Building Legacies that Last Estate Planning and Elder Law

An Executor Cannot Make Everything Right

Last will

Imagine that you are made the executor of your mom’s will. You have several other siblings and the will gives all of you an equal share.

One of your brothers has borrowed a lot of money from your mother over the years and never paid any of it back. Although there is no documentation for any of these loans, you might be tempted to use your powers as the executor of your mother’s estate to collect the debt from these loans.

This is essentially the situation that a reader recently wrote into the Napa Valley Register to ask about in “Can mom make son pay debt?” There are several problems with what the executor wants to do.

The first is that loans to children are often more gifts than they are loans. The mother probably “loaned” the money to the sibling, knowing that it would never be paid back. That makes it a gift.

The second problem is since the loans are undocumented, there is no way to prove they happened short of a court battle over them.

The third problem is that even if these were considered loans and not gifts, they would likely be well outside the statute of limitations, unless they were made recently.

It can be tempting for executors to want to redress past wrongs. However, they should be careful before doing so.

Executors do not have unlimited powers and should consult with an estate attorney before doing anything that is outside the directions given by the probate court.

Reference: Napa Valley Register (Oct. 26, 2017) “Can mom make son pay debt?”

What Aging Parents Need

Bigstock-Elder-Couple-With-Bills-3557267_previewPlanning for retirement can be challenging.

People usually need to save a lot of money before they consider retiring. When that is done, they need to apply for Social Security and Medicare.

At the same time, these same people need to make arrangements for where they want to live during retirement, if they do not want to stay in the same place.

Many people seek their children’s assistance for some of these decisions. They assume that if anything else is needed when they retire, then their children will be able to help them.

However, planning for retirement is not quite done until an estate planning attorney is consulted.

Some fundamental legal documents need to be drafted as Gambit points out in “The legal needs of
aging parents.”

Parents need to think about the legal ability of their children to take over for them, when necessary.

For example, the children need to be able to handle the parents’ finances and make medical decisions
for the parents, if necessary.

Preparing for that goes beyond just making sure a child has the knowledge to do those things. The child
also needs the legal authority.

That is where a visit to an estate planning attorney comes in.

The attorney can draw up a general durable power of attorney to give a child the legal authority to
handle the finances, when necessary. The attorney can also draw up a health care power of attorney to
give a child the legal authority to make medical decisions, when necessary.

Reference: Gambit (Oct. 30, 2017) “The legal needs of aging parents.”

Parents Should Explain Finances to Their Children

Bigstock-Extended-Family-Relaxing-On-So-13907567If you are a typical parent then you probably expect that your children will inherit your assets.

You probably also expect that when you get older and are unable to handle everything for yourself, your children will assist you.

That is what happens in most families.

However, most families also make a pretty big mistake when it comes to these expectations. They
assume the children will be able to step in immediately and take over for the parents having little or no prior knowledge about any details.

This can lead to big problems, which is why parents should talk to the adult children about the finances as TC Palm discusses in “Acquaint grown children with your financial affairs.”

You do not need to tell your adult children every last little detail about your finances.

Nevertheless, they need to know enough so that they can take over with few problems.

They certainly need to know where to look for details regarding your assets. While you are at it, make sure your children are familiar with financial concepts that they might not know.

What do they know about basic “financial planning”?

One great way to make things easier for your children is to get an estate plan. Going through that process can give you an idea of what you need to let your children know.

Reference: TC Palm (Oct. 30, 2017) “Acquaint grown children with your financial affairs.”

Common Marriage and Estate Planning

MarriageIn most states, the idea of common law marriage has been abolished for a long time. Only a small
number of states recognized the concept until recently.

Courts in some states are beginning to recognize these marriages again.

Why? Probably because more couples are choosing to live together for long periods of time and acting
like married couples, despite never making it “official” through the process of formally getting married.

By recognizing the existence of a common law marriage, the courts are then able to treat the couple as
they saw themselves when it comes to divorcing or settling an estate.

