We Were Surfing, Then a Shark Ate Her
What Happens if You Die Without a Will While On Vacation? It was going to be the best honeymoon ever. We met a couple of years post-divorce for both of us, and fell madly in love with each other and each other’s children. We were financially secure and each of us had our own wealth and intended to keep our assets separate. The water was beautiful and blue and the waves were amazing. We went out on our boards and out of nowhere appeared a grey fin, an ugly snout, and then menacing black eyes. She freaked out, fell off, that thing opened its snout, showed teeth, and the center half – 1/3 – of my new wife’s body disappeared. Then all hell broke loose. We had quickly prepared powers of attorney prepared before we left and were planning to have an estate plan prepared by an attorney once we returned. My wife was particular about how she wanted her remains disposed – she wanted to be buried in the most sustainable and economical way. At the hospital, researchers appeared and refused to release her body. Unlike our home state, in this state, doctors were the final decision-makers on dispositions of remains. So I had to leave her remains in a strange place. I’m also going to have to pay thousands of dollars to a healthcare system because we didn’t have traveller’s insurance. When I returned home, I learned that some of her accounts had no designated beneficiaries, so instead of everything going to her children, her children will have to split everything with me. When they found out about that, they began blowing up my cell phone asking me what I intended to do. Of course, I intend to give them the 100% of my share but one of them is a spendthrift – money burns holes through their pockets and my wife was adamant about being careful how much to give to this child on a regular basis. That has caused some friction between all my stepchildren. Also, since my wife had no Will or Trust, her estate must go through probate. In this state, because I’m the surviving spouse, I have preference in acting as an administrator for her estate. This issue also created discord between me and my stepchildren. That frickin’ shark! I think what I’m going to do is use part of my half to create a trust for the spendthrift child to shelter at least part of their share of the estate, and they are not going to like that, but I know it’s what my wife would have wanted. She would have been very upset with the fact that this kid, who she actually suspected as being a functional addict, is going to obtain 1/6 of their share completely outright. I really hope the kids don’t blow through their inheritance; they are still young adults, just a few years out of college. Her estate was rather large, so I also must obtain insurance to cover the value of her estate, which cost the kids thousands of dollars. My wife was also working with a tax professional because she also had a significant tax liability that they were disputing with the IRS. That means I can’t distribute her estate to the kids (or anyone else) until that issue is resolved. How am I going to explain that to the kids? Maybe I can provide a partial distribution, but I still need to have some appraisals done – she owned a couple of rental properties and a small online business. I really miss her – she was fun but brilliant. This is a mess… And a fictional story…kinda
Welcome to Pride 2025…Or Stonewall Pt 2
I’ve been writing and speaking on LGBTQ+ rights as they intersect with estate planning and otherwise since the inception of my firm. (It’s related to my lawyer origin story.) In fact, serendipity had our firm launch on the day Illinois passed the Civil Union Act, on June 1, 2011. Then, in 2015, the U.S. Supreme Court ruled for marriage equality in Obergefell v. Hodges. Still, that ruling was a plurality, which means it could be readily overturned if the Court agrees to hear another marriage equality case, that is founded on a different and novel legal argument. Perhaps reading the tea leaves or understanding the direction of the Court, in 2022, former President Biden, signed into law the Respect for Marriage Act. The law undergirded interracial marriage, repealed the infamous DOMA, and required states with mini-DOMAs to respect same-sex marriages if the couple was married in a jurisdiction that provided same-sex marriages. So, same-sex marriage is safe, right? DOMA was signed into law in 1996 by former President Bill Clinton. The law defines marriage as a union between one man and one woman. Technically, same-sex marriage is safe, but the benefits that accompany marriage are still governed by state and federal law and the doctrines supporting states’ rights are more popular now and the Supreme Court has a different composition than it did in 2015. The results: second-parent adoptions for same-sex couples are being sought more now than ever in addition to amended estate plans that protect LGBTQ+ couples regardless of their domicile; and any other protections that can be provided by law. It is unfathomable the reverse course that LGBTQ+ rights are confronting, but the Stonewall Generation doesn’t forget. So, Welcome to Pride 2025. On September 30, 2022, the U.S.’s Financial Crimes Enforcement Network (FinCEN) issued its final rule on Beneficial Ownership Information Reporting Requirements, mandated by the Corporate Transparency Act (CTA). The rule