Appraisal Method to Change?

October 31, 2009

In trust administration and probate in San Diego County, appraisals of the decedent's real property are an important part of settling an estate. At Law Office of Scott C. Soady, A Professional Corporation, one of the first tasks is to obtain an appraisal of real property as of the date of death. The appraisal, in addition to valuations of the rest of the decedent's estate, form the basis for determining the total value of the estate for purposes of distribution to beneficiaries.

Recently, a bipartisan amendment approved in October by the House Financial Services Committee proposes a new set of rules for obtaining appraisals. The old rules imposed nationwide by mortgage giants Fannie Mae and Freddie Mac, according to realtors and mortgage brokers, produced appraisals often below the agreed-upon price, causing delays and disputes and the necessity for multiple appraisals. The new rules are more likely to encourage independent appraisals, not influenced by loan officers and mortgage brokers. The new amendment has the endorsement of President Obama and the House of Representatives but may face an uphill battle in the Senate.

Appraisals are just one part of trust administration and probate. We use independent appraisers for real property and can help with appraisals of valuable personal property as well. There are numerous tasks that must be done by a successor trustee of a trust or an executor or administrator of a probate estate. Our estate planning lawyers at Law Office of Scott C. Soady, A Professional Corporation can assist you with all aspects of trust administration or probate. Please call or email with questions or to set a complimentary consultation.

Estate Issues Litigated in J.R.R.Tolkien Estate 26 Years after Death

October 28, 2009

In the Estate Planning area, we frequently see estates remaining open for years or litigation developing long after a person's death. Do you remember "The Hobbit" written by J.R.R. Tolkien? For many of us baby boomers, it was a favorite story, one of the first “fantasy” novels which have become so popular. First published in 1937, it is now scheduled to be released in theaters as two prequels to the “Lord of the Rings.” The “Lord of the Rings” trilogy grossed about $2.9 billion world wide plus another $3 billion from DVD, TV licensing, and merchandise.

The movie based on The Hobbit was a long time coming because the movie studio who owned the rights to the story was sued by the heirs of J.R.R. Tolkien who died in 1973. Mr. Tolkien had sold the movie rights in 1969 for $250,000. The studio was to pay his heirs a percentage of the gross receipts after certain production and advertising expenses were deducted. The two children of Mr. Tolkien claimed that the accountancy methods used to apply this formula were improper so as to reduce the payments to them. Their initial demand in the lawsuit was in excess of $150 million, which increased as the case progressed because discovery, according to the estate’s lawyers, revealed additional impropriety.

The case was scheduled to go to trial in October and has apparently been settled. The settlement amount is confidential although some sources claim it is well over $100 million. The settlement paves the way for the movie studio New Line Cinema, a subsidiary of Warner Brothers, to move forward with the Hobbit movies.

Useful Links for Retirement Issues

October 24, 2009

In San Diego, there are many people wondering in this economy, when they can retire, when to take social security, how much they need to retire, etc. Social security has predicted that many Americans will live into their 90's in the years to come and the cost of living will continue to increase so these aspects of retirement also have to be considered.

When to take social security? Although the normal age is 66 years, you can take benefits as early as 62, but your monthly benefit will be reduced. Social security has a table to determine how much it will be reduced. If you take social security early and still continue to work, your benefit will also be reduced for every dollar you earn over $14,160. See the SSA website for a chart on the amount of reduction.

If can be difficult to calculate how much you need to have saved to start retirement. Many people by delaying retirement just for a year or two can increase their annual retirement income by 9 or 10%. There are many on line sites where you can calculate how much you need for retirement. One is on Money Magazine. Another is offered by T. Rowe Price and there are many others. Make sure when you input information, consider that most peple will need at least 70% of their pre-retirement income after they retire. Be sure to add in all sources of income such as a part time job or a second career. Also figure in your projected social security benefits at retirement age.

Health care is also a retirement consideration. At age 65 you qualify for Medicare but many people also purchase a Medigap policy to supplement Medicare. A great guide to most of these issues can be found on the CNN Money site, including a section on estate planning.

The experienced estate planning lawyers at Law Office of Scott C. Soady, A Professional Corporation can help you with the estate planning aspect of retirement planning. We have helped many people facing retirement create an estate plan and the documents they need to feel secure about their later years.

Estate Planning for the Terminally Ill

October 21, 2009

For a person who is terminally ill, obviously time is of the essence. This urgency creates unique estate planning issues. Planning under these circumstances may involve not only the terminally ill individual but also an estate planning lawyer, CPA, financial advisor, and insurance agent. Family members may also need to become involved to assist the person in getting documents together, transporting the client, and assisting in other ways.

Here are some issues that need to be considered:
1. Does the terminally ill client still have mental competency? If the person has capacity at the present time but there is a risk that he or she may lose that capacity, then the planning needs to be done as soon as possible. Another thing to consider is having the individual execute a power of attorney that specifically includes the power to do estate planning so that an agent can make estate planning decisions for the terminally ill person.

