Estate Planning, Living Trusts, Real Life Lessons

Someone Finally Did Things Right! Lessons from Robin Williams’s Estate Plan

downloadLast week we tragically lost an entertainer who played a major role in the lives of many. Usually when a celebrity dies I read about how their estate plans went awry and how they did everything wrong, but today I am pleased to report that I am able to discuss one celebrity who may have done things right. Early reports, citing TMZ (seriously, where do they dig this stuff up and how ridiculous is it that I am citing it?), indicate that Robin Williams may have used a revocable trust as his primary vehicle to transfer his assets at death.

There are a number of reasons a revocable trust may be the perfect estate planning tool, but primary among them is privacy: a revocable trust is a private document that normally will be unavailable to the public, an important consideration for a public figure. In contrast, consider the cases of Phillip Seymour Hoffman and James Gandolfini, among others, whose wills and dispositions from their large estates were on public display. A will is a public document, filed with the court in a probate proceeding, and as such is available to the public; a trust is not automatically subject to probate or court jurisdiction. If a client-say a celebrity, an athlete, or even a resident of a small town full of nosy neighbors—ever has a need for privacy, the revocable trust is the preferred instrument.

A revocable trust can also reduce (but not eliminate) the possibility of intra-family drama surrounding the estate plan. A revocable trust avoids a probate proceeding, without which no notice to family members and heirs is necessary. Only the named beneficiaries need to get notice of the distribution from a trust, unlike in probate where all defined heirs, along with named beneficiaries, are required to receive notice. This means that a child or someone else who intentionally may have been excluded as a beneficiary will receive notice and will be an interested party in a court-supervised probate proceeding. It is still possible to bring action to determine the validity of a trust, or to contest distributions from a trust, but a party who might wish to press such claims may never even receive notice that the trust exists.

Just because Robin Williams appeared to have used a revocable trust instead of a will as his primary estate planning vehicle doesn’t mean his estate plan was perfect, but it does mean he was able to ensure that the division of his assets will remain private. One caveat: revocable trusts are only helpful if you have actually transferred your assets to the trust. Funding the trust is crucial and you should always work with a qualified estate planning attorney to coordinate the details.



Special Needs

Five Planning Pointers for Parents with Disabled Children

Special-Needs-Child-300x211Buy enough life insurance.  A parent is irreplaceable, but someone will have to fill in if the worst happens. It may be siblings or other relatives. In all likelihood, the family will have to pay for at least some services the parent or parents had provided when able. If the estate is not large enough for this purpose, it can be made large enough through life insurance proceeds. Premiums for second-to-die insurance (which pays off only when the second of two parents passes away) can be surprisingly low.

Set up a trust.  Any funds left for a child with special needs, whether from an estate or the proceeds of a life insurance policy, should be held in trust for his or her benefit. Leaving money for anyone with a special need may jeopardize public benefits. Many people with special needs cannot manage funds — especially large amounts. Some families disinherit children with special needs, relying on their siblings to care for them. This approach is fraught with potential problems. Siblings can be sued, get divorced, disagree on their responsibilities, or run off with the funds. It can also cause tax problems for the siblings. The best approach is a trust fund set aside for the child with special needs.

Create a Will and appoint a guardian. While a Will and the appointment of a guardian is important for anyone with minor children, it is doubly so if the child has special needs. Finding the right guardian can be difficult. In some cases, the care needs of the child may be so demanding that he or she will need a different guardian from his or her siblings. The parents need to make these determinations while they can. The Will is the vehicle for the appointment of a guardian.

An adult child may also require a guardian when the parent can no longer serve in this role (whether officially appointed or not). It will probably not be legally possible to officially appoint a successor guardian once the parent is out of the picture. So, it may make sense to begin making the transition to a new guardian while the parent is able to assist in the process. This can be in the form of a co-guardianship, or passing the baton to a successor guardian.

Write down the care plan.  All parents caring for children with special needs are advised to write down what any successor caregiver would need to know about the child and what the parent’s wishes are for his or her care. Should the child be in a group home, live with a sibling, be on his or her own? Usually, the parent knows best, but needs to pass on the information. The memo or letter can be kept in the attorney’s files with the parent’s estate plan.

Coordinate with other family members. Even a carefully developed plan can be sabotaged by a well-meaning relative who leaves money directly to the child with a special need. If a trust is created for the benefit of the child, grandparents and other family members should be told about it so that they can direct any bequest they may like to leave to that child through the trust.

Estate Planning

When a Loved One Dies

Loved_OneAfter a loved one dies, there are many issues which need to be addressed to wrap up the person’s legal and financial affairs. The following is a checklist of issues to consider:

The funeral home should take care of providing you with certified copies of the death certificate. The number of death certificates you need will depend on the assets remaining at the time of death.

The funeral home should contact the Social Security Administration to report the death. If there is a surviving spouse, the spouse will be entitled to a one-time death benefit of approximately $250. In addition, the surviving spouse may begin receiving the deceased spouse’s monthly social security payment if it was higher than their own.

Regarding any life insurance, you will need to call the insurance company to report the death. The company will send you a claim form to complete and will request a certified copy of the death certificate. The death benefit proceeds will then be issued to the beneficiaries. (Retirement plans, such as IRA’s and annuities, work much the same way. You must contact the appropriate company to report the death, complete the necessary claim forms and submit a death certificate before the proceeds will be distributed to the beneficiaries.)

If your loved one was receiving a pension from the VA or a former employer, you should contact the institution and report the death. If there is a surviving spouse, it is possible that the spouse may receive a death benefit or may begin receiving a monthly pension check.

If your loved one owned real estate in joint tenancy with another individual, a certified copy of the death certificate should be filed with the county registry of deeds office. The same is true if they owned the real estate alone but had designated a beneficiary. (Keep in mind, if the home is now vacant, there will most likely be a limit on how long the home will continue to be insured—you should check with the insurance company.)

If your loved one owned a car, a death certificate should be presented to the local Secretary of State office.

Any other assets remaining, like bank accounts, CD’s, stocks and bonds should be handled similarly to the real estate and car. Those assets with Payable on Death (POD) or Transfer on Death (TOD) beneficiary designations will require that a death certificate be provided to the appropriate financial institution or company.

Finally, you may be wondering if anything will have to go through probate. Those assets that were titled in your loved one’s name alone with no beneficiary designation at the time of death will need to be probated. If there was such an asset, then your loved one’s Last Will and Testament will need to be filed with the probate court. If there was no Last Will and Testament in place, a probate estate will need to be opened and state law will determine the distribution of the assets. (There are exceptions to this procedure which may simplify the process if the assets remaining in the deceased person’s name at the time of death are relatively minimal.) If, on the other hand, some of the deceased person’s assets were held in Trust, a trust administration will have to be conducted.

Regardless of the amount of assets and how they are titled, it is always wise to contact an elder law attorney for guidance after the loss of a loved one. The Wall Law Group offers a free initial consultation. For your appointment please call 888-829-0894 or click here.