Humorous Wills: David Brenner

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One of the greatest aspects of creating your estate plan is the ability to write anything you want in your documents. Most of the time, estate planning documents are very cut and dry. They outline who is to administer the estate, the distribution of the estate, and list the intended beneficiaries.

Sometimes, individuals include statements or requests that have wandered away from the path of convention.

One such individual was Comedian, David Brenner. I stumbled upon an article written by Richard Johnson on Page Six, entitled “Comedian David’s Brenner’s Hilarious Last Will” that detailed the Comedian’s will.

According to Johnson’s article, Brenner’s will instructed he be buried in jeans and a nice shirt, in plain box, with a small stone on the grave site that read “Here Lies David Brenner. He lived, he died, but MAN DID HE LIVE!” on one side and “If this is supposed to be a joke- I don’t get it” on the other.

Brenner also reportedly requested to have one hundred dollars, in small bills, placed inside his left sock “just in case tipping is recommended where I’m going”.

And as any true comedian, his farewell statement read: “To those who have been kind to me and loved me, thank you. To those who were not kind and didn’t love me, I hope you’re next!”

Does having these jokes in his document invalidate it? No. It most certainly does not. You have the right to include anything you wish in your documents. Now, your attorney will probably caution you in regards to validity of certain requests you might make, but for the most part, statements and requests like Brenner’s, are usually fine.

It is nice to think that even from beyond the grave, you might be able to bring a smile to your loved ones faces one last time.

Important South Carolina Legislative Decisions. Part 1: Durable Powers of Attorneys

South Carolina’s Legislature passed two key pieces of legislation regarding the area of Estate Planning. The first, which is the topic of this blog post, deals with the changes to the Probate Code surrounding Durable Powers of Attorney. The second, which will be discussed in another blog post, created the South Carolina Uniform Fiduciary Access to Digital Assets Act.

Effective January 1, 2017, the South Carolina Probate Code will include an eighth article, dedicated solely to Durable Powers of Attorney. While the new article reaffirms the majority of the already existing law, there are some key changes.

First, any power of attorney drafted after January 1, 2017, will be presumed to be durable.

As it stands today, for a power of attorney to be durable, the documents must specifically state something to the effect of, “this power of attorney is durable upon execution and is not effected by incapacity.” Barring that language, or language specifically identifying the power of attorney as “springing”, the document is ambiguous under the eyes of the law. The new statute’s presumption of durability means, unless otherwise stated, the power of attorney is effective upon execution and can be used immediately upon the Principal’s incompetency or incapacity.

Second, Co-Agents are presumed to have the ability to act independently, unless otherwise specified.

This change is significant because it automatically deems Co-Agents to have independent authority to act. Meaning, a single agent may act alone and without the signature or permission of the other agent appointed. Co-Agents might not always be able to handle the necessary affairs at the same time they arise, for an array of reasons. This change prevents a hindrance in having to wait to act until both named agents are available.

Third, the statute clarifies the recording requirements for a power of attorney.

Recording of a power of attorney is always been a grey area and interpreted differently by different attorneys. This change require that a power of attorney must be recorded in order to be effective after a person become incompetent or incapacitated.

Fourth, the statute specifically addresses the gifting power.

            The gifting power is one of the most important powers the Principal can grant to an Agent. It is also a power that is most easily abused. The current law does not specifically address this power, but the new statute requires specific reference in the power of attorney of this power in order to grant the power. The new statute also goes into detail about this power and how it is to be used.

Fifth, the statute addresses certain changes that will affect the way attorneys draft powers of attorneys.

The new statute will affect how attorneys are to draft powers of attorneys after January 1, 2017. Some of the changes are basic, i.e. using the term “agent” instead of “attorney in fact” or “incapacity” instead of “disability”. Other changes that effect drafting deals with how the durable power of attorney functions and changes the powers of the agent.

Please be aware that these changes will only effect powers of attorneys drafted after January 1, 2017. Any powers of attorney, legally drafted prior to this effective date, are not rendered invalid by the new statute. You do not have to have your powers of attorneys redone just because the statute changed.

However, if you power of attorney is more than five to ten years old, it might behoove you to have them reviewed by a competent attorney. Similarly, if you powers of attorneys were drafted in a state other than the one you current reside, it would not hurt to have a competent attorney review your powers of attorney as well.

Statutes are always changing. Without change, the laws would not be able to effectively govern in an ever changing world. This is why is vital when wanting to draft estate planning documents, you visit a licensed and qualified estate planning attorney.

I am _____ Years Old. What Estate Planning Documents Do I Need?