2. Is there a problem with estate taxes? An estate that is likely to have to pay estate taxes raises a number of issues. One way to reduce estate taxes is to have the individual make gifts. The annual gift exclusion is $13,000 per person so the ill client can give up to $13,000 to any one person. If the client makes such gifts in 2009 and then is still living in 2010, he or she can make another series of gifts of $13,000 per person. If the persons receiving the gifts are also beneficiaries under the ill client's will or trust, there is a substantial savings by gifting instead of the beneficiaries having to pay estate taxes at a rate of approximately 50%.

The ill client may also consider gifting to a charity. The ill client could potentially save on personal income taxes and his or her estate would also benefit by reduction of estate taxes by a charitable gift. Also when estate taxes are involved, an individual could consider creating a foundation, a charitable lead trust, or a generation-skipping transfer.

3. Does the terminally ill person have an up to date Advance Health Care Directive? This document is absolutely necessary for someone suffering a terminal disease. This is the document that allows an individual to appoint an agent to make health care decisions when that individual is unable to. This document can also spell out the specifics about what type of measures you want or don't want at the end of your life. A Do Not Resusitate Order may also be something that a terminally ill person may want to consider signing.

4. Are beneficiary designations up to date, such as on life insurance, annuities, retirement plans, IRAs, and POD (payable on death) accounts? Sometimes people fail to change beneficiaries on these types of accounts upon a death or change of circumstance. Now is the time to be sure all of these have the designated beneficiaries that the ill client wants.

5. Is the person's will or trust up to date and fully funded?
It should go without saying that a person who is facing a terminal illness should have an estate plan. If one has been created, it needs to be up to date and in the case of a trust, funded by retitling all the trust assts in the name of the trust.

For help with any of these issues, call us at Law Office of Scott C. Soady, A Professional Corporation. We know how important it is to get these matters taken care of and will assist you to accomplish your goals in a timely manner.

Your "To Do" List

October 17, 2009

It's hard for most people to plan for their death but one of the greatest gifts you can give your loved ones is to create an estate plan and with it a List of Guidelines for Location of Assets and Final Instructions.

In addition to your will and trust, you should prepare and keep current a list of your assets and a letter of instruction to provide the executor or trustee with important information to handle your estate and personal affairs in the most efficient manner. Copies should be distributed to your executor or trustee (if other than yourselves) and one copy should be in the binder that contains your will or trust.

The Location of Assets list should contain the following if applicable to you:
1. Bank Accounts: List all your bank accounts, with name and address of bank, account number, name on the account, and type of account. If any are online accounts, list Log In Name and password.
2. Stocks & Bonds: List all bonds with their serial number, denominations, and names in which they are registered. List all shares of stock, with name in which issued and name and phone number of brokers.
3. Pension or Profit Sharing Plans: List all plans and the location of any pertinent documents.
4. Mutual Funds: List all mutual funds and the location of any pertinent documents.
5. Real Estate: Location of deeds, names and phone numbers of any mortgage lenders involved.
6. Life and Other Insurance Policies: List all policies with name and address of company, policy number, amount of coverage, beneficiaries, and name, address and phone number of insurance agent. List of homeowner’s, fire, casualty, and other insurance policies, including name and address of company, policy number, amount of coverage, beneficiaries, and name, address and telephone number of insurance agent.

Instructions Upon Death should contain the following information, if applicable to you:
1. Persons to Notify: Persons to be notified upon death, with their addresses and phone numbers. This may include such people as relatives, employer, lawyer, partners or business associates, accountant, stockbroker, clergyman, or rabbi, etc.
2. Burial and Funeral Instructions: List the location of any cemetery plot, deed number,and location of deed. Lists facts needed by the funeral director such as decedent’s full name, residence, marital status, name of spouse, date of birth, place of birth, father’s name and birthplace, mother’s maiden name, military service, length of residence in state, Social Security number, and special wishes and desires (such as words to be inscribed on gravestone, cremation desires with specification as to disposition of ashes.)
3. Location of Important Papers: Location of all important legal and personal papers such as your trust, will, insurance policies, bank books, checkbooks, and certificates of deposits,
bonds and stock certificates,social security and Medicare cards and papers, title and registration documents of automobiles, titles, deeds, and other relevant papers relating to real property, birth, marriage, and divorce certificates,military records, income tax returns, mortgage or other documents relating to outstanding loans.
4. Location of Safe-Deposit Box: Location of safe-deposit box, number, in whose name it is registered, location of key, and list of contents.
5. Memberships: Membership in any fraternal or mutual aid association which has a part of its membership death benefits or insurance coverage, address and telephone number of association, person to contact as to procedure for collecting benefit, and location of certificate of membership or certificate of insurance.
6. Credit Cards: List of all credit cards, with the name and address of the issuer and card number.
7. Automobile Models: List of all automobiles, with year, make, model, body type, number of cylinders, color, and identification number.
8. Location of Personal Effects: List and location of personal effects and other personal property with sentimental value, and names and addresses of persons to whom such property should be given. If you have a letter for disposition of personal property, be sure to update it periodically.
9. Veteran Instructions: If veteran, instructions to notify nearest Veterans Administration of death and ask what benefits are available.
10. Pin numbers and Passwords: If any of your financial matters are handled on line, list log in names and passwords. If accounts need pin numbers, list those.
11. Other Instructions: Any other instructions you would like to have followed in the administration of your affairs.
No one can prepare these guideline and instructions for you. It's something you have to do for yourself and your loved ones. We can however help you create an estate plan that is right for you. Contact us for a free consultation.

