‘Bye Bye Love’ Rocker Ric Ocasek Cuts Wife Out of Will

In a world where many stars have their estates dragged through the probate court, it can be a relief to see a celebrity use estate planning documents to accomplish their post-death goals. One example is Ric Ocasek.

The language in the will was very clear, according to the article “Cars singer Ric Ocasek cuts supermodel wife Paulina Porizkova out of will” from Page Six. There was no provision for his wife Paulina since they were in the process of divorcing. He added that even if he died before their divorce was finalized, she was not to receive any elective share “… because she has abandoned me.” This highlights the fact that Ocasek thought through different possibilities, and the lack of ambiguity makes it easier for a court to administer the will.

It was Porizkova who found Ocasek’s body in September while bringing him coffee as he recovered from recent surgery. The couple had two sons together and had called it quits in May 2018, after being married for 28 years. They met on set during the making of the music video for the Cars’ song “Drive.”

A filing with Ocasek’s will stated that his assets included $5 million in copyrights, but only $100,000 in tangible personal property and $15,000 in cash. The document did not detail the copyright assets.

That may seem like a small estate for someone with Ocasek’s fame. However, an attorney who examined the document told The New York Post that it was likely the Cars’ frontman probably had more assets protected through trusts, yet another indication that Ocasek was very intentional about his estate plan.

Like other high-profile performers who have considerable assets and who are savvy about finances, it’s possible that he has many more millions of dollars. Thanks to proper planning, however, they will not pass through probate and will be protected from the public view and scrutiny. That is why people use trusts, especially when they are public figures.

The Cars’ singer also seems to have left two of his six sons out of the will. The children he had with Porizkova were not left out of the will. Even though this may seem harsh, it’s possible that the sons who were left out of the will were compensated through other means. There may have been trusts set up for them, or life insurance proceeds.

The document indicates that the will was signed on August 28, less than a month before his death.

Ocasek died of heart disease on September 15. At the time, he also suffered from pulmonary emphysema. Mario Testani, his friend, and business manager is named as the executor.

The advance planning done in Ocasek’s estate is a lesson in how trusts and other estate planning methods can be used to maintain an individual’s privacy, even if some of their other assets pass through a will.

Reference: Page Six (Nov. 7, 2019) “Cars singer Ric Ocasek cuts supermodel wife Paulina Porizkova out of will”

Do Name Changes Need to Be Reflected in Estate Planning Documents?

When names change, executed documents with the person’s prior name can become problematic. For example, what about a daughter who was named as a health care representative by her parents several years ago, who marries and changes her name? Then, to make matters more complicated, add the fact that the couple’s daughter-in-law has the same first name, but a different middle name. That’s the situation presented in the article “Estate Planning: Name changes and the estate plan” from nwi.com.

When a person’s name changes, many documents need to be changed, including items like driver’s licenses, passports, insurance policies, etc. The change of a name isn’t just about the person who created the estate plan but also their executors, heirs, beneficiaries and those who have been named with certain legal powers through power of attorney (POA) and health care power of attorney.

It’s not an unusual situation, so there are some different solutions that can address this situation. It’s pretty common to include additional identifiers in the documents. For example, let’s say the will says, “I leave my house to my daughter Samantha Roberts.” If Samantha gets married and changes her last name, it can be reasonably assumed that she can be identified. In some cases, the document may be able to stay the same.

In other instances, the difference will be incorporated through the use of the acronym AKA—Also Known As. That is used when a person’s name is different for some reason. If the deed to a home says Mary Green, but the person’s real name is Mary G. Jones, the term used will be Mary Green A/K/A Mary G. Jones.

Sometimes when a person’s name has changed completely, another acronym is used: N/K/A, or Now Known As. For example, if Jessica A. Gordon marries or divorces and changes her name to Jessica A. Jones, the phrase Jessica A. Gordon N/K/A Jessica A. Jones would be used.

However, in the situation where the sisters-in-law had such similar names, most attorneys want to have the documents changed to reflect the name change. First, the names are too similar, as are their relationships with the testator. It is possible that someone could claim that the person wished to name the other person. It may not be a strong case, but challenges have been made over smaller matters.

