Turmoil in Aretha Franklin Estate: She Did Have A Will, After All - Three of Them

Our prior post of August 2018 is titled, Aretha Franklin, Queen of Soul, Dies Intestate. Now it turns out that the "intestate" part may not be true. Three handwritten wills were found in Franklin's suburban Detroit home recently. This development may well complicate matters, not clarify them.

The wills were discovered by the estate executor, Sabina Owens. Two were found in a locked cabinet. One dated March 2010 is 11 pages long. In it Franklin mentions the mass on her pancreas (she ultimately died of pancreatic cancer). The second will is dated June 2010. The third will, found scribbled in a spiral notebook and hidden under a couch cushion in the living room, is the most recent, dated March 2014. It is four pages long and particularly difficult to decipher, with multiple crossouts, additions, and notes in the margins. The provisions in the three wills have some similarities as well as differences.


Michigan recognizes handwritten (holographic) wills. The three documents have been turned over to the court, which will determine if any of the wills is valid and can be admitted to probate. According to Franklin's longtime entertainment attorney, David Wilson, all the wills appear to be in his client's handwriting. But that alone is not sufficient to prove a will's authenticity and validity; it must meet additional legal requirements. A hearing on the matter is set for June 12.


If none of the wills is deemed valid, Franklin’s estate will remain as it was - intestate - and her assets will be divided equally among her four sons. Some sons will be winners and other losers, depending on how this all plays out. The situation is likely to fuel the family division that is simmering. Six days after discovering the wills, Owens provided copies to Franklin’s children. Already, two sons have challenged their validity. One son, Kecalf, has said that because the 2014 will names him executor, he should replace Owens. He also objects to the sale of a piece of land that that document leaves to him.

 
Although all the wills specify that the sons are to share equally in their mother's music royalties and the proceeds from her memorabilia, she gives special attention to Clarence, her eldest son with special needs. She prohibits his father, who did not participate in his upbringing, from handling money or property for him. She also leaves one of her residences to each of her three other sons: her main residence in Bloomfield Hills goes to Kecalf; another home in that town to Edward; and her Detroit home to Teddy. 


At the time of her passing, Franklin’s estate was estimated to be about $80 million, but that is just a rough figure. In December 2018 the IRS filed a claim against the estate for $6 million in back taxes, and over $1 million in penalties. The agency continues to audit past years' returns. Also, Franklin had a stake in a yet-to-be-released film about her life; advance ticket sales have already generated over $3 million.

 
You may wonder why Franklin, with more than enough money to get expert legal help, would handle her final affairs in this manner. It is possible the answer can be found in her well-known passion for guarding her privacy. Ironically, her lack of sound planning has led to the very opposite outcome she would have wanted, with her finances and family circumstances open to public scrutiny.

Attorney David Wilson has stated that he often advised his client to create a will, and also a trust in order to keep her financial and family situation private. He says he had no idea she was writing  do-it-yourself, multiple wills. “If she had mentioned that to me,” he notes, “I would have said, ‘Aretha, what you really need to do is go see a lawyer and make sure it’s done in accordance with the law." Sounds like good advice for everyone.

How To Divide Your Assets Among Children: What's Really "Fair"?

“That’s not fair!” What parent of youngsters hasn't heard that countless times? It's a complaint that doesn't necessarily vanish when children are adults. In fact, depending on how they feel they've been treated in your estate plan, your kids may be complaining about unfairness even after you are gone, to the detriment of their relationship with one another.

 

Is equal always fair? How can you avoid playing favorites in your estate plan? The most obvious approach is to split everything equally. But suppose your children's circumstances are vastly different? In those cases, treating your children "equally" in your estate plan may not necessarily be the same as treating them "fairly." Here are just a few situations when dividing everything equally may not be the best solution:

• Scenario 1: One child is far more successful financially. Example: Child A is making a killing on Wall Street as an investment banker. Child B, just as hardworking, has made teaching high school English his life’s work. If you split your assets “equally,” B may feel slighted, and miss out on money he could legitimately put to good use. If you give the financier less, he may feel rejected and punished for being successful, despite the fact that he does not need the money.