aims to combat money laundering and terrorism by collecting and maintaining Beneficial Ownership Information (BOI) for U.S. businesses. It addresses the use of corporate structures, such as Limited Liability Companies (LLCs) by illicit actors and aligns with international efforts to combat unlawful activities. The rule outlines reporting requirements, including who must report and the violation consequences that are costly (like $500/day!). The current U.S. framework for combating money laundering and terrorism has shortcomings, making it attractive for illicit actors to create hidden shell companies. The final rule requires new covered businesses to submit timely BOI reports to FinCEN within 30 days of establishment. Existing businesses have until January 1, 2025, to submit their initial reports. Accuracy and updated information are emphasized. Reporting companies must include specific information in their initial reports, such as legal name, trade name, address, jurisdiction of formation, and EIN or TIN. They must also provide details of each beneficial owner and company applicant, including full names, dates of birth, addresses, unique identifying numbers, and images of identification documents. Corrected and updated information must be reported later. The final rule defines a “beneficial owner” as an individual who exercises substantial control over the reporting company or who owns at least 25% of the company (ownership interest). Exceptions to the definition include minor children, nominees, intermediaries, custodians, agents, employees, individuals with future inheritance interests, and creditors. If no exceptions apply, beneficial owners can be identified based on substantial control and ownership interests. The rule provides indicators of substantial control and clarifies the definition. Businesses must determine if they are considered reporting companies for purposes of the final FinCEN BOI rule. Domestic reporting companies include corporations, LLCs, or entities created by filing documents with a secretary of state or similar office. Foreign reporting companies are entities formed under foreign law and registered to do business in a state or tribal jurisdiction. The rule does not add exemptions beyond the 23 specified in the CTA. Companies must also determine the extent of their reporting obligations and maintain a record of changes in company applicant information. The definition of a company applicant is limited to one or two persons. Additionally, existing companies are exempt from providing applicant information, but new companies must comply. Complying with the final rule may be challenging, because it involves analyzing multiple individuals with ownership interests and substantial control. FinCEN has not imposed limits on the number of beneficial owners to be reported to create a comprehensive database. Small businesses may benefit from legal counsel to navigate and comply with these measures.
Navigating Florida\’s Perilous Spousal Estate Inheritance
Contributing Author: Nicole Page Florida law provides significant protection to surviving spouses who have been disinherited or left a small share by their deceased spouses. In Florida, a spouse cannot be disinherited by a will or a trust, which is different than Illinois, where a spouse can be disinherited by using a trust. Florida law gives spouses the option to choose to inherit what was left to them according to their deceased spouses will or the choice to elect to receive a percentage of the elective estate. A surviving spouse usually elects to take an elective share in situations where the deceased spouse attempts to disinherit them or leaves them less than they would receive if they took an elective share. The amount of the elective share is a case-by-case analysis, depending on the value of the estate. There is no fixed number, but rather a percentage – up to 30% of the deceased spouse’s estate. It’s also important to note that some assets that aren’t typically a part of an estate are considered to determine the surviving spouse’s elective share. This means that an attempt to circumvent the elective estate statute by distributing assets into a trust may still not be sufficient to disinherit a spouse. Florida does not discriminate by codifying what type of character the spouse had or the nature of the relationship between the spouses. This means that even if the spouses have been living separately for years, it does not infringe on the right to the elective share. As long as the spouse is a Florida resident and still married at the time of the death, they can claim the elective share. Barriers to claiming the elective share are: Executing a valid premarital or postmarital agreement. Required procedural protocols: The surviving spouse must file a written notice that they are invoking the elective share statute with the probate court within 6 months after the date of service of the notice of administration or 2 years after the date of the decedent’s death. Still, if you would prefer to provide for your children because you\’re in a second marriage, beware of what\’s lurking beneath…
Changes in New York\’s Power of Attorney
