Oregon Estate Planning Blog

3 Things I Hope Elizabeth Edwards Incorporated into Her Estate Plan

As you probably already heard, Elizabeth Edwards passed away this past Tuesday after a long battle with breast cancer.  Her surviving children are 28, 12, and 10 years old.  (Her son, Wade, who died in 1996, would be 31.)

 She posted her last message on Facebook on December 6th:

 

"You all know that I have been sustained throughout my life by three saving graces - my family, my friends, and a faith in the power of resilience and hope.  These graces have carried me through difficult times and they have brought more joy to the good times than I ever could have imagined.  The days of our lives, for all of us, are numbered.  We know that.  And, yes, there are certainly times when we aren't able to muster as much stregnth and patience as we would like.  It's called being human.

 

"But I have found that in the simple act of living with hope, and in the daily effort to have a positive impact in the world, the days I do have are made all the more meaningful and precious.  And for that I am grateful.  It isn't possible to put into words the love and gratitude I feel to everyone who has and continues to support and inspire me every day.  To you I simply say: you know."

 

Elizabeth Edwards was an inspiring woman who faced struggles and tragedy with so much grace.  She faced the death of a child, infertility, cancer, very public infidelity by her husband, separation from her husband, and ultimately, an early death.  She always remained positive and gave those around her hope.

Of course, as an Estate Planning Attorney, whenever anyone dies, I think about his or her estate plan, and in thinking about Elizabeth Edwards, there are 3 things that I hope she has included in her estate plan.

1. I hope that Elizabeth has a KidsCare Plan.

When Elizabeth died, full custody automatically went to the children's father, John.  I still hope that both Elizabeth and John have a KidsCare Plan, because if something happens to John, Elizabeth would have wanted to have a say in who would care for the kids.  This is something that all parents need to discuss and get in place legally.  It is a mistake to assume that you and the other parent are on the same page with respect to guardians, and it is a mistake to assume that your kids would go to the person you would choose, without any legal documentation in place.

A KidsCare Plan names long-term guardians who would care for your kids if you died or were incapacitated for more than a few days; names short-term guardians who would care for your kids immediately so that they would not have to experience foster care; eliminates specific people from being considered for guardianship; communicates the entire plan with everyone involved so that as soon as there is an emergency, everyone knows what to do; outlines your emergency plan for caregivers; and documents matters of importance that your guardians should know.  My office is offering a free KidsCare Plan Packet this month for all parents in Oregon.  Click here to receive your copy of the KidsCare Plan.

2. I hope that Elizabeth has protected her children's inheritance.

Although Elizabeth planned to file for divorce from her husband, she had not yet met North Carolina's "one-year separation before filing" requirement, and so when she died, she was still legally married.  Without any planning in place (and with most plans that married couples set up), this would mean that all of her assets would go to her husband. There are a couple of problems with this arrangement.

The first problem is that an inheritance is not secured for the children.  Sure, chances are that John Edwards will spend the next several years supporting the children through school and college, but if he remarries and does not set up an estate plan that protects the kids' inheritance, chances are that when he dies, everything will go to the new spouse.  This is incredibly common.  Children are disinherited all the time because of remarriage.  Once John Edwards dies, the new spouse does not even have to be a wicked stepmother to disinherit the children.  All she has to do is nothing, and the kids are automatically disinherited.  (John still has time to plan to avoid this kind of situation, though.)

The second problem is that if there is not a plan in place, the combined estate of Elizabeth and John Edwards may lose out on estate tax saving opportunities that are available to the family right now.  By leaving everything to John, Elizabeth's estate misses out on the 2010 year of no estate taxes and fails to plan for a possible retroactive tax on 2010, and everything will be taxed at John's death.  (That's putting it simply.  What you need to know is that anybody who will die with more than $1 million in assets, including life insurance and retirement accounts, needs to see an attorney to talk about estate and tax planning.)  There may also be state estate and/or inheritance taxes that require planning.  (Oregon has an inheritance tax.)

3. I hope that Elizabeth has found a way to pass on her values to her kids.

I read that Elizabeth, in anticipation of her death and inspired by the movie, Terms of Endearment, decided to write a letter to kids.  I hope that she finished this letter, and I hope that the kids have a recording of her voice as well.  There is nothing more precious that you can leave behind for your kids than your guidance and insight into who you are as a person.

