Aaron Charles Gregg

Do Unmarried Couples Need Estate Planning?

“Experts say that creating a plan for what happens to your estate — regardless of how meager or massive your assets — is key for unmarried couples who want their commitment to each other protected in the event of death.”

A couple that has no intention of ever getting married should know that they won’t get the automatic rights and protections that legally wed spouses get, particularly when it comes to death. Therefore, unmarried couples must make a concerted effort to cover all the bases, says CNBC’s recent article entitled “Here’s what happens to your partner if you’re not married and you die.”

The number of unmarried couples who live together reached 18 million in 2016, a 29% increase from 14 million in 2007, according to the Pew Research Center. Among adults age 50 and older, the increase was 75% with roughly 4 million cohabiting in 2016, compared to 2.3 million in 2007.

These couples still face some key differences from their married counterparts. For example, there’s no filing federal taxes as a couple, and if an employer allows health insurance for a partner, the amount the company contributes is taxable to the employee, rather than being tax-free for a spouse.

End-of-life considerations also need attention. Unmarried couples can sign some legal documents that will dictate what happens, if one of them either becomes incapacitated or passes away, which is a type of estate plan.

If you die without a will or intestate, the state probate court will decide how your assets are distributed. A will by itself also won’t address everything. If you want to make sure your tax-advantaged retirement accounts — like your Roth IRA and 401(k) plans — go to your partner, make sure that individual is the designated beneficiary on those accounts. Even if your will says otherwise, whoever’s listed as the beneficiaries on those accounts will get the money. It’s the same for insurance policies and annuities.

If both partner’s names are on checking, savings or investment accounts, the account will pass directly to the surviving partner. However, for an account with only one partner’s name on it, ask the bank about the appropriate form to be completed, so the money is left directly to the surviving partner. This is what’s called a transfer-on-death or payable-on-death designation. Without this designation, the assets will end up in probate and distributed either in accordance with the will or intestacy state laws.

Regardless of how the mortgage is paid or whose name is on the loan, the person named on the deed is the owner. If the house in one partner’s name, it won’t automatically pass to the partner, as it would with a married couple (via joint tenancy with rights of survivorship). It would become part of the probate estate. To remedy this, you can retitle the home, so that both partners are listed as joint owners on the deed, “with rights of survivorship.” Each partner then equally owns the house and is entitled to assume full ownership upon the death of the other. Note that there could be other factors to consider before adding a partner’s name to an existing deed, such as expenses, tax implications and protection from potential creditors. Ask your estate planning or probate attorney before you make a change. A partner owning the house, could leave it to the surviving partner in the will. Remember, though, any asset passing via the will is subject to probate, which may lead to unforeseen issues.

In addition, a partner has no legal say in his or her partner’s medical treatment, if he or she is in a situation where they can’t make decisions for themselves. To give the partner that right, partners can grant each other a durable power of attorney over health care. This allows the partner to make important health-care decisions, if the one in the hospital is unable to do so. This is different from a living will, which states a person’s wishes if they are on life support or suffer from a terminal condition. This document helps guide the agent’s decision-making. If no one is named, medical personnel must follow the instructions in that document.

Likewise, partners may want to give each other durable power of attorney for finances. This would let them handle one another’s money, including accessing accounts as necessary, if the incapacitated partner could not do so. If the partners have dependents, name a guardian for them in the will. Otherwise, that decision will be left to the courts.

Reference: CNBC (Dec. 16, 2019) “Here’s what happens to your partner if you’re not married and you die”

How Did Alzheimer’s Impact the Estate Planning of These Famous People?

“In honor of Alzheimer’s Awareness Month - and the more than five million Americans living with the disease - we highlight our Top 7 Celebrity Estates impacted by Alzheimer’s disease…”

Forbes’ recent article, “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease” looks at seven celebrity estates that were affected by Alzheimer’s disease.

1. Rosa Parks. The civil rights icon died at 92 in 2005. She was living with Alzheimer’s disease. Legal battles over her estate continue to this day. Her estate plan left her assets to a charitable institution she created. However, her nieces and nephews challenged the validity of her will and trust, due to her mental deficiencies and allegations of undue influence. That claim was settled, but there have been fights over broken deals and leaked secrets, claimed mismanagement of her estate and assets, allegations of bribery and corruption and a battle over Rosa’s missing coat that she wore at the time of her famous arrest at the Alabama bus stop in 1955.