Not all states will recognize these marriages though as the Wills, Trusts & Estate Prof Blog points out in
“Why Common Law Couples Need an Estate Plan (New York).”

What makes a valid common law marriage varies from state to state.

Normally, if the couple holds itself out to the public as married or tells a government agency that they
are married, then a common law marriage exists. For example, if the couple files a joint tax return with
the IRS, then the existence of a common law marriage will be recognized in those states that allow them
and the couple will be in trouble with the IRS in other states.

Since not all states recognize common law marriages, it is important that you understand that you will
still need an estate plan to protect your common law spouse’s interests in some states.

Even if you act like you are married, you are not actually “married” in most states and you need to
account for that in your planning.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 25, 2017) “Why Common Law Couples Need an Estate Plan (New York).”

Mediation in Estate Disputes

Estate PlanWhen family members start fighting over the estate of a loved one, the battle can turn acrimonious.

There is almost no way for there to be a civil intra-family estate dispute, unless the case goes to trial before a judge.

When family members start testifying against each other it is extremely difficult for the wounds to heal. To avoid this problem, many courts prefer that families to try to solve their disputes through other methods before a case goes to trial.

A common way to do this is for the litigants to be sent to mediation which the Wills, Trusts & Estates Prof Blog discussed in “Court Rejects Effort to Avoid Settlement Agreement.”

In mediation a trained, neutral third party attempts to facilitate an agreement between the parties to the dispute. A mediator will often try to get the parties to see the other person’s side and to compromise.

Even when mediation does not instantly help the parties to reach an agreement, it often helps to clarify the issues. Many feuding family members do decide to reach post-mediation settlements.

Mediation does not always work. Some people feel that they are pressured into settling during mediation.

For that reason, it is important to have an attorney during estate litigation as courts are reluctant to allow people who have second thoughts out of any agreements reached during mediation.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 25, 2017) “Court Rejects Effort to Avoid Settlement Agreement.”


The Dangers of Guardianships


Rudy and Rennie North were a normal Nevada couple in their 50s. Rennie needed some assistance with day to day living, which she was able to get from a nurse at home.

Then, a woman named April Parks came into their lives.

Parks owned a business and was considered a professional guardian. Without consulting the Norths or anyone in their family, Parks was able to get a letter from a physician’s assistant declaring that the Norths needed a guardian.

Parks took this letter to court and was appointed their guardian.

The Norths again were never consulted.

No tests were conducted on them, to see if they were lacking in cognitive functioning and unable to care for themselves.

Eventually their life savings were used up and they now live in a converted office with their daughter.

The New Yorker reported this story in “How the Elderly Lose Their Rights.”

Although things like this should never happen, they occur all too frequently.

If the legal system is not diligent in protecting the elderly from so-called guardians who just want to take what the elderly have, there is little the elderly can do about it. In this case, the court system was complicit in Parks’ scam.

If you suspect that someone has used the guardianship system to take advantage of you or someone you love, it is vital that you speak to an elder law attorney immediately.

The attorney can help you to stop the guardian before it is too late.

Reference: The New Yorker (Oct. 9, 2017) “How the Elderly Lose Their Rights.”

Section 2704 Rules to Be Withdrawn


When the Obama administration announced changes to the valuation discounts for family businesses for estate tax purposes, known as the Section 2704 rules, there was a lot of consternation.

Many estate and legacy plans would have to be completely reworked in order to comply with the complicated new rules. It was not absolutely clear how all of those plans could be reworked and how the rules would actually be enforced. This created headaches for many people.

The Trump administration has decided to change course, as Forbes reports in “Treasury To Withdraw Hated Estate Tax Valuation Rules.”

The Treasury Department announced that it will soon publish an official withdrawal of the rules, since they have decided the rules are unworkable. That means planners can continue to rely on previous valuation methods, which brings a lot more certainty about how to make legacy plans for now.

This does not mean the estate tax itself has been repealed. President Trump has indicated he wants to do so, but, in the meantime, it should help those people who are affected by the estate tax.

Of course, even without the Section 2704 rules, it is still a good idea to review any previously made plans to make sure they will still be effective as intended.