• Scenario 2: Child A is fiscally responsible. Child B makes bad financial decisions and seems always to be in dire financial straits. B may be immature, or may have a drug of mental health issue. You know that if A gets his inheritance as a lump sum up front, he'll manage it wisely. But you hesitate to give B his inheritance all at once, and would prefer to put it in trust so that the trustee has oversight over how it is used. Will B understand why he is being treated differently? Maybe. Will he resent his sibling who is getting his inheritance up front? Quite possibly.

• Scenario 3: Child A is healthy, but Child B has a disability or lifelong medical issues. Depending on B’s circumstances, you may want to leave him more than you leave A. If you expect B will need federal benefits in the future, you may want to put B’s funds in a special needs trust. Despite the unequal treatment, the need for this arrangement is likely to be understood by both children. But that does not eliminate the issue of who gets to manage child B's trust. Will your healthy child want to be his brother's or sister's keeper, or consider it a burden?

• Scenario 4: Child A has worked since the teenage years, put himself through school and never asked you for a penny. On the other hand, you gave Child B $200,000 for college tuition and room and board, and you recently gave him $50,000 as a down payment for a home. Splitting your assets equally at death between the two of them might be great for B, but is it really "fair"? Instead of equal distributions, you may want to consider the gifts you’ve made to B over the years as a kind of early inheritance, and deduct that amount from what you are leaving B when you pass away. 

• Scenario 5: Over the years Child A has been caring for you, taking you to your doctors' appointments, checking up on you by phone and in person, helping you with your paperwork and with other everyday matters. Child B is no busier than A and lives just as close, but rarely lifts a finger to help. You don't know if A resents B, but you wouldn't be surprised if he does. Is an equal division of your assets between the two really fair, you wonder? How will this play out between the two if you reward A for his efforts by giving him more? 

What are your alternatives? When they were little, all you had to do was split the cookie equally, and problem solved. It's not that easy now. 

How to distribute assets to children with different needs and histories while trying to be even-handed can be a vexing problem. Some parents, unable to find a “perfect” solution, will continuously delay making a plan or never create one, letting the State of Florida's intestacy laws determine who gets what. That will result in each child getting an equal share - but doesn't solve the potential problem of one child feeling resentful in relation to siblings.

Our job as your Florida estate planning lawyers is to help you formulate a reasonable plan that you can live with (and die in peace with), and that your kids are likely to find "fair." Obviously, there is no one solution suitable for every family. We will sit down with you to explore in detail your finances, family dynamics, family history, and your goals. 

 
If you decide not to split everything equally, it is usually a good idea to tell your children about the decision in advance and explain the reasoning behind your decision, so they are not blindsided later on. You should also make brief mention of your reasons in your estate plan. This can go a long way towards fostering a good relationship among your children after your passing - and could potentially even prevent a lawsuit against your estate from an angry child who feels "That's not fair!"

Sumner Redstone Estate Battle: The Wheel Has Come Full Circle

It's been as much a Shakespearean tragedy as a legal battle over an elderly billionaire's assets. The story features power grabs, on-again, off-again lovers, betrayal, and money... lots and lots of money.

In my post of 2016 I described the first act of the drama: Media tycoon Sumner Redstone's relationship with Manuela Herzer, four decades his junior. Since meeting her in 1999, the now 95-year-old had lavished  gifts on her totalling in the millions. In 2015, as Redstone's health continued to fail, she was living in his Beverly Hills mansion. He had named her his health care decision maker. She was also included in his estate plan, set to receive $70 million and the California house. Forbes estimates Redstone's worth at $4.5 billion.

Act Two opened in October 2015. That is when Redstone suddenly ejected Herzer from his home and cut her out of his estate plan. He replaced her with his daughter, Shari, as health care surrogate. Shari effectively began taking increasing control of the business, National Amusements, a national theater chain that owns Viacom and CBS.

Herzer did not go gently into the night, however. She launched a series of lawsuits to reclaim her role as health care surrogate and reclaim her expected inheritance. She alleged that Redstone's daughter and his nurses had conspired against her, and that Redstone was competent when he created his estate plan and named her his health care surrogate. Redstone countersued, alleging elder abuse and claiming Herzer had attempted to isolate him from his family in order to bilk him out of his fortune.