Interesting Estate Planning Issues in Brooke Astor's Estate Disaster

October 12, 2009

Recently you may have heard about the conviction of Anthony Marshall, son of New York philanthropist and socialite Brooke Astor. Tony Marshall, the only son of Brooke Astor, was convicted of 14 counts of grand theft and larceny for allegedly stealing millions from his mother's estate while she was suffering from Alzheimer's disease. The lawyer who prepared an amendment to Mrs. Astor's will was also convicted on charges of fraud and conspiracy and one count of forging Mrs. Astor's name to the amendment which changed the distribution of her estate. The amendment was made when Mrs. Astor was almost 102.

Now controversy will shift to what will be done with Mrs. Astor's estimated $180 million dollar estate. Some people speculate that the conviction might cost the grandsons of Mrs. Astor, Phillip Marshall and his twin brother Alexander, about $10 million each, a fact apparently not known to Phillip when he started a guardianship proceeding in 2006. Phillip petitioned the Probate Court to appoint a guardian for his grandmother, claiming that his father Tony was allowing her to live in squalor, telling her she had no money left, all the while taking millions from her estate. The guardianship proceeding caused prosecutors to begin investigating Tony Marshall which then led to the criminal charges. Phillip Marshall has said he never knew about the inheritance for he and his brother from his father's estate and that it was “not about the money. He wanted to protect his grandmother.”

Hopefully what this case has done in the real world is raise the public's awareness about elder abuse. Elder abuse affects about 2 million Americans over the age of 65. It can be physical abuse such as using force or causing physical injury or it can be neglect. Elder abuse can also be financial abuse where someone wrongfully takes or uses an elder's money or other assets. It can also involve, as in the Astor case, using undue influence of forgery to cause an elder to change a will or a trust. It sounds from the Astor trial testimony that the elder abuse there was both types. If we can help with an elder issue such as one discussed here or any other estate planning issue, call us at Law Office of Scott C. Soady, A Professional Corporation.

Martin Luther King Jr. Estate Dispute Still Pending

October 6, 2009

Martin Luther King Jr. died in 1968. His wife Coretta Scott King died in 2006 and yet issues are still being disputed over their estates. Two surviving children of Martin Luther King Jr. and Coretta Scott King are fighting over their parents’ estates. Bernice King, who is the administrator of her mother’s estate and her brother Martin Luther King III are suing their brother Dexter King alleging he wrongfully took money from Martin Luther King Jr.’s estate. Dexter King has counter-sued his sister to force her to turn over personal papers and love letters from Coretta Scott King’s estate.

A judge in Atlanta has ordered the personal property in dispute turned over to the Court until the issues can be resolved. The Judge has also order the three children to meet and try to mediate their differences.

Celebrities are no different than their non-famous counterparts when it comes to bickering over the administration of an estate. The probate court will treat them no differently. The only difference may be that they have to do their bickering in public as well as in the court room.

At Law Office of Scott C. Soady, A Professional Corporation we handle many cases in which the dispute turns into litigation. Read more about trust and estate litigation here on our website. If you need our legal counsel for litigation or any other estate planning issue, we would be happy to meet with you. The initial phone or office consultation is always free.

TV Shows Highlight Organ Donation

October 3, 2009

ER’s final season and the recent premiere of Grey’s Anatomy were emotional reminders about the importance of organ donation. Family members in both series had to make hard decisions about whether to make organ donations. If you feel strongly about organ donation, one way or the other, it is important to let your family and friends know how you feel. Not only that but you should put your feelings in writing so that family and loved ones know how to carry out your wishes.

In California you can spell out your wishes in an Advance Health Care Directive. You can state whether you want organ donation, whether you don’t, and if you do, what organs and for what purposes. You can specify that you only want to donate organs for transplant or also for education or research. Another way to make organ donation possible is to put a sticker on your driver’s license. In California you can also sign up online with Donate Life California, a nonprofit organ and tissue donor registry. Registration with this entity could speed up the donation process if family members could not locate your advance health care directive.

Statistics show that the need for organs is growing but the amount of organs available for donation is not keeping up with the need. Specifying your feelings about organ donation is just one piece of estate planning. Your family and friends also need to know how you feel about end of life issues and health care, how you want your assets to be distributed upon your death, and who you want to distribute your estate. Putting your wishes down in writing to guide your family and loved ones is the best gift you can give them. Contact our firm if we can help with putting these important decisions down in the appropriate estate plan to meet your goals and specify your wishes.