Second Marriages, Drunken Debauchery, & Children Left Behind
Often couples with no children think that they don’t need a will because their spouse will fulfill their wishes with respect to extended family. Sometimes it works; often it doesn’t. Though we can hope, we simply cannot predict what the future will hold for us or our loved ones, which is why planning is critical. Incapacity can strike in more ways than one leaving our extended family members or favorite charities empty: Gina and Lisle were in their second marriage. Gina was a widow when she and Lisle met. Her first husband was a generous man, with no extended family, so he left Gina the bulk of his estate. Lisle’s ex-wife retained a very good divorce attorney, so she ended up with nearly everything he owned, including the shirt off his back. Fortunately for Lisle, his ex found a wealthier second husband and Lisle was eventually able to buy a new shirt. Neither Gina nor Lisle had children but both had siblings and Gina had nieces and nephews who captured her heart. Lisle only had one brother, Jake, a scoundrel and leech, living off relatives and women who took pity on his substance abuse and inability to stay employed for longer than a couple of weeks.* One day, Lisle received a call from a hospital. Gina had been admitted after slipping and falling on an icy intersection crosswalk. She broke her ankle as a result of the fall. Lisle arrived at the hospital and the doctor told him that while treating Gina, they noticed she had an irregular heartbeat. They wanted to examine the cause and decided to keep Gina for a few days and run tests during that time. After running the tests, doctors determined that Gina had severe blockage but before the hospital could treat the blockage, Gina developed a bacterial infection. And this bacteria was very resistant. The bacteria was so resistant and Gina’s immune system so compromised by the blockage that she never recovered and died in the hospital. Gina left no will or trust but had a verbal understanding with Lisle that part of their combined estate was to go to Gina’s nieces and nephew to assist with their college education. However, as Lisle floundered in grief after Gina’s passing and became gravely ill himself a little more than a year after Gina\’s death, he fell victim to Jake’s undue influence and the nieces and nephews never got a dime. Sometimes it’s not your incapacity but the disability of others that may undermine your wishes if you haven’t a solid plan in place. *Whether he realizes it or not, Jake is incapacitated with respect to Illinois law, whose definition of incapacity includes, “because of gambling, idleness, debauchery or excessive use of intoxicants or drugs, so spends or wastes his or her estate as to expose the person with disability or dependents to want or suffering.”
How Do I Love Thee? Let Me Count the 8 Articles
On Valentine’s Day it may seem off-kilter to some to read an article on death, but not here in the Shark Free Zone. The interesting truth about estate planning is that it can be a genuine measurement of how much someone loves you. If we consider the 8 basic articles that are found – or should be found – in wills, the evidence is undeniable. So, from a potential beneficiary’s perspective, hoping he or she is loved, let’s look: Article 1: Family. Love = your name is in this article. Article 2. Definitions. Love = your name is listed in the “partner” definition since you and the testator (person writing the will) are cohabiting, i.e., unmarried and un Civil Unionized, because Illinois doesn’t recognize in-state Domestic Partnerships or common law marriage. Article 3: Guardianship. Love = if you’re 14 years old (why are you reading this?), your parent or parents have named at least 2 other individuals to take care of you, just in case… Article 4: Debts, Taxes, Expenses. Love = The estate has sufficient funds to cover memorial services, credit card debt, taxes, and any other bona fide expenses that belonged to the dearly departed and not you. Article 5: Personal Property. Love = you get the Beatles White album, first edition. Article 6: Residuary Estate. Love = you get a whole lot more than the Beatles White album, first edition. Article 7: Personal Representative. Love = your name isn’t listed, so all you have to do is accept the Beatles White album, first edition and any other bequests; and you don’t have to worry about a greedy beneficiary trying to sue you for breach of fiduciary duty, such as not handing over the Beatles White album, first edition. Article 8: Disaster Awaits. Love = hoping this article isn’t triggered.
