The Wiewel Law Firm

Yes, You Need a Durable Power of Attorney

If you can’t take care of your finances yourself, who can?

What if something were to suddenly happen to you? It would be wise to take into consideration just how difficult it would be for someone else to take care of all your bills, according to WMUR 9 ABC in "Money Matters: Why you need a durable power of attorney."

 You need to think about what would happen if you had an accident and could not pay your bills for a month or two or even more.

What would it be like to get out of the hospital and come home to a big stack of unpaid bills? How many of your services would be cut off? Would you be in any shape to pay all of the stacked up bills to quickly get everything back in order?

There is a way to avoid that scenario.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, which will most likely contain a durable power of attorney.

Reference: WMUR 9 ABC (July 6, 2017) "Money Matters: Why you need a durable power of attorney."

Alan Thicke’s Estate Faces Obstacles to Settlement

Thicke’s sons and their stepmother square off over correct distribution of estate.

It is not unusual for children and their stepmother to get into arguments when settling an estate, but it is unusual to bring the threat of revealing information to tabloids, according to TMZ in "Alan Thicke Sons Go To War With His Wife To Protect the Estate."

Two sons of deceased actor Alan Thicke have filed a claim suggesting that Thicke's third wife, Tanya Callau, is attempting to get more of the estate than she is entitled to receive and that she has threatened to go to the tabloids, if she does not get her way.

Thicke and Callau had a prenuptial agreement and she is already set to get a sizeable portion of his estate. Her take includes 25% of his personal assets, 40% of the remainder of the estate, a $500,000 life insurance payment and she can stay in the residence for the remainder of her life.

Other than the celebrity nature of this estate and the alleged threat to get the tabloids involved, this is, of course, not a particularly unusual estate battle.

Adult children are often at odds with a surviving step-parent and that battle often makes its way into probate court to fight over the estate. This is especially true when there are large sums of money involved.

It would probably be wise, if wealthy people who have remarried and who have children from previous relationships, meet with an estate planning attorney and attempt to reduce the chances of major arguments after they have passed on.

Reference: TMZ (May 16, 2017) "Alan Thicke Sons Go To War With His Wife To Protect the Estate."

‘Slayer Statutes’ May Not Always Be Effective

People cannot inherit assets from people they have killed, but there are exceptions.

“Slayer Statutes” have their limitations, according to the Wills, Trusts & Estates Prof Blog in "Court Determines that Slayer Statute is Not Applicable in Self-Defense Case."

We have long had laws that are designed to prevent people from inheriting assets from people they have killed. These laws are known as "Slayer Statutes."

They generally state that people cannot inherit from those they are responsible for killing.

In the case discussed in the article, it was not clear what led to the death of the holder of a life insurance policy. The sole beneficiary of the policy was involved in the death and had given conflicting statements.

The beneficiary was not convicted of murder and claimed self-defense.

The deceased's sister sued to claim the policy, but the court decided that since there was some merit to the self-defense claim, the slayer statute did not apply.

Reference: Wills, Trusts & Estates Prof Blog (April 11, 2017) "Court Determines that Slayer Statute is Not Applicable in Self-Defense Case."

Politics Sparks Battle in Phyllis Schlafly’s Estate

Bitter dispute began with support for then Presidential candidate Donald Trump.

Phyllis Schlafly’s support for Donald Trump for President mattered to her children as well as her estate, according to the Daily Mail 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, who was once well-known as a powerful force in Republican politics, had a reputation for her fight against the Equal Rights Amendment and remained an important figure in Republican circles until her death in 2016. She endorsed Donald Trump for President during the 2016 primaries.

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.

Tennessee Takes Fresh Look at Disinheritance Rule

Tennessee has an exception to the rules, in how to legally disinherit a child from a will.

The Supreme Court of Tennessee has agreed to hear the case of some children who were not mentioned in a will, according to the Times Free Press in "Tennessee Supreme Court agrees to hear J. Don Brock estate challenge."

The case resulted after J. 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 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.

An estate planning attorney can advise you on the laws of your state as well as guide you in creating an estate plan that meets your unique circumstances.

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

New Jersey Has Change of Heart on Student Loans

Parents who cosigned student loans for their children, who then passed away, no longer have to pay back New Jersey.

The state of New Jersey has been known for taking a hard stand on student loans.  However, it has now taken a reverse course, according to Financial Advisor in "N.J. Discharging Loans For Families of Deceased Students."

If a student passes away with outstanding student loan debt, then the federal government discharges the debt. Many private student loan companies also do this.

New Jersey, however, has been known for taking a tougher stand.