Author Gabrielle Wasenius Laws always evolve. Here at the Law Offices of Max Elliott, we stay current on estate planning, estate administration, and probate laws of the jurisdictions we serve. The laws related to the New York Power of Attorney (POA) underwent significant changes in 2021, bringing more flexibility for those preparing POAs and greater safeguards for those relying on them. One notable improvement is that the POA no longer requires an “exact wording” match but only wording that that “substantially conforms” to the statute. Previously, even minor typos or small mistakes could invalidate POAs. While the wording requirement changed, the fundamental rule that an agent’s powers are limited to those listed in the POA remains unchanged. However, the new law allows for more powers to be granted to agents, especially regarding gift-giving. Before the law changed, an agent could only make annual gifts of less than $500 unless the principal initialed a section of the POA to grant authority to the agent to make larger gifts and then also executed a separate Statutory Gifts Rider. The Statutory Gifts Rider had to be notarized and signed by 2 witnesses. These requirements were meant to combat fraud and abuse. But, requiring 2 forms created confusion. While POA forms properly executed under the law in effect at the time of their signing remain valid, the new POA law eliminates the Statutory Gifts Rider completely and allows for gifting provisions to be included in the POAs Modifications section. It also includes a standard provision allowing up to $5,000 in gifts per year, with the option to specify other amounts in the document itself, specifically in the Modifications section. This significantly simplifies the process. The new law also makes POAs easier to use. The law ensures that third parties like banks cannot reject a properly executed POA without good cause, and the statute provides a specific timeframe for them to do so. If they unreasonably refuse to recognize the agent\’s authority, they may be held responsible for damages and reasonable attorney fees and costs by a court. The law also protects those who rely on POAs. The safe harbor provision shields third parties from liability if they act in good faith, even if the POA turns out to be invalid. However, for this protection to apply, the POA must appear to be executed correctly, and the recipient must not have actual knowledge of forgery, voidness, or misuse of authority. This provision does not protect parties involved in fraudulent activities. These legal changes in the New York POA make it easier for agents, principals, and estate planning attorneys to work within the system. A well-prepared POA, along with other advanced directives, can provide valuable protection when needed. Don\’t wait until a crisis; start planning today for a more secure tomorrow.
Diverse Family Legacies
Not only is it PRIDE month, but it\’s also our anniversary! As we reflect on our 12 years of service, we look fondly on plans we\’ve created for families who the law once ignored and persons who are currently under attack by laws in certain states. Yes, marriage equality is the law of the land, but if you\’re a transgender person, you and your marriage has a target on its back. Additionally, diverse families are also under attack. The Law Offices of Max Elliott wholeheartedly agrees with the travel advisory… Diverse families include LGBTQ+ families; blended families with step-children, adopted children, or godchildren treated like children; non-married couples with adult children; and more. Your families (like ours) require carefully crafted solutions to ensure that your legacy is fulfilled, and this planning for beautifully diverse families and persons is what we\’ve been doing ever since our doors opened on the day that Illinois passed the Civil Union Act. #LGBTQ+rights #estateplanning #protectingtodaysfamilies
Zen and the Art of Sibling Rivalry
(Or more aptly titled, \”Probate War Stories That Will Scare You Into Estate Planning…I hope\”) My sister predeceased me. During our childhood, as the older sibling, I did what most older siblings did – tortured her because my parents tortured me. Okay. Torture is a misnomer, but childhood psychologists say that my actions seeking to control my younger sibling, were natural for the stage of our relationship. And in my evolving yet immature brain, it was only fair: There were only 2 of us, and I was the oldest. But it ended when I stayed small for my age and my younger sister grew large for her age, and she showed me who was really boss. After that, my sister and I rarely had a row. Maybe we had strong differences of opinions three times during the entire 46 years we were together. She was no saint (and neither was I), but there were lines we just didn’t cross. And maybe we were just lucky that way, or maybe I’m just dreaming because of the 4 in our tiny family, my sister was the first one to die. However, I would prefer to think that we were just lucky that way, like our cousins who were also sisters with parents who predeceased them. Because O-M-G… Siblings who will drain an estate dry because of control issues and parents who just knew the kids would get along fine. Death and money changes everything… Sibling POAs who absconded with the bulk of the fortune while a POA, leaving other siblings to wonder if the medical bills were that high. Pending death and money changes everything… Siblings who changed the Last Will and Testament in the hospital room, after the morphine drip increased and other siblings were taking care of the house. Like