Aug 12, 2018

Anthony Bourdain not yet divorced when he died, potentially complicating estate plan

Anthony Bourdain's estranged wife, Ottavia Busia, filed his will in New York Surrogate Court in July. The celebrity chef committed suicide in June, while on a film shoot in France. He was 61.

Busia and Bourdain married in 2007 and had a daughter, Ariane. According to Bourdain, their relationship was always amicable, but they effectively led separate lives. They officially separated in 2016 and were in the process of divorcing when Bourdain died - and therein is a potential problem for Bourdain's estate. Because Busia was still officially his spouse, she may be entitled to more than he left her under his will. Litigation is a possibility.

Busia is the executor of his will. Bourdain appears to have had about $1.2M in assets at the time of his death. This includes $425,000 in cash and savings, $500,000 in intangibles such as royalties and residuals from his books and television show, $35,000 in brokerage accounts, and $250,000 in personal property. 

Bourdain left the bulk of his assets to his daughter. The will also calls for the creation of a trust for her benefit. She is to receive a distribution at age 25, another distribution at 30, and the rest of the money will be released to her age 35. Distributing the money through the trust prevents Ariane from receiving her  inheritance in full at age 18, when she may not yet be mature enough to properly handle finances.

Aug 3, 2018

New 1040 Tax Form: Really Simpler?

In keeping with the administration’s vow to simplify tax filing, the Internal Revenue Service is putting finishing touches on its revised 1040 income tax form. The new form has been touted as postcard-sized, and is to replace the current 1040,1040A and 1040EZ forms. About three-quarters of taxpayers currently use one of those three forms.

So does the new form ease taxpayers' burden? Maybe, depending on who you are. Although not quite as small as a postcard, the new form has only 23 lines, down from the 79 lines of the current one. Because the new tax law roughly doubles the standard deduction, many taxpayers will not bother to itemize. For them, the new form will be simpler.

Others will not find the new form much simpler. For example:
  • The 19 million taxpayers who according to the Tax Policy Center will continue to itemize, will still need to complete one or more of six associated tax schedules. 
  • The form has space for five forms of income: wages, salaries, tips, etc;  interest; dividends; pensions, IRAs, annuities; and Social Security. If you have other types of income - for example, business income or capital gains income - you too will need to fill out additional schedules. 
  • According to a recent article in Inc, some very common tax strategies will also require completion of additional tax schedules - for example, reporting retirement savings contribution credits.

You can read more about the new form in this article in the Wall Street Journal.

Jul 24, 2018

CHRONIC Act expands coverage for Medicare Advantage enrollees with chronic illnesses

Beginning in 2020, people enrolled in Medicare Advantage plans who have chronic illnesses will be covered for certain supplies and services not previously covered. Examples include bathroom grab bars and wheelchair ramps; and services such as home meal delivery, at-home visits from personal assistants and pharmacists, and transportation to/from doctors' visits. Medicare Advantage plans currently serve about one third of Medicare’s 60 million beneficiaries.

Those with chronic conditions such as rheumatoid arthritis, stroke, heart disease, diabetes, Alzheimer's and Parkinson’s will benefit. The AARP reports that more than two thirds of current Medicare beneficiaries have multiple chronic conditions. These individuals account for 75% of all Medicare spending, according to Kenneth E. Thorpe, chairman of Emory University's health policy department. 

The new policy arises from the passage earlier this year of the CHRONIC Act (“Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care"). The law received bipartisan support. Its proponents anticipate that covering these services and supplies will result in better patient outcomes and save Medicare money in the long run. 

The new law also expands coverage for telehealth services, in recognition that those with one or more chronic conditions often face obstacles to traveling for medical care and are often better off staying away from the doctor's office if they have a compromised immune system. The new law will also expand telehealth services for anyone experiencing symptoms of stroke, covering the cost of a neurologist to remotely review CT scan images and recommend treatments, including the use of highly effective clot-busting drugs. 

The Department of Health and Human Services is currently working out the details for the program.You can read the CHRONIC legislation here.

Jul 21, 2018

Can You Bequeath (Or Inherit) Airline Rewards Points?

Many of our clients are frequent travelers who have accumulated significant reward points with one or more airlines. Naturally, they would like any miles that remain in their accounts at their deaths to go to loved ones.

This topic has generated increased interest this past month, following the death of Anthony Bourdain. The globe-trotting celebrity chef mentioned his airline miles in his will, requesting that his ex-wife Ottavia “dispose of them in accordance with what she believes to have been my wishes.”

This approach may work for Bourdain – after all, no airline would want negative publicity arising from refusing to honor a celebrity's wishes. But for the rest of us, it's not so simple, and bequeathing miles to loved ones in an estate plan is not a workable approach. That is because your rewards account is a contract specifically between you and the airline. It is the airline's policy that determines if, when and how miles can be left to others.