Second, the document being discussed in the case above is a healthcare designation. Usually, when a health care power of attorney form is being used, it’s in an emergency. Would a doctor make a daughter prove that she is who she says she is? It seems unlikely, but the risk of something like that happening is too great. It is much easier to simply have the document updated.

In most matters, when there is a name change, it’s not a big deal. However, in estate planning documents, where there are risks about being able to make decisions in a timely manner or to mitigate the possibility of an estate challenge, a name change to update documents is an ounce of prevention worth a pound of trouble in the future.

Reference: nwi.com (October 20, 2019) “Estate Planning: Name changes and the estate plan”

Spare Family Fights: Make a Will

Thinking about your own mortality can be something frightening that many people would rather not do, which makes something like creating a will a difficult thing to do. But if for no other reason than to avoid fracturing the family, everyone needs a will. Otherwise, the family might end up spending all their time fighting over who gets Aunt Nina’s sideboard or Uncle Bruno’s collection of baseball cards.

But whether we want to think about it or not, having an estate plan in place – and that includes a will – is a gift of peace we can give to our loved ones and ourselves. It’s peace of mind that our family is being told exactly what we want them to do after we pass, and peace of mind to ourselves that we’ve put our plan into place.

A recent article from Fatherly, “How to Write a Will: 8 Tips Every Parent Needs to Know,” starts with the basic premise that a will prevents family squabbles. Families fight when they don’t have a clear direction of what the deceased wanted. That’s just one reason to have a last will and testament. However, there are other reasons.

A will is one way to ensure that your property is eventually distributed as you wish. Without a will, your estate is administered as an “intestate estate,” which means the state’s laws will determine who receives your assets after you pass. In some states, that means your spouse gets half of your estate, with your parents getting the rest (if there are no children). If the parents have died and there are no children, the rest of the estate may go to your siblings.

Most people—some studies say as many as 60% of Americans—don’t have a will. It’s hard to say why they don’t: maybe they don’t want to accept the possibility of their own death, maybe they don’t understand what will happen when they die without a will, or perhaps they want to wreak havoc on their families. However, having a will is essential.

Don’t delay. If you don’t have a will in place, stop putting it off. Creating a will gives you the opportunity to effectuate your wishes, not that of the state. What if you don’t want your long-lost brother showing up just to receive a portion of your estate? If you don’t want someone to receive any of your assets, you need to have a will. Otherwise, there’s no way to know how the distribution will play out.

Not only should you think about who will get your assets, you should also be thoughtful about how you distribute your assets. If you have children and your will gives them your assets when they reach 18, will they be prepared to manage without blowing their inheritance in a month? A qualified estate planning attorney will be able to help you create a plan for distributing your wealth to children or other heirs in a way that will match their financial abilities. You may want to create a trust that will hold the assets, with a trustee who can ensure that assets are distributed in a wise and timely manner.

Every family is different, and today’s families, which often include children from prior marriages, require special planning. If you have remarried and have not legally adopted your spouse’s children from a previous marriage, they are not your legal heirs. If you want to make sure they inherit money or a specific asset, you’ll need to state that clearly in your will. If you are not married to your partner, they will not have any rights to your estate, unless a will is created that directs the assets you want them to inherit.

The will can also provide reassurance and protection in case you need to appoint a guardian for your children. Because of this, parents of young children absolutely need a will. If you do not and both parents pass away at the same time, their future will be determined by the court. They could end up in foster care while awaiting a court decision. Battling grandparents may create a tumultuous situation with long-lasting and detrimental effects on your children and their relationships with their other family members. The court could also name a guardian who you would never have chosen. A will lets you tell the court what you want.

Speak with an estate planning attorney to make sure you have a will that is properly prepared and follows the laws of your state. You also want to have a power of attorney and a health care agent named. Only if you have these plans in advance can you express your wishes in a way that can be legally enforced when you actually need them.

Reference: Fatherly (Feb. 6, 2019) “How to Write a Will: 8 Tips Every Parent Needs to Know”

What Happens When There’s No Will or the Will Is Invalid?

The Queen of Soul’s lack of a properly executed estate plan isn’t the first time a celebrity died without a will, and it surely will not be the last says The Bulletin in the article “Aretha Franklin and other celebrities died without an estate plan. Will you?”

