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Lessons from the passing of Adam Yauch and Sherman Helmsley

8/30/2012

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In the past couple of weeks two news stories relating to the estate planning of some recently departed celebrities have served to highlight a couple of important but less commonly discussed aspects of a comprehensive estate plan.

The first  story is about the late Adam Yauch, founding member of the Beastie Boys. Yauch died in May, at the age of 47. According to Yauch’s will, if both he and his wife—the mother of their child—died at the same time (such as in a common accident) while the child was still a minor, then Yauch’s parents would raise the child if Yauch and his wife died in an even-numbered year, and his wife’s parents would raise the child if Yauch and his wife died in an odd-numbered year. Presumably, Yauch’s wife’s will had an identical provision. It’s a bit of an arbitrary solution, but nevertheless a workable solution to what I suspect was deep disagreement between the spouses about who would raise their child if they both died and thus neither could do so. 

As it happens, Yauch’s wife survived him, and she will of course raise their child. And should she now die at some later point but before their child reaches 18, then the child will be raised by whoever Yauch’s wife names as guardian, which she is now free to choose solely on her own in a new will, unless there was some provision in the original wills preventing such a change (which I doubt would be legally enforceable in any event, for reasons beyond the scope of this post). 

In my law practice, I find that the most contentious estate planning-related discussion between spouses or partners with minor children is the discussion about who will raise their minor children should both parents die. It’s not always contentious by any means, but when there is contention, it is usually for this reason. Additionally, when I notice parents delaying in taking the first step toward getting an estate plan, and also when, once involved in the process they delay in approving draft documents and signing final documents, it is usually because they are still working through the guardianship issue. But, the good news is that they almost universally report that once they emerge on the other side of the decision they have incredible peace of mind and their relationship is in a better place as a result.   

The second news story involves the late Sherman Helmsley, best known for his portrayal of George Jefferson on TV. Helmsley died in Texas in late July, and at the time I’m writing this post it is the end of August. As of now, a month after he died, Helmsley remains unburied. His body is being stored at an El Paso funeral home pending the outcome of a legal dispute between his longtime partner, Flora Enchinton, and a man claiming to be Helmsley’s brother. The dispute arises because the alleged brother claims he is the sole heir of Helmsley’s estate since he believes the will Helmsley signed a month before he died is not valid.

This post isn’t about the merits of the legal dispute, because I really have very few details about it, but it highlights a problem that often arises when a person dies and leaves behind an unmarried partner, whether that partner be of the same sex or (in Helmsley’s case) the opposite sex. In those cases, the surviving partner often has no legal standing. This post isn’t about the will itself, but about the fact that since Helmsley’s will provides instructions for the disposition of his remains, and since that will is being challenged with a claim that it’s not valid, Helmsley’s remains cannot be disposed of until it is determined whether the will is valid and that its provisions should therefore be carried out. 

That said, it is important to note that since 2006 New York has had a law that allows a person to appoint an agent to be responsible for the disposition of his or her remains. Much like a health care agent is authorized to make medical decisions on behalf of a person no longer able to make decisions for him- or herself, an agent authorized to dispose of a person’s remains is legally recognized as the sole person responsible for making all decisions related to the disposition of the deceased person’s remains, such as funeral and/or memorial service plans, whether the body is to be buried or cremated, etc.  The person you choose can be anyone, as long as they’re 18 and mentally competent.

Further, even if you die without such a document, the law provides the order of priority that must be followed when determining who will have the authority to make decisions regarding the disposition of remains. The order as determined by the New York statute is:

  • Surviving spouse or domestic partner
  • Any of the decedent's surviving children over the age of 18
  • Either of the decedent's parents
  • Any of the decedent's surviving siblings (brothers or sisters) over the age of 18
  • A guardian appointed by a court
  • Person 18 years or older who are eligible to receive an estate distribution, in the following order:
  • Grandchildren
  • Great-grandchildren
  • Nieces and nephews
  • Grand-nieces and grand-nephews
  • Grandparents
  • Aunts and uncles
  • First cousins
  • Great-grandchildren of Grandparents
  • Second cousins
  • The duly appointed fiduciary of the decedent's estate (i.e., the executor)
  • Close friend or other relative who is reasonably familiar with the decedent's wishes, including his or her religious or moral beliefs, when no one higher on the list is available, willing, or competent to act;
  • The Office of the Public Administrator

In New Jersey, the law provides that if a will states who should handle the disposition of remains, that person can do so, even if the will has not been admitted to probate. However, those wishes must be expressed in a will, not a separate document, so it’s important 1) to have a will, and 2) for family members or other loved ones to know where to access your will in a way that allows for a timely funeral/burial/cremation. If the will is locked in a safe deposit box, for example, it will take weeks before a court order can be issued to allow the safe deposit box to be opened.