All of our clients have the opportunity to record a message for their kids, where they can discuss their most important values and tell their kids how much they mean to them and what they would want for them.  If a parent dies young, the recording serves as guidance, and if the parent lives a long life, the recording serves as a treasured window into a young parent's thoughts and dreams for their kids.

If Elizabeth has incorporated these 3 things into her plan, her kids will greatly benefit from that.

How about you?  Have you incorporated these things into your plan?  If you are ready to get started on creating a plan that will make things as easy as possible for your family, call my office at (503) 235-5150. 

To your family's health & prosperity,

 

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You can!  Just please be sure to use this complete blurb with it:

 

Candice N. Aiston is an Estate Planning Attorney for families in
the Portland, Oregon area.  She helps loving parents to prepare
their families for a lifetime of security, prosperity, and
guidance.  If you would like to receive her free report, "The 9
Common Planning Mistakes Parents Make," please visit
http://candiceaistonlaw.com/.

Wednesday Web Wrap-Up

Welcome to Wednesday Web Wrap-Up! Lots of great information put out over the past two weeks! Thank you to the attorneys and organizations that provided such great information.

Massachusetts Attorney Danielle G. Van Ess linked to this article, which illustrates the importance of business succession planning. Business owners need to think long and hard about how they want their business handled after their death. Not planning can leave a mess for your family. The law may require that some heirs have a stake in the business that you would never have wanted, and it may leave out heirs that you had wanted to include.

Los Angeles Attorney Angelica Simmons linked to this article about the feud between the grown children of Artist Frank Frazetta. Frazetta is still kickin' at age 82, but his children are already fighting over their future inheritance. I think the article speaks to the importance of family communication and planning.

Attorney Mike Lichterman posted this article, called, "What's So Bad About Probate?" on his blog. It explains why many people and their attorneys plan to avoid probate - it can be expensive, time consuming, and the records are public.

I cam across this article, "Celebrity estate fights can offer lessons for us," linked to on Twitter by various Estate Planning Attorneys. From the article: "[Michael] Jackson, for example, died at 50 but had made a will and set up a trust for his children. But like so many everyday fathers or mothers, he didn't take the next key step -- funding the trust or re-titling his assets into it. Now, it's a family mess." It's amazing to think that even Michael Jackson didn't properly set up his trust. It's scary to think that so many regular folks think they can do it properly online! 

WealthCounsel linked to two articles from fool.com: "Make Your Heirs Rich, Not Your Lawyer," and, "The Truth About Living Trusts." The first article talks about how much of your estate can be eaten up in probate fees and costs if you fail to plan (or use a will-based plan), and the second article talks about the use of trust planning. I personally believe that most families should use trust planning. The transfer of assets after death is much smoother, less costly, less time consuming, and totally private.

Attorney Jackie Bedard, of Carolina Family Estate Planning, linked to this Forbes photo article: "In Pictures: Nine Facts You Need to Know about Estate Tax." There are many misconceptions that people have about estate taxes. Most people don't realize that life insurance is included in your estate if you own the policy. Many people don't realize how steep the tax is and that it's not just the uber-wealthy that will be taxed. Look at the article to find out other facts.

To your family's health & prosperity,

McNair died without a will: What now?

Steve McNair, the recently murdered former Tennessee Titans' Quarterback, apparently died without a will (or any estate planning) in place.

His wife, Mechelle McNair, has been granted her request to administer the estate. In documents she filed with the court, she listed herself and her two sons as the only heirs, even though McNair has two other children from previous relationships.

Can I take this opportunity to point out how absurd it is that someone with all the resources to pay for the best estate planning known to man wouldn't even have a will? Major FAIL!

Three issues immediately cross my mind:

1) In all likelihood, the two "other" kids will take a share of the estate. I don't know what the law is in Tennessee, but in most states, the default rule is that the wife would get a share and each child would get equal shares.