Reference: Forbes (Oct. 4, 2017) “Treasury To Withdraw Hated Estate Tax Valuation Rules.”

Jerry Garcia’s Estate Difficulties


It probably never should have been assumed that Jerry Garcia’s estate administration would go smoothly, after he passed away in 1995. At first, it did seem that maybe there would not be any major problems.

However, Garcia passed away after being married three times, having four children and having one stepchild.

Even after his third wife threw the first two wives out of his funeral, it did not necessarily mean the estate administration itself would go wrong. No one challenged his will, for example.
The big mistake came when the third wife, Debra Koons, was chosen to administer the estate, as the Wills, Trusts & Estates Prof Blog discussed in “The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia’s Heirs Discovered.”

The problem for Garcia’s estate is that his other heirs objected to many of the decisions that Koons made. They felt she was acting in her own interests and not in the best interests of everyone.

This led to constant family squabbles and made the estate administration more costly and time-consuming than it needed to be.
The problems should have been anticipated.

It would have been wiser to have an independent professional hired to handle the administration of the estate. That might not have been a solution to all of the problems, but it would have taken much of the family drama out of the situation.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 12, 2017) “The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia’s Heirs Discovered.”

Prove You are Alive

4fjHtYHdRlSemICxjjBu_IMG_8424There is a master government list that has your name and other identifying information on it. When you pass away, that will be recorded and your death will be noted on another master list.

These lists are maintained so the government and private businesses can know when you are eligible for services and when your eligibility ends. For example, the government uses the lists to know when you can receive Social Security and when to stop sending benefits to you.

Human error sometimes causes problems with the list.

People who are still alive are accidentally put on the master list of the deceased.

That can cause some problems, but usually not as bad as what one Spanish woman is going through as
Fox News reported in “Spanish woman wants to open up grave to prove she’s alive.”

Juana Escudero has been deceased for seven years. Well, not really, she’s actually still alive.

The Spanish government just thinks she’s dead, because seven years ago someone with her exact same
name and place of birth was recorded as deceased.

As a result, Escudero has not been eligible to receive government services, including going to a doctor,
for the last seven years. Her efforts to convince the government that she is alive, have so far been

She’s asking the government to open the grave of the person they declared dead, so she can prove it is
not her.

In the U.S., it is easier to fix these clerical errors, but it still is not always easy.

If it happens to you, then it is a good idea to get an attorney to help you.

Reference: Fox News (Sep. 27, 2017) “Spanish woman wants to open up grave to prove she’s alive.”

Little Things That Cause Estate Problems

Bigstock-Extended-Family-Relaxing-On-So-13907567When families fight over estates, it is not always over things of great importance. They often fight over the little things.

Much of the discussion about how to avoid family feuds over estates focuses on major items. The focus is on making sure that everyone gets his or her fair share of the estate’s wealth, so they will be satisfied and not challenge the estate.

That is an important discussion, but little items of personal property can also be a problem, as CNBC discusses in “7 Ways that cheap Tweety Bird figurine can screw up your estate.”

Potential problems include:

• Items that do not have great monetary value can still have great sentimental value to family members. If two people want the same item, it can be difficult to resolve that dispute.

• Do not tell anyone verbally they can have a piece of personal property without putting that in writing in your estate plan. If other people want the same item, the person you want to have it will have no way of proving that you said they could have it.

• Do not just let your family divide all your assets between themselves when you pass away. It is most likely that they will fight over who gets what.

• Even if you have given someone access to a safety deposit box and told them they can have the contents after you pass away, you still need to make that official in your estate plan.

• Make sure that any unusual items have been planned for, such as digital media accounts and frequent flyer rewards.

• Items regulated by the government can be complicated. You should plan accordingly.

• Your executor will need to have the authority to change the locks on your door. You would be surprised how often people simply walk in and help themselves to items that they want.

Reference: CNBC (Oct. 10, 2017) “7 Ways that cheap Tweety Bird figurine can screw up your estate.”