A slew of litigation ensued since then. As the legal wrangling unfolded, Redstone's already-precarious health continued to decline. Today, Redstone is unable to speak and is looked after by an army of round-the-clock caregivers. Last month, he was put under court-supervised guardianship.

Last year, the Redstones offered Herzer $30 million to go away. She rejected the offer. It's a move she likely regrets, because now, in Act 3, she's suffered a serious reversal of fortune. The Wall Street Journal reports that a settlement has been reached that requires Herzer to pay back $3.25 million to Redstone for the gifts she received over the years, and to agree not to file any more lawsuits.
 

As Shakespeare wrote in King Lear, "The wheel has come full circle."

Legal battles erupt over far less than $4.5 billion! See a qualified estate planning attorney to devise a thoughtful estate plan, including a plan to protect you from potential financial predators as you age.

HBO exec left it all to exotic dancer he knew briefly. His family is not happy.

Did exotic dancer Veronica Beckham perpetrate a sweetheart scam on Micky Liu? Manipulate a lonely and sick man into making her the beneficiary of his estate? Or did he leave her his money, free from any pressure and manipulation, purely out of love - even though they knew one another for a very short time? This is the tabloid fodder that leaped from the tabloids and landed in Manhattan Surrogate Court in December 2015, with Lui's sister alleging Beckham coerced her late brother into leaving his estate to her.

Liu, 51, was unmarried and lived alone in New York City. An executive at HBO, he was also an obese alcoholic who suffered from a variety of other ailments, including diabetes and heart disease. He and Beckham, 31, met in July 2014 at Scores in Atlantic City, where she was working as an exotic dancer. They apparently struck up a friendship of sorts. Liu began paying the rent on Beckham's New Jersey rental apartment, and covered the cost of her plane ticket to visit her mother in Florida in August 2014. When Beckham returned from Florida, she gave up her apartment and moved in with Liu for a total of 35 days. On October 2, 2015, she moved out of his apartment and back to Florida in order to assist her ailing mother. 

In his emails to her, Liu professed his love and concern for Beckham, but did not mention that he had made her the beneficiary of his retirement accounts and life insurance policy. He was found dead in his apartment on March 17, 2015. Several months later Beckham collected Liu's retirement funds and $223,000 in life insurance.

This turn of events is not sitting well with Liu's siblings. In the papers filed with the court, his sister May Liu alleges that "Beckham, as a professional exotic dancer, was adept at applying and using coercion and manipulation upon men." She contends that her brother was on heavy medication and very vulnerable, and that Beckham cheated her and her sibling out of her brother's monies that they should have received.

For her part, Beckham denies being a financial predator. She says she did not seduce Liu and never had a sexual relationship with him. His decision to leave her assets, she says, was his choice alone. She was surprised when his financial institutions contacted her about her inheritance. Until then, she never even knew the meaning of the word "beneficiary," she has said.

However this case is eventually decided, it brings into clear focus an alarming and  growing problem in this country and our state: financial abuse of vulnerable adults. The elderly are especially vulnerable, because like Liu, they are often isolated and have physical disabilities that make them an easy mark.

The Florida Department of Children and Families defines adult financial exploitation as follows:  

Exploitation may result in loss of property, money, or income. Exploitation means misusing the resources of an elderly or disabled person for personal or monetary benefit. This includes taking Social Security or SSI (Supplemental Security Income) checks, misusing a joint checking account, or taking property and other resources.

Sometimes the elderly or disabled become isolated or ill and do not have someone who is willing and able to help meet their basic needs.

If you have an aging parent or an incapacitated loved one you believe is,  or may be the target of financial exploitation, a key preventive step is to stay in touch with the person. Involve yourself in the person's life, concerns and care, stay on top of things, and enlist neighbors and other family members to crack through the isolation. If you think someone is being taken advantage of, contact Adult Protective Services at 800-96-ABUSE or online here.

The scoop on U.S. government savings bonds

Do you have old paper U.S. savings bonds sitting around? Introduced in 1935, paper bonds were once the go-to gift for weddings, birthdays and other occasions. There are three things you need to know about those old bonds to determine what they are worth and whether you should redeem them: the type of bond, the maturity date, and whether they have matured or are still gathering interest.

There are three basic types of bonds:  

• E bonds, and EE bonds issued more than 30 years ago, have matured and are no longer paying interest.