2. Gene Wilder. Wilder’s widow–his fourth wife, Karen–and his adopted daughter didn’t fight over Gene’s estate after he died, which shows good estate planning. Wilder makes the list because of how his widow used her husband’s struggle—which she kept private while he was alive—to bring attention to the terrible disease, including permitting his Willy Wonka character to be used in a campaign to raise awareness.

3. Aaron Spelling. The Hollywood producer left behind a reported fortune worth $500 million. His death certificate listed Alzheimer’s disease as a contributing factor. Spelling changed his estate plan just two months before he died, reducing the share to his daughter, actress Tori, and his son, Randy, to $800,000 each.

4. Etta James. Legendary blues singer Etta James passed away in 2012, at 73. Her family said she had been living with Alzheimer’s disease for several years, and her illness ignited an ugly court battle between her husband of more than 40 years and her son from a prior relationship, over the right to make her medical and financial decisions, including control of her $1 million account. Her husband, Artis Mills, alleged that the power of attorney she signed appointing her son as decision-maker was invalid, because she was incompetent when she signed it. Mills sued for control of the money to pay for Etta’s care. After some litigation, Etta’s leukemia was determined to be fatal, which led to a settlement. Mills was granted conservatorship and permitted to control sums up to $350,000 to pay for Etta’s care for the last few months of her life.

5. Peter Falk. The Lieutenant Columbo actor died at 83 in 2011, after living with Alzheimer’s disease for years. His wife Shera and his adopted daughter Catherine fought in court for conservatorship to make his decisions. Shera argued that she had power of attorney and could already legally make Peter’s decisions for him, which included banning daughter Catherine from visits. The judge granted Shera conservatorship, but ordered a visitation schedule for Catherine. However, a doctor, who testified at the hearing, said that Falk’s memory was so bad that he probably wouldn’t even remember the visits.

6. Tom Benson. The billionaire owner of the New Orleans Saints and Pelicans was the subject of a lengthy and bitter court battle over control of his professional sports franchises, and hundreds of millions of dollars of other assets. Prior trusts, that he and his late wife established, left the sports franchises and other business interests to his daughter and two grandchildren. One of granddaughters operated the Saints as lead owner, until she was fired by her grandfather. Tom decided to take the controlling stock of the teams out of the trust and substitute other assets in their place, taking over control of the teams. However, his daughter and grandchildren fought the move. A 2015 court ruling declared Benson to be competent, despite allegations he suffered from Alzheimer’s disease. Benson then changed his will and trust and left everything to his third wife, Gayle. They all settled the dispute in 2017, leaving other assets to the daughter and grandchildren—but ultimately leaving Gayle in control of the Saints and Pelicans, after Benson’s death in 2018 at age 90.

7. Glen Campbell. Campbell’s 2007 estate plan left out three of his adult children. They sued to challenge their disinheritance after he died. They dropped the case in 2018, without receiving a settlement. The fact that Campbell’s final will was drafted several years prior to his Alzheimer’s diagnosis was a critical factor in the outcome of the lawsuit.

The estate planning of these celebrities shows the importance of proper estate planning, before it is too late. Wills and trusts that are created or changed after someone is diagnosed with Alzheimer’s disease, dementia, or similar conditions are more apt to be challenged in court.

Reference: Forbes (November 25, 2019) “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease”

What Estate Planning Documents Does My Child Need Now That They’re an Adult?

“Parents may be surprised to learn that without some specific documents in place, they will no longer be able to obtain information or help their loved one should they be in an accident or other situation, where they can’t advocate for themselves.”

Your child may graduate from high school and head off to college or start a full-time job or vocational training program.

Although they’re still your children, the law sees them as are adults. As a result, parents’ “rights” to protect their adult children or make decisions for them immediately becomes quite limited.