2) I will assume that McNair's wife is not a total bitch and just simply (oopsie) forgot that the other two kids existed. If she's as nice as I choose to assume, I feel sad for her that she has to deal with all of this legal crap while she should be able to grieve and comfort her kids. Note to spouses and parents: PLEASE take the simple steps today to make sure that if something happens to you, your loved ones have the resources to be able to grieve properly. This means taking the legal steps NOW so that they don't have to be faced with these decisions later. I can't imagine it would be easy to make good decisions while grieving either. Dealing with finances and assets would seem so trite in the face of losing a loved one. Estate Planning is a GIFT to your loved ones. [Side note: Finding out about your dead spouse's secret girlfriends is also not a fun way to spend the grieving process.]

3) I'm going to venture a guess that McNair had a taxable estate, and without having planned for it, his family is facing the possibility of paying millions to the government that could have been avoided, all with a little bit of planning.

Why? Why? Why? Why? Why?

To your family's health & prosperity,

Michael Jackson: She-hoo, she-hoo!

You know he's bad, he's bad...

I'm just happy because it's been a good day in Michael Jackson news, and now I don't feel as worried for his kids.

There's a Will, and it names guardians and basically pours everything over into a trust for the benefit of the kids. Observe (written by David Shulman, of South Florida Estate Planning):

"The will is what’s known as a “pourover” will.  In other words, instead of the will itself disposing of all of his assets directly, it instead transfers all of his assets to the “MICHAEL JACKSON FAMILY TRUST” as amended and restated on March 22, 2002.  The terms of his revocable trust will govern the disposition of his property.  I assume that most of the assets will remain in trust for his children and their children, with significant distributions to other family members and charities.

"However, I don’t know.  I’m only assuming.

"A will is public and is filed with the court.  A trust is not.  There is no obligation to disclose the terms of the trust to the public.  Certain beneficiaries are entitled to copies of the trust however, and it’s possible that one of them might leak it at some later point in time.

"The executors of the will (which in Florida would be called personal representatives) are John Branca, John McClain, and Barry Siegel.  Their primary responsibility will be to transfer the estate’s assets, that is the assets that were not already owned by the trust, to the trust.  The successor trustee (whoever that might be) is then responsible for managing the trust estate.

"He did nominate his mother, Katherine Jackson as the guardians of his minor children.  In the event of the death, inability, or refusal to act of Katherine Jackson, he nominates, believe it or not, Diana Ross!

"Those are the only details now.  It’s a short five page will.  Unless there is a subsequent will, or the trust somehow becomes public, this is all the information that will be public."

So...you can read his Will here.  It is a matter of public record, so it's a really great thing that it doesn't say much and that things are dictated according to the terms of his private trust. This is going to go a lot differently than the Anna Nicole Smith probate, that's for sure!

What about YOU? Have you name guardians, at the very least? Do it for free here: www.kidsprotectionplan.com.

To your family's health & prosperity,

Michael Jackson's Mom awarded temporary guardianship of kids

Michael Jackson's Mom, Katherine Jackson, won temporary guardianship of his three children. It appears that MJ died without a valid will. [Edited to add: He may have a will. There are conflicting reports.] KJ is also seeking to be appointed administrator of the estate.

I really have to wonder if this is what MJ would have wanted. The kids have a godfather, Mark Lester, a former British child star, who says that the kids are in good hands with KJ. I have to wonder if MJ is like most parents who choose godparents, thinking they will take over the care of the kids if something happens to them, and just failed to get it in writing, like 73% of parents have, and failed to communicate any sort of plan with everyone.

It is well-known that MJ was abused by his father, Joe Jackson, and yes, I'm going to cite Wikipedia:

"Jackson stated that he was physically and emotionally abused by his father from a young age, enduring incessant rehearsals, whippings and name-calling. However, he also credited his father's strict discipline as playing a large part in his success. In one altercation — later recalled by Marlon Jackson — Joseph held Michael upside down by one leg and "pummeled him over and over again with his hand, hitting him on his back and buttocks". Joseph would also trip or push his male children into walls. One night while Jackson was asleep, Joseph climbed into his room through the bedroom window. Wearing a fright mask, he entered the room screaming and shouting. Joseph said he wanted to teach his children not to leave the window open when they went to sleep. For years afterwards, Jackson said he suffered nightmares about being kidnapped from his bedroom. In 2003, Joseph admitted to the BBC that he had whipped Jackson as a child.