• I Bonds: Those issued more than 30 years ago have matured.

• H/HH: All H bonds, and HH bonds issued more than 30 years ago, have matured and are no longer paying interest.

To determine if your bond is still paying interest, go to the Treasury Department's  Savings Bond Wizard.  If it is still earning interest, you can keep the bond until it matures, or, if you think you could get a better return elsewhere, cash it in and put the money into a different and presumably better investment. If you decide to cash in the bond, whether mature or not, the interest is subject to federal income tax. However, if you are going to college or graduate school, you may be able to avoid the tax consequences and use the interest from EE and I bonds to pay for your educational expenses. Read more about that here.

Not every bank will cash savings bonds, so call around first to find one that will. The Treasury Department website does not maintain a list, unfortunately.  

Today, paper bonds are no longer issued. They can be purchased electronically only. If you don't plan to redeem your paper bonds, it's a good idea to convert them to electronic format using the Smart Exchange program. 


What about bonds that are inherited from a decedent, such as Series E bonds, which grow tax-deferred and therefore no income tax has been paid on the appreciation? (Unlike H bonds, which pay interest semi-annually). Since E Bonds are income tax-deferred, not tax-exempt, income tax must ultimately be paid. And unlike stocks with capital appreciation, there is no step-up in basis, which would provide income tax-free passage of the appreciation. The income tax can be paid as income with respect to the decedent (on the the decedent's final income tax return), or may be paid by the beneficiary of the bond. 

There are a numerous other rules that apply to purchasing, passing on and redeeming bonds. I suggest you check out TreasuryDirect.gov if you have additional questions: click here. (This link takes you to the section on EE bonds, but there are also clickable links for other types of bonds.)
  

Should parents tell their adult children what's in their estate plan?

A recent article in Wealth Management attempts to answer the question, Should parents tell their adult children about their   estate planning? Author Avi Kestenbaum advises against it, noting, "the parents are essentially begging their children to complain to them: 'Why am I getting this, or why can’t I have more or have it sooner?' Also, 'Why is that sibling getting this?' ” 

Let me weigh in on this. I agree with Kestenbaum that telling children about specific amounts and specific assets has its risks. But that doesn't mean that it's always the wrong approach, or that you can't give your children a general idea of what to expect. How much to tell, if anything, is highly personal and must be determined by your own comfort level, your assessment of your child's temperament and maturity level, and the family dynamic. Is your child responsible and hard-working, and will remain so no matter what? Do you have a child who may be inclined to get lazy if she expects a windfall? If one child is getting more than the other and you let them know, how will that knowledge affect their relationship with one another, and with you? Do you have a disabled child whose siblings will be involved in that child's future and therefore must know about the plans you are making for that child?

Just remember, you are under no obligation to tell your adult children about what you're leaving to whom. For that matter, you are not obligated to leave them anything at all! It is all up to you.

One parent-adult child discussion that is NOT optional concerns the parent's incapacity. I urge my clients to talk to their children about their incapacity plans, since more than likely they are relying on the children to step up to the plate if incapacity strikes. Discuss with your child your health care preferences, how you want your finances managed, and point your child in the direction of the documents (health care power of attorney, living will, durable power of attorney, etc.) that will give him the legal authority to manage your affairs. I am always sympathetic when I get a call from an adult child whose parent never prepared him for this eventuality. Not only is the child upset over the parent's health crisis, but is also feeling disoriented and unprepared to handle the parent's legal, financial and health issues. Talk to your child in advance - it's only fair to him, and you, that he know what will be expected of him!

Management of Bobbi Kristina Brown's affairs - in life and death - turns on whether she was legally married

Another day, another high-profile estate dispute. Another demonstration of why good planning is necessary to protect families from falling into disarray following the disability or death of a loved one. 

This time, the sad incident centers on Bobbi Kristina Brown, the only child of rapper Bobby Brown and his late wife, singer Whitney Houston. Brown was found unconscious January 31 in the bathtub of her Atlanta home. The 21-year-old has been hospitalized since then. Her ventilator was removed last week and she remains unconscious, in a medically induced coma. Her recovery is uncertain. 

