Building Legacies that Last Estate Planning and Elder Law

Wills Can Be Changed

Bigstock-Attractive-Mixed-Race-Couple-P-9992345[1]Spouses will often agree to get wills. They or their heirs believe that a contract has been entered into that prevents those wills from being changed. It is not true.

It is fairly common in estate planning attorneys' offices, for a husband and wife to come in and declare that they both want similar wills drawn up. These wills are often referred to as "mirror image wills."

The most common form they take, is that each spouse gets a will leaving everything he or she owns to the surviving spouse. The second to pass away spouse, then gives everything to the children or other agreed upon heirs.

Despite their seeming simplicity, these wills are an unusually common source of litigation, as the National Law Review discusses in "Contracts to Make Wills or Trusts."

The problem starts when the surviving spouse has a change of plans and changes his or her will to divide things differently or to give the estate to different heirs.

The heirs of the original mirror image wills routinely argue in court, that the spouses entered into a contract to make the original wills. Unfortunately, that is simply not the case in almost all circumstances.

To be valid, a contract requires that a person receive some sort of compensation, called consideration, for whatever promise it is that they are contracted to perform.

In the case of mirror image wills, spouses rarely receive any form of consideration for promising not to change the will later.

It is important to understand this point, because the issue frequently comes up in estate litigation. It costs estates a lot of money, when the issue is raised.

Reference: National Law Review (April 10, 2017) "Contracts to Make Wills or Trusts."

 

An Estate Battle over Support for Donald Trump

Bigstock-Elder-Couple-With-Bills-3557267[1]In an extremely unusual case, the children of Phyllis Schlafly are involved in a bitter dispute over her estate that appears to have started, when Schlafly decided to support Donald Trump for President.

Throughout the late 20th century, Phyllis Schlafly was a well-known and powerful force in Republican politics. She is often credited with personally defeating the Equal Rights Amendment, when it appeared to be on the verge of passing.

Although she had faded away from the public eye in recent years, Schlafly remained an important figure in Republican circles until she passed away in 2016. When she endorsed Donald Trump for President during the 2016 primaries, it might not have mattered to the general public, but it did matter in the Republican operative world.

It also appears to have mattered to her children and her estate, as the Daily Mail reports in "Children of late conservative icon Phyllis Schlafly at war over their inheritance and have been fighting since she threw her support behind Donald Trump."

Schlafly's endorsement of Trump created a rift between her sons, who supported the decision, and her daughter, who opposed it. The daughter claims that the decision was influenced by Republican political operative Ed Martin.

Since Schlafly passed away, Martin has been creating political action committees in her name to support Trump and the daughter has attempted to stop him. She also claims that Martin and her brothers unduly influenced their mother to change her will in their favor and to make it more difficult for the daughter to challenge the will.

This is disputed by the sons.

Reference: Daily Mail (March 23, 2017) "Children of late conservative icon Phyllis Schlafly at war over their inheritance and have been fighting since she threw her support behind Donald Trump."

 

Tennessee’s Cowan Rule

MP900202201[1]In most states, to completely disinherit a child in a will, parents have to mention the child and specifically disinherit him or her. Otherwise, it is presumed that the child was left out by mistake. Tennessee has an exception to the rule.  Likewise, in Maryland, a parent must explicitly state an intent to disinherit a child to do so and should proceed with the advice of a Maryland estate planning attorney.

  1. Don Brock, the late CEO of Astec Industries, wrote many wills over the years. He executed new wills in 1994, 1998, 2006, 2012 and 2013. His first three wills all did different things with regard to his five adopted children.

They were given various amounts of money or cut out from receiving anything in the different wills. The last two wills did not mention the adopted children at all. They claim that was done by their stepmother, in order to preserve the assets of Astec Industries for herself.

The children filed a lawsuit against the estate, but lost in the lower courts. The Supreme Court of Tennessee has now agreed to hear their case, according to the Times Free Press in “Tennessee Supreme Court agrees to hear J. Don Brock estate challenge.”