I said, pending death… Siblings who saw the Last Will and Testament before the other siblings, didn’t like what they saw, decided to keep the Will in a safe place, and upon death, when asked, “What will? There is no will.” Secret knowledge of disproportionate gifting changes everything… I recently listened to a panel of estate planning attorneys discuss the importance of transparency in gifting. I agree and disagree. Parents generally love their children and, before the parents die or become incapacitated, they rarely see the sibling ghoul that lurks within. So, being transparent about estate planning is an exercise in futility. However, disproportionate gifting, making only one a POA over financial matters, and the rationale behind these actions should be discussed with everyone in the room and…probably a Zen Master. Now, not all siblings are evil-doers. In my practice, I’ve witnessed wonderfully loving acts of generosity between siblings. But, the wars… Namu Myōhō Renge Kyō
Dad\’s Inheritance Is at The Car Wash
Most people incorrectly assume that if someone has a Last Will and Testament, then the Will captures everything the decedent owns and probate is not required. If this were correct, the lives of probate lawyers would be a lot easier. Often people pass away with a Will or a Trust not accounting for a legatee (someone who inherits under a Will) or beneficiary that might predecease them or not referencing a bank account here or there or thinking that they have “time” and will deal with the real property “later” but “later” never comes. And the result is usually very unhappy executors, successor trustees, and beneficiaries. When a loved one dies intestate, that means they died without having designated beneficiaries to all of their estate. And what is an estate for inheritance purposes? An estate is everything the decedent owned outright, with no other person, at the time of their death. Occasionally, minors inherit estates. Sidebar: A minor is a person who has not reached adulthood or “age of majority.” When a minor inherits from an intestate estate, guardianship or conservatorship is usually required. And to make matters even more complicated, jurisdictions and government agencies disagree on the precise definition of minor. For example, some states specifically define a minor as a person who is 16 years of age or older, other states, such as Illinois, specifically define a minor as someone who hasn’t reached age 18…but a state agency has determined that a minor is someone who hasn’t reached 21. Next, let’s say the child’s parent died with a 401k that has no designated beneficiary. According to Illinois law, the child is an adult and would be an heir able to inherit the 401k, provided no other issues would impede their ability to do so. And no guardianship would be needed. Sidebar: I am not suggesting an 18 year-old inheriting $50,000 without guidance is a good thing. Oh contraire… And, according to the most updated SECURE Act provisions, which governs inheritance of retirement assets, an 18-year-old child is a minor for purposes of inheritance. Furthermore, since the SECURE Act is Federal Law, with respect to the inheritance and federal law supersedes state law, does that also mean that the 18-year-old child will need a guardian? State law says no, but the decedent would likely be rolling over in their grave I am sure. Because…this hasn’t been tested in the courts yet. And if the decedent had a surviving spouse, what can that spouse do? Say, “No, surviving child, I know the state court says you can take the lump sum of $50,000 now, but please don’t.” This scenario occurs more often than one imagines. Oh how I do wish our government agencies talked with each other… In the interim, the surviving spouse should probably make sure the 18-year-old has a very good driving instructor and lots of car insurance…
DEI and Estate Planning: The Economic, Non-Business Case, Imperative
National Estate Planning Awareness Week has come and gone. But it was busy! I presented LGBTQ+ estate planning tips and a helpful loophole to members of the Dramatists Guild. Next, esteemed panelists and I shared thoughts about diversity and inclusion and the wealth gap in the context of the estate planning profession. Then, there was the usual stuff, non-stop. Estate planning loophole, you ask? Yes, there is for unmarried couples of certain ages with retirement assets. Contact us to learn more. Diversity & Inclusion and the wealth gap in estate planning, you ask? Yes, for me and our firm, diversity’s moral imperative is a given. Yet, there’s an economic imperative beyond the business case: To be successful in the U.S., one must be financially successful, which means be gainfully employed so that you can enjoy a comfortable living. Appropriate DEI initiatives in the estate planning profession, a profession traditionally dominated by old, white guys, address not just the mythical pipeline issue but compensation and retention issues, which ultimately address the wealth gap. Thus, it’s an economic imperative for estate planning firms to be authentically diverse and equitable and inclusive. (Read: Diversity is not just on our website or in support but front and center in our firm\’s planning professionals and we\’ve been this way since day one.) Mythical pipeline issue, you ask? Yes, but we’ll save that discussion for another day.