At the time she was found, Bobbi Kristina was romantically involved with Nick Gordon, the man her mother took into her home and raised throughout his teens, but never officially adopted. In fact, in January, Bobbi Kristina announced that she and Gordon had been married. Brown's father denies they were legally wed, though. If he is right and they were not married, in the apparent absence of any written advance directives from Kristina, that leaves her father, her closest living relative, in charge of decisions about her medical treatment and continuing life support. He and Gordon have not been on good terms and to date he has not permitted Gordon to visit his daughter in the hospital. No marriage also means that if she passes away, her father is on track to inherit the $20 million his daughter is to inherit from her late mother. For his part, Gordon has accused Brown of managing the entire sad affair so he can get his hands on his daughter's fortune.

Stay tuned. There will surely be much, much more, and it does not look like it will be pleasant.

Most of us come from homes and families far less complicated, and far less wealthy, than Brown's. Even so, even the strongest of relationships can be tested when there is competition for an inheritance or differing opinions about who makes the decisions for an incapacitated loved one. Learn more about making plans to avoid these disputes in your own family with advance directives, and Florida estate planning.

Robin Williams' family tangles over his estate

Millions of dollars. Many marriages. Several children from those marriages. Mix in a dash of estate plan ambiguity, stir well and voila: The perfect recipe for an estate battle. It occurs in middle class families after the death of a loved one. But when it happens in the family of the rich and famous, headlines ensue. And that is just what is happening now in the family of the late Robin Williams.

The comedic genius and award-winning actor died by his own hand in August 2014. Family members are now butting heads over his assets, and in the process making public the details of his trust that otherwise would have remained private.

Williams is survived by three children from two prior marriages, and his third wife, Susan Schneider Williams, whom he married in 2011. She reportedly signed a prenuptial, but its provisions are unknown. Williams' will refers to a trust he set up that gives his three children the bulk of his estate, including most of his personal effects and memorabilia from his long entertainment career. Those items include bicycles, fossils, jewelry, photos, sports memorabilia, graphic novels, action figures, statuettes for his Oscar, Golden Globe and Emmy wins, and his famous "Mork and Mindy" suspenders. The trust also calls for his widow to continue to reside in the Tiburon, California home they shared. The actor owned a second, larger home in Napa, California, which is to go to the children. 

In December Schneider-Williams petitioned the court, asking for clarification on just what personal effects and memorabilia she was entitled to. She alleges that the trustee for the children's trust entered her Tiburon home just days after Williams' death and removed many items that were not intended for the children. She contends that since Williams wanted her to continue residing in the home, its contents should pass to her. Only items related to Williams' career in entertainment, and those located in the Napa home, should go to the children, she argues.

The children fired back in January. They claim that Schneider-Williams is acting against their father's wishes "by challenging the plans he so carefully made for his estate,” and attempting to "prevent them from receiving what their father wanted them to receive." The children contend that their father placed no geographical restrictions on the personal items he wanted to pass to them.

The two sides also differ on how to identify the items that are specifically related to Williams' career. While the suspenders that were part of his "Mork and Mindy" costume are indisputably related to his career, what about his collection of action figures and other toys? Did those items spark his imagination and contribute to his success as a performer - and might it be reasonably argued that they are related to his career? 

We do not know how the conflict will be resolved, or when. My guess is that we will hear much more about it in the months, and possibly even the years to come. The conflict serves as a valuable reminder that your estate planning documents must express your intentions with unassailable precision. Ambiguity may be tolerable when you can clarify yourself, but it has no place in your estate plan, which must speak for you when you are gone. Any provision that is open to interpretation might just be the match that ignites a family feud.

Inheritances, from the priceless to the peculiar, featured on TV reality show

Bug collections. Baseball cards. From the practically priceless to the plain old peculiar, people inherit all kinds of things. A new television show, Strange Inheritance, will delve into these stories, featuring families who have inherited an array of interesting objects. The show debuts January 26. Here's how the show bills itself:

"Love, loss, and a legacy left behind. "Strange Inheritance" is a ground-breaking new reality program from the Fox Business Network. From multi-million dollar treasures, to truly bizarre collections and one-of-a- kind artifacts, this series tells the stories of how families decide what to do with their newly acquired possessions. Shocking secrets are discovered, gut-wrenching decisions are made about priceless heirlooms and fascinating histories are uncovered along the way."