The main issue in this case is a 110-year-old decision by the Supreme Court of Tennessee that created what is known as the Cowan Rule. It limits the ability of potential heirs to challenge a will, if they were not mentioned in the previous will.

The adopted children lost in the lower courts because they were not mentioned in the 2012 will. The rule makes some sense.

Why?

Merely having the 2013 will ruled invalid would not create an inheritance for the children,  since it would just validate the 2012 will, unless it is also successfully challenged.

However, this is not how other states handle disinherited children.

In other states, it is presumed that if a child is not mentioned in a will at all, it was a mistake and the child can challenge the estate, regardless of what an older will might state. In Maryland and DC, the will should explicitly disinherit.  Contact a Maryland estate planning attorney or DC estate planning attorney in order to successfully disinherit a child.

Reference: Times Free Press (March 21, 2017) “Tennessee Supreme Court agrees to hear J. Don Brock estate challenge.”

 

Audrey Hepburn’s Sons Use Mediation to Settle Estate Plan Dispute

Audrey-hepburn-actress-breakfast-at-tiffany-s-prominent-76961Audrey Hepburn’s estate planning mistake has led to a long legal fight between her sons. It appears that they have finally reached an agreement. Like many, she gave vague instructions to her sons about dividing her legacy and did not include any instructions  for her sons on resolving disputes.

Audrey Hepburn starred in some of the most beloved movies of all time. She came to symbolize beauty and grace in mid-century Hollywood.

When she passed away in 1993, she left behind a gigantic amount of memorabilia from her acting career, including some of the costumes and jewelry that she wore in her iconic roles. These items have obvious value to collectors, but so far no one has gotten their hands on them.

Why?

The items have been the source of a long dispute between her two sons.

Hepburn specified in her estate plan that everything she owned should be split between those sons equally, but she left no instructions regarding just how that was to be accomplished.

Which son should get which item?  This dispute could have been resolved without costly litigation if she included in her will instructions for mediation to resolve such disputes.  Michelle Profit, an estate planning attorney, has written an article on how mediation can be used to peacefully resolve disputes.

Hepburn’s will was silent, however, so memorabilia has been contested in court for the last two years, but the sons may have finally reached an agreement, according to the Daily Mail in “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

The sons have agreed to submit the question to mediation and use that process to determine the distribution of particular pieces of memorabilia. However, this will not be the end of all battles concerning Hepburn’s estate, since a charitable fund she founded is now suing one of the sons for interference with its affairs.

Hepburn’s mistake was not including some way for her son’s to resolve any disputes about who gets what in her estate plan. She could have made provisions for a mediator to resolve the disputes. That would have saved a lot of headaches and legal bills for her family. Profit Law Firm, LLC can include dispute resolution in your estate planning documents to avoid these disputes, and reduce the cost of such disputes, when they occur.

Reference: Daily Mail (March 9, 2017) “Audrey Hepburn’s sons agree to split their late mother’s treasure trove of belongings, including costumes, jewelry, scripts and awards, after two-year legal dispute.”

 

Suing Yourself on Behalf of an Estate

Bigstock-Young-man-holding-a-trash-bin--26453660[1]Estate executors and personal representatives have a duty to the estate to pursue any causes of action that the estate might have, but what if that means they have to sue themselves? A case in Utah answers that question.

If a deceased person or the estate of that person has reasonable legal recourse against some other person or entity, then it is ordinarily the duty of the estate's representative to pursue that action in court. However, a recent case in Utah shows how that can lead to interesting results.

A man died in a one-vehicle accident when his common law wife was driving. The wife was the man's sole heir and was named the personal representative of his estate. In that capacity, on behalf of the estate, she filed a lawsuit against herself for wrongful death. Then, in her capacity as an individual and the defendant in the wrongful death case, she moved to dismiss the case on the grounds she could not sue herself.

The trial court dismissed the lawsuit.

The grounds?

