The strangest wills of all time

Posted March 9, 2016 in Estate Planning by Michael Lonich.

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March 9, 2016
The strangest wills of all time
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The Huffington Post recently compiled a list of 7 of the weirdest, but very real, wills of all time. Although some are foreign wills, the article serves to remind us that wills are a powerful tool. Creating a will allows us to control the disposition of our property, and fulfill some last wishes.

1.       The Original “P.S. I love you”

Comedian Jack Benny left a provision in his will instructing a local florist to deliver a red rose to his wife every day for the rest of her life.

2.       A Dog’s Life

Businesswoman, Leona Helmsley, left her dog “Trouble” 12 million to inherit. (Although a judge later reportedly reduced the inheritance to 2 million)

3.       The Talking dead

Magician, Harry Houdini’s, last wishes included a request for his wife to hold a mini séance every year on the anniversary of his death. Houdini had promised to contact his wife after death and they even agreed upon a phrase that he would say as confirmation that it was him really speaking. His wife, however, quit the séances a decade after his death.

4.       The unhappy husband

German poet, Heinrich Heine’s wife was set to inherit all his assets upon the fulfillment of one condition, she had to remarry. His will reportedly read, “because, then there will be at least one man to regret my death.”

5.       The Stork Derby

Toronto businessman, Charles Miller’s, left his fortune to the married woman in Toronto who could birth the most children in the decade following his death. The stork derby, as the race for the fortune later became labeled, eventually led to a 4 woman tie, each producing 9 children.

6.       The unfitting funeral

Writer, F. Scott Fitzgerald, initially wrote in his will that his funeral should be “suitable” and “in keeping with my station in life.” However, by the time he died, Fitzgerald had changed his will to say it should be the “cheapest” funeral because Fitzgerald had gone into debt.

7.       Controlling from the grave

Real estate millionaire, Maurice Laboz, who died in 2015 left his nearly $40 million estate to his 2 daughters. His daughters are set to receive the inheritance at 35, but can receive bonuses before, if they adhere to certain rules. For example:

1)      Daughter, Marlena, will receive 500,000 upon marrying, but only if her husband signs a sworn statement promising to not touch the money

2)      Marlena will receive another 750,000 if she graduates from an accredit university and writes an essay “100 words or less describing what she intends to with the funds”

Source: http://www.huffingtonpost.com/entry/7-of-the-most-unusual-wills-of-all-time_us_55fb0059e4b0fde8b0cd5bc5?utm_hp_

If you would like to learn more about wills or avoiding probate in general, call Lonich & Patton to schedule a free half-hour consultation. Our attorneys are passionate about estate planning and have decades of experience handling complex estate planning matters, including wills and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich & Patton for further information.

 

 

 

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How to protect your assets, even if you didn’t win the billion dollar powerball

Posted January 25, 2016 in Estate Planning, Probate by Michael Lonich.

After the historical $1.5 billion jackpot was finally won, it is time for many of us to consider how to protect our assets during our lifetime and after. Although winning the lottery may not be something we will experience, many of us do have valuable assets that we would like to protect when we are gone.  Therefore, this year it might be time to give your estate plan a review.

An important tool in estate planning to consider is the living trust (also called a revocable living trust). In its simplest form, a living trust is a written agreement which sets forth what happens to your assets in the event of your death.  One of the greatest advantages of a living trust is that it protects your estate from the probate process, which can be time consuming and expensive. And while a living trust is primarily used as a convenient and efficient way to distribute your assets upon death, you still maintain control over all your assets during your lifetime. Therefore you can alter, add or revoke the living trust at any time for any reason.

In many situations, a trust is the best way to achieve your goals. With a trust you can:

  • Avoid probate
  • Provide for your care should you no longer be able to handle your own affairs
  • Provide for children from a previous marriage
  • Hold money for minors and ensure they cannot spend it all the minute they come of age
  • Protect assets from creditors and former spouses
  • Benefit family and charity through one mean

Probate, on the other hand, is the process the court utilizes to manage the affairs of a decedent’s estate. In contrast to a living trust, the probate process, in most metropolitan areas in California, can take about 6- 18 months. This delay creates additional expenses that can consume 3% to 6% or more of the gross value of the probate estate.

At Lonich & Patton, our estate planning attorneys don’t believe in offering services that are “one size fits all.” We understand that each family has particular needs and concerns, and we can customize our estate planning services to meet these specific needs and ensure that your long term wishes are carried out. If you are interested in nonprobate transfers or have any questions regarding your current estate plan, please contact the experienced estate planning attorneys at Lonich & Patton for further information. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters, including nonprobate transfers, and we are happy to offer you a free consultation. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Source:

http://www.forbes.com/sites/deborahljacobs/2012/01/04/make-a-new-years-resolution-to-give-your-estate-plan-a-checkup-2/#2715e4857a0b7be8584f7cf0

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Important Estate Tax Figure for 2016

Posted January 21, 2016 in Estate Planning by Michael Lonich.

