Prince Dies Without A Will; Special Administrator Appointed

Although the quote: “Where there is a will, there is a way” is meant to encourage perseverance, it also seems appropriate in the estate planning realm as a Last Will and Testament can guide surviving family members as to the disposition of assets after a person’s death.  In the case of Prince, the quote is better modified to say: “Where there is no will, there is a messy road ahead.”  As reported earlier this week, Prince’s sister filed an emergency petition asking the court to appoint a special administrator to oversee the initial stages of administering Prince’s estate.  She did so because no Last Will and Testament could be located.  The Court agreed and appointed Bremer Bank, National Association as the special administrator.  The Court’s actions allow Bremer Bank to marshal or gather the assets and preserve such assets until a personal representative or executor can be appointed.  In short, it appears that Prince failed to plan and the laws of Minnesota will now dictate what happens to his estate.  

And what does this all mean?  Dying without a Last Will and Testament or a revocable living trust means that a person is intestate and the laws of the state in which they resided at death will spell out who is to receive the assets of the estate.  In Prince’s case, since he had no spouse or surviving children or parents, his siblings, both full and half siblings, are the beneficiaries of his estate under Minnesota law.  Thus, the law of unintended consequences may now apply as Prince may not have wanted his siblings to become the beneficiaries.  He may have wanted to include charity or friends perhaps even other relatives.  But, without a Last Will and Testament or revocable living trust, we will never know what his wishes may have been. 

It will also be interesting to see how the administration of Prince’s estate unfolds.  A number of questions will have to be asked and answered, including, but not limited to: Who will end up being the personal representative or executor?  What debts does the singer have?  How will the estate tax be paid (both at the Federal and state level since Minnesota has an estate tax)? What assets will each beneficiary ultimately receive?  Will an agreement be reached amongst the beneficiaries regarding the management and distribution of the assets?  Unfortunately, the process that has begun will be lengthy, likely expensive and may result in the dismantling of a legacy if the process devolves into an ugly court battle. All of which could have been avoided or at least minimized had Prince simply planned. #PrinceDiesWithoutWill; #Prince; #estateplanning #intestacy

Caring for Pets As Part of Your Estate Plan

Many if not all of us have had a pet during our lifetimes.  But what happens to that pet if the owner becomes incapacitated or dies?  Virginia (Section 64.2-726), Maryland (Section 14.5-407)  and the District of Columbia (Section 19-1304.08) all have statutes that permit the creation of a trust for the care of a pet.  In determining how to provide for a pet during incapacity and/or at death, here are a few items to remember:

1.  The owner should ensure that, at a minimum, they have a Power of Attorney giving someone authority to take care of their pets using the owner’s monies to do so.   In addition, the owner should ensure that instructions for caring for the pet have been provided for in their estate plan.  This can be done in various ways including specific provisions in a Last Will and Testament or through a Revocable Living Trust.

2.  An owner of a pet may want to carry information in a wallet or purse that identifies the fact that he or she owns a pet, what kind of pet, where the pet is located and any special instructions regarding care.  The thought is that if the owner is unable to return home those going through the wallet or purse will find this information and ensure the pet receives the proper care.

3.  Along with other important papers relating to one’s estate plan, there should be a document that summarizes all pertinent information relating to the pet including any medical history, veterinarian’s contact information, allergies, likes/dislikes, etc.  The information carried in the purse or wallet would also be included and further detail provided, if necessary.

4.  Many pet owners now post a notice near their front door that they have pets in the house to alert anyone entering the home to be on the look out for the animals.

5.  If the owner is considering establishing a Pet Trust, then the following questions must be asked:
     a. Who will be named as caregiver for the pet?
     b. Will there be different caregivers for different pets? 
     c. Is the proposed caregiver willing to serve? 
     d. Who are the alternate caregivers?
     e. Who will be Trustee of the Pet Trust? 
     f. Will the Trustee be the same as the caregiver?
     g. Who will be successor Trustee?
     h. How much money should be set aside for the pet or pets that the Trustee will manage?
     i. What special care instructions should be included in the Pet Trust?
     j. How should the Trustee make distributions from the Pet Trust (i.e., to the caregiver or directly to the vendor)?
     k. Should any monies be paid to the caregiver from the Pet Trust?
     l. What should happen to any remaining monies upon the death of the pet or pets?
     m. Are there any specific burial and/or cremation instructions for the pet or pets?