The Tewksbury Town Crier’s recent article, “Is your child turning 18? Here’s what you need to know,” explains that people often have an estate planning attorney draft the appropriate documents, so they will be legal and binding. Let’s look at a list of documents to consider and discuss with your young adult:

• HIPAA Authorization: if your 18-year-old has a job in another state or will be attending college and needs medical records or assistance making appointments, ask her to go to the doctor’s and dentist’s office and sign forms that designate agents to act on her behalf. Due to HIPAA laws, information can’t be released without the adult child’s permission.
• Healthcare Proxy: Have your 18-year old complete this document, make a copy, put a copy on each parent or guardian’s phone and put a copy on your child’s phone. This is for an emergency, like when the child can’t speak for herself. However, don’t wait for an emergency. If your child is at college, the school will only contact you as the emergency contact, but the proxy is between you and the hospital and includes mental health issues. A healthcare proxy lets you to participate in life and death decisions, should your child not be able to advocate for herself.
• Durable Power of Attorney: A general durable power of attorney or financial power of attorney must also be signed by the 18-year old, designating his parents, guardians, or others as agents authorized to act on his behalf. This allows the agent access to financial information, so that he can participate in the financial issues with a university or business in the event that the child cannot.
• FERPA: This is an educational records release, which allows the educational institution to share grades, transcripts and other related materials with parents or designated agents. Without it, the school will not provide you with access to any information.

Finally, encourage your young adult family member to register to vote.

Reference: Tewksbury Town Crier (December 8, 2019) “Is your child turning 18? Here’s what you need to know”

What Are My Estate Planning “Must Have’s”?

“Estate planning is not only for the wealthy—everybody can benefit from ensuring their assets and finances are properly taken care of after their death.”
Many people think that having an estate plan just means drafting a will or a trust. However, there’s much more to include in your estate planning to be sure all of your assets are transferred directly to your heirs at your death. A successful estate plan also includes provisions allowing your family members to access or control your assets, if you become incapacitated.
Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides us with a list of items every estate plan should include:
• A will and/or a trust;
• Powers of attorney;
• Beneficiary designations;
• A letter of intent; and
• Guardianship designations.
In addition to these documents and designations, a thorough estate plan also should consider the purchase of insurance, like long-term care insurance, a lifetime annuity to generate some level of income until death and life insurance to pass money to beneficiaries without probate.
Let's look at each item on this checklist to make sure you haven't left any decisions to chance.
Wills and Trusts. A will or trust should be one of the primary parts of your estate plan, even if you don't have a lot of assets. Wills make certain that your assets are distributed according to your instructions. Some trusts also help limit estate taxes or legal challenges. Talk to an experienced estate planning attorney about wills and trusts.
Power Of Attorney. A durable power of attorney (POA) allows an agent or a person you assign to act on your behalf, if you’re unable to do so yourself. A healthcare power of attorney (HCPA) designates another person to make critical healthcare decisions on your behalf in the event of incapacity.
Beneficiary Designations. Some of your assets will pass to your heirs without being mentioned in your will, such as 401(k) plan assets. Therefore, maintain a beneficiary and a contingent beneficiary on these types of accounts. Likewise, insurance plans should have a beneficiary and a contingent beneficiary, because they also pass outside of a will. Your beneficiaries should be over 21 and mentally competent.
Letter of Intent. This is simply a document for your executor or a beneficiary to define what you want done with a particular asset after your death or incapacitation. Some letters of intent also contain funeral details and other special requests. A letter of intent isn’t legally binding. It helps inform a probate judge of your intentions and may help in the distribution of your assets, if the will is declared invalid for some reason.
Guardians. If you have minor children or are considering having kids, naming a guardian is very important. Be sure the person(s) shares your views, is financially sound and willing to raise your children. You should also name a backup or contingent guardian.
Without these designations, a court could order your children to live with a family member you wouldn't have selected, or in some instances, the court could instruct that your children become wards of the state.
A will is a great place to start, but it's only the starting point.
Reference: Investopedia (July 16, 2019) “6 Estate Planning Must-Haves”

What Do I Need to Do Financially, When We Have a Baby?