Popping the Question, Prenupts, and Powers of Attorney
Valentine’s Day is quickly approaching and thousands of individuals will be “popping the question” and getting the question popped at them. This is, at least what jewelers around the country have been spending all those advertising dollars on. It’s also what those individuals wanting to be “popped,” so to speak, are also hoping for, and my hopes are with you. In celebration of that bended knee, larger than life smile, and mother’s joyous tears, I offer a few points to ponder after the popping and before the party planning. The points are sobering but will help to provide years of “bubble and squeaky” happiness long after you’ve settled in with each other. If you’re not cohabiting, have “the money talk.” If you are living together and haven’t had the money talk, tsk..tsk… If you are cohabiting and have had it, good for you! and have the money talk again. If there is a large disparity of income or both of you are very affluent, consider a prenuptial agreement. It is commonplace in such scenarios so no one should feel offended if it is mentioned or requested. The basic rule is that both parties should retain their own attorneys to draft and review the document, which should be signed before the formal engagement celebration, if there is one. If you’re cohabiting obtain life insurance and powers of attorney. If you’re not living together but engaged, obtain these items before going on the honeymoon. If you’re on relatively equal financial footing economically and the families are smiling, when you return from the honeymoon, add a will to your estate plan. If even one close family member is frowning, turn that frown upside down by promising to leave him or her something in your will and then add an in terrorem clause. Better yet, have a trust prepared with a pour-over will attached and leave him or her whatever you like with or without the in terrorem clause. Love means planning a relationship founded on pragmatic principles as well as butterflies in the tummy.
The Issue of Issue, Deers, and ART
A couple of days ago, I read an article on alternative reproductive technology, “ART,” and posthumously born children. It reminded me of conversations and cases about heirs that I’d also recently encountered. The article, conversations, and readings affirmed for me that the question of who is an “heir” or “issue,” while initially may seem simple to answer, can be complex. Thirty years ago, the definition of “child” found in a will or trust may have been a few sentences. Today, that definition is – or should be – a few paragraphs. Consider the following: Jeremy and Jessica were in a loving, committed, cohabiting relationship for more than 10 years and were unmarried because they refused to institutionalize their relationship. Still they wanted to have a baby, but Jay was sterile. However, Jeremy’s best friend, Keith, agreed to b a sperm donor. Eventually, they found a clinic that would perform the procedure and Keith was asked to sign a consent form. One statement on the form provided that Keith waived all rights of parentage with respect to the child that would be born to Jeremy and Jessica using Keith’s sperm. He was to check that box if he agreed with this statement. Keith thought about his significant other, Karen. He and Karen were also in a long-term relationship and discussed marriage and children a few months ago. But no definitive plans were made. Keith was in his early 40s and very successful; if he and Karen didn’t work out, he reasoned that this could be his only chance at quasi-parenthood. He decided not to check the box and think about it more but he signed the form. Jessica underwent the procedure the day Keith signed the form. Then, the 3 left the clinic; Keith headed home to Karen. Unfortunately Keith never arrived home. He was killed when a deer darted out in front of his car and Keith swerved onto a patch of ice, careening him and his car into an oncoming semi-tractor trailer. Karen was more than distraught because she was going to tell Keith about the bundle of joy that was produced when she and Keith had far too much to drink a couple of months ago. Keith died without a will, so who will eventually inherit his estate? Illinois law provides that posthumously born children are children of the decedent. Consequently, if both ladies were successful giving birth, then both children would have been Keith\’s heirs. This also illustrates the importance of another provision now becoming a standard in wills and trusts – the genetic reproductive material provision. If Jessica chose to store Keith’s sperm until a day she was more fertile and Keith died before that day with a will that had a genetic reproductive material provision, then Jessica could have been precluded from using his sperm. Keith could have also changed the definition of children in his will to expressly disinherit any children born of ART except those born during the time he is in an intimate, cohabiting relationship with the mother of said child. Still, all this presupposes that Keith would not have wanted 2 daughters. The point? No one can predict who or what our family will be or look like, but when we make a decision about what part or all of that family may look like, we need to write it down in a legal instrument ASAP.
