Washington Estate Planning

Another Celebrity Will Contested: Lessons for All

One
could only imagine what George Jefferson — the wise-cracking character who was
“movin’ on up” on the 1970′s TV hit, The Jeffersons — would have said about
this predicament.  The body of actor
Sherman Hemsley, who played George Jefferson, has been kept on ice for the last
3 1/2 months.  His remains have been
refrigerated since he passed away from lung cancer on July 24, 2012, at the age
of 74.

Will contests can yield some
strange stories. Take for example the case of the late Sherman Hemsley and the
three and a half months his remains rested on ice before he was finally put to
rest. A recap of that story can be found at Forbes
in, “Court Ruling Finally Allows Body of Late
Jefferson Star To ‘Move On Up’.”

Hemsley’s story is a troubling
one, perhaps even more so because his estate was valued at only around $50,000.
Sherman Hemsley, who played George Jefferson on the hit TV comedy “The
Jeffersons,” didn’t have any real family, but he did have a close friend and
business manager in Flora Enchiton whom he named in the will he drafted a mere
six weeks before his passing. When a long-lost half-brother showed up to
dispute the validity of Hemsley’s will and claim his right to direct the
burial, the ensuing fight became both ugly and very public. In the end,
Hemsley’s will prevailed, but not without a long fight.  

Teaching points:

1. 
   Even estates of relatively small value can bring out
   the worst in your relatives.
2. 
   Proper estate planning can help ensure your wishes are
   carried out after your passing, even if some would choose to violate them.
3. 
   Don’t procrastinate. The fact that Hemsley’s will was
   written a mere six weeks before his death did complicate matters. Had the will
   been signed long ago, before Hemsley was sick, it’s unlikely that the case
   would have taken so long to resolve.

Reference: Forbes
(November 12, 2012) “Court Ruling Finally Allows Body of Late
Jefferson Star To ‘Move On Up’”

ESTATE PLANNING / CELEBRITY ESTATES

Amid the sad story of Amy Winehouse’s death came one positive note of inspiration for her heartbroken fans: The troubled singer left her affairs in remarkable order.

We are used to hearing dramatic stories about the estate woes of celebrities like Anna Nicole Smith and Gary Coleman. From all appearances, however, in the tragedy of singer Amy Winehouse’s recent death there is one positive note: she left her affairs in remarkable order.

According to US News & World Report, Winehouse’s assets, estimated at around $16.4 million were at risk of going to her ex-husband, who is currently in prison, since the English legal system tends to favor ex-spouses. But Winehouse avoided that problem by writing a new will directing her estate to her parents and brother instead.

Whether you have $16.4 million (or more) … or substantially less … there are fundamental estate planning moves that every adult should undertake. These include making a will, appointing powers of attorney, and completing health care documents. Trusts also are versatile estate planning tools that may help you achieve your goals in a variety of situations.

You can learn more about these basic strategies in the Fundamental Estate Planning Practice Center on our website. 

Reference: US News & World Report’s MONEY (July 27, 2011) “Amy Winehouse’s Financial Legacy”

ESTATE PLANNING / ESTATE ORGANIZATION

Most experts recommend creating a comprehensive folder of documents that family members can access in case of an emergency, so they aren't left scrambling to find and organize a hodgepodge of disparate bank accounts, insurance policies and brokerage accounts.

The financial consequences of failing to keep your legal and financial documents in order can be significant. As pointed out in a recent Wall Street Journal article, state treasurers currently hold $32.9 billion in unclaimed bank accounts and other assets. Additionally, some of the country’s largest life insurers are under investigation for failing to pay out unclaimed life policies to beneficiaries. Insurers say they are behaving lawfully and under their policy contracts are required to pay a claim only when beneficiaries come forward.