For 2016, the federal estate tax exemption has increased to $5.45 million per individual, up from $5.43 million in 2015.

The estate tax is a tax on the value of your estate which exceeds the estate tax exemption. Your estate consists of the fair market value of everything you own or have interest in at the time of your death. The total of all of these items is your “Gross estate.” Once your Gross estate is accounted for, certain deductions are allowed and thus your “taxable estate” is determined.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit.

Many relatively simple estates do not require the filing of an estate tax return, however you should consult with an estate attorney. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $5.45 for 2016.

 

Estate Tax 2016 2015
Federal estate tax exemption $5.45 million $5.43 million
Maximum estate tax rate 40% 40%
Annual Gift Exclusion 2016 2015
Amount you can give each recipient $14,000 $14,000

 

Estate planning is a highly complex area of law. If you are interested in creating a trust for your family business or have any questions regarding your current estate plan, please contact the experienced estate planning attorneys at Lonich & Patton for further information. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters, including family business trusts, and we are happy to offer you a free consultation. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Sources:

IRS 2016 tax: https://www.irs.gov/pub/irs-drop/rp-15-53.pdf

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Whats-New-Estate-and-Gift-Tax

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-Tax

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Have You Heard of Digital Estate Planning?

Posted November 3, 2015 in Estate Planning by Jennifer Mispagel.

In today’s increasingly technological world, leaving your digital accounts out of your estate plan can prove to be a big mistake. As of 2014, 84 percent of American adults own a personal computer and 64 percent own a smartphone.[1] As of June 2015, there were approximately 1.49 billion Facebook users, 300 million Instagram users, hundreds of thousands of videos uploaded on YouTube each day, and over 6 billion photos on Flickr.[2] Given the user increase, more and more people are challenged with administering a loved one’s digital assets.

Digital assets can include files stored on digital devices, email accounts, digital music, digital photographs, digital videos, social network accounts, file sharing accounts, online stores, and software licenses.[3] The entirety of these digital assets forms an individual’s digital estate. Due to the role technology has in today’s world, the deposition of digital assets has become a major issue in estate planning.

One of the biggest concerns necessitating digital estate planning is the emotional value of social network accounts. For example, in 2005 a dispute arose in which a mother, Karen Williams, turned to her twenty-two year old son’s Facebook account after his sudden death in hopes of learning more about him.[4] Ms. Williams found her son’s password and emailed the Facebook administrators, asking them to maintain her son’s account so she could look through his posts. However, within two hours, her son’s password was changed, essentially locking her out of the account. It was not until she filed a lawsuit that Facebook granted her ten months of access to her son’s account and after this period, his profile was removed.

With careful digital estate planning, situations like Ms. Williams’ are less likely to occur. Digital estate planning can also serve a variety of purposes aside from the emotional value. It can make things easier on executors and family members, it can prevent identity theft, it can prevent financial losses to the estate, and it can prevent unwanted secrets from being discovered.[5] However, the current state of the law is uncertain and changing in regards to digital estate planning. Currently, federal law addresses privacy concerns and regulates the unauthorized access of digital assets under the Stored Communications Act and the Computer Fraud and Abuse Act, which can create limitations for those attempting to plan for their digital assets. But recently, the Uniform Fiduciary Access to Digital Assets Act (UFADAA) was created and nearly half of U.S. states have introduced legislation this year to enact the Act.[6]  The UFADAA is an inclusive law that would remove obstacles that prevent fiduciary access to digital assets and would also give access to a wide range of digital assets. In California, a bill has been introduced known as Assembly Bill 691 or the Privacy Expectation Afterlife and Choices Act (PEAC). PEAC would deny relatives access to electronic information of their loved one, unless the court finds that the person had previously agreed to pass them onto a fiduciary. This bill was unanimously passed by the House of Representatives and as of September 10, 2015, it was sent to the Senate floor with the instruction that it not be voted on until January 2016 in order for further negotiation among parties and amendment.[7]

Our daily lives have changed from sending letters and keeping photo albums to emailing and using social networking accounts. While the state of the law is uncertain, technological use increases each day, emphasizing the importance of digital estate planning to carry out an individual’s wishes.