“There's a lot of prep work to complete when you're expecting a new baby. Expectant parents have a nursery to paint, strollers to buy, doctor's appointments to attend and nannies to hire.”
In addition to all the logistics involved with a new baby, new parents should also take care of financial and legal matters in the months leading up to the big day.
U.S. News & World Report’s recent article, “Financial Steps to Take When You're Pregnant” reminds us that pregnancy is a terrific time to review your financial life. It's a great time to assess your budget, emergency savings, estate planning documents and insurance needs to see if anything needs to be refreshed.
Here are a few things to do to prepare for a new baby:
Employee Benefits. Take a look at your employee benefits or have a conversation with HR to determine how much time you can take off and whether you'll be paid your salary, while on parental leave. This is important because many families are faced with higher living costs by the presence of a new baby, as well as taking parental leave that may cut their take-home pay. New parents may have to use the Family and Medical Leave Act (FMLA), which offers eligible employees 12 weeks of unpaid leave; or tap short-term disability insurance, which typically only replaces a portion of your salary. The amount you receive in short-term disability will also be impacted by whether you pay premiums with pretax or post-tax dollars. If you pay with pretax, your benefit will be subject to taxes, which will decrease the overall amount received.
While reviewing these policies, look at your health insurance and see whether prenatal visits and pediatric care are covered. You could be liable for health insurance premiums, if you're taking leave from work. Remember that you'll need to add your baby to your medical insurance within 30 days of the birth.
Budget. Calculate new baby expenses, such as childcare.
Life Insurance. Determine if your current life insurance will meet your needs. If you need more, look at term life insurance. It’s usually affordable and expires after a set term, typically anywhere from 10 to 30 years. This policy payout would help a surviving parent or a guardian care for your child.
Estate Planning. Consider who would care for your child, if both parents were to die before he or she turns 18. Talk to family or close friends about who you'd like as guardian of the child. Talk to an estate planning attorney to update (or create) a will and guardianship choices. In addition, ask about formulating a plan for how inheritance, insurance and other assets will be handled and disbursed, if you die while the child is a minor. A testamentary trust is a way to direct a future inheritance. You can designate your child as the beneficiary and a relative or close friend as the trustee. The trustee will help decide how the money is spent. This trust is usually included in the will and activates after the death of the person who created it.
Beneficiary Designations. Update any beneficiary designations on your retirement and insurance accounts.
529 College Savings Account. You should also look into funding a 529 college savings account. However, making certain that your budget, estate, and insurance needs are tailored to meet your new family dynamic are more pressing concerns.
Reference: U.S. News & World Report (August 29, 2019) “Financial Steps to Take When You're Pregnant”

What Will Happen to Jeffrey Epstein’s Estate?

“Two days before he died in what was ruled a suicide in a Manhattan jail cell, Jeffrey Epstein signed a will that put all of his holdings into a trust.”
Jeffrey Epstein’s will was filed in the U.S. Virgin Islands. It’s a "pour-over will" that transfers all of his assets into a trust. The trust is secret, not open to the public, and is administered by trustees. Epstein's will, which is a public document, claimed assets of more than $577 million.
However, none of that money can be moved into Epstein's trust until a probate court decides what to do with the numerous claims made against the convicted sex offender and his estate.
CBS News’ recent article, “What we know about Jeffrey Epstein's will, and what happens next with his estate,” provides a list of questions that can help explain what happens next with Epstein's estate. His estate will be overseen by the two executors named in the will, attorneys Darren K. Indyke and Richard D. Kahn.
The terms of the trust are not public, because they’re not part of the will itself. Epstein's creation of the trust is commonly done by those who desire privacy. Of course, there is some surprise because the will and the trust were created just two days before he died. One of the most intriguing parts of Epstein's will is that it lists his domicile (his permanent residence) as the U.S. Virgin Islands. Domicile is important in determining which jurisdiction controls the estate. Domicile must be proven in a probate court, and is usually accomplished with tax returns, a driver’s license, or documented time spent in the jurisdiction.
Another question about Epstein's will, is whether it will even be declared valid. His will, and thus his entire trust, can be held invalid, if the will wasn’t properly executed and if it wasn't properly witnessed or signed. There can’t be any fraud, undue influence, or duress. Since the will was made right before his suicide, there’s no certainty of his mental capacity.
His testamentary capacity, which means his mental ability make a valid will or estate, will probably be decided by a probate judge. If his estate planning documents are voided, the assets would transfer to the beneficiary of the estate, which is his brother Mark Epstein. However, Mark would still be liable for creditors' claims and any alleged victims' lawsuits.
Epstein's $577 million in assets will not pass from his estate into his private trust, until all creditors' claims have been satisfied in a probate court.
Legal experts expect a long, drawn-out, and complex process for deciding the future of Epstein's wealth.
Reference: CBS News (August 21, 2019) “What we know about Jeffrey Epstein's will, and what happens next with his estate”

How Do I Plan My Estate With a Disabled Child?