"Jackson first spoke openly about his childhood abuse in a 1993 interview with Oprah Winfrey. He said that during his childhood he often cried from loneliness and would sometimes start to vomit upon seeing his father. In Jackson's other high profile interview, Living with Michael Jackson (2003), the singer covered his face with his hand and began crying when talking about his childhood abuse. Jackson recalled that Joseph sat in a chair with a belt in his hand as he and his siblings rehearsed and that 'if you didn't do it the right way, he would tear you up, really get you.'"

MJ's Mom apparently allowed this to go on. I hope things have changed since MJ was a kid.

In any event, if YOU want to make sure your kids are raised by the people that you would want, get it legally documented! And, if there is anyone you DON'T want raising your kids, legally document that too!

Michael Jackson: What will happen to his kids?

Like many people my age, I am a HUGE fan of "early" Michael Jackson. Loved him pre-surgery, during the disco and Thriller eras. It was sad to watch such a talented individual become a self-hating recluse. It was sad to see him on trial for sexual molestation of a young boy, and I can only hope that he didn't really do it. He was acquitted, in any event. It kind of made me sad to see how oddly it seemed he was behaving with regard to his kids - contracts with the birth mother, veiled faces, a baby dangled over a balcony...remember the weirdness?

Now everyone is talking about how much money he left behind and how complicated his estate will be, what with all of his credit and debt issues and split ownership of certain rights to music. There's a lot of talk about how it could take years to settle his estate. I guess that mostly depends on the type of estate planning he's done, and we'll find out all about it soon enough.

But what about the kids?

I wonder what sort of planning MJ did for the care of his kids. I wonder if he selected a guardian. I wonder if they'll go back to the mother. I wonder if he's left their inheritance in trust or if they'll all just get checks for millions of dollars on their 18th birthdays. I wonder if he's left behind any instructions on how he wants the kids raised.

The guy obviously felt pretty strongly about how his kids were raised. He kept them away from the media. (It was really hard to find even this fuzzy photo of them!) He spent tons of time with them, fired nannies who didn't live up to his explanations, and kept them away from certain family members.

Regardless of how you feel about MJ's parenting, you probably have strong beliefs about the way your kids are raised. Do you have any family members you would NOT want them raised by? Do you have specific people in mind that you would want to raise them? Are there activities that they should continue? Friends and family they should continue to see? Do you have religious beliefs or non-beliefs? Medical wishes? Want the money you leave behind to be spent a certain way?

If so, make sure you get it all in writing!

To your family's health & prosperity,

Paul Newman's will - read it online!

 

You can actually read Paul Newman's will online.  I know it seems horrifying, but wills are a matter of public record!  This can be a big problem if you don't want the public to know what assets you own and who is going to inherit them (especially if one of your minor children is going to inherit money or assets).  If you want to avoid this situation, you can use a revocable living trust to dispose of your assets and take them out of your estate.  Let your attorney know if you think this might be an option you want to consider.

To your family's health and prosperity,

Candice

Just for fun - Crazy wills of the last century

Just for fun, check out this article about crazy wills of the last century.  My favorite is the lady who wanted to be buried wearing her mink bikini.  My least favorite is the mean husband who left his estate to his wife only if she smoked five cigars per day!  Thank goodness I don't take on clients like that!

Pope John Paul II's Will

I just read Pope John Paul II's will online.  It reads more like Life Letters, which are letters that I encourage my clients to write to their loved ones to include with their estate planning binder.  It's really a valuable gift that you can leave behind.  The Pope's includes a lot of encouragement to Catholic believers, as well as his hopes for the world.  It thanks various people and declares his faith in God.  Of course, yours probably won't look like the Pope's, but you can include information about yourself that you want your kids to know, lessons that you've learned in life that you hope to pass on, values that you've held that you think are really important.  You can also include a letter to Guardians that explains the values that you hope your kids will be raised with. 

If your attorney doesn't include this with your Estate Planning Binder, it's easy enough to do on your own.  Just start writing letters and try to update them every few years.  Your loved ones will be glad you did!

Happy Birthday, USA!

USA is 232 today.  On July 4, 1776, the Declaration of Independence was approved and went to the press.  The primary author of the Declaration, as you might know, was Thomas Jefferson.  What kind of estate plan do you think Thomas Jefferson had?  Not one that took care of his debts, that's for sure.  His heirs had to sell his beautiful Monticello Estate, which is now one of the most famous historic sites in the country.  You can read the whole story here.