Interestingly, Texas has a similar law to New York’s, with a little bit of New Jersey’s mixed in. Essentially, it provides that a person can appoint an agent for the disposition of remains in a will, and that that provision will be recognized even before the will is admitted to probate. Apparently, however, it doesn’t necessarily apply if the will is being challenged. The exception in the Texas statute seems to indicate that the provision will not be honored pre-probate only upon a showing of bad faith in the creation of the provision/will (but don't quote me on that). I’m guessing that the delay in Helmsley's burial is that the alleged brother is claiming bad faith on the part of Helmsley’s partner in drawing up the will that contains the disposition of remains provision. Just a guess.  

Additionally, while like New York the Texas law provides a hierarchy of people eligible to serve as agent in the absence of a document naming an agent, the Texas statute (like statutes in most states, I'll wager) has no provisions recognizing domestic partners.  Remember: Helmsley was not married to his longtime partner. Thus, she cannot benefit from the law. Under the Texas law, in the absence of a valid will or other document naming an agent for the disposition of remains, then the person claiming to be Helmsley’s brother—if he is in fact Helmsley’s brother—has a greater standing than Helmsley’s partner under the law to decide what happens to Helmsley’s remains, even though the two had no relationship whatsoever other than blood ties. In fact, Helmsley’s partner has no standing whatsoever, like she would in New York.

The long and short of it is that anyone who is not in a legally recognized marital relationship should take the precaution of executing an “Appointment of Agent to Control Disposition of Remains” document. This is a standard practice of mine, although it likely is not part of the estate planning toolbox of attorneys not used to working with people in so-called “non-traditional” relationships. It is therefore important to raise the issue with your estate planning attorney if he or she does not raise the issue with you first.

DISCLAIMER: THIS IS ATTORNEY ADVERTISING. The information you obtain at this website is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Review of this website does not in any way constitute legal representation. Contacting Michael Bond or the Law Office of Michael Bond by telephone, fax, e-mail, or any other method does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised. 
 
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Everybody Has an Estate (Really!) Which is Why Everybody Needs an Estate Plan

6/6/2011

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The most common misperception I encounter when talking to friends, family, and potential clients about estate planning is that they don’t think they have an estate in the first place. 

For many, the word “estate” has come to be associated only with manor houses and trust funds, but the reality is that your estate is anything you leave behind at death, be it a mansion or mobile home; a billion dollars or a dime.

Since it has now been established that you do indeed have an estate, it is important that you engage in some estate planning with the guidance of an attorney.

For starters, if you don’t take steps to make sure your estate passes to those you want it to pass to, a judge will decide who gets what based on your state’s intestacy laws, which are triggered when you die without a Will. [For brevity’s sake, only the term “Will” is used in this article even though there are other estate planning instruments, such as Trusts, that can accomplish the same objectives, depending on your particular circumstances.] Intestacy laws attempt to mirror what the average person would want done with their property had they prepared a Will but, as you will see, such statutes can fall far short of the mark. 

Next, if you have minor children, part of your estate plan will include designating who you would like to serve as guardian for them should they be orphaned. If there is no Will containing a guardianship designation, then a judge will need to make the designation based on what he or she decides is in the best interests of your child. 

More still, a well-designed estate plan includes, at a minimum, a health care proxy designation and “living will”, as well as a power of attorney. 

This article first provides an overview of New Jersey and New York’s intestacy laws to give you an idea of what might become of your estate in the absence of a Will. Next, it explains what might happen if guardianship for minor children is not designated in a Will. Finally, it briefly discusses the purpose and benefits of health care proxies/“living wills” and powers of attorney.

The Effects of Intestacy

As mentioned at the beginning of this article, each state  has a law that dictates what happens to the estate of a deceased person (known as the “decedent”) in the event the decedent dies without a Will. These laws are called intestacy statutes, and they also apply when a person creates a Will that is not drafted or executed with the required formalities.

Although intestacy statutes aim to reflect what the majority of people would want done with their estates upon their deaths, they are by necessity one-size-fits-all solutions. Intestacy statutes know nothing about your particular family structure or dynamic; they know nothing about how many assets you have or what those assets consist of. 