There is certainly more information that can be included in the Pet Trust depending on the kind of pet, the standard of care, the amount of money to be set aside and the overall goals and objectives of the owner.   But these items will help you to start thinking about what happens next for your pets who are more likely than not a part of your family, and therefore, need to not be forgotten in any estate plan.  #pettrust #estateplanning #incapacityplanning #caringforanimals

National Healthcare Decisions Day – April 16

Previous posts have talked about you controlling your final moments and also how you want to be remembered.  April 16 is National Healthcare Decisions Day and provides a reminder that having a living will in which you express your wishes regarding life-prolonging procedures or choosing not to have a living will are crucial components in every estate plan.

To that end, during this past legislative session of the General Assembly of Maryland, a bill was introduced that would authorize a qualified individual to request aid in dying.  The Richard E. Israel and Roger “Pip” Moyer End of Life Option Act would have allowed individuals meeting certain criteria to request and receive from their physician a lethal dose of a particular medication.  The bill was withdrawn from consideration as it lacked enough support, but not before sparking public conversation about the topic.  At this juncture, there are four states that have death with dignity statutes: Washington, Oregon, Vermont and California.  In fact, California’s statute is so new it will only take effect in June.  Montana does not have a statute, but a 2009 Montana Supreme Court case (Baxter v. State of Montana) examined whether a physician could prescribe a fatal dose of medication to a terminally ill individual without being charged with a crime because consent was involved.  In the end, although attempts have been made to pass aid in dying legislation, Montana does not have a statute legalizing the practice and the Baxter case addressed a very narrow aspect of the practice.

Regardless of your position on death with dignity statutes, end of life decision-making and advance healthcare planning is an important conversation to have and to share with your loved ones and National Healthcare Decisions Day helps remind us of the need to begin the dialog on the subject.  @deathwdignity @NHDD #livingwill #estateplanning #endoflife #advancedirective #NHDD

New Department of Labor Rules May Impact Your Retirement Accounts

Recently, the Department of Labor issued new rules that may impact your relationship with your financial advisor as it relates to your individual retirement accounts.  The rules are an attempt to require investment advisors who provide retirement investment advice to put a client’s best interest first translating to the parties signing a ‘best interest contract‘.  The effort to create these new rules began in 2010 with proposed rules issued last year, and after a period for comments, the new rules being issued now.  Implementation of the rules will be staged over the next couple of years with compliance required by January 1, 2018.   

So, what does this mean to an individual investor?  The ultimate impact is still being determined, but it does mean that individuals should reach out to their investment advisors to determine how their relationship may change, if at all, and whether fees will be impacted.  And how does such news correlate to estate planning?  Since almost every estate plan involves disposing of financial assets, and for most individuals that means passing on retirement assets, having your financial plan in order and understanding your rights as an investor is part of the process of structuring your estate plan so that your plan will meet your goals and objectives. #DOLnewrules #retirement #money #bestinterestcontract          

Alternative Living Solutions – “The Granny Pod”

As the population ages and the costs of entering and living in a continuing care retirement community (CCRC) or an assisted living facility (ALF) continue to rise, families are looking for alternative living arrangements for their loved ones.  One alternative is ‘the granny pod‘ or ‘MedCottage.’  In general, these tiny houses are comprised of a bedroom, bathroom, kitchen area and living space.  The pod is meant to reside in the backyard of an existing residential location and be a safe living area for an aging family member.  So, instead of families looking to buy a bigger home or to construct a large addition to accommodate their family member, the pod gives everyone the space they need.  Arguably, the cost is less than several months at an assisted living facility or the entry fee for a CCRC (depending on location).  Of course, one cannot simply move a pod into the backyard without first ensuring compliance with zoning ordinances, permit requirements for construction and hooking up utilities, insurance coverage and an overall fit for the family lifestyle and the care needs, among other considerations.  However, the idea is unique and innovative and may relieve a lot of stress and avoid family arguments during what may already be difficult times. #alternativeliving #grannypod @KennethDupin #elderlaw