Should be interesting! Learn more here.

Federal estate tax exemption increasing in 2015, but you may still be on the tax hook

On January 1, 2015 the federal unified estate and gift tax exemption will increase from $5.34 million per person to $5.43 million. The top tax rate is now 40% on the portion of a taxable estate in excess of the cap. This means you may give away, without paying any federal estate/gift taxes, a total of $5.43 during your lifetime and/or at death. A married couple can pass twice that amount. And because the federal estate tax is "portable," a surviving spouse may utilize any unused portion of the deceased spouse's exemption.

Most Americans do not have taxable estates and need not incorporate federal estate tax reduction strategies into their estate plans. But it is prudent to remember that the government will always get revenue from somewhere. If it's not from one pocket, it's from another. Keep an eye on your other pockets as you approach your estate planning! Other tax traps may await you:

Capital Gains Taxes:  Do you have a highly appreciated asset that you wish to pass to your heirs? If so, one of the goals of your estate plan will be to reduce capital gains taxes.

One way to do this is to pass the highly appreciated asset to your loved ones at your death, rather than give it away during your lifetime. Assets that you pass at death are inherited with a "step-up" in basis. For example, let's say you bought a home for $100,000 in 1975 and it's now worth $500,000. You'd like to give it to your daughter. But if you give it to her now, and she then sells it, she will owe taxes on $400,000 (the difference between the cost basis and the current value). You would be better off hanging on to the house and passing it your daughter at your death, when she will get it with a step-up in basis. In other words, the government will consider her cost basis to be $500,000, its value on the date she inherits it, not its value on the date you bought it. This will significantly reduce or even eliminate any capital gains tax whenever she chooses to sell it.

Another way to avoid capital gains tax is with a Charitable Remainder Trust. When you place highly appreciated assets in a Charitable Remainder Trust whose ultimate beneficiary is a charity (or charities) of your choice, you receive an immediate income tax deduction. Your designated trustee then sells the asset - without any capital gains tax because charities are exempt from the tax -  and invests the monies in income-producing investments. You then receive income for life from the trust. When you die, your designated charity receives the principal of the trust. Although the trust is irrevocable, you may retain the power to change or add charitable beneficiaries at any time. 

State Estate Taxes: Florida does not have an estate tax, but several other states do. If you are a transplant to Florida, is it possible you will end up back in your original state of residence? Many people relocate in order to be closer to their family. If the state you end up is one that has an estate tax of its own, it's a whole other ballgame from an estate planning perspective.

Here's a sampling of estate tax exemptions in a few places many of my clients hail from:

New Jersey: $675,000. Top tax rate of 16%

District of Columbia: $1 million. Top tax rate of 12%

Maryland: $1.5 million. Top tax rate of  with a top tax rate of  16% 
Connecticut: $2 million. Top tax rate of  with a top tax rate of 12%

New York: $2.062 from Jan. 1 to April 14, 2015. Starting April 15, 2015, $3.125 million with a top tax rate of 16%

When I meet with clients and ask if there is even a remote possibility of their returning to their state of origin, or relocating to a state where their children currently reside or may reside in the future, most don't rule it out. That's why we always try to build in state estate tax planning, in anticipation of this possibility. 

And to put aside the tax issue entirely, don't forget the most important thing to get right with your estate plan: Creating harmony and security for your family and for yourself! See a qualified estate planning/elder law attorney to discuss your estate planning needs.

Your Florida will: Avoid the "do it yourself" approach

Considering creating a do-it-yourself will to save a few bucks? Please reconsider. You may cause your family unnecessary anguish and conflict. And the few dollars you "save" could be gobbled up at the end of the day by lawyer's fees. The case of Aldrich v. Basile, recently decided in the Florida Supreme Court, clearly demonstrates the disadvantages of do-it-yourself estate planning.

In 2004 Florida resident Ann Aldrich wrote her will using an "E-Z Legal Form." In the handwritten parts of the will that she completed, she indicated that at her death, her possessions were to go to her sister, Mary Jane Eaton. If her sister predeceased her, those assets were to go to her brother, James Michael Aldrich. Her will also had a hand-written list of specific assets, which included several bank accounts, her home and its contents, an IRA, a vehicle, and a life insurance policy. The will was properly signed and witnessed. 