Lottery Lessons for Murderers
Recently, an Illinois man won a million dollars playing the Illinois Lottery. In an unfortunate turn of events, shortly after taking his smiling photo op with check in hand and stating his intentions, he died. Initially, it was thought he died of bad eating habits leading to clogged arteries and a bad heart. However, something seemed a little fishy, so the authorities were called in to request an autopsy and investigate. Ya think? One need not be a lawyer to know who was first on the list of suspects: immediate family. Not only is this is going to make an interesting whodunit but it also gave yours truly the answer to “what to write about this week?” Answer: Crime doesn’t pay even if the “payor” died without a will. Let\’s look at an example: Jennifer inherits $1 million from her father and announces to family that she is going to place the money in trust for her children. Her only living relatives are her spouse, Jeremy, and their 2 sons, Bill and Ted. Jennifer then drowns while swimming but before establishing the trust and she didn’t have a will. Later, authorities arrest a close family member and charge that person with murder. It seems that the family member didn’t agree with Jennifer’s plans. So what will happen to the cool million? It depends. Usually, in Illinois, if a spouse with a child or dependent dies intestate (with no will or trust in place), then the surviving spouse and the child will share equally in the decedent’s estate…unless one of the heirs caused the decedent’s death. If the heir intentionally and unjustifiably caused the decedent’s death, then he or she will not “receive any property, benefit, or other interest by reason of the death.” Illinois Probate Act of 1975, 755 ILCS 5/2-6. Instead the benefit will go to the heir next in line. Also, the form of that benefit or interest is irrelevant; it could be retirement proceeds, which are nontestamentary. Furthermore, the denial of the inheritance need not be made in criminal court but can be made by any competent jurisdiction. However, a few hurdles still exist: The criminal proceeding must end with a final judgment of guilty … unless the criminal trial doesn’t occur for more than a year after the death. The 401(k) administrator, for example, could have released the funds to the murdering heir without knowing the heir was the one who really retired the retiree. Accordingly, the plan administrator won’t be held liable. Still, the court would likely make the defendant give the money to the heir next in line … unless, of course, the murder is a successful fugitive and not a defendant. So what would be the results for our example: If Jeremy murdered Jennifer, then the money would go to Bill and Ted as intended. If Bill was the murderer, then the money would go to Jeremy and Ted to share equally. If Bill and Ted were co-conspirators, then Jeremy gets it all. If Jeremy, Bill and Ted were co-conspirators, that would be a little odd given that Bill and Ted were going to get it all, but hey… In that case, if there were no heirs, then Illinois won the Lottery. Lesson: If you win the lottery and you have to take a photo and someone asks about your plans, tell them to contact your attorney.
Don\’t Let JT Defeat Your Purpose
A piece I wrote a little while ago described the 3 tenancies of property ownership: Tenants in Common, Joint Tenancy with Right of Survivorship, and Tenancy by the Entirety. Occasionally, individuals of modest means will ask me about adding a non-spouse family member as a joint tenant to a bank account or to the title of their home. Typically, the individual is elderly, recognizing his or her mortality, or failing health. I applaud their queries because ensuring your financial affairs and making sure that funds are available to address illness or incapacity are in order as the golden years approach is critical. Yet, I caution against using joint tenancy with non-spouses* for the following reasons: Creditors. While the original owner’s credit may be stellar, the son, daughter, or niece may have outstanding debts. Joint tenancy allows creditors to attach liens to the property, thus defeating the purpose of having one’s financial affairs in order or being able to at least financially provide for one’s self in the event of illness or infirmity. Potential Probate. Just because property is in joint tenancy, at least in Illinois, doesn’t mean that probate is automatically avoided. If a gift wasn’t the rationale but a matter of convenience, as mentioned above was the premise and a will is in place, then per Illinois law, the property could have to pass through probate. Taxes. Unless the joint tenancy is between spouses, estate gift taxes may be triggered. Upon one tenant’s death, the estate tax is determined by the amount of contribution by the surviving tenant. If the surviving non-spouse tenant didn’t contribute to paying for the property, then the entire amount of the property is included in the decedent’s gross estate for estate tax purposes. So, we should think again about entering into joint tenancy agreements with non-spouse members, especially if any of the 3 reasons above may loom overhead. *If the surviving tenant is a spouse, then only half of the value of the property is included in the deceased spouse’s estate, reducing potential estate taxes by 50%.
