interned for a Judge one summer who loved to address the issue of DIY legal work with pro se litigants. It usually went like this:

Judge: “Mr./Ms. Person, let me ask you a question. If your appendix needed to be removed because it was inflamed and making you ill, what would you do?”

Mr./Ms. Person: “Well, I would go to the hospital and have a doctor remove it.” (I find it fascinating that every single time he asked that question, the person would answer this way. They would have a smile and such conviction in their answer because they had no idea they just fell into his trap.)

Judge: “I see. So, you would go the hospital and let a trained, qualified, doctor who attended and graduated medical school perform the surgery?”

Mr./Ms. Person: (A little hesitation in their voice) “Yes Sir.”

Judge: “So, you would go to a doctor, who has a degree in medicine, to remove the appendix. You would go to a doctor, over say, doing it yourself on the kitchen table with a sharp knife and some alcohol?”

Mr./Ms. Person: (confused look on their faces) “Yes Sir.” or even sometimes “Of course, I wouldn’t try to operate on myself.”

Judge: “I see. So if you would go to the doctor for a surgery, where would you go if you needed some dental work done?

Mr./Ms. Person: “A Dentist”

Judge: “I see. So you would go to a doctor for medical issues and a dentist for dental issues. Well, then, you seem like a very practical and intelligent human being. So, tell me, why on earth would you NOT go see an attorney for your legal issues? An attorney who has gone through law school, passed the bar, and knows the law like a doctor knows medicine?”

Mr./Ms. Person: (shocked and scared expression) “Umm, well.” (Litany of excuses follow).

Interesting way to picture this situation is it not? For every other matter, people seek out a qualified licensed professional. Why is legal work any different?

The bottom line is: Do-it-yourself legal documents might seem like a good idea at the time, but they are not worth the potential costly hassle they can cause. What you think is a good document could really be a useless piece of paper.

Talk to a qualified attorney today about your Estate Plan. Peace of mind comes from having documents in place that you can rely on 100%.

 

 

 

 

 

 

 

 

Procrastination- Why You Still Don’t Have an Estate Plan

“If it Wasn’t for the Last Minute, Nothing Would Ever Get Done.”

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We all procrastinate. It’s just part of being human. Teacher assigns a project with a due date four months away, you think, perfect! I’ve got plenty of time to brainstorm my idea, put the project together, and make any adjustments! Then three and half months later, OMG I HAVEN’T EVEN STARTED! You throw the project together in two weeks and pray for an a passing grade. Usually, with enough effort, intelligence, and luck, you come out fine. Does that help with you NOT procrastinating the future? Nope.

Everybody Procrastinates.

There are certain things in life that should never be procrastinated. Your estate plan is one of them.

Here are the top reason people of all ages, but especially Millennials, procrastinate their estate plans:

  1. The process of developing an estate plan is intimidating.
    • Yes, it can be if you think you have do it on your own. An experienced attorney can asses your assets, your goals for those assets, and easily identify the available estate planning options that best suit your needs.
  2. Too Expensive
    • Not all estate plans are expensive. The more complex your plan, the more expensive it will be. However, you can either pay now or let your estate pay more later after it goes through probate.
    • Simple plans that include a basic will, durable power of attorney, and healthcare power of attorney, cost usually less than $500 dollars for a single individual. Yes, I am aware most Millennials do not have $500.00 laying, but why not save up for it? You save up for spring break, beach trips, new clothes, and the latest gadget? Why not for your estate plan? Instead of going out and dropping $600 or more on the latest IPhone, why not actually invest that money in an estate plan?
    • Most attorneys will work with you on payments. You will never know until you go visit one.
  3. “I don’t have time”
    • There are 24 hours in a day. Somehow, we as humans manage to jam pack a lot things in those 24 hours. The whole “I don’t have time” spiel just does not cut it. If you can make time to go to the gym, go shopping, go to the movies,  to get your taxes done,etc., then you can make time to go spend an hour or so with an attorney and discuss your estate plan. DVR is a wonderful invention. Set your favorite show to record and make an appointment.
  4. “I don’t have a lot of assets or money”
    • You do not have to have a lot of money or things to have an estate plan. Powers of Attorneys are needed by everybody because they grant someone the authority to make decisions for you and tend to bills. Everybody has bills.
    • If you have a car, a house, kids, a bank account, a pet, a collection of some kind, etc. then you have assets and you need an estate plan. Period.
  5. Too Young (Millennial reason #1)
    • As I have stated over and over again, and will state probably a million more times. YOU ARE NEVER TO YOUNG TO HAVE AN ESTATE PLAN. Once you turn 18 years of age, your parents are not guaranteed to be able to make decisions for you.
    • Youth is not a good excuse. Especially those of us who are in are late 20s to early 30s. Buying our first homes, having kids, having bank accounts. All of those things will be at the mercy of the state if you fail to plan.
    • Youth does make you invincible.
  6. Invincibility – “I’ve got plenty of time”
    • The cold hard reality is, you might not have “plenty” of time. Death does not come for just the old and sick. Death is a heartless purveyor of souls who can swoop down and scoop up anyone, at anytime, regardless of age, health, or social status.
    • When you fail to plan and something happens, albeit death or incapacity, your family and loved ones are left to deal with the consequences.
  7. DIY Options are cheap and quick
    • Legalzoom and alike sites are quick and cheap. However, they provided really basic and general cookie cutter documents that will fall flatter than a pancake if challenged in court.
    • Also, these sites tell you THEY ARE NOT ATTORNEYS. Meaning, they cannot give you legal advice. If the are not giving you LEGAL advice on the LEGAL documents you are paying for, what good are they really?
  8. Lack of Understanding
    • The generalization for estate planning is “it’s something old wealthy people do”.
    • Estate planning is more than just a will. It is more than just simply delegating where your assets go. It’s about preparing for the unknown future.

In my short span as an estate planning attorney, I have seen far too many cases of people who waited to last minute to plan, something happened, and now their family is having to scramble to figure out what to do.

When the “last minute hits” you might not be able to make your plan. If you get in a car wreck, end up in a coma, and need someone to make medical decisions for you and you lack a power of attorney, how do you expect to grant anybody that authority? You can’t. It’s too late.

I think people wait because they believe they will “know” when they need to make a plan. Life does not give warnings. You are not going to an email or text saying “you are going to be hit by bus tomorrow, go to attorney today” or “you’re going to have a heart attacked Friday at Noon, is your estate plan ready?”

Only being PROACTIVE and not a PROCRASTINATOR will ensure you peace of mind in knowing whatever life brings, you are prepared and your family and loved ones have the tools to take care of you.