When it comes to planning to leave miles to loved ones, there is no getting around it: You will need to do your homework! Read the fine print on the airline's web site. Call customer service, too, as our clients often report there is some "wiggle room" between what the web site says and what customer service is prepared to do. Document everything you are told.

The same goes for survivors of someone who held an account: Call customer service to see if those miles can be salvaged. Some airlines may comply, regardless of written policies, after requesting certain documentation from you.

Here are the current policies of two major airlines servicing our South Florida area: 

Delta Sky Miles Program

Miles are not transferable. The website says: Restrictions on Transfer: Miles are not the property of any Member. Except as specifically authorized in the Membership Guide and Program Rules or otherwise in writing by an officer of Delta, miles may not be sold, attached, seized, levied upon, pledged, or transferred under any circumstances, including, without limitation, by operation of law, upon death, or in connection with any domestic relations dispute and/or legal proceeding.
Jet Blue True Blue Program

Jet Blue has a "family pooling program" that allows family members to transfer points to one another. But when an account holder passes away, the points die with the holder. The Jet Blue web site says:  Accrued Points and Award Travel do not constitute property of Member and are non-transferable (i) upon death, (ii) as part of a domestic relations matter, or (iii) otherwise. 

Also, remember to check back with the airline from time to time. Airline policies can change over time... sometimes in your favor. Good luck.

Jul 3, 2018

Houston, We Have A Problem

Houston, we have a problem.

Nearly 50 years after becoming the second man to walk on the moon, Buzz Aldrin is undertaking a more earthly mission: fighting guardianship proceedings  to stay in control of his own affairs.

In May, two of Aldrin’s three children asked a Florida court to grant them guardianship over their father so they can manage his financial affairs and make other decisions for him.  Andrew Aldrin, 60, and Janice Aldrin, 51, claim that their 88-year-old father, now a Satellite Beach resident, has Alzheimer’s Disease and is being manipulated by others and spending money at an alarming rate.

The Apollo 11 pilot is having none of it. On June 7 the he filed a lawsuit against his children and his business manager, Christina Korp.  “Nobody is going to come close to thinking I should be under a guardianship,” he told The Wall Street Journal. Aldrin requested an evaluation from James Spar, a geriatric psychiatrist at UCLA. According to Spar, Aldrin scored normal to superior on tests of cognitive ability. Spar concluded that Aldrin is "...substantially able to manage his  finances and resist fraud and undue influence."

Aldrin's lawsuit is multifaceted. It accuses his son, daughter and business manager  with elder exploitation and misuse of funds. He claims that Andrew, who is involved with his businesses and nonprofit ventures, has stolen half a million dollars from him and used his credit card without authorization. He alleges that Janice has failed to perform her fiduciary duties. The lawsuit also accuses Andrew and Korp of seizing control of millions of dollars of Aldrin's "space memorabilia" and "space artifacts." Aldrin claims Korp has been taking, without his knowledge, a 5% commission on all the speaking engagements she has booked for him.

Aldrin claims all three have slandered him and his legacy by telling people that he has dementia in order to "...gain further control over Plaintiff's personal relationships, business contacts and assets." He says that his children have taken his passport away from him, and undermined his romantic relationships by forbidding him to remarry. Aldrin is thrice divorced.

Janice and Andrew deny their father's allegations and have pushed back. Through their lawyer, they issued this statement: "We are deeply disappointed and saddened by the unjustified lawsuit that has been brought against us individually and against the Foundation that we have built together as a family to carry on Dad's legacy for generations to come." Interviewed on Good Morning America about the situation, Aldrin called it "the saddest thing that has ever happened in my family." Watch the interview here

Aldrin was scheduled for another mental health evaluation on June 26 and 27. At this writing, the results are not yet known. Aldrin says he expects to pass with "flying colors" - an appropriate boast from the former air force colonel who flew to the moon and back. Aldrin remains an outspoken advocate for travel to Mars. In June he occupied a front-row seat when the president announced the formation of the Space Force, the sixth official branch of the military. 

Remember, you don't need to be an astronaut to find yourself the subject of a guardianship. Your best defense doesn't require a visit to the moon - just a consultation with a competent estate planning attorney.

Jun 27, 2018

Be Your Own Superhero: Protect Yourself From Financial Predators

Spider Man. Ant Man. The Fantastic Four. The Hulk. These comic book superheroes sprang from Stan Lee's imagination and made their creator a wealthy man. But at 95, the Marvel mogul's own powers appear diminished, potentially putting him and his estimated $50-$70 million fortune in jeopardy.