The Rev. Dr. Martin Luther King Jr., Howard Hughes, and Prince all died without a valid will and estate plan. When actor Heath Ledger died, his will left everything to his parents and three sisters. The will had been written before his daughter was born and left nothing to his daughter or her mother (it should be noted that if Ledger lived in California he would have needed a trust to avoid probate). Ledger’s family later gave all the money from the estate to his daughter.

Getting started on a will is not that challenging if you work with an experienced estate planning attorney. They often start clients out with a simple information gathering form, sometimes in an online process or on paper. They’ll ask a lot of questions, like if you have life insurance, a prenup, who you want to be your executor and who should be the guardian of your children.

Don’t overlook your online presence. If you die without a plan for your digital assets, you have a problem known as “cyber intestacy.” Plan for who will be able to access and manage your social media, online properties, etc., in addition to your tangible assets, like investment accounts and real property.

Automatic bill payments and electronic bank withdrawals continue after death, and heirs may struggle to access photographs and email. When including digital estate plans in your will, provide a name for the person who should have access to your online accounts. Check with your estate planning attorney to see if they are familiar with digital assets. Do a complete inventory, including frequent flyer miles, PayPal and other accounts.

Remember that if you don’t make a will or trust, the state where you live has laws that will decide for you. Each state has different statutes determining who gets your assets. They may not be the people you wanted, so that’s another reason why you need to have a will or trust.

Life insurance policies, IRAs, and other accounts that have beneficiaries are handled separately from the will. Beneficiaries receive assets directly and that bypasses anything written in a will, so you should confirm and keep documentation that specifies who your beneficiaries are. This is especially important for unmarried millennials, Gen Xers, divorced people, single individuals, and widows and widowers, who may not have designated someone as a beneficiary.

Don’t forget your pets. Your heirs may not want your furry family members, and they could end up in a shelter and euthanized if there’s no plan for them. You can sign a “pet protection” agreement or set up a pre-funded pet trust. Some states allow them; others do not. Your estate planning attorney will be able to help protect your beloved pets as well as your family.

Reference: The Bulletin (Sep. 14, 2019) “Aretha Franklin and other celebrities died without an estate plan. Will you?”

How to Choose an Estate Planning Attorney

Estate planning is a critical part of financial planning, but it is something that many Americans prefer to procrastinate about. However, drafting a will, health care proxy, and power of attorney are too important to leave to chance, says Next Avenue in the article “How to Find a Good Estate Planner.” An experienced estate planning attorney can help prevent critical mistakes and help you adjust your plan as circumstances change.

Here are a few tips:

Look for an estate planning attorney. This is not the same as a real estate attorney. An attorney who practices real estate law is not going to be up to date on all of the latest changes to estate and tax laws. You should also determine if the attorney deals with families who are in similar situations as yours. An attorney who works with family-owned businesses, for instance, will be more helpful in creating an estate plan that includes tax and succession planning for small business owners, whereas an attorney who works with special needs trusts will be more informed on drafting those.

Experience matters in this area of the law. The laws of your state are just one of the many parts that the attorney needs to know by heart. The estate planning attorney who has been practicing for many years will have a better sense of how families work, what problems crop up when it comes time to execute these plans, and tips on how to avoid them.

Ask about costs. Don’t be shy. You want to be clear from the start what you should expect to be spending on an estate plan. The attorney should be comfortable having this discussion with you and your spouse or family member. Remember that the attorney will be able to understand the scope of work only after they speak with you about your situation. What may seem simple to you, may be more complicated than you think.

If a trust is added, the fees are likely to increase. A trust can be used to avoid or minimize estate taxes, avoid probate, save on time and court fees and create conditions for the distribution of assets after you die.

A full plan includes incapacity documents. Don’t neglect to have the attorney create a Power of Attorney form and any other advance directives you need. These vary by state, and you don’t want them to get too old, or they may become out of date.

Recognize that this is an ongoing relationship. Make sure that you are comfortable with the attorney, how the practice is run and the people who work there—receptionist, paralegals and other associates at the firm are all people you may be working with at one point or another during the process. You will be sharing very personal information with the entire team, so be sure it’s a good fit.

This is not a one-and-done event. Having an estate plan is a lot like having a home—it requires maintenance. Every four years or so, or when large events occur in your life, you’ll need to have your estate plan reviewed.