First off, as I’ve stated many times in previous blog, you do not NEED an estate plan. Every state has laws in place to handle situations arising from people with no estate documents. For example, in South Carolina, if you become incompetent or disabled and have no Financial or Healthcare Power of Attorneys, your parents, spouse, friend, partner, etc. can go to the Probate Court and petition the Court to be appointed as you Conservator (Finances) and/or your Guardian (healthcare/everything else). Similarly, if you die with no will or trust in place, South Carolina’s intestacy laws will control and dictate how your estate is distributed.

If you, like so many out there, find that leaving your care and estate up to the discretion of the State to be less than satisfactory, then you should speak with an Estate Planning Attorney and get your affairs in order.

Now with that being said, I am frequently asked by people “I am ____ years old. What do I Need?” Below is a breakdown, by age, of what estate planning documents you should consider based upon your age and current situation.

*NOTE: This breakdown is just a guideline. Everybody has a different situation. Everybody should take this guideline as basic information to get you thinking about the different documents you should have at each age. Talking with a qualified Estate Planning Attorney is the best option because they will be able to give you specific advice based upon your specific situation

Twenty-Somethings:

After the age of 18, financial and healthcare decisions are no longer defaulted to your parents. Many people in this age group, especially those in their early twenties, feel like they do not need an estate plan because they do not have an “estate”.

Single, twenty-somethings, should at bare minimum have a Healthcare Power of Attorney and a Durable Power of Attorney (financial). These documents allow you to name specific agents to make healthcare decisions for you in the event you cannot and to handle your finances in the event you cannot. Barring these documents, if something happens to you, your parents, partner, friend, sibling, etc. are going to have a rough time trying to help make decisions for you.

Married, twenty-somethings, with no children, should have the above mentioned Power of Attorneys and a Will. A will clearly indicates who you wish to handle your estate and how you wish you estate to be distributed. Having the power of attorneys will negate any issues that could arise between  your spouse and your parents. Especially, if the two are not in agreement how to manage and handle your care. Similarly, having a will helps negate any issues over who should handle your estate and how should everything be distributed.

Married, twenty-somethings, with children. Again, all of the documents mentioned above are the bare minimums you should have at this point. Having a will when you have children is even more important because the will names Guardians for your children. If you and your spouse are both kill in a car crash, who is going to take care of your children? The will, naming guardians, will prevent the “battle of the in-laws”, over who should raise your children. A Living Trust is also a good document to consider.

 Thirty-Somethings:

Christina Lesher writes: Typically, this is the decade where you’ve purchased your first or second home, and may be well into starting a family. This is the age where you can begin to gather your financial information including assets, and even if you feel like you haven’t accumulated a large amount of assets, you still need to start planning your estate.

Bare Minimum: Wills, Healthcare Power of Attorneys, and Financial Powers of Attorneys.

At this stage in life, a thinking about a Trust is the best way to go.

Living trusts used by themselves or in conjunction with a will become really beneficial in safeguarding your family in the event you should become incapacitated. A trust is a legal device that states that your assets are transferred into the ownership of a designated trustee, who will manage those assets. You will have to determine a trustee and who will have the right to use the assets (beneficiary).  (Lesher).

Forties and Fifties:

Hopefully, by this stage in life you have some form of an estate plan. If not, then not only should you consider everything mentioned above, but you should also start considering long term care insurance and retirement planning.

Long Term Care Insurance is always something to look into and consider. If the situation arises where you or your spouse has to go into a nursing home, then long term care insurance can help with those hefty bills.

Planning for retirement is extremely important. You need to be able to plan on how to save for retirement and how those funds can be protected should something happen to you or your spouse. It is also important to constantly reevaluate who you have named as death beneficiaries on such policies. As life progresses, people change, and so do who they want their estate to go to.

 Sixties and Older:

At this stage in your life, you should just be focusing on how to refine and update your estate plan so that it suits your currents needs and wishes. Asset Protection planning to protect assets from nursing homes is also a good conversation to start having.

If you have no documents at this stage in your life, it is important to talk to an Estate Planning Attorney and get something together. Your family is going to grieve when you pass. Why make the process even harder because you did not plan well enough to handle your estate?

No matter your age, everyone needs an Estate Plan. Talk to an Attorney today.

 

 

No Spouse + No Children = No Estate Plan Necessary?

Every time someone finds out I am an Estate Planning Attorney, the very next question is “Is your estate plan completed?” When I answer, “Why, yes it is. I have a complete estate plan that suits my current needs and situation”, they look at me like I have lost my mind. “But, you’re not old, or married, or have kids, why do you have an estate plan now?”

EVERYBODY NEEDS AN ESTATE PLAN REGARDLESS OF AGE, MARTIAL STATUS, OR CHILDREN.

When you are married and/or have children, it is easy to assume how you estate will be distributed upon your passing. Normally, spouses leave everything to one another, the surviving spouse will be the sole guardian of any children, and any medical or financial authority will be given to the other spouse.