April Showers Brought May Flowers and More…
Cultivating Your POA Relationships Reaping what you sow translates to more than just the garden—your work, lifestyle, education, relationships (personal and professional). As we previously discussed here and here, as the Principal, you can grant an individual authority through legal instruments to act as your Agent in different ways and for different circumstances. Besides cultivating the relationship with the person designated as your Agent in the power of attorney (POA) world, should you be fostering relationships with others? Yes, third parties. Who are “third parties?” Third parties are any person or entity – such as banks, brokers, businesses, etc. – that your Agent may deal with on your behalf. These entities (or persons) may examine the POA to make sure the Agent does in fact have the proper authority before allowing the Agent to make your legal or financial decisions. In true CYA fashion, these third parties can question the legitimacy of a POA, queuing up legal headaches. By forming a relationship with these entities or persons (and your estate planning attorney, of course), you can let them know about any POAs you form and even introduce them to your Agent before the need for Agent authority arises. Agent Authority. Your Agent may do as much or as little as you have directed them to do and for as long as you have determined they may act for (while keeping in mind that some POAs last indefinitely). It’s crucial that POAs are drafting correctly and fully grasp the details about how you want your affairs handled. Termination and Third Parties. You have the power to terminate the Agent’s authority at any time. But, to make sure the Agent doesn’t continue acting on your behalf without your knowledge, you must notify third parties that the Agent can no longer make legal or financial decisions for you. This is especially important if any third parties have dealt with your Agent previously and the Agent has acted under the POA. You may end up bearing the risk of your Agent continuing to make financial and legal decisions for you if your third parties are unaware that the relationship ended. Start sowing. Maintaining your relationships with your Agent and any third party is equally as important even after you have a POA in place. Iron out the specifics by talking with your New York estate planning attorney to make sure your ducks are all in a row.
Doctors v. Family — Who Decides Treatment When You Can’t
By Melissa Aristizabal An unfortunate reality in living through a pandemic is being forced to think about what directives you have in place if you cannot make decisions for yourself. A common instrument that you may have heard of in all those evening medical sitcoms (looking at you #GreysAnatomy) is a DNR or “Do Not Resuscitate Order.” So what are your options IRL (in real life)? As previously discussed, a Power of Attorney (POA) is an instrument used to appoint another individual, your “Agent,” to make legal decisions for you, the “Principal.” But, unlike in Illinois, in New York, the instrument used to make healthcare decisions on your behalf is referred to as a “Health Care Proxy.” Health Care Proxy. A Health Care Proxy gives you, the Principal, the power to appoint a competent adult as your Agent to make healthcare decisions in your best interest and in accordance with your religious preferences or moral beliefs. Your Agent only makes healthcare decisions for you when a physician determines that you are no longer able to do so, that is, you lack the mental capacity to “understand and appreciate the nature and consequences of health care decisions” or make an informed decision weighing the benefits, risks, or alternatives of the proposed treatment. When is capacity determined? An attending physician or attending nurse practitioner makes the determination and it is summarized in a writing included in the Principal’s medical records that details their opinion on what caused the Principal’s incapacity and its possible extent and duration. The Principal’s capacity is re-evaluated at the time health care decisions are taken and – if the decision to stop life-saving measures is made – another attending physician or attending nurse practitioner must also determine that the Principal lacks capacity before life-sustaining treatment is ended. But, if the Principal regains capacity at any time, the Agent’s authority to make healthcare decisions automatically ends. Benefits. Having a detailed Health Care Proxy takes the guess work out of, for instance, what risky procedures or treatment you wish to undergo or if you would like medical professionals to take heroic efforts to keep you alive. This can also keep the family discord to a minimum. Undoubtedly, stress will be high and it’s likely that there could be a disagreement among family members on what life saving measures should be taken. Be Prepared. Though it’s never fun discussing end-of-life topics, now is the best time to do so with an attorney. Thinking through what we want in a situation we hope to never encounter puts everyone in the best position to ensure our wishes are followed. Contact a New York estate planning attorney to start your planning today.