“As our children with disabilities grow older, and we ourselves grow older, the future can seem daunting. The future can be overwhelming. Taking steps to plan for the future can seem way too complicated, especially when you don’t know where to start.”
Yahoo News’ recent article, “4 Tips for Estate Planning When Your Child Has a Disability” gives us four simple steps to take, if you have children with disabilities.
1. Draft a letter of intent. This is a letter of instruction that includes instructions that your family and friends will need, if you die or for any reason become incapacitated. This letter should list the passwords to your online financial accounts and personal information someone would need to efficiently step into your life, your home and care for child with a disability. It can include medications, daily routine, strategies you use for calming, therapists’ contact info and other daily living items someone not living in your home may not know about your life.
2. See an estate planning lawyer. Ask an attorney to help you build a vision for what you want your child’s future to look like. Have the attorney create a will and a special needs trust. A special needs trust lets you to distribute funds and property in a way that doesn’t interfere with government program benefits.
3. Create a power of attorney or guardianship. A power of attorney for financial and medical issues may be a viable solution. Supported decision-making is an alternative that empowers those with intellectual disabilities to make choices with support and while preserving their rights. If guardianship is your objective, talk to an attorney before your child reaches age 17.
4. Create an ABLE account. This account can hold funds to ensure your child’s regular account never has more than $2000, which would jeopardize government program benefits, like Medicaid.
This may seem like a gigantic task, so take it one step at a time. Do one thing at a time. Begin the process with the letter of intent and think about the vision you have for your child. Then speak with an estate planning attorney, who is experienced in helping special needs families.
Reference: Yahoo News (August 26, 2019) “4 Tips for Estate Planning When Your Child Has a Disability”

When Do I Need a Power of Attorney?

“In the absence of a durable power of attorney, who has the right to sign for an incapacitated person?”
Without a valid durable power of attorney, the answer really depends on what documents need to be signed.
A power of attorney is a legal document signed by the “Principal,” granting the authority to another individual to make decisions on the Principal’s behalf. This document is only in effect during the lifetime of the Principal.
nj.com’s recent article on this topic asks “Who can sign for an incapacitated person if there’s no power of attorney?” The article noted that to have the authority to conduct financial transactions concerning the assets solely owned by the incapacitated person who failed to execute a power of attorney, a guardian will have to be appointed by the court.
A guardianship is a legal relationship established by the court, in which an individual is given legal authority over another when that person is unable to make safe and sound decisions regarding his or her person, or property.
For example, in New Jersey, an application will have to be filed in the probate part of the Superior Court, in the county where the incapacitated person resides.
If it’s not an emergency, a guardian also will need to be appointed to make medical decisions for an incapacitated person who hasn’t signed a health care proxy. This is a legal document that gives an agent the authority to make health care decisions for an incapacitated person. It will take effect, if the person is incapacitated or unable to communicate. The agent will make decisions that reflect the wishes of the incapacitated individual.
It’s typically not necessary to be appointed as an agent under a power of attorney or health care proxy or legal guardian for another person to sign an assisted living or nursing home admissions contract or a Medicaid application.
However, prior to signing another person’s admissions contract, read the fine print to be certain that you don’t become responsible for the bills!
Reference: nj.com (July 22, 2019) “Who can sign for an incapacitated person if there’s no power of attorney?”

Can I Insulate My Will From Challenges After I’m Gone?

“You’ve probably seen it in the movies or on TV hundreds of times: A close-knit family gathers for the reading of the will of a wealthy patriarch or matriarch. When the terms are revealed, someone benefits at the expense of someone else, causing a ruckus. It may even come to blows.”