When you are unmarried and have no children, there is no easy assumption as to who the individual would grant medical or financial authority, nor as to where the estate will be distributed. Sure, you could assume parents and siblings would be the most likely candidates, but even that is far less of a given than a spouse or children.

This next statement holds true for any individual: If you do not specifically state who you intend to grant certain medical or financial authority in the case of incapacity, and you do not specify who should receive your estate, then how are your wishes to be followed? No one will even know them.

Picture this scenario: Minnie Millennial (MM) comes into my office to discuss estate planning. She is unmarried, no children, two dogs and a bird, owns a home, has one bank account, a car, and her closest family is six states away. Her father has passed, she has no contact with her mother, and only has a relationship with one of her four siblings.

If MM were to pass with no will or trust in place, she would be subject to her state’s intestacy laws. Most state’s intestacy laws would follow MM’s genealogical line and distribute her estate to those qualifying family members. Meaning, the mother and siblings with whom she has no contact, could receive a share from her estate.

In conjunction, the court would have to appoint a Personal Representative/Executor to oversee the estate. The named agent would most likely be a family member. Would MM really want her mother to be her personal representative? What about one of her estranged siblings?

What if MM wanted to leave money to a charity? What if MM had a partner who was living in her house? What If… What If … What If…

I can ramble on for a good while about all of the “What ifs” scenarios. Each ending will come to the same conclusion. No documents means the court has to essentially guess about MM’s wishes.

The idea that estate planning is for those who are married, have children, have a mortgage, who are wealthy, etc. etc., is just an excuse for individuals to continue procrastinating developing an estate plan.

Everybody needs, at minimum, a basic estate plan. Millennials especially. Do not let excuses dictate your actions. Do not put those you love in a predicament to have to battle with each other, and the court, for the ability to make decisions for you, or to deal with your estate.

 

Basic FYIs regarding a Special Needs Trust

The firm I work for frequently hosts what we call “Workshops”. They are seminars on various estate planning topics. Before each workshop we always ask the attendees, “What did you come here to learn more about?” The newest question asked at the last three or four workshops revolves around Special Needs Trusts.

So, what exactly is a Special Needs Trust (SNT)?

A Special Needs Trust is an estate planning tool that allows a parent, guardian, caregiver, or family member, to set aside funds and assets to be used for the care of a disabled person. These trusts are generally created so that the disabled person’s governmental benefits such as SSI or Medicaid are protected.

A lot of the time, having a Special Needs Trust established means the disabled person will still qualify for their government benefits, while having funds available to pay for things above basic care, like dental or eye care. It also could insure there is money in place to help pay for care if governmental benefits are cut back or extra services are needed.

Like other trusts, there are certain important details to be considered:

  1. What type of financial support would the disabled person need if I was no longer living?
  2. Where would the disabled person live if I was no longer living?
  3. Who would tend to the needs of disable child if I was no longer living?
  4. How can I protect the disabled person’s governmental benefits?
  5. Who would be in charge of the trust?
  6. What type of Special Needs Trust is best for the disabled person (ex. First party, third party, testamentary, etc.)
  7. What assets are going to pass to the disable person?

The list can go on and on.

A parent of a disabled child should meet with an experience estate planning attorney to assist with developing their estate plan. An experienced attorney will be able to evaluate your current plan, the goals for any share of your estate for the disabled child, best type of special needs trust, and other important factors.

DIY estate planning is never a good idea, but especially when dealing with a disable child.

For example, a disabled person receiving certain governmental benefits are required to meet a specific income level. If you DIY estate plan and leave a pay on death account to your disabled child, upon receiving that inheritance, they could be dropped from the governmental program because they no longer meet the income requirements.

Similarly, a common estate planning blunder many parents make is leaving their disabled child out of their estate plan altogether. They do this under the belief that by not including the disabled child, they are protecting the governmental benefits, and their other children will use their shares to continue to assist the disabled person. This is extremely flawed logic. Once a person receives an inheritance, it is theirs to dispose of however they please.

A Special Needs Trust alleviates all kinds of issues that could come up down the road. It grants the parents peace of mind to know that when they are no longer able to care for their child, there is a plan in place to care for them.

Each case is different. Each Special Needs Trust developed with be different. If you are the parent, guardian, caregiver, or relative of a disabled person, talk to an estate planning attorney today about a Special Needs Trust.

“Thieves in the Temple”: Prince dies Intestate

Music icon Prince died on April 21, 2016. Reports indicate his estate is worth between $100-$300 million dollars, and growing. A little more than a month has passed since Prince’s death and the hot topic is that Prince  had no estate plan.

No Trust, No Will, Nada. Therefore, his entire estate is going to be probated by the Minnesota probate court. And it could take years and possible millions to probate.