No superhero is swooping in to save Lee - but there is Tom Lallas, Lee's former estate planning attorney. Lallas recently filed a petition with a Los Angeles court alleging that Lee is being abused by his business partner, Keay Morgan. Lee reportedly has hearing, visual and possibly cognitive impairments. The court issued a temporary restraining order against Morgan on June 13 and appointed Lallas as Lee's legal guardian, pending further investigation.

Morgan deals in artifacts related to cultural figures, particularly Marilyn Monroe and Michael Jackson. He met Lee years ago through Lee's daughter and only child, J.C. Both Lee and his wife Joanie have had a combative relationship with their daughter, with disputes often revolving around money (more on that later). When Joanie passed away in July 2017, Morgan stepped in as Lee's caregiver. According to the court filing, Morgan began isolating Lee.  He fired Lallas and other longtime staff members, including the housekeeper and  gardener. He replaced Lee's accountant with his own friend. He changed Lee's phone number and refused to allow family and friends to visit. He also moved Lee out of his longtime family home and into a condo.

The Los Angeles police are currently investigating the matter. It is far from clear-cut; Lee himself has defended Morgan's behavior. On one Twitter post he wrote: "I just want to go on the record and say I have only one partner, only one person who does represent me, and that's Keay Morgan. Anybody else who claims to be my rep is just making that story up." Whether that post was actually written by Lee is not known.

Daughter J.C. is now 67. According to an  April 10, 2018 story in The Hollywood Reporter, she has never been self-supporting and relies on funds from the trust her parents established for her. A prodigious spender who reportedly blows through $20,000 to $40,000 every month, she nonetheless resents the trust's financial restrictions and has been known to take out her frustration on her parents. The family housekeeper recalled that J.C. would phone her father several times a day to berate him about money, leaving Lee hoarse and agitated from fighting with her. At one point he allegedly said he would cut her off completely. Another individual familiar with the family relates that in 2014, J.C. became infuriated when she learned that a new Jaguar parked in her parents' driveway was a leased vehicle in her father's name, and not a gift for her. She physically attacked her mother and father. The Lees did not press charges out of concern about negative publicity and the impact on their daughter. 

Legal Steps You Can Take To Protect Yourself From Financial Predators

Regular readers of this blog will recognize that this situation is not an outlier. Elder financial abuse is becoming increasingly common as Baby Boomers age. Numerous initiatives continue to be taken at both the state and federal levels to protect seniors and to encourage reporting of potential abuse. One recent step in that direction is the federal Senior Safe Act, which you can read about here. 

You can also take your own proactive steps to protect yourself and your assets from financial predation. We often recommend establishing a Predator Protection Trust for clients who are concerned that as they grow older, their adult children or others may try to take advantage of them financially. It is an unfortunate fact of life that it is family members - the ones we should be able to trust the most - from whom we most need protection.

How The Predator Protection Trust Works

A Predator Protection Trust is an irrevocable trust in which you specify how the trustee may expend funds on your behalf. This gives you, the grantor of the trust, the ability to establish a trust for your benefit and anyone else you desire, and put someone else in charge. Then, when demands are placed on you for money - usually from a "loved one" - you can respond that you cannot meet those demands because you have no authority to give money away. 

You may appoint one or more trustees.  Some clients select a financial institution, or their accountant or lawyer as co-trustee along with a family member. 

Here's a case I had that illustrates the value of this kind of trust. My client complained about a conniving granddaughter who was constantly bullying her and demanding money. She had given in to the badgering many times. My client was exhausted from the battle, and was increasingly worried about her own financial welfare. We solved my client's problem by setting up a Predator Protection Trust for her. I then followed up by sending a letter to the client's granddaughter, and to all her grandchildren and children, indicating that the client no longer had control of any of her assets under her new irrevocable trust and therefore would no longer be able to gift any assets to them. I explained that although my client presently had full competency and capacity, she recognized that she could lose capacity in her declining years and become vulnerable to financial manipulation. The Predator Protection Trust provided my client with peace of mind because she now knew her assets were kept safe for her use, and that her loved ones' inheritances were also secure.

Contact our office at 561-625-1100 to discuss establishing a Predator Protection Trust.

Jun 9, 2018

Estate Planning When Your Beneficiary Has A Drug Problem: The Sad Story Of Matthew Mellon

Do you have a beneficiary with a drug problem? You are not alone. The Federal Reserve's Report on the Well-Being of American Households in 2017 reveals that one in five Americans knows someone who is addicted to opioids or prescription painkillers. That’s doesn’t even include all the other available habit-forming drugs.

If you have a loved one with a substance abuse problem and want to include that person in your estate plan, proceed with caution. Consult with an experienced estate planning attorney to explore the best approach. Inheriting a large sum of money can be detrimental to your loved one's health. The recent death of Matthew Mellon, scion of the banking dynasty, illustrates this sad point.