For example, under New Jersey’s (and to a large extent, New York’s) intestacy laws, the only time a surviving spouse or domestic partner will receive the entirety of the decedent’s estate is if the decedent dies with no surviving parents or surviving descendants (children, grandchildren, etc.). If there are surviving descendants and/or parents, they all receive a percentage of the estate, as determined by the statute. Although most people who create Wills leave their entire estate to their surviving spouse or partner, it might not seem unreasonable on first glance for the intestacy statutes to provide for the decedent’s children, grandchildren, and/or parents in the absence of a Will. 

But what if the surviving spouse or partner has minor children to take care of, yet has to hold a portion of the decedent’s estate in trust for those children until they reach adulthood, and as a result doesn’t have enough assets to raise those children to adulthood in the first place? What if there are adult children (or even the decedent’s grandchildren or parents) who are all entitled to a share of the estate, thus forcing the surviving spouse or partner to sell the family home in order to liquidate enough assets to give everyone their share? 

Intestacy laws are not concerned with whether you want to provide different gifts to different children, based upon their special needs or other factors. Intestacy laws are not concerned with whether your surviving spouse or partner needs your estate’s assets in order to provide for his or her basic needs, while your surviving parents have no need for your money whatsoever. In fact, intestacy statutes don’t care whether you even have a relationship with your parents or children at all. Intestacy laws also don’t care about distributing your estate in a way that provides the maximum tax benefit to those who inherit your estate.

As you can imagine, there are numerous scenarios that might play out in the absence of a Will that can lead to entirely unwanted, even tragic, outcomes. Finally, it is important to remember that, even with a Will, you will be deemed to have died without one if your Will was not drafted properly and executed with the necessary formalities. It is, therefore, very important to see an estate planning attorney to help ensure that all the t’s are crossed and all the i’s dotted.

“Best Interests of the Child”?

A Will that is drafted by a competent attorney will designate who is to raise your minor child (or children) in the event both parents die before the child reaches age 18. Making the guardianship designation is often the hardest decision people face when planning their estate. However, it is also arguably the most important decision. (For more information, please see my post “Choosing a Guardian for Your Minor Children”) 

Your estate planning attorney can and should discuss with you the issues to consider when making a guardianship designation, and should also see to it that the designation is not only included in your Will, but also in a separate document designed to govern if both parents are alive but incapacitated. This is important because the provisions of a Will only take effect upon a person’s death, and thus your wishes for your child’s guardianship, as stated in your Will, will have no effect if you are alive but unable to care for the child.

So, what happens if you and your child’s other parent die while the child is a minor, and you have not designated a guardian in your Will? The answer is that a judge will decide who raises your child, based on a “best interests of the child” standard. But, as you can imagine, the “best interests of the child” standard is very subjective. Should the child’s grandparents raise the child? What if they are financially or physically unable to do so? Or, what if there are two sets of grandparents, both of whom want to raise the child? Even if both sets of grandparents are perfectly fit to raise the child, is it in the child’s best interests to be shuttled between both sets of grandparents? If not, which set should the judge choose? And how should the judge choose? Based on financial means? The emotional attachment between grandparents and child? The wishes of the child? The age of the grandparents? 

Or maybe someone entirely different wants to raise your child. Perhaps your brother or sister or best friend. Regardless of who is seeking the responsibility, the judge will have to hold lengthy hearings to make the determination. Evidence will need to be gathered and presented to the judge. Oftentimes, investigations and interviews must be conducted, audits of the potential guardian’s assets must be undertaken, etc. These things can be very expensive and lead to hurt feelings and bad blood between family members and other loved ones. It is also a time-consuming process—and in the meantime the judge will have to appoint someone to temporarily look after your child while a permanent decision is being made. This will delay your child’s adjustment to his or her new home and will be a time of great uncertainty and insecurity for the child while he or she is also trying to cope with your loss.

Having a Will is the best way to avoid the heartache, time, and expense that can stem from a judge deciding who will raise your child. Far better is for you to make the decision and have it memorialized in your Will. This will give you peace of mind that, should the unthinkable come to pass, your children will be raised by the people you want raising them and not by whoever a judge decides should raise them.

Other Elements of a Sound Estate Plan

In addition to a Will, every estate plan should include a health care proxy and “living will”, as well as a power of attorney. 

A “living will” (or advanced directive) is a written statement of your wishes regarding medical treatment, including what life-sustaining measures you do or do not want provided on your behalf, as well as at what point those measures should or should not be taken. The statement is to be followed if you are unable to give instructions at the time such medical decisions need to be made. 