As mentioned several times, over in previous posts, when a person dies with no estate plan, they are considered to have died intestate. Each state has intestacy laws that allow the state’s probate court to probate and administer the estate. Intestacy laws are basically a state’s way of speculating who a person would have selected to inherit their estate.

Prince had no spouse nor children. Both of his parents are deceased. So, his heirs are his six (6) siblings. One (1) full sibling and five (5) half siblings. In Minnesota, half siblings are entitled an equal share of an estate, just like full siblings. Therefore, Prince’s estate could be split in six (6) equal parts.

Now, on the surface this does not seem like a major issue. Prince had six (6) siblings, surely he would have left them something in his will, right? Well, maybe. I have yet to see a report indicating he had intentions to disinherit any of this siblings. BUT, if he did intend to disinherit any of them, with no estate planning documents, those intentions are lost. Similarly, any intention to leave money to charities, churches, friends, etc. are also lost.

Recent articles have surfaced detailing that Prince was devout in his religion and would have wanted to leave something to his church. Others speculated there were several charities he would have wanted to share in his estate.

Moreover, Prince’s entire “musical catalog” is now under the control of the named estate administrator, including several unreleased songs. The lack of an estate plan means no one knows if those unreleased songs are supposed to stay private or be released. Furthermore, the fate of the rest of his music now rests with the estate administrator.

What is known is the Minnesota probate court is going to have a long and probably complicated road ahead trying to administer this estate.

What many fail to understand is estate planning is vital for anyone with assets. Only you know where you wish your estate to be distributed. Do you want to disinherit a child? You need to have it in writing. Do you want to leave money to a charity? You need to have it in writing. Do you want to have money set aside for a niece, nephew, grandchild, etc. in a trust? You need to have it in writing.

A lack of an estate plan means your estate is open to the public, anyone who believes they should inherit can make a claim, and it will cost your heirs time and money in court battles and attorneys fees.

Keep the “thieves out of the temple” by creating an estate plan.

 

Benefits of Separate Share Trusts

In the past month and a half I have noticed an increase in prospective clients wanting to know more about protecting assets for a child/beneficiary who has one or combination of the following issues: financial, medical, addiction, or spousal.

When developing an estate plan, it is paramount you understand how distributions work and what that means for your potential beneficiaries.

For example, a married couple has two children. One child is capable of managing their assets, has a job, no financial issues, and supports their family. The other child, however, is an alcoholic or an addict, cannot keep a steady job, and is in financial trouble. The first child would have no issues receiving a sum of money from an estate, whereas, the second child would have some major issues.

For instance, if the second child was an alcoholic and received a sum of $10,000.00, how long would it take the second child to drink up the entire inheritance? Would they survive having that much money to spend on their addiction?

Or what if the second child had a judgment against them or owed creditors money? The inheritance would be gone as soon as they received it in order to settle the debts.

Is that really what the clients would want for their estate? For it to be spent enabling their child’s addiction or to be used completely to pay for creditors? For most, the answer is no. The intention is for any inheritance to be used for the benefit of the child, not to settle debts or feed an addiction.

One prospective client made the comment, “I never expected to have to worry about my adult child inheriting my estate.”

One sure fire way to guarantee an inheritance is used for the benefit of the child/beneficiary is through a separate share trust. A separate share trust can be included in any revocable living trust plan or be drafted into your will.

If the separate share trusts are included in a revocable trust, they come into being after the grantor(s) have passed. Instead of the trust being distributed outright to the named beneficiaries, any designated share would be moved to the specified separate share trust and managed for the beneficiary.

Similarly, a separate trust included in a will comes into existence after the estate and will have been probated. Instead of an heir receiving a distribution, the separate share trusts are created and managed for the beneficiary.

Separate share trusts mean the assets are never transferred into the name of the beneficiary. By the assets remaining in trust, creditors cannot reach the assets to settle the beneficiaries debts. If the beneficiary were to go through a divorce, the inheritance would not be a part of the marital estate. If the beneficiary was struggling with addiction, the separate trust could specify the amount the beneficiary was allowed to receive per month, specify the beneficiary could use any amount necessary for  rehabilitation, specify upon proof of sobriety for a certain period of time would allow an increase in the distribution, etc.

The beauty of a separate share trust is they can be tailored to the specific issues and needs of the beneficiary. Whereas, if the beneficiary were to receive an outright distribution, there is no control over how the inheritance is used.

This is the number one reason why it is important to update your estate plan and talk to an experience estate planning attorney. Life happens. People’s situations change as years go by and it is vital that you make sure your estate plan is equipped to handle the circumstances of your children/beneficiaries.

Separate share trusts are an extremely useful tool to have in your estate planning toolbox. Talk to an estate planning attorney today to learn more about separate share trusts and whether or not they are right for you and your estate.