Will your family members reap the full benefit of your estate planning efforts, or will they miss out simply because they cannot locate all of your important legal and financial documents in a timely manner? Of course, you don’t have to keep every single scrap of paper, but the WSJ offers a pretty comprehensive list of the 25 most important legal and financial documents you should compile, and make sure your heirs can quickly access, to include:

1. Will
2. Letter of instruction
3. Trust documents
4. Housing, land, and cemetery deeds
5. Escrow mortgage accounts
6. Proof of loans made and debts owed
7. Vehicle titles
8. Stock certificates, savings bonds, and brokerage accounts
9. Partnership and corporate operating agreements
10. Tax returns
11. List of bank accounts
12. List of all user names and passwords
13. List of safe-deposit boxes
14. Durable health-care power of attorney
15. Authorization to release health care information
16. Living will
17. Do-not-resuscitate order
18. Personal and family medical history
19. Life insurance policies
20. Individual retirement accounts
21. 401(k) accounts
22. Pension documents
23. Annuity contracts
24. Marriage license
25. Divorce papers

The original article goes into much more detail with each, and whether you have or need each of these documents will depend on your individual situation and the various legal facets of your life, but it is a list that commands a certain attention. By putting this all together you help your loved ones to more quickly and easily pick up the pieces and put your plan into operation.

Reference:  The Wall Street Journal - Saabira Chaudhuri (July 2, 2011) “The 25 Documents You Need Before You Die”

ESTATE PLANNING / WILL CONTESTS

We frequently read about the protracted, or particularly venomous will contests of celebrity families. But what about your will – and your family? Are you confident that you are leaving a family legacy of peace and harmony, and not a wake of destruction? Bernard Krooks of Forbes recently wrote about how to prevent will contest in your own family.

A will contest is a lawsuit challenging the validity of a last will and testament. A contest may ensue if an heir or family member perceives some inequity or unjustness in the distribution of money or possessions. They may contest that the willmaker lacked mental capacity to execute the will, was under the undue influence of another, or that there is some sort of fraud or improper execution of the will.

Proper drafting of the will can make these types of contests less likely to occur – or succeed. Your will may include a no contest clause, or an in terroreum clause, which is a provision that can be used to strip the inheritance from anyone who contests the will if that person loses the lawsuit. These types of clauses often dissuade disgruntled heirs from pursuing a contest.

Some other tips include:

• Explaining the will to your heirs, or leaving a related letter to be read after your death to help explain some of your decisions.
• You may consider videotaping the signing of the will to help show the court that you signed freely and with the requisite mental capacity to agree.
• To remove the possibility of allegations of undue influence, meet with your estate attorney independently, and without the presence of other family members.

If you are the executor of a will and concerned about disgruntled heirs perhaps pursuing a contest, you may be well-advised to enlist an experienced estate attorney to assist you and ensure that the will is executed according to law

Not Just Anyone Can Contest a Will

Imagine you had a close friend who was quite elderly and lived alone. Not too long before your friend’s death, his children hired a new, live-in caregiver for him. This caregiver was a much younger woman who immediately hit it off with your friend, and she began spending the bulk of her time with him. You and his children didn’t like this arrangement very much, because it seemed that the new caregiver was isolating him from his family and friends.  When your friend passed away, it was revealed that, shortly before his death, his new caregiver had taken him to her attorney’s office, and he had made a brand-new Will, leaving her his entire estate and disinheriting his children.

You don’t believe this Will is valid; can you, as his friend, contest it? Probably not, and here’s why:

In order to file a Will contest, you have to have what is known in legal jargon as “standing,” meaning that you have to have a personal stake in the outcome of the case. Who has standing to file a Will contest?

1.       Heirs at Law. The family members of the decedent who would stand to inherit under state law, absent a Will, but who are not included in the decedent’s Will, would generally have standing to file a lawsuit challenging the Will.

2.       Prior Beneficiaries. An individual or entity named as a beneficiary in a previous Will of the decedent, but who is cut out of the decedent’s final Will, generally has standing to file a Will contest. This might include relatives who would not qualify as heirs at law, friends of the decedent, or even charities that once stood to gain from the decedent’s estate.

So, in the above scenario, as a friend of the decedent, unless you were named as a beneficiary in a prior Will, you would not have the right to file a Will contest.

A final note: it’s important to remember that the simple fact that an individual has standing to challenge a decedent’s Will does not mean that he or she can prove the necessary grounds for invalidating the Will.