A health care proxy, on the other hand, empowers another person of your choosing (your “health care agent”) to make health care decisions for you if you cannot do so yourself. The health care proxy defines your agent’s scope of authority, and can also limit that scope if you desire.

The health care proxy and living will are often combined into a single document that can also express your wishes on organ donation, autopsy, and disposition of remains. 

Next, a Power of Attorney is an authorization granted by you to a person of your choosing to act as your agent and to make binding legal and financial decisions on your behalf, either under all circumstances or under specifically designated circumstances. The power usually comes into effect immediately upon the signing of the document, so it is important that you choose a person who you truly trust. Although a power of attorney can also be drafted to take effect only upon your incapacity, taking that approach raises the issue of what constitutes incapacity, and who can make that determination. 

Determining incapacity can be a time-consuming process and, in the meantime, there will be no one who is able to take care of your affairs, such as paying your bills, maintaining your home, running your business, etc. Until a determination of your capacity is made, those tasks will go unattended to. 

If you have questions or concerns about which type of power of attorney to grant, your estate planning attorney can walk you through the various considerations.

However modest your estate may be, you do have one, and you should develop a plan for it so that what you’ve worked for all your life will be passed down to those you want to have it after you’re gone. If you have minor children, the person or persons who will raise them and shape their futures must be designated. And you need to look after yourself, too, by making known your wishes with regard to end of life medical treatment, while also giving someone you trust the ability to make health care decisions for you—and to take care of your other affairs, too—should you become incapable of doing so. 

Otherwise, the state can and will do it for you.
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Choosing a Guardian for Your Minor Children

6/6/2011

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For many parents, choosing who will raise their minor children if both parents die is not only disturbing to think about, but is often the most difficult decision they have to make when planning their estate. However, it is also one of the most important. Failing to make and document the decision can lead to outcomes the parents never would have wanted for their children.

This article first discusses the factors you should consider when making the guardianship decision, and then outlines how a well-considered estate plan can help ensure that your children are raised by the people you want to raise them, that their needs while still minors are provided for, and that your assets pass to your children in a responsible way once they reach adulthood.

Considerations When Naming a Guardian

When a parent dies and leaves behind a minor child, the surviving parent usually automatically becomes the child’s guardian (although there are special considerations for same-sex and unmarried couples, discussed below). The issue of guardianship primarily arises when both parents die or become incapacitated. Admittedly, it is a difficult thing to contemplate, but it can happen, and if it does happen what can be more important than making sure your children are raised well and loved by someone you trust to provide for them?

Some of the questions you should ask yourself when choosing a guardian are:

  1. Whose parenting style and values most closely match your own? The importance of this consideration will vary from parent to parent, but it is important to decide to what extent a prospective guardian should share your values, including religious beliefs.
  2. Who is most able to take on the responsibility of a caring for a child — emotionally, financially, physically, etc.? Oftentimes, parents of a minor child assume one set of the child’s grandparents will be ready, willing, and able to assume the role of guardian. However, it is important to discuss these factors in advance with the prospective guardians—whoever they are—to make sure raising a child is a responsibility they want to take on, and one they can handle.  Additionally, will you be able to provide enough assets for the guardians to raise your child? If not, do the prospective guardians have the means to do so on their own? Are they mature enough to raise a child? Do they have the physical stamina you know from experience is important to safely raising a healthy and happy child?
  3. Does the child feel comfortable with the prospective guardian already? Would your child need to move far away? These considerations go hand in hand because losing both parents is already a traumatic event for a child. Further trauma can be minimized if the child’s new guardian is someone the child is already comfortable around, and if the child won’t have to change schools and make new friends in a strange place. 


Once you have made a choice, or narrowed down your options, you should discuss it with the prospective guardians to find out if they are interested in raising your child if you are not able to. You should be candid about your wishes for your child and the responsibilities involved, and also make it clear that you want them to be candid with you, too, and that you won’t be offended if they do not want to assume the role. 

Another thing to consider is alternate guardians, and under what conditions, if any, the alternate guardian would be preferred over the first guardian you designate. Obviously, the death or incapacity of the first guardian would trigger the appointment of the alternate guardian. But what if you named your parents as initial guardians and one of the parents dies or becomes incapacitated? Or, perhaps you named your sibling and his or her spouse as initial guardians. What if they divorce? Would you still want them to be co-guardians? Would you want a sibling-in-law raising your child if your sibling died? You should think through these issues, and your estate planning attorney can help you do it.