A South Florida native, Mellon was raised in Delray Beach by his mother and stepfather. Mellon was diagnosed with bipolar disorder, and his substance abuse problems emerged while he was still in school. He was in and out of rehab facilities from an early age. Nevertheless, in 1998, the 21-year-old inherited $25 million from one of 14 trusts under which he was a named beneficiary. Subsequent events demonstrate that for someone like Mellon, having that kind of money can be a curse, not a blessing.

Mellon met his first wife at a Narcotics Anonymous meeting in London. They had one daughter. In 2015, Mellon married again and had two more children. The drug problems were ever-present. In a 2016 interview with the New York Post, Mellon said that at one point his oxycontin habit was costing him $100,000 every month. And he could afford it. He was living in luxury at a swank New York hotel and he was rich - and in fact, about to become even richer as a result of his timely investment in cryptocurrency. Thanks to that investment, Mellon went from being a mere multi-millionaire to being a bitcoin billionaire.

In April 2018, with his second marriage failed, Mellon headed to a rehab facility in Mexico. Upon arrival in Mexico, he did not go directly to the facility. Instead, he checked into a hotel, and was later found dead in his hotel room. His death was attributed to ingestion of ayahuasca, a hallucinogenic.

Mellon's estate is now in probate. According to reports, the estate consists almost entirely of cryptocurrency, whose value is rapidly declining. Estate administrators are eager to sell off the assets before they decline further. Given all the circumstances, I suspect we will hear much more as the probate process goes on. Mellon left behind a fortune, albeit a greatly reduced one, and three children from two wives. If the way he planned for death in any way resembles the way he lived, the family may have a legal mess on its hands.

If you have a loved one like Matthew Mellon, even if you don't have a lot of money, it's critical to get your estate planning right to protect your peace of mind, protect your family, and protect your loved one from himself/herself. The Karp Law Firm's attorneys have helped many families facing this dilemma. Contact us for advice by phoning 561-625-1100 or emailing us here.

Jun 4, 2018

Hear Kim Campbell talk about her Alzheimer's journey, June 12 in West Palm Beach

Our law firm is co-sponsoring this wonderful event on June 12!

May 16, 2018

Estate Battle Continues Between Alan Thicke's Wife, Children

Blended family? Better pay close attention to your estate planning! Inheritance conflicts between stepparents and grown stepchildren are all too common. And since women tend to outlive men, it’s usually the stepmother at the center of the controversy. In his book, The Wolf At The Door: Undue Influence and Elder Financial Abuse, California attorney Michael Hackford notes that half of his probate litigation cases involve stepmothers and stepchildren. 

Over the years I’ve written about many such conflicts. Here’s an update on one: The estate of Alan Thicke, singer and star of TV's Growing Pains.  You can read my original blog post here.

Thicke died suddenly in 2016, leaving behind his third wife, Tanya Callau, and children from prior marriages. His trust named his two sons from a prior marriage, Robin and Brennan, as co-trustees. The children were to inherit the California ranch he and Callau lived on, but she would get to remain there so long as she maintained the property. His children would get over half of the remaining estate, while Callau would get the furnishings, her late husband's pensions and union death benefits,  half a million dollars in life insurance, and 40% of the remaining estate.

Without Thicke to hold the family together, and with co-trustees Robin and Brennan holding the purse strings, things started going off the legal rails almost immediately. As I noted in my prior blog post, Callau questioned the prenuptial she'd signed previously, alleging it did not properly distinguish between personal property and community property. Robin and Brennan went to court to block her right to challenge the prenup, but lost that legal battle last year.

More recently Callau filed papers accusing her stepsons of violating their fiduciary duties. She claims they are spending the estate assets recklessly, denying her her inheritance, not keeping her informed, and that she is being charged for taxes and other expenses that are not her responsibility. Among her specific complaints is that Thicke's sons refused to reimburse her for the cost of the monument she selected for her late husband's gravesite. This particularly irked her because his sons reportedly threw a pre-funeral memorial party for their father -- to the tune of $105,000. 

Callau's attorney, Adam Streisand, says: "America's dad would would be ashamed of his own sons who disgrace their father's legacy out of greed and resentment against the woman whose only crime was loving her husband with everything she had... the fact that Tanya still hasn't received her inheritance is unconscionable." 

No doubt more legal fireworks are ahead. If you are planning your estate and you too have a "blended family," remember that you may be more responsible than you realize for the peace in your family. When you're gone and money is at stake, relationships can suffer, so it's vital to make sure every "i" is dotted and every "t" is crossed in your estate plan. The Karp Law Firm attorneys can help.

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