When the details of a will are announced, “bad blood” can continue to boil between estranged family members, who won’t even speak to one another.

Wealth Advisor’s recent article, “How to Protect Your Will From Legal Challenges,” explains that unfortunately, a similar scene can also play out in real life, if you fail to make proper provisions.

However, with some planning, you can avoid these kinds of disputes—or at least minimize the risk of your will being contested by your loved ones.

Before you (and your spouse, if married) consider your will and your comprehensive estate plan, discuss estate matters with close family members who likely will be impacted. Give them a rough outline of your plans for the disposition of your assets and other important topics. These types of conversations can eliminate potential problems and better prepare your heirs. It will also avoid a dramatic “shocker,” like those seen on the big and small screen.

While there are no guarantees, review these ways to bulletproof your will from a legal challenge:

A no-contest clause. This is also known as an “in terrorem clause.” It says that if anyone named in your will challenges it, he or she is excluded from your estate.

Witnesses. Use witnesses who know you well, like close friends or business associates because they can state convincingly that you were of sound mind when you made out the will. You should also select witnesses in good health, preferably younger than you are, and easily located. You can also add extra witnesses for more protection.

A physician’s note. A doctor’s note about your health status is recommended, if you’re extremely ill or elderly. This can declare that you have the requisite mental capacity to make estate planning decisions, which can be useful in addressing legal challenges. Get the physician’s note near to the time that the will is signed.

In addition, you can protect your will from legal challenges, by recording it. State laws may have something to say about this, so speak with your estate planning attorney.

Reference: Wealth Advisor (August 12, 2019) “How to Protect Your Will From Legal Challenges”

Is it Worth it to Contest a Will?

You never expected your mother to leave you a fortune, but you thought that she’d leave you something when she passed. Did a sneaky cousin have something to do with it? What do you do now?

If it helps, and it might not, this happens more frequently than you’d think. The response is sometimes shock, other times, it’s anger. However, according to this recent article from Forbes, “5 Things You Should Know About Contesting A Will,” before you start making revenge plans or hiring the most tenacious attorney in town, take a deep breath. You need to consider some cold hard facts:

1. Litigation is expensive. Many people will ask if an attorney will take the case on a contingency fee basis—typically a third of what you receive, and he or she only gets paid if you do. Most probate attorney won’t take a will contest on a contingency fee, because there’s a risk they won’t get paid. If they do, be certain that you have an experienced estate planning attorney with experience in estate battles.
2. Have lots of Rolaids on hand. You’re gonna need them. It’s a rough journey, one that can be full of lies, misrepresentations and accusations. There may also be a counter lawsuit against you. You’ll probably be deposed in a deposition, where the opposing lawyer will ask you questions about the case. You may be portrayed as greedy, and you might have to testify in court.
3. Snap decisions are required. Once you hire your attorney, he or she will work with you to develop a strategy for the case. Your attorney may recommend that you file suit immediately and be the first one into the courthouse. On the other hand, your counsel may think it best to send a letter to the attorney representing the person you’re suing with a request for information. Depending the response, you may decide to file suit. In most cases, you’ll have a limited time to contest the will. If you don’t do so within that time period, you can’t bring a lawsuit. Talk to an experienced attorney shortly after the death.
4. You’ll probably reach a settlement. Once the litigation has begun, and the attorneys have had time to exchange information and do some fact finding (in what is known as the discovery process), your attorney will talk to you about the strengths and weaknesses of your case. It may be appropriate at that juncture for one side to present the other with a settlement offer. This would end the litigation without the time and expense of trial. This may be a wise option, if you’re tired of fighting and willing to consider a settlement instead of going to trial. Your attorney may also point out weaknesses in your case and advise you to be happy with getting a settlement. That way you can move on with your life. You should approach the settlement like a business decision, and try to keep emotion out of it.
5. Expect emotional pain. While you may get some satisfaction if you win, you will may lose any connection with the people you bring to court. If you lose, well, that’s a lose-lose proposition. No matter how big the win, any underlying emotional issues will still be with you. Be prepared to be very businesslike about any estate battle.

Reference: Forbes (May 21, 2018) “5 Things You Should Know About Contesting A Will”