Friday, July 31, 2009

Medical Claims Against Estates

I read an article in the Philadelphia Estate Planning Council Newsletter by Susan H. Kavanagh of Kavanagh Solutions pertaining to estates and medical claims. I have discussed in prior blogs that upon someone's death, the debts and expenses of the estate must be paid prior to any distribution to heirs or beneficiaries. An increasing problem for estates are medical claims, as noted in the article.

What is the problem?
This increase is due to gaps in coverage, higher deductibles and coinsurance policy limits; hospitals and other providers are negotiating higher fees and aggressively pursuing balance bill collections; medical cost inflation; reimbursement issues; prescription drug cost increases and aging baby boomers having more medical problems.

What can you do?
You want to be adequately insured and make sure the same applies to your loved ones; have a professional review significant bills/payments for chronic illnesses; organize your bills chronologically; become knowledgeable in insurance and healthcare; seek the needed expertise from others.

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Thursday, July 30, 2009

Social Security - Myths and Facts

As part of our Elder Law work, we often address social security questions. I recently read a good article by Renee DeFranco, Social Security Myths Debunked, which addressed 7 important social security questions. Here are 2 of the questions with part of the answers and a link to the article so you can review the other 5 questions and answers.

Q: Social Security is predicted to run out of money within the next 30 years. Should we start collecting as soon as possible, at age 62, before there's nothing left to claim?

A: According to Social Security commissioner Michael J. Astrue, benefits for today's retirees are safe. However, if nothing is done to reform the system, the trust funds will begin to lose money in 2016 and will run out by 2037. A Social Security spokesperson John Shallman assured that Social Security tax income would be enough to pay roughly 75 percent of scheduled benefits through 2083. However, if the thought of insolvency keeps you up at night, it might be better to cash in early.

Q: Do I have to pay income tax on my Social Security benefits?

A: Less than one-third of current beneficiaries pay taxes on their benefits, according to the Social Security Administration. The rule: If you file a federal tax return as an "individual" and your total income is more than $25,000, you will have to pay taxes. If you file a joint return, and you and your spouse have a total income over $32,000, you will also have to pay taxes. Consider having taxes withheld from your Social Security checks.

For the 5 other questions and answer visit

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Wednesday, July 29, 2009

Tax Incentives and Long-term Care Insurance

I have discussed the importance of having long-term care insurance. Since we are now living longer, healthcare issues have become more prevalent. Over time the cost can be exuberant and consume all of the family's assets. A previous survey of the Health Insurance Association of America revealed that 48% of those turning age 65 will make use of a nursing home and and 72% will use home care. Long-term care insurance covers the costs of a nursing home, assisted living and home care depending upon the coverage your purchase.

Tax laws at the federal and state levels provide incentives for individuals and businesses to purchase qualified long-term care insruance policies, with the goal of decreasing reliance on Medicare and Medicaid both of which may experience capacity issues in the future.

Browse some of my other blogs on this topic to educate yourself on your needs and your next steps. Leave your comments here or contact us at

Tuesday, July 28, 2009

Celebrity's Will

Another celebrity's will is being revealed and what can we all learn. Farrah Fawcett who died June 25, 2009, the same day as Michael Jackson, left most of her fortune in trust to her only child. Sounds simple and straight forward enough. But, as with all things it is the back story that fuels the headlines.

Farrah Fawcett left nothing to Ryan O'Neal, her longtime companion and the father of her son Redmond O'Neal. And the point here is WHAT??? It is HER will and other than a spouse, she is not required by law to leave anything to a companion even if he was with her throughout her illness.

Her estate is being reported to be 5.5 million dollars in cash and millions more in special holdings, still to be determined. Her son who was in prison at the time of her funeral, and still is, for drug related probation violation, though he was allowed to attend the funeral. In any event, she left the money in trust with 2 executors to oversee the money for his "journey into sobriety rather than giving him the means to destroy himself." If a dying mother can not turn a child's life around, will a well manage fortune do it? At least Farrah Fawcett believed as much and in the final analysis that is all that matters.

She also left money to her alma mater, Texas University. This is an important part of her legacy and her way to help others as she was helped by her alma mater.

More when the will is released. Your thoughts or comments are appreciated. Contact us at

Monday, July 27, 2009

Probate - Your Questions Answered

I address so many questions from clients going through the probate process. These questions are raised by beneficiaries under the will as well as executors. Here are a few with the answers.