Public policy prevents someone from suing themselves.

However, the Utah Supreme Court reversed that and allowed the wrongful death lawsuit to continue.

The Wills, Trusts & Estates Prof Blog discussed this case in "Case Summary on Suing Yourself as Personal Representative for Wrongful Death."

At first glance, this might seem ridiculous and pointless, since the woman is the sole heir. Even if the estate collects money from the lawsuit, it would just go to her. However, there are a couple of things that could be going on here.

Before any heirs receive their inheritances from the estate, any debts of the deceased have to be paid. It could be that the estate cannot cover the man's debts, unless judgment is obtained against the woman.

Another possibility is that the woman had insurance at the time of the accident. In that case, the insurance company might be required to indemnify her if she is held liable for wrongful death.

Thus, the estate would not really be collecting from her. It would be collecting from the insurance company.

Reference: Wills, Trusts & Estates Prof Blog (Dec. 22, 2016) "Case Summary on Suing Yourself as Personal Representative for Wrongful Death"

 

Prince Record Label Sues Jay Z

Business_meeting[1]As expected the dispute between Prince's estate and Jay Z has resulted in a lawsuit.

How Prince's estate will manage to pay its hefty estate tax bill has been a source of much speculation. It was assumed that one way to do so would be to sell the rights to Prince's unreleased recordings. Rapper Jay Z had offered a reported $40 million for those rights. However, the estate turned that offer down and it has come up with a possibly different answer.

It can raise money by suing Jay Z, as it hinted it might do in a statement made after rejecting Jay Z's offer.

Through Prince's record label a lawsuit has been filed against Jay Z's company Roc Nation, according to TMZ in "Prince to Jay Z No Free Rides in My Little Red Corvette … Record Label Sues."

The lawsuit alleges that prior to his death, Prince had negotiated a deal with Jay Z to allow Jay Z to stream Prince's last album on the Tidal service, which Jay Z owns through Roc Nation. However, instead of just streaming that album, Jay Z assumed that he had permission to stream all of Prince's music and in June of this year began streaming all of Prince's best-known songs.

The lawsuit does not state the amount of damages that the record label is seeking, but it is likely to be extremely high given the popularity of Prince's music.

This is a case that both copyright attorneys and estate planning attorneys will keep a close eye on. The latter will be interested to learn if it sheds some light on how Prince's estate plans to pay estate taxes.

Reference: TMZ (Nov. 15, 2016) "Prince to Jay Z No Free Rides in My Little Red Corvette … Record Label

Tupac’s Pendant for Sale

Bigstock-Vintage-brass-telescope-on-ant-44347372[1]If you would like to purchase a pendant that Tupac Shakur was wearing when he was shot, you can. You might get sued though.

The deceased rapper Tupac Shakur remains one of the biggest stars of the music genre years after his death. Fans still cannot get enough of his music, but his personal items have not been nearly as accessible to interested collectors.

A single piece of memorabilia has now appeared.

According to TMZ in "Tupac Bullet-Dented Pendant. . . Up For Grabs For $125K," a bullet-dented pendant the rapper was wearing when he was shot in New York City two years before his death is up for sale at a fixed price of $125,000

The pendant was allegedly given to a memorabilia dealer for the sale by an unnamed family member. It is not certain why it is a sale for a fixed price when most high value celebrity memorabilia is put up for auction.

What does seem clear is that this sale is very much a buyer beware situation.

Tupac's estate has declared that no one, including family, has been authorized to sell any merchandise. The estate has threatened to sue anyone who sells or buys the pendant.

Until more details come out, it cannot be determined whether the estate has the right to block the sale of this pendant.

If the family member who gave it to the dealer was given the pendant as part of the estate, then it is not clear what grounds the estate has to sue on. However, if the pendant was improperly acquired, then the estate has a much better case.

Reference: TMZ (Oct. 16, 2016) "Tupac Bullet-Dented Pendant. . . Up For Grabs For $125K."