How Will My Estate Plan Provide for My Minor Children?

A comprehensive, well-designed estate plan will look at several factors, including who will serve as guardian upon the death of both parents, who will serve as guardian should both parents be alive but become temporarily or permanently incapacitated, and who will look after the deceased parents’ estate so that it is available first to provide for the child’s upbringing and then, upon reaching adulthood, that it passes to the child in responsible, age-appropriate way.

One thing your estate planning attorney should do is prepare a Designation of Guardian document to name a guardian in the event of your incapacity. A Will is not adequate in this instance because it only takes effect upon your death. For any circumstance short of death, the Designation of Guardian document is needed.

Next, your attorney should make sure your Will names, as an added safeguard, the surviving spouse or co-parent as guardian, with any subsequent guardians to assume the role only upon the death of both parents. If you or your attorney feel a court might take issue with your designated guardians, you can write a letter of explanation to keep with your Will that states the reasons for your choice. Because a judge must always rule in the best interests of the child—a subjective standard indeed—a letter of explanation can be helpful to the judge in reaching a decision. Such a letter can be especially important in situations where a same-sex couple co-parents a child, even when one of the partners is still alive. In such situations there are also other steps you and an estate planning attorney sensitive to and knowledgeable about same-sex considerations can and should take to help ensure your relationship—and guardianship decision—are recognized and respected by a court.

Because a minor cannot inherit outright before reaching adulthood, your Will should direct that a trust be created upon your death to hold and administer your estate until your child is of suitable age to receive your estate outright. In recognition of the expenses associated with raising a child, the trust will also direct that funds be dispersed generously to aid your child’s guardian in providing for your child’s well-being, education, etc. The trustee of this trust can, but need not be, the same person who serves as guardian. Some people designate a different person (or entity, such as a financial institution) to serve as trustee, because the guardian—while well-suited to raise the child—might not be the best money manager; sometimes a separate trustee is named as a kind of check on the guardian—with one person being in charge of raising the child, and the other being in charge of making sure the child is provided for financially in a fiscally responsible way. An estate planning attorney can help you think through the different options.

Once your child reaches adulthood, he or she can inherit. However, while 18 might be the age of majority, in most cases it is not the age of maturity. How your child receives his or her inheritance is your decision, but one route to consider is establishing a trust that will allow the trustee to distribute funds to your child at the trustee’s discretion—for education or other reasonable, responsible purposes—from age 18 to 30, while paying out a certain percentage of the trust’s principal at various set intervals, such as every two years beginning at age 22, with the entirety being paid out by age 30. You and your estate planning attorney can discuss an appropriate payout schedule depending on various factors such as your child’s sense of responsibility, financial obligations, health, or other special needs. In the case of multiple children, you might wish for one child to receive trust assets on one schedule, with another child receiving assets on a different schedule.

This article has highlighted some of the basic considerations involved in a relatively straightforward situation. As mentioned above, additional measures should be taken by same-sex and unmarried couples to provide for guardianship of their children. Even for a heterosexual married couple with children, various complexities might emerge. To name a new examples:  What if you don’t think your family will like your choice of guardian? What if you don’t like your choice’s spouse? What if you have children from previous marriages? These and other circumstances can be met head on with the help of an estate planning attorney who is interested in learning about the particulars of your family and financial situation, and who knows how to create a plan for the guardianship of your children that reflects your wishes and is constructed with the mechanisms necessary to carry out those wishes. Although the unpleasant nature of the decision might make it difficult to get the process started, the peace of mind you’ll have once your plan is in place will give you invaluable peace of mind.

This article has been provided by the Law Office of Michael Bond for general educational purposes and does not constitute legal advice or create an attorney-client relationship. For more information about the contents of this article, or if you have any other estate planning questions, please contact Michael Bond at 646-535-1529 or mike@michaelbondlaw.com.
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    These posts have been provided by the Law Office of Michael Bond for general educational purposes and do not constitute legal advice or create an attorney-client relationship. For more information about the contents of these posts, or if you have any other estate planning questions, please contact Michael Bond at
    646-535-1529 or mike@michaelbondlaw.com.

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DISCLAIMER: THIS IS ATTORNEY ADVERTISING. The information you obtain at this website is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Review of this website does not in any way constitute legal representation. Contacting Michael Bond or the Law Office of Michael Bond by telephone, fax, e-mail, or any other method does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised. Michael Bond, Esq., is licensed to practice in the states of New York and New Jersey, and this website is directed only to individuals or entities who may need legal information or representation in those two states.