(1) How do I know what I get under the will? The will is a public document. You can obtain a copy of the will from the register of wills if it the executor does not provide you with a copy.
(2) When do I receive my share? All debts must be paid prior to any distribution of assets to beneficiaries. This would include final funeral expenses, last medical expenses, taxes and all other debts. A notification placed in the paper regarding a death puts creditors on notice and gives them the opportunity to present their claim if it is not already known to the executor.
(3) Do I pay inheritance taxes on what I receive? Inheritance taxes must be paid. If the executor does not pay the taxes out of the estate, the beneficiary (the one receiving the asset) must pay the taxes. Since the executor is responsible for the complete administration of the estate, it would be prudent for the executor to make sure the inheritance taxes are paid prior to making distribution.
(4) How do I transfer real estate located in another state? This question is often raised by executors when the deceased person lived in one state and owned real estate in another state. If the property was owned jointly with rights of survivorship, then it would pass to the surviving owner without going through probate. However, if the person was the sole owner or was a joint owner (without rights of survivorship) then the real estate interest will pass through probate. The executor would have to open up probate in 2 states.
(5) How can I successfully challenge the will? A challenge to the will would have to be based upon its validity. Was it executed in accordance with the legal requirements in the state? Was the decedent of sound mind? Was the decedent under undue influence or duress? The evidence would have to support the allegations. It may be costly and it would delay any probate.

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Saturday, July 25, 2009

Your Legacy And Charitable Giving

When you use the term philanthropy, many people think it does not apply to them but to the very wealthy. However, most people do see themselves as charitable. Well, philanthropy and charity are one in the same thing. You often are charitable to those things that matter most to you. In your display of charity, you are expressing a part of yourself, a part that can be captured in your estate planning. It is your personal legacy.

For many, one of the most important part of a personal legacy is philanthropy/charitable. But it is seldom just about the amount of the check or the impact the gift has on taxes. It is about the personal legacy story and the portion of the story that the charitable gift completes.

I have many clients who are committed to the idea of higher education and making it more accessible and afforable to others. As a result, they often want to provide a bequest in their will or establish a trust which would represent their legacy. They feel a greater sense of connection to the causes and educational institutions to which they give, and they are better able to articulate their values and life experiences that led them to their philanthropic/charitable choices. As a result, philanthropy/charity can provide the added benefits of both a teaching tool and a treasured family tradition.

Your comments are encourage or feel free to contact us at

Friday, July 24, 2009

Don't Take Your Passwords To The Grave.

I was reading an article in MarketWatch written by Andrea Coombes. See link below to place in your browser. I think it is food for thought. Many of us do not think about the details of our estate. Business that we do on-line has grown leaps and bounds. Many of our heirs would know nothing of these accounts waiting for something to come to our homes in our mailbox. I encourage you to read the article and see how your might protect your valuable assets from the state or others who are not entitled to the fruits of your labor.


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Thursday, July 23, 2009

Is This Your Child?

I was walking this morning and thinking about how important it is to plan these days. Can you imagine that after your death, someone claims to be your child? This is a person that no one in your family knew existed. This happens more than you might think. Anna Nicole Smith's attorney had stated that some of the provisions in Anna Nicole Smith's will was to address this concern. Both men and women need to address clearly who they intend to be the beneficiaries under their will.

As I have pointed out before, you do not have to provide for your children in your will. However, those who may claim to be your children, though they were not named in the will, can allege that it was an oversight. If you just state that you provide for your "children" without defining, then they claim rights under that broad designation. If you die without a will, the intestate laws provide for distributions to children.

So, is this your child may be a question that has to be answered after your death. Your planning can at least make clear your intention regarding inheritance rights.

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Wednesday, July 22, 2009

Planning for Non-Traditional Families - continued

Yesterday in my discussion of domestics partners, I mentioned there are situations where cohabitation/domestic partnership agreements are advisable. Among those reasons are:
1. When a second person's name is added to a deed after considerable equity has already been established in the home during ownership by the first owner. The agreement will help clarify ownership interest in the real estate.