Not only would New Jersey still expect payment from the estate, it would require co-signers to pay, if the estate was unable to do so. This left many families deep in debt over the unrepaid loans of their deceased children.

The policy was roundly criticized for the burden that it left on grieving parents.

Attempts had been made to change the law and the state's policy to no avail. However, the state legislature has recently reversed course and will now discharge the debt of deceased students.

An estate planning attorney can advise you on how to properly discharge a student debt under your unique circumstances.

Reference: Financial Advisor (Feb. 21, 2017) "N.J. Discharging Loans For Families of Deceased Students."

Trump Could Face Early Test with Estate Tax

U.S. remains equally divided on estate tax issue.

What President-elect Trump and the Republican majority do about the estate tax, could indicate what sort of leader Trump plans to be, according to Bloomberg in "Estate Tax Repeal Would Be a Bonanza for Trump and His Cabinet."

If people are asked whether they favor a tax when someone dies, the majority will say that they do not. However, when they are also told who the estate tax affects, then the majority of people support the estate tax. That pretty much equally divides the country on the issue.

Trump campaigned on the notion that he would bring prosperity to the working class.  However, he also favored repealing the estate tax, which no one in the working class pays. His family would also benefit greatly from repealing the tax. One estimate of his net worth, that he has said is too low, would indicate that his estate would save $545 million by not having to pay estate taxes. Several members of his cabinet would also save millions of dollars.

This is important for people who do want to see the estate tax eliminated.

Reference: Bloomberg (Dec. 9, 2016) "Estate Tax Repeal Would Be a Bonanza for Trump and His Cabinet."

Money May Not Be the Root of Family Estate Dispute

If one watches an estate dispute among wealthy families in the media, they sometimes find out that it isn’t just about the dollars.

Traditionally feuds are over wealth, crown or other inheritances and are considered to be about money. Generally speaking something deeper is going on, according to Psych Central in "Death, Wealth, and the Psychological Anatomy of a Family Dispute."

In the U.S., the participants in a family estate fight no longer enlist armies and fight it out on a field of battle. Instead, people today fight things out in court. However, the reasons for today’s disputes are very similar to what they were hundreds of years ago.

Psychologists and even pop culture have known for a long time about sibling rivalry. Although there is disagreement about the core reasons for the phenomenon, no one disputes that it exists. Whether it has its roots in birth order, a desire to be loved more by parents or something else, sibling rivalry is a real thing that does not go away when children grow up.

The same psychological reasons that lead siblings to argue over who gets to ride shotgun in the car are the same reasons that lead to arguments over estates.

Knowing sibling rivalry exists and making estate plans with it in mind, can sometimes make for a smoother process.

Reference: Psych Central (Dec. 13, 2016) "Death, Wealth, and the Psychological Anatomy of a Family Dispute."

Student Loans Not Equal in Estate Plans

The status of an outstanding student loan if the holder of the loan dies varies by type of loan.

The New York Times reports in "In New Jersey Student Loan Program, Even Death May Not Bring a Reprieve," that the state of New Jersey wants its money back because it does not forgive loans when debtor-students pass away. That often means parents who have cosigned the loans are required to pay them off.

Most private student loans issued through banks operate in the same way. The loan must still be paid after the student debtor passes away. If there is not enough money in the estate to cover the costs, cosigners are stuck with the bill.

On the other hand, loans insured by the federal government are written off if the debtor passes away. It is not automatic, however. Executors need to take affirmative steps to have the loans forgiven, but it is not a difficult process.

An estate planning attorney can guide you in dealing with unpaid student loans and the proper way to handle them in an estate.

Reference: New York Times (July 3, 2016) "In New Jersey Student Loan Program, Even Death May Not Bring a Reprieve

Student Loans Not Equal in Estate Plans

The status of an outstanding student loan if the holder of the loan dies varies by type of loan.

The New York Times reports in "In New Jersey Student Loan Program, Even Death May Not Bring a Reprieve," that the state of New Jersey wants its money back because it does not forgive loans when debtor-students pass away. That often means parents who have cosigned the loans are required to pay them off.

Most private student loans issued through banks operate in the same way. The loan must still be paid after the student debtor passes away. If there is not enough money in the estate to cover the costs, cosigners are stuck with the bill.

On the other hand, loans insured by the federal government are written off if the debtor passes away. It is not automatic, however. Executors need to take affirmative steps to have the loans forgiven, but it is not a difficult process.

An estate planning attorney can guide you in dealing with unpaid student loans and the proper way to handle them in an estate.

Reference: New York Times (July 3, 2016) "In New Jersey Student Loan Program, Even Death May Not Bring a Reprieve"