Your estate planning attorney should become a trusted advisor who works hand in hand with your accountant and financial advisor. Together, they should all be looking out for you and your family.

Reference: Next Avenue (September 10, 2019) “How to Find a Good Estate Planner”

Do It Yourself Estate Planning Leads to Bad Outcomes

While the attraction of simplicity and low cost is appealing for estate planning, the results are all too often disastrous, affirms Insurance News in the article “Mind Your Mouse Clicks: DIY Estate Planning War Stories.” The number of glitches that estate planning attorneys are seeing with clients’ plans and documents has increased, correlating with the uptick in the number of people using online estate planning forms. For estate planning attorneys who are concerned about their clients and their families, the disasters are troubling.

A few clumsy mouse clicks can derail an estate plan and adversely affect the family. Here are five real-life examples.

Details matter. One of the biggest and most routinely made mistakes in DIY estate planning goes hand-in-hand with simple wills, where both spouses want to leave everything to each other. Except this typical couple neglected something. See if you can figure out what they did wrong:

John’s will: I leave everything to my wife Phyllis.

Phyllis’ will: I leave everything to my wife Phyllis.

Unless John dies and Phyllis marries someone named Phyllis, these Wills are not going to work. It seems like a simple enough error, but the courts are not forgiving of errors.

Life insurance mistakes. Jeff owns a life insurance policy and has been using its cash value as a “rainy day” fund. He had intended to swap the life insurance into his irrevocable grantor trust in exchange for low-basis stock held in the trust. The swap would remove the life insurance from Jeff’s estate without exposure to the estate tax three-year rule, and the stock would receive a stepped-up basis at death, leading to tax savings on both sides of the swap.

However, Jeff had a stroke recently, and he’s incapacitated. He planned ahead though, or so he thought. He downloaded a free durable power of attorney form from a nonprofit that helps the elderly. The POA specifically included the power to change ownership of his life insurance.

Unfortunately, Jeff put his own name in the space designated for the agent, which means no agent is actually named with the authority to change his life insurance. As a result, the insurance company won’t accept the form, and the swap isn’t going to happen.

Incomplete documents. Ellen created an online will leaving her entire probate estate to her husband. It was fast, cheap, and she was delighted. However, she forgot to fill in the space where the executor is named. The form was set up so that the website address for the website company is the default information in the form. The court is not likely to appoint the website as her executor. Her heirs are stuck, unless she corrects this, hoping the court will understand. Hope is a terrible estate plan.

Letting the form define the estate plan. Single parent Joan has a 6-year-old son. Her will includes a standard trust for minors, providing income and principal for her son until he turns 21, at which point he inherits everything. Joan met with a life insurance advisor and applied for a $1 million convertible 20-year term life insurance policy and designated that it be payable to the trust. However, her son has autism, and receives government benefits. There are no special needs provisions in her will, so her son is at risk of losing any benefits if, and when, he inherits the policy proceeds.

Don’t set it and forget it. One couple who had a blended family created online wills when the estate tax exclusion was $2 million. They opted for the credit shelter trust (also known as a bypass trust) to reduce their estate taxes, by allowing each of them to use their estate tax exclusion amount. However, the federal estate tax exclusion today is $11.4 million per person. With $4 million in separate assets and a $2 million life insurance policy payable to children from a previous marriage, the husband’s separate assets will go into the bypass trust. None of it will go to his current wife.

An experienced estate planning attorney who is licensed to practice in your state is the best source for creating and updating estate plans, preparing for incapacity, and ensuring that tax planning is done efficiently.

Reference: Insurance News Net (Sep. 9, 2019) “Mind Your Mouse Clicks: DIY Estate Planning War Stories” 

Leaving a Legacy Is Not Just about Money

A legacy is not necessarily about money, says a survey that was conducted by Bank of America/Merrill Lynch Ave Wave. The study surveyed more than 3,000 adults, with 2600 of them being 50 or older. The study also incorporated focus groups where participants were asked about end-of-life planning and leaving a legacy. The article, “How to leave a legacy no matter how much money you have” from The Voice, shared a number of the participant’s responses.

A total of 94% of those surveyed said that a life well-lived is about “having friends and family that love me.” 75% said that a life well-lived is about having a positive impact on society. A mere 10% said that a life well-lived is about accumulating a lot of wealth.