2. When property purchased jointly is only held in one person's name.

3. When one person is the financial provider and the other is a home-maker.

4. When unequal contribution are made towards the purchase of jointly held property.

5. When there is an interest in giving benefits or rights to another which are not required or available under the law.

6. When assets are co-mingled or combined.

7. When there are family members who may dispute the interest of a domestic partner.

I think it is always wise to have an agreement between domestic partners because there are many situations that we can not anticipate and an agreement helps with defining how to handle.

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Tuesday, July 21, 2009

Planning for Non-Traditional Families

It is just as important if not more important for same sex couples to engage in estate planning. With the exception of states like New Jersey, Massachusetts and Vermont, there are few laws providing benefits and protections for domestic partners.

I was talking with a CPA specializing in estate planning about the unique tax issues that arise in domestic relationships. Specifically, she expressed that same sex partners, unlike married couples, have no IRS exclusion for property or monetary transfers between them. Such transfers could be subject to gift tax and transfer tax. If there are significant assets involved in a separation between domestic partners, even if the financial provider wanted to be fair with property division, the tax consequences may be prohibitive. After the lifetime exclusion of 1 million dollars is gifted, the excess will have a gift tax imposed. The gift tax rate starts at 41% and goes to 45%. It will be lowered in later years to 35% but this is still a hefty tax for anyone to pay.

Tomorrow I will address Domestic Partnership Agreements. When should you have one? Leave your questions or comments here or contact us at

Monday, July 20, 2009

Where Are Your Estate Planning Documents and Have They Been Signed?

One of the biggest problems when someone you love dies is where are their "official" documents. Some people share that information with others close to them but too many do not. So today I want to share best practices for estate planning documents with you.

Estate planning documents have no legal effect whatsoever until they are signed and, where required, notarized. Once you have reviewed and finalized the documents, you should proceed to have them executed immediately. As important as this may be, I have found on more than one occasion that people have held documents for years without having them executed. I remember one couple wanted to know if they should execute documents drafted more than three years prior. There are some people who never get around to executing documents prepared for them. That is why it is important that the attorney, or whomever you choose as the coordinator of your estate planning, should always make it a part of their practice to arrange the execution of all estate planning documents.

Once your estate planning documents are executed, you have several options for places to maintain your original documents. You can keep them in a safe deposit box at your bank or financial institution or a safe that is fireproof and waterproof in your home. The attorney can maintain your original documents for you as well. In many states like Pennsylvania, you do not have to file or register your will upon execution. It is only filed or registered at death.

It is your preference regarding the maintenance of your original documents. You also want to make sure those who will be serving in a fiduciary capacity know where your documents are located and can get to them when needed for your benefit.

Do you have questions or comments? Leave them here or contact us at

Friday, July 17, 2009

As We Age - Elder Law

I had mentioned before that I alway use my birthday as a time to review and reflect on important health, financial and personal matters. Making sure my estate plan is up to date is a part of this annual reflection. Well, today is my MOTHER's birthday!! Happy Birthday Mom!!

We are fortunate that my mother and father are both vibrant and healthy individuals. However, just like we should be doing our estate planning when we are healthy and can make sound and rational decisions, we should address issues of healthcare and long-term care when we are healthy and can make sound and rational decisions. The "sandwich generation", those caring for children and potentially caring for aging parents, should be planning for the issues that arise as we age. This would include the social security areas of retirement, disability, medicare and medicaid; long term care insurance; assisted living; and, guardianship. All of these areas have issues within them that can be sorted through with the help of an elder law attorney.

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Thursday, July 16, 2009

Guardianship - Lessons from the Celebrities

The issue of guardianship is just such an important part of one's estate plan that it can not be stressed enough. I am reminded of the case of Anna Nicole Smith. It illustrates the importance of determining guardianship in a current will. Former Playboy model celebrity Anna Nicole Smith (Vicki Lynn Marshall) died in 2007 at age thirty-nine, leaving a five month old baby, naming no father, and having an obsolete will that left everything to a deceased son and omitted provisions for future born children.

Even after paternity was determined, the litigation and law commentaries continued over other unresolved questions. My advice is to take the time now to survey the list of potential guardians for your minor children, make a decision regarding guardianship, and stay current by updating your will when necessary. In fact, the lesson to be learned from this case is the importance of a properly drafted estate plan in order to protect your children who are an essential part of your legacy.