Estate planning is a highly complex area of law. If you are interested in digital estate planning or have any questions regarding your current estate plan, please contact the experienced estate planning attorneys at Lonich & Patton for further information. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters, including nonprobate transfers, and we are happy to offer you a free consultation. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

 



[1] Michael Rosen-Prinz, The Uncertain Future of Estate Planning for Digital Assets in California, 21 Cal. Trusts and Estates Quarterly 37 (2015).

[2] Number of Monthly Active Facebook Users Worldwide as of 2nd Quarter 2015, STATISTA, http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/.

[3] Evan Carroll, Sample Will and Power of Attorney Language for Digital Assets, THE DIGITAL BEYOND, http://www.thedigitalbeyond.com/sample-language/.

[4] Karen Williams’ Facebook Saga Raises Question of Whether Users’ Profiles Are Part of ‘Digital Estates’, HUFF POST TECH (Mar. 15, 2012, 5:57 PM), http://www.huffingtonpost.com/2012/03/15/karen-williams-facebook_n_1349128.html.

[5] Gerry W. Beyer, Web Meets The Will: Estate Planning for Digital Assets, 42 Est. Pln. 28 (2015).

[6] States Struggle to Adopt Uniform Access to Digital Assets Act, ARMA INTERNATIONAL,  http://www.arma.org/r1/news/washington-policy-brief/2015/04/08/states-struggle-to-adopt-uniform-access-to-digital-assets-act.

[7] Michael Rosen-Prinz, The Uncertain Future of Estate Planning for Digital Assets in California, 21 Cal. Trusts and Estates Quarterly 43 (2015).

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The Many Forms of Nonprobate Transfers

Posted October 7, 2015 in Estate Planning by Michael Lonich.

Many Americans, even those with children, die without a will. State intestacy laws may provide a framework for how a decedent’s asset should be divided amongst his or her heirs. However, many know that it might be wise to avoid the probate process because it ties up property for months and it can be very costly.[1] There are other processes in place for transferring remaining assets after death. In California, there are several options to transfer assets without probate administration.

Here are a few of these options for transferring assets at death, while avoiding probate: 1) joint tenancy, 2) community property with right of survivorship, and 3) California Probate Code Section 13100 et seq.

  • Joint Tenancy
    • Pros
      • Joint tenancy has a right of survivorship.
      • Each joint tenant owns an identical percentage of the entire asset.
      • Clearing the title to a joint tenancy upon the death of a joint tenant is often a straightforward process.
      • Joint tenancy may be severed unilaterally.
    • Cons
      • The new joint tenants will have the power to manage the asset along with the original owner, which may not be the intention of the original title owner.
      • The transfer may have gift tax consequences.
  • Community Property with Right of Survivorship[2]
    • Pros
      • Real or personal property may be owned by a married couple as community property, but with the survivorship features of an asset held in joint tenancy.
      • Community property with right of survivorship is normally more favorable than joint tenancy ownership since both the decedent’s and the survivor’s half of the asset receive a basis adjustment equivalent to the fair market value of the asset at the death of the first person to die. When the surviving spouse dies later still holding the asset, the basis will receive another adjustment to the fair market value.
      • A spouse can establish an account that provides for a nonprobate transfer at the spouse’s death to a non-spouse beneficiary.
      • There is no gift tax consequence.
    • Cons
      • A spouse may be able to act alone to revoke the right of survivorship.
  • Probate Code Section 13100 et seq.
    • Pros
      • If the total gross value of the decedent’s real and personal property in California does not exceed the amount of $150,000, the decedent’s personal property may be conveyed by affidavit or declaration pursuant to Probate Code Section 13100 et seq. and no court involvement will be required.
    • Cons
      • Probate Code Section 13100 et seq. is only available if no probate proceeding will be commenced for the decedent’s estate or the personal representative of the decedent’s estate consents in writing to the transfer of property through this method.
      • May not be used to transfer real property, regardless of the value of real property.

These are only a few of the methods to avoid probate administration of a decedent’s estate. In planning for nonprobate transfers, individuals should be aware of the pros and cons of their options and anticipate which option works best for their needs. Individual should also be aware of issues regarding liquidity and the intended beneficiaries. Even so, many can benefit from the use of the various nonprobate transfers.

Estate planning is a highly complex area of law. If you are interested in nonprobate transfers or have any questions regarding your current estate plan, please contact the experienced estate planning attorneys at Lonich & Patton for further information. The attorneys at Lonich & Patton have decades of experience handling complex estate planning matters, including nonprobate transfers, and we are happy to offer you a free consultation. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.



[1] http://www.nolo.com/legal-encyclopedia/why-avoid-probate-29861.html

[2] Cal. Civ. Code 
§ 682.1

[3] California Trust and Estates Quarterly (2014)

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