However, Aldrich did NOT state what should happen to any assets she might acquire after the execution of her will. In other words, there was no "residuary clause."  The form had neither a pre-printed residuary clause or guidance for including one.

Eaton died in 2007, predeceasing Aldrich and leaving her a Fidelity account and property in Putnam County, Florida. Obviously, these assets were not included in Aldrich's 2004 will. In an attempt to rectify the problem, Aldrich hand-wrote a note in 2008 stating: This is an addendum to my will dated April 5, 2004. Since my sister Mary Jane Eaton has passed away, I reiterate that all my worldly possessions pass to my brother, James Michael Aldrich..."  The note did not conform to the requirements of Florida law. There were no impartial witnesses; the one and only witness who signed the note was Sandra Schuh, daughter of James Aldrich.

The entire matter sparked a family dispute that ended up in court, ultimately making its way to the Florida Supreme Court. Ms. Aldrich's brother James argued that all of his late sister's assets should go to him. Ms. Aldrich's two nieces (the daughters of another of Aldrich's deceased siblings) argued that the assets Aldrich inherited from Eaton should pass according to Florida intestacy law since (1) her will neither mentioned those assets nor contained a residuary clause and (2) Aldrich's "addendum" was legally invalid. Therefore, the nieces argued, as constitutional heirs at law they were entitled to a piece of the assets Aldrich had inherited when Eaton passed away.

Ultimately the court decided in favor of the nieces, concluding that the assets Aldrich inherited from Eaton could not pass under Aldrich's will. The court decision reads:   

Whether acquired before, after, or at the time a will is executed, assets covered by no provision of the will are not disposed of under the will. Ms. Aldrich's will does not say the first thing about real property in Putnam County or a non-IRA account at Fidelity Investments. The will cannot therefore dispose of these items not because they are after-acquired, but because no provision of the will covers them.

The remarks of Judge Barbara J. Pariente are particularly instructive for anyone who is considering creating an estate plan without using a qualified estate planning/elder law attorney: 

While I appreciate that there are many individuals in this state who who might have difficulty affording a lawyer, this case does remind me of the old adage "penny wise and pound foolish." Obviously, the cost of drafting a will through the use of a pre-printed form is likely substantially lower than the cost of hiring a knowledgeable lawyer. However, as illustrated by this case, the ultimate cost of utilizing such a form to draft one's will has the potential to far surpass the cost of hiring a lawyer at the outset. In a case such as this, which involved a substantial sum of money, the time, effort, and expense of extensive litigation undertaken in order to prove a testator's true intent after the testator's death can necessitate the expenditure of much more substantial amounts in attorney's fees than was avoided during the testator's life by the use of a pre-printed form. I therefore take this opportunity to highlight a cautionary tale of the potential dangers of utilizing pre-printed forms and drafting a will without legal assistance.  As this case illustrates, that decision can ultimately result in the frustration of the testator’s intent, in addition to the payment of extensive attorney’s fees — the precise results the testator sought to avoid in the first place.

To Judge Pariente's remarks I add this: Remember that any errors, omissions or ambiguities in your estate plan will likely remain undiscovered while you are alive. Your will has to clearly speak for you because you will not be around to explain what you really wanted! Please see an experienced and knowledgeable estate planning attorney to make sure that your wishes are honored when you are no longer around to speak for yourself.  

You can read the text of the Florida Supreme Court decision here. 

Are you the family bank?

Americans lead increasingly complicated family and financial lives that make for challenging estate planning and retirement planning. An interesting new survey by Merrill Lynch and Age Wave puts some hard numbers on these trends we see in our Florida estate planning practice. The 2013 study, "Family and Retirement: The Elephant in the Room," polled 5,400 Americans of various ages about issues related to retirement. Here are some key findings. Do you recognize yourself and your family?

Are you the family bank? 

The study found that in most families, there is one individual who relatives view as the "family bank." (That is usually our client!) A majority of those age 50+ have given money to family members on a one-time or continuing basis. 