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Wednesday, July 15, 2009

Disinherited Spouse - Elective Share

We have learned while watching the coverage of Michael Jackson estate that you do not have to provide for parents, siblings, an ex-wife or other family members. However, I thought I would take this time to address who you can not disinherit. You can not disinherit a current spouse; husband or wife.

If the will does not provide for a husband or wife, then the disinherited spouse can elect to take against the will. The assets which the spouse has a right to includes property passing under the will of the deceased spouse or by intestacy if the deceased spouse died without a will. In addition, assets conveyed during marriage, by the deceased spouse to himself or herself and another with rights of survivorships, are also included. Finally, assets that were given away within one year of death, to the extent that the gift exceeded $3000 or the statutory limit.

The elective share rule is an election that a spouse must affirmatively make in order to receive a 1/3 share of the deceased's estate.

Each state differs so to learn more contact our office at or leave a comment.

Tuesday, July 14, 2009

Guardianship and Your Minor Children

Back to Michael Jackson's estate, the importance of addressing guardianship can not be stressed enough. If you know there may be a contest for your children, it is important that you get resolution of those potential issues while you are living. Based upon the most recent reports, the guardianship hearing for Michael Jackson's children has been postponed for another week. Over the next week, it is anticipated that Debbie Rowe and Katherine Jackson may come to an amicable settlement for guardianship of Paris and Prince I.

Stay tuned. Time will tell. In the meantime, if you have issues regarding your minor children, I urge you to address them NOW. Your children's future depends upon it.

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Monday, July 13, 2009

Updating Your Will

Life if funny you know. It has a way of bringing you such great joy and at other times such overwhelming pain. But, through it all we keep on doing what we need to do. I had clients who came in to have their estate planning done when there was much to celebrate in their life; successful job, great kids. Within two years they were back to update their documents because the husband, not yet 60,was diagnosed with Alzheimer's. Changing life circumstances represent a time to review and possibly update your will and other estate planning documents. Other considerations for updating your will and other estate planning documents include:
(1) Moving to another state
(2) Marriage
(3) Birth of a child
(4) Divorce
(5) Death of a loved one
(6) Disability
(7) An Inheritance

We are here to assist you. Leave your comments or contact us at

Sunday, July 12, 2009

Continuing Care Retirement Communities - Healthcare Options

The Continuing Care Retirement Communities can offer independent living, assisted living and nursing care. Many offer all three levels of care or services, though there are some that do not include nursing care as part of the covered continuum or which offer nursing care at a separate location. There are three primary types of health care options:

First type
provides an individual with the ability to move from independent living to assisted living or nursing care without any significant change in their monthly payment. For example, if a resident was paying $ 3,000 for a one bedroom apartment but now requires round the clock skilled nursing care,- in this type of community, the monthly fee would remain at $ 3,000 with some additional charge for three meals per day that are required by long term care regulation to be provided in the nursing setting. This first type of community tends to have higher entrance fees and higher monthly fees than the second and third type of communities.

Second type communities are sometimes referred to as modified fee-for-service communities. There are various forms of these communities, but essentially life care is not offered. The resident does not have to pay the full cost of the higher levels of care, either because they receive a discount on the per diem or monthly costs for the higher levels of care (i.e. assisted living and nursing care) or receive an agreed upon number of days within the higher care levels, without additional charge to their independent living unit monthly fee.

Third type communities are frequently referred to as fee-for-service communities. The monthly fee in particular (but also entrance fees) tends to be lower than the fee at other type communities. The reason for this is that there is no insurance like component to the third type community. If an independent living resident requires assisted living or nursing care, they can access that care but will be charged the full cost of the care. There is no discount or free days.

While the advantage of the first type communities is that they offer residents and families the ability to define and pre-plan the expenditures that will be made for current and future care, these communities, of course, tend to be more expensive. The third type community recognizes that not all residents will require higher levels of care; therefore, the resident is only charged for the actual care that is received.

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Saturday, July 11, 2009

Continuing Care Retirement Communities - Payment Options

Before Michael Jackson's death and all the estate planning issues raised by his death, I had been covering the Continuing Care Retirement Communities. Picking back up with it today I will look at the payment options available in those communities.