The study highlights that people want to be remembered for how they lived, not what they did at work or how much money they saved. Nearly 70% said they most wanted to be remembered for the memories they shared with loved ones. And only 9% said career success was something they wanted to be remembered for.

While everyone needs to have their affairs in order, especially people over age 55, only 55% of those surveyed reported having a will. Only 18% have what are considered the three key essentials for legacy planning: a will, a health care directive and a durable power of attorney.

The will addresses how property is to be distributed, names an executor of the estate and, if there are minor children, names who should be their guardian. The health care directive gives specific directions as to end-of-life preferences and designates someone to make health care decisions for you if you can’t. A power of attorney designates someone to make financial decisions on your behalf when you can’t do so because of illness or incapacity.

An estate plan is often only considered when a triggering event occurs, like a loved one dying without an estate plan. This is often a wake-up call for the family once they see how difficult it is when there is no estate plan.

Parents aged 55 and older had interesting views on leaving inheritances and who should receive their estate. Only about a third of boomers surveyed and 44% of Gen Xers said that it’s a parent’s duty to leave some kind of inheritance to their children. A higher percentage of millennials surveyed—55%—said that this was a duty of parents to their children.

The biggest surprise of the survey: 65% of people 55 and older reported that they would prefer to give away some of their money while they are still alive. A mere 8% wanted to give away all their assets, before they died. Only 27% wanted to give away all their money after they died.

Reference: The Voice (June 16, 2019) “How to leave a legacy no matter how much money you have”

What Happens when Both Spouses Die at the Same Time?

There are any number of ways a person can inherit assets from another person. They may inherit assets from a trust, through a will or as a designated beneficiary of an insurance policy or retirement account. However, in each case, says Lake Country News in the article “Simultaneous and close together deaths,” the person inheriting the asset is living, while the person they inherited from has died.

What happens if spouses die either at the same exact time or at a time that is very close to each other? The answer, as with so many estate planning questions, is that it depends.

The first question is, did both decedents have estate planning documents in place? If so, what directions do the wills give? Are there trusts, and if so, who are the trustees? If they served as trustees for each other’s trusts, did they name a secondary trustee?

If assets were owned as joint tenancy with right of survivorship, the estate of each deceased tenant receives an equal share of the asset, unless it can be proven that a joint tenant survived the other.

Here’s an example: if a parent dies without a will, is survived by two children, but one of the two children dies only four days after the parent’s death, i.e., fewer than 120 hours, in California, the law presumes that the deceased child did not survive the mother. The sole surviving child receives the entire parent’s intestate estate.

A trust may provide for distributions to alternative beneficiaries, and accounts with pay-on-death beneficiaries can sometimes name contingent beneficiaries. This is another reason why it is wise to have primary and secondary beneficiaries on all accounts that permit secondary beneficiaries. Check to see if your accounts have this option, as not all accounts allow for secondary beneficiaries.

Keep in mind that a beneficiary who survives long enough to inherit might die before receiving complete distribution of his or her inheritance. In this case, that beneficiary’s share will pass through his or her estate plan. Unless there has been advance planning, the undistributed inheritance becomes part of the deceased beneficiary’s estate, where it will be distributed either according to the beneficiary’s will or according to the laws of intestacy of the decedent’s state of residence. In this case, the beneficiary’s estate may need to be probated to distribute the inheritance.

The legal and factual analysis associated with the distribution of a couple who died at the same time or in close proximity to each other varies from case to case. Speak with an experienced estate planning attorney to have an estate plan prepared to avoid your family having to unravel the knotty mess that is created when there is no trust, and no estate planning has been done.

Reference: Lake Country News (Aug. 10, 2019) “Simultaneous and close together deaths”

Portland Museum Wins $4.6 Million Lawsuit

Families are not the only ones embroiled in estate battles. The Portland Museum of Art won a $4.6 million court award after they convinced a jury that a caretaker of a wealthy woman had unduly influenced the woman to change her will and give the caretaker her entire estate. The museum said that an early version of the woman’s estate plan makes it quite clear that the museum was to receive an art collection and a major cash gift after she died.

Eleanor Potter signed an estate plan in 2014, in which she stated that she intended to give much of her estate to the museum, as reported in the Press Herald’s article “Portland Museum of Art wins $4.6 million in lawsuit over benefactor’s will.”