4 Occasions When a Will Won\’t Work
Recently, law students received the following hypothetical to answer: “Ms. Angel Booth has phoned you, Ms./Mr. Associate, and said, “Hi, this is Angel Booth and I want to set up a will because I want to completely disinherit my daughter.” What is your response?” After getting rid of the “deer-in-headlights” look, the students came up with a myriad of answers. Yet and unfortunately, this isn’t an uncommon scenario and for valid reasons. Furthermore, this occurs not just between parents and children, but between as many relationship pairings as you can think of. Still, this scenario goes to reason number 1. Using a will is a tenuous proposition at best if you’re trying to disinherit an heir. Admittedly, I’m being a tad hyperbolic, because it can work – after a lengthy court battle involving lawyers, doctors, and a ton o\’ family members. To disinherit an immediate heir, in Illinois, using a standalone will where the value of the estate is more than $100,000 in personal or real property will beg for a contest and bye-bye goes a large portion of the estate – in probate litigation. Mamma Mega Millions Marries Gorgeous. Yes, you’ve been smitten by the most gorgeous, decades younger, individual walking the planet. You’ve worked your petooty off as a single mother, put your children and your siblings through university, and now want to enjoy the million-dollar fruits of your labor with Gorgeous in the bounds of matrimony. You will probably be advised to have an airtight prenuptial agreement. You also want a will prepared, but a will that leaves most of those millions to Gorgeous will shout, “Probate Litigation!” and siblings, children, BFFs, third cousins, you name it will probably shout back with claims against the estate. Grandpa Disses Daughter-in-Law. So, while it can’t be proven that she murdered your dearly departed son, you, Grandpa, just don’t agree on anything with your daughter-in-law about your grandchildren. In your opinion, she isn’t parenting the way your loving son would have. Still, you’ve saved about $30,000 that you want the children, ages 7 and 8 to have upon your death. I previously wrote about the imprudence of leaving substantial financial gifts outright to minors. This is another example. In Illinois, if a minor receives a substantive gift, e.g., more than $10,000, the funds must be transferred into a restricted vehicle for the minor whereby the guardian or custodian is given control. Typically, the guardian or custodian is an adult member of the minor’s family, i.e., Dastardly Daughter-in-Law or a trust company. Thirty-thousand dollars isn’t usually sufficient for a trust company; thus, DDIL will likely gain control over the $30,000. Calling Dr. Cooper. Finally, setting aside seedy scenarios, let’s consider Dr. Amy Cooper. She has a thriving practice with three other doctors and has started accumulating a substantive portfolio. She doesn’t mind paying her fair share of taxes, but doesn’t want her beneficiaries to pay more than their fair share either. Leaving everything outright to her partner and children in a will, however, results in the very thing she doesn’t want.
Why We Provide Wills for Heroes…
As serendipity would have it, my colleague, Stephen Hoffman, has recently posted a piece I wrote for him, leaving me with empty space, if I so choose, to fill with something a little different and something a little personal and I so choose: Congratulations to my \”brother,\” Kevin Bell, who retired today, with a full pension, from his position as a Detective for the Chicago Police Department. When Kevin received his first opportunity to request a patrol assignment, more than 20 years ago, he requested a patrol in the roughest, most gang-infested neighborhood on Chicago\’s south side. He knew that the African-American community needed to see and understand that all police weren\’t against them, but were sincerely patrolling to protect them. Kevin was shot at point blank range during that first assignment and survived because of his vest. He subsequently returned to the same assignment, undeterred. When we were out together for an evening of fun with friends and family, whatever side of the city we were on, if there was a disturbance, a person having difficulty, Kevin was there and helping out because he understood that, as a police officer for the City of Chicago, he was never really \”off duty.\” He was passed up for detective often; some say it was because of his ethnicity. Nevertheless, he stayed the course, undercover or in open blues, and was finally awarded his detective shield. Kevin has protected our streets – north and south, east and west – for decades. I pray that there is another officer, just as dedicated, moving up in the CPD ranks. But even if there is, I can\’t be as proud of him as I am today. An African-American man, with a private Catholic school background and a bachelor’s degree from a well-respected university, who consciously and intentionally decided to protect our streets, our homes, and our communities as his career instead of doing something more lucrative and safe, is a man who deserves, at the very least, a word of thanks from us all. Thank you, Detective Kevin Bell (Ret.), my cousin, my brother, my hero.