Another key distinguishing characteristic of CCRC is the refundability of the entrance fee. The four basic types of entrance fee approaches are as follows:

Non- Refundable:
The Entrance Fee is non-refundable in the event of the resident’s death. Non-refundable entrance fees are generally lower than the remainder of the Entrance Fee options described below.

Amortized: An amortized entrance fee generally offers the resident or the resident’s estate the ability to recoup a portion of the entrance fee paid during an agreed upon period.

Refundable: The term Refundable entrance fee is typically used to describe an entrance fee that offers the resident or the resident’s estate the ability to always obtain a specific refund amount – as a minimum.

Equity: Though less common, it is another payment option for some CCRC. The Equity approach represents entrance fee refund plans that offer the resident or the resident’s estate the ability to obtain a refund that reflects a portion of the appreciation of the resident’s living unit or apartment.

What are your thoughts regarding CCRCs? We would like to hear from you. Leave a comment or contact us at

Friday, July 10, 2009

Michael Jackson - Five Estate Planning Lessons

I thought I would check in at this point with estate planning lessons learned thus far from Michael Jackson's death. I am sure there will be more during what is the beginning of a long and complex estate planning saga:

FIRST, you must have a will that is up-to-date and valid.
SECOND, you must name the guardian of your minor children and address potential issues and challenges from a surviving parent who is not named as guardian.
THIRD, you must name the executors who will gather up and protect your assets and ensure distribution in accordance with your will.
FOURTH, you must provide for the distribution of your assets, but you are not required to provide for parents, siblings, an ex-wife, or other family members.
FIFTH, unlike a will, a trust, with all its terms and conditions, is not a public document.

Comment on what lessons you might have learned or contact us at

Thursday, July 9, 2009

Business Succession Planning - Continued

In follow up to yesterday's post, I wanted to provide the general estate planning principle regarding debts. Creditors can proceed against the estate to collect their debts. Debts and taxes must be paid out of the estate (or be otherwise provided for) prior to distribution of assets to beneficiaries. Therefore, it is important in any business venture to determine what exposure your venture may have on your personal estate as oppose to your business entity. You want to make sure that you separate the exposure of your business venture from your personal assets. The following are important steps to take:

1. Make sure business ventures are done in the name of your business operation.
2. Make sure your business has been properly capitalized and is in compliance with all legal requirement to assure its viability.
3. Make sure you have assessed risks in your business ventures and provided adequate insurance where your business assets might not be sufficient to cover potential exposure.

ABOVE ALL, ALWAYS seek professional advise and make sure your business succeesion planning is up to date. Leave your comments and questions here or contact us at

Wednesday, July 8, 2009

Your Estate and Business Succession Planning

Well, yesterday's Memorial Service for Michael Jackson was extraordinary and a real tribute to his legacy.

I had a question posed to me. What effect will the cancellation of Michael Jackson's "This is it" Tour have on his estate? Of course, I do not know the terms of any agreement which may have been put in place but there are a number of conditions that may or should have been considered. I will discuss a few here.

FIRST, the promoters of the concerts, AEG Live, would have taken out INSURANCE on the Pop Star. They reported to the press that Michael Jackson had passed the insurance company's physical exam. He would have been insurable. How much insurance did they have on Michael Jackson and under what condition and terms would coverage be paid out? Only time will answer those questions.

SECOND, there would have been an AGREEMENT to cover all kinds of contingencies like death, disability, sickness, etc. If as reported, the promoters spent $30 million dollars in preparation and made $85 million dollars in tickets sale, in theory they might be out $115 million dollars. However, it has also been reported that 40% to 50% of the ticket holders may opt to keep the ticket as a souvenir reducing the promoter's exposure to approximately $73 million. Further reduction will occur if the agreement provided the promoter with rights to the musical footage of the rehearsal. The small footage already released has received record attention.

FINALLY, in business you must consider the effect of your actions on your estate. What happens if you die? If Michael Jackson worked with an estate planning team and professional advisors, the cancellation of the concept tour may have no negative effect on his estate. Let us see.

An interesting question that we can all watch unfold. Leave your comments here or contact us at

Tuesday, July 7, 2009

If the will is valid, the named executor rules!

As I sit to write this morning, I reflect on the news coverage and stories since Michael Jackson's death. His memorial service will be today and so the focus may now just be on the musical and humanitarian legacy he leaves behind. Let's hope the other stories are put on hold for a couple of days.