No surprise: The study found that the family bank is usually the parents. More than two thirds of parents age 50+ who were polled reported providing some form of financial support to adult children during the past five years, and one in five parents has an adult "boomerang" child living at home. Parents said the money they gave children went to pay mortgage or rent (20%), phone bills (18%), car payment (17%), health care (15%), and student loan repayment (11%). However, the majority of parents were not sure precisely how their gifts were spent by their children.

While generosity is a great thing, clients should be careful about giving away too much. Who will take care of YOU if your retirement funds run short?


Do you have stepchildren or step-grandchildren? 

If you are in a blended family, welcome to a growing club... and you had better attend to your estate planning. Divorce rates have resulted in a high incidence of blended families: Two in five of those polled said their family includes stepchildren. One third admitted that having stepchildren complicates their estate planning. This comports with our observations, as clients frequently express concern about making sure their assets pass to their own children and grandchildren, not in-laws. (There are several strategies to achieve that goal, including the increasingly popular Heritage Trust.)



Do you fear you will become a burden on your children? 

There is widespread fear about outliving one's money, getting sick and becoming a burden on one's children. The study found older people worry most about getting Alzheimer's. Surprisingly, only 37% of respondents thought they would eventually need some form of costly long-term care! In reality, 70% are likely to need these services for a period of time.

Nearly 90% of those polled said they would prefer to remain in their own homes if they could no longer care for themselves and needed long-term care. The biggest concern: relying on a family member for actual physical care. Living with a family member is considered just as undesirable as living in a nursing home. Despite these concerns, 67% of those polled admitted they have made no plans to avoid having to live with a family member if they are no longer capable of living independently. Thus, long-term care planning, from investigating long-term care insurance to Medicaid planning, should be included in every person's estate planning goals.

Are you avoiding "the conversation?"  

In our law practice, we encourage clients to provide their families or other trusted individuals with basic information about their estate plans and health care preferences. However, the study showed that most people have not had this conversation. More than 56% of parents over age 50 said they have not discussed estate planning or financial issues with their kids, be it wills, inheritances, or advance directives. They cited three main reasons for this: avoiding family conflict, avoiding plain old discomfort, and the belief that in the end, such discussions won't change anything.

Read the entire survey here.

Should your Florida estate plan stagger your child's inheritance?

In my Florida estate planning practice, I have noticed that increasing numbers of my clients' children  remain "young" longer than their parents or grandparents did. A generation ago, people in their 20s, 30s and beyond who had not yet established a career or who did not have a stable marriage or children were fairly atypical. No longer.

Some say we have raised a crop of lazy adults who feel entitled to get things without hard work. That is probably true for some late bloomers, but the truth is more complex. Today's young adults are confronting far less bountiful opportunities than their parents. It's a much harsher world out there. 

No surprise, then, that today's Baby Boomers are planning their estates differently from the way their own parents did. Instead of giving a child an inheritance in a one-time, lump-sum distribution, clients are more inclined to use trusts that stagger distributions. Clients may want their children to begin receiving distributions when the kids are well past the age of legal majority - at 25, 35 and even well beyond that. The idea is to provide them with a cushion in a world where it's harder to come by economic security, stable employment and a fixed pension. And clients do not want to give away too much too soon, for fear of squelching their children's initiative. (Reuters ran an article this year that discusses this trend in estate planning. You can read it here.)

The plans I design for my clients usually give the trustee some discretion over the monies in the interim, before the age-fixed distributions are made, so that the children can get funds for certain specific purposes, such as purchasing a house or additional vocational training. I also can help a client create a "carrot-and-stick" plan that builds in incentives for behaviors the client wants to encourage; for example, the trust provisions can be designed so that an adult child receives more, sooner, upon the completion of college.

While creating a trust with staggered distributions and/or strings attached can protect your child economically and encourage him to get his act together, I caution about controlling too much from beyond the grave. No adult, even a self-acknowledged late bloomer, enjoys being treated like a child at 25, 30, 40 or beyond. Remember, your legacy is about more than money - it's also about values and memories. You don't want the provisions of your trust to generate resentment toward an over-controlling parent or grandparent, even if you are not around to see that resentment first-hand.

Needless to say, all of this requires careful, detailed discussion with  a competent Florida estate planning attorney who understands your desires and can design a thoughtful, effective plan to achieve them. Contact us or your own estate planning attorney for assistance.