About six months later, said the museum’s attorney, a new will was signed that named her caretaker as the sole beneficiary.

The museum’s attorney said the caretaker coerced Potter into making the change, depriving the museum of the art and cash. The jury agreed and granted the museum a request for punitive damages, in addition to the originally intended gift to the museum. The museum said the punitive damages request was made as an effort to deter any others from trying to take similar actions.

It took the jury only one hour to come to a conclusion. They were unanimous in their finding. In Oregon state civil cases, six of nine jurors must agree on a verdict. This is unlike a criminal trial, where a unanimous verdict beyond a reasonable doubt is required for a conviction.

As part of her estate plan in March 2014, Potter made the museum a “remainder” benefactor of her estate, meaning that it would receive all of her art collection and money left over after fulfilling specific bequests to others. This is a commonly used strategy to give money to museums and nonprofits.

A few months later, she fired the attorneys who created that plan and in October 2014 had a new will created that named the caretaker as her sole heir. The woman had cared for Potter for many years and moved into her home after Potter broke a hip in 2012. The museum alleged that the caretaker conducted a “long, systematic and relentless” campaign of control, threatening Potter and telling her she would have to go to a nursing home. During phone calls with attorneys, the caretaker could actually be heard coaching Potter on what to tell the attorneys.

The caretaker’s attorney claimed that Potter simply wanted to take care of her. Her attorney said the museum acted as if it was “entitled to Eleanor’s estate.”

The museum issued a statement after the verdict was announced, acknowledging that Eleanor Potter had been a longtime supporter of the museum over many decades and expressed gratitude that her intent to promote art and culture could now be recognized.

Reference: Press Herald (July 22, 2019) “Portland Museum of Art wins $4.6 million in lawsuit over benefactor’s will.”

A Love Letter to Your Family

For the 70% of Americans who do not have an estate plan, the article “Senior Spotlight: Composing the ‘family love letter’” from the Lockport Journal should help you understand why it is so important to set one up. One reason why people don’t take care of this seemingly simple task is because they don’t fully understand why estate planning is needed. They think it’s only for the wealthy, or that it’s only for old people, or that it’s only about death and taxes.

Consider this idea: an estate plan is actually about protecting yourself while you are alive, protecting your family when you have passed, and leaving a legacy for those you have left behind.

The main elements of an estate plan are: 1) create and execute documents that provide for incapacity and death, and 2) provide information about and guidance to help navigate your assets, liabilities and wishes.

You’ve spent a lifetime accumulating assets. It is now time to sit down with family members and have a heart-to-heart talk about the details of the estate and what your intentions are with respect to its distribution. The subject of death can be challenging for all. However, discussing your estate plan is vital if you want to protect your family from what might come after you are gone. Each family has its own goals, so it’s a good idea to talk about it frankly while you still can.

Even though these topics may be hard to bring up, not having those discussions significantly increases the chances of your family having conflict and choosing sides, assets not going where you had intended, and unnecessarily higher costs in taxes and legal fees.

If speaking about this is too hard, you may want to write your family a love letter. It would contain all the information that your family would need at the time of your death or your incapacity due to illness or injury. That includes a power of attorney, a health care directive, and maybe other documents depending on your situation.

Ideally, all this information will be located in one convenient place. Don’t put it on a computer where you use a password. If the family cannot access your computer, all your hard work will be useless to them. Put it in a folder or a notebook, that is clearly labeled and tell family members where it is.

They’ll need this information:

  • A list of your important contacts — your estate planning attorney, financial advisor, CPA, insurance broker and medical professionals.
  • Credit card information, frequent flier miles.
  • Insurance and benefits including all health, life, disability, long-term care, Medicare, property deeds, employment and any military benefits.
  • Documents including your trust, will, power of attorney, birth certificates, military papers, divorce decrees, and citizenship papers.

Think of these materials and discussions as your opportunity to make a statement for the future generation. If you don’t have an estate plan in place already or if you have not reviewed your estate plan in more than a few years, it’s time to make an appointment for a review. Your life may have not changed, but tax laws have, and you’ll want to be sure your estate is not entangled in old strategies that no longer benefit your family.

Reference: Lockport Journal (Feb. 16, 2019) “Senior Spotlight: Composing the ‘family love letter’”