In any event, I did want to speak on yesterday's findings relating to his will. I do agree with the judge that the administration of the estate should be turned over to the executors. Michael Jackson did name his executors in his will and his selection is what should control. The temporary administration of his estate was given to his mother but at that time Michael Jackson's will was not available. Whether the family agrees or not with Michael Jacksono's choice, the will controls.

So today if you should get a chance to see the memorial service, please share your reflections here with us or contact us at

Monday, July 6, 2009

Your Body is an Asset of Your Estate

Tomorrow is the memorial service for Michael Jackson who died June 25th. We can take this time to reflect on another important asset of our estate and that is our bodies.

Many people do provide for direction regarding the disposition of their bodies upon death. Others choose to leave the arrangements and decision to close family members. Generally, close family members take on that responsibility. However, it is important for you to plan. This could be anything from life insurance to cover costs to prepaid funeral arrangements including your burial plot and the service. If you have a preference for cremation, you can provide for that in your will as well.

When you are a Pop Icon, it is even more important to provide for your preference. Did Michael Jackson want to be buried at Neverland? Is that even an available option? What type of remembrance ceremony would he have preferred? Was he an organ donor?

Think about your own situation. Will the disposition of your body cause unnecessary turmoil and more distress because your preferences were not made known? Have you considered the cost and made appropriate arrangements to cover such costs? Does your will address your interest and if not who knows what you want and can carry it out?

Let us remember the genius of Michael Jackson, his legacy and musical gift to the world. But more importantly, let us remember his humanity, kindness and charity. Leave your comments here or contact us at

Sunday, July 5, 2009

Witnesses to a Will

A question was posed to me regarding Michael Jackson's will. Apparently the named executors signed as witnesses to Michael Jackson's will. The copy of the will that I was able to obtain had the witnesses name and address covered up so I was unable to confirm who signed. Let's assume that the executors did sign as witnesses. Is that permissible? If not, would that invalidate the will?

Under Pennsylvania law, any competent individual can be a witness; the interest of such a witness does not disqualify, but does AFFECT CREDIBILITY. For that reason, if an individual has a BENEFICIARY interest in the will, the general practice is not to allow such individual to sign as a witness. A BENEFICIAY is someone who will receive an advantage/benefit under the will. Receiving any of the assets is clearly as advantage. Serving as the Executor, is that an advantage? Even if it is, it would not invalidate the will, at least not in Pennsylvania. We will see, in time, what the California law provides.

In any event, having the executors sign as witnesses does raise a question regarding the credibility of the executors to affirm that the person signing was of sound mind and not acting under duress or undue influence. Will this become an issue? Will the executors be able to establish credibility? Thanks for raising the question and let watch how this might play out.

Your comments are welcomed and encourage. Contact us at

Saturday, July 4, 2009

Independence Day


I share with you part of a message from President Obama:

"...As we all celebrate this weekend, let's also remember the remarkable story that led to this day.

Two hundred and thirty-three years ago, our nation was born when a courageous group of patriots pledged their lives, fortunes, and sacred honor to the proposition that all of us were created equal.

Our country began as a unique experiment in liberty -- a bold, evolving quest to achieve a more perfect union. And in every generation, another courageous group of patriots has taken us one step closer to fully realizing the dream our founders enshrined on that great day.

Today, all Americans have a hard-fought birthright to a freedom which enables each of us, no matter our views or background, to help set our nation's course. America's greatness has always depended on her citizens embracing that freedom -- and fulfilling the duty that comes with it.

As free people, we must each take the challenges and opportunities that face this nation as our own. As long as some Americans still must struggle, none of us can be fully content. And as America comes ever closer to achieving the perfect Union our founders dreamed, that triumph -- that pride -- belongs to all of us.

So today is a day to reflect on our independence, and the sacrifice of our troops standing in harm's way to preserve and protect it. It is a day to celebrate all that America is. And today is a time to aspire toward all we can still become."

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Friday, July 3, 2009

Michael Jackson's Children still in play?

Well, back to the guardianship issue, it seems.

FIRST, it is reported that Debbie Rowe has not decided whether she will or will not challenge custody of Prince Michael and Paris, her 2 children with Michael Jackson. However the permenant guardianship hearing has been delayed a week until July 14th. This may give the parties time to reach an agreement if in fact there is a dispute.