5 Ways to Protect 4 Critical Relationships
As mentioned in a previous post, once an adult starts working and accumulating assets, even if they’re simply a car and nice living room furniture, he or she also needs to start protecting their livelihood. The same holds twice as true for young couples.* Couples sometimes erroneously believe that they don’t need to protect themselves or their relationship until they get married, enter into a Civil Union, or have children. However, just like working single adults need protection, so do “young” couples. Therefore, once a decision to reside in one household as a loving and committed couple is made, the documents previously discussed – powers of attorney and life insurance – should be revisited to reflect this relationship. Moreover, depending on the legal status of the relationship, or the lack thereof, legally documenting your agreement about your assets is very important. For example, in Illinois, if you’re cohabiting, your relationship lacks legal recognition except by contract. Therefore, an agreement to share expenses and property is the bare minimum of what is required to at least document your relationship and its affect on your assets. Additionally, ensuring your testamentary documents – a valid will and trust – reflect your intentions toward your partner and the rest of your family is equally important. If a cohabiting partner dies intestate (without a will), unlike the surviving partner in a Civil Union or legally married couple, the surviving cohabiting partner will have no rights under Illinois laws. However, the next of kin to the deceased will have rights. Therefore, unless a document, such a shared expense and property agreement, is in place with mounds of receipts and statements providing supporting evidence of the agreement, the surviving partner will have no way of retaining assets that were obtained as a couple. Still, even with this agreement in place, the decedent’s relatives may still challenge by asserting their rights to inheritance under Illinois’ intestacy laws. Thus, to prevent a possible brouhaha, it’s advisable to have at least a valid will prepared, designating your partner as a beneficiary. But remember, because a will is public – see Whitney Houston’s will – your family gets to see who gets what. And if you have an evil twin who doesn’t like what he or she sees, the brouhaha will not be averted. So then what? You might have a revocable living trust prepared. Trusts are private – you can’t see what Michael Jackson left – and become irrevocable upon the grantor’s (trust maker’s) death. Civil Union and legally married couples are more fortunate than cohabiting couples with a caveat for Civil Union couples. The right to inherit and renounce bequests are generally universal rights for spouses through the U.S. and Civil Union couples typically have all the rights of spouses. However, Civil Union couples are not recognized in all states, so spousal rights are not available, placing them in the same position as cohabiting partners in unfriendly states. So for couples without children and without consideration for probate proceedings, the most basic ways to protect your relationships may resemble this:
5 Reasons Why You\’re Not too Young to Save a Goldfish
It’s hard to believe that summer fun is nearly over and soon laser focus will target the school year, getting those year-end business deals done, and dare I say – holiday planning. Over the summer, my newsletter introduced topics on planning and I’ll end the summer with articles on estate planning for the various life stages. Also, joining me as a guest blogger this month will be a well-respected attorney and colleague, so stay tuned. Now, onto the first life stage where estate planning matters: Young adult working singles. Many people ask, “Why would a young person gainfully employed, but a young single adult nonetheless need estate planning?” The answer is for the same reason older adults need it – to protect themselves and their families, e.g., their parents. Christopher’s Yarn After college graduation, Christopher was offered an entry level position at the company for which he worked part-time while in college. His starting salary didn’t approach 6 figures, but was sufficient to afford him a nice apartment. So he moved out of his mom’s home after about 7 months of work and rented a place with a roommate, Alex. Since Chris telecommuted a couple of days a week, he also had a well-equipped home office. One day, the weather forecast was gloomy, so Chris decided to work from home. He was glad he did because early that afternoon a severe thunderstorm started raging. Chris was number crunching on a report that was due that evening when suddenly his computer froze; the cursor wouldn’t move; control-alt-delete wouldn’t work. Chris bent down and flipped the switch on the power strip and ZAP! That evening when his boss didn’t get the report, she e-mailed Chris and waited for a response. When there was no word from Chris the next morning and he didn’t show up for work, his boss phoned HR. HR tried phoning him but kept getting his voicemail. Later that afternoon, Alex returned home from spending the night at a friend’s. He unlocked the door and saw Chris sprawled across the floor of his home office. Chris’ mother was a single parent who worked 2 jobs to help Chris through college. After he moved out, she quit one job and took a long vacation with a friend in Mexico. Alex had her phone number but couldn’t get through. The only other relative Chris mentioned was an older brother who Chris said couldn’t be trusted to watch a goldfish. Alex called the medics but was stunned. Chris had no healthcare powers of attorney, no property powers of attorney, no life insurance, no will, and an irresponsible brother. He and Alex only met a few months ago, so Alex didn’t know his medical history. Whether Chris survived or not, I can’t say for sure, but upon his employment for 6 months, I would have given Chris the following 5 tips: You can authorize a successor agent under a healthcare power of attorney, who can make healthcare decisions on your behalf if you become incapacitated. Renter’s insurance is very helpful if you telecommute; perhaps not against lightning strikes, but definitely against thieves. A property power of attorney can authorize someone other than an irresponsible brother to manage your bank account and bills while you’re hospitalized. Life insurance will help your mom pay for your services so she won’t have to struggle financially. A will allows you to ensure that your irresponsible brother doesn’t get the goldfish. If you think you’re too young for an estate plan, think again before it storms.