SECOND, though the will names Katherine Jackson as guardian, Debbie Rowe's parental rights were not severed by the courts. Unless a parent is determined to be "unfit" custody by the biological parent is favored by the courts under normal circumstances. This is anything but normal circumstances.

THIRD, the courts also favor keeping siblings/families together. Debbie Rowe would have no legal rights to Prince Michael II. As reported, Princed Michael II's mother was a surrogate.

FOURTH, though the law is well settled on the rigthts of biological parents and adoptive parents, the rights of surrogates or sperm donors are less clear. Many issues in this area have not been explored by the courts. Will this case serve as that opportunity to explore issues in this area? Only time will tell and I will be providing my estate planning insights.

What more could Michael Jackson have done to secure the future of his children upon his death? This and other questions will be explored in the days to come. We want to hear from you. Leave your comments here or contact us at

Thursday, July 2, 2009

Terms of the Michael Jackson Will

So, the terms of Michael Jackson's 5 page will are revealed. What does it mean to YOU? Here are my thoughts on what can be learned from a public discussion of a celebrity's will.

Under the will all assets are to be placed into the Michael Jackson Family Trust. The Trust was not filed with the will and is not required to be filed. So, the terms and conditions of the Trust may remain private. The only person that can not be disinherited is a spouse. You do not have to leave anything to parents, children or siblings.

Katherine Jackson was named guardian of the children and Diana Ross named as the alternate guardian. Who should one name as a guardian? It does depend on your family circumstances. Generally the considerations are your parents, if not aged and unable to provide care, your siblings, if there is a relationship, family friends, if willing and able. Most importantly, whoever is named, should be aware of your intent and agree. This should not come as a surprise to the named guardian.

Co-Executors under the will are Michael Jackson's lawyer John Branca and family friend John McClain, a music executive. The role of the excecutors is to gather up the assets and distribute in accordance with the will. In this case, all assets are to be transferred into the Trust. It will be the Trustee under the Trust who will be responsible for managing the assets for the benefit of those named in the Trust. The will does not indicate who the trustees will be.

Who should be named as your Trustee? Generally, it can be individuals, ones whom you trust and whom may be familiar with your affairs or it can be an institution, a bank, trust company, law firm etc. It can be a combination of individual and institution. The more complex the estate, the more essential that the trustee be able to be around for awhile. Institutional trustees generally fit this requirement.

What else can we learn from the Michael Jackson affair? Stay tuned. Leave your comments or contact us at

Wednesday, July 1, 2009

Michael Jackson Remembered…

Michael Jackson's Will

It has been reported that Michael Jackson's will was found. This was a will from 2002 and reports indicated that there might be another will. Several things came to mind when I read and heard the reports and I share them with you.

FIRST, it is always important to keep your will up to date, to address changed circumstances such as a birth, death, additional assets, relocation, etc. Given Michael Jackson's life, a 7 year old will would probably be outdated.

SECOND, there should only be one original will. It should be maintained in a safe place. Generally the attorney preparing the will maintains the original in a safe. I have my clients maintain the original in their safe at home or at their bank in a safety deposit box. My records reflect the location of the will. When a new will is made the old original will should be destroyed. However, any new will would state that it revokes any prior (old) will.

THIRD, given all of the financial, legal and personal advisors to Michael Jackson, there should be more than just a will for his situation. He needed not only estate planning but asset protection planning. For his children, Trusts could have been established and funded during his lifetime. Such Trusts, if irrevocable, would not be subject to any creditors. Trustee(s) would have been named to manage the Trusts for the benefit of the children. The complexity of Michael Jackson's estate would result in not a simple estate plan but an intricate one addressing Federal Estate tax issues, creditors's issues, family and business matters.

FOURTH, the will when filed becomes a public document. For that reason, many people have their assets placed in a Trust which is not a filed or public document. If there is a will, it would be a simple one which is only done to make sure any asset not already in the Trust is place by the will into the Trust. All the terms, conditions and other specifics of the estate would be addressed in the Trust, the details of which would never become known to the general public.

IN CONCLUSION, this is just the beginning of what will be a long and complex legal matter. As the estate planning side of it unfolds, I will keep you apprised of what matters most. Your comments are welcomed or contact us