Kent Larsson writes about the proper use of wills, advance directives, trusts, and other estate planning tools, and how how they play a vital role in you receiving proper medical care and helping you to preserve and pass on your assets to your loved ones.
Las Vegas killer leaves large estate, but fair compensation for the victims will be a challenge.
Despite a hefty estate of $5 million left behind, it will be difficult to compensate the victims of Las Vegas mass shooter Stephen Paddock, according to The New York Times in "The Las Vegas Gunman Was Rich. Will His Wealth Go to the Victims?"
It still is not known exactly why mass murder Stephen Paddock decided to shoot at Las Vegas concert goers from his hotel window. He was relatively well-off and had not been in trouble as far as anyone knows.
Despite the mystery surrounding his motivations, his victims and their families would like to be compensated for his actions.
His estate is worth approximately $5 million. That money would ordinarily go to his mother, since Paddock is not known to have had an estate plan. However, Paddock's family has indicated they have no interest in his estate.
There are some challenges to making sure that all the money goes to the victims.
The first is that the estate could be rolled into an existing victims' compensation fund that has already raised $22 million. However, all of the victims might not be eligible for compensation under the fund's rules.
The second challenge is that many victims are filing independent claims and lawsuits to the estate.
Reference: New York Times (Dec. 23, 2017) "The Las Vegas Gunman Was Rich. Will His Wealth Go to the Victims?"
Sometimes it creates problems to name a close family member executor, as seen in Jerry Garcia’s estate.
A big mistake in Jerry Garcia’s estate came when third wife Debra Koons was chosen to administer the estate, according to the Wills, Trusts & Estates Prof Blog in "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."
Garcia passed away in 1995 after being married three times, having four children and having one stepchild.
Koons threw the first two wives out of his funeral. However, no one challenged his will, so no problems were anticipated.
The problem for Garcia's estate is that his other heirs objected to many of the decisions made by Koons. They felt that she was acting in her own interests and not in the best interests of everyone.
This led to constant family squabbles and made the estate administration more costly and time-consuming than it needed to be.
The problems should have been anticipated.
It would have been wiser to have an independent professional hired to handle the administration of the estate. That might not have been a solution to all problems, but it would have taken much of the family drama out of the situation.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and can also advise you on naming an executor.
Reference: Wills, Trusts & Estates Prof Blog (Oct. 12, 2017) "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."
Jury has awarded money for damages. However, it appears likely the amount won’t hold up to court scrutiny.
JPMorgan has been ordered to pay plaintiffs $5 million in actual damages and $4 billion in punitive damages for a suit involving the handling of a complex estate that didn’t have an estate plan, according to Bloomberg in "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."
The case began when Max Hopper, an American Airlines executive credited with creating an innovative reservation system, passed away and left an estate valued at $19 million.
Unfortunately, he did not have an estate plan.
JPMorgan was chosen to administer his complex estate. However, Hopper's widow and her stepchildren, angry at the way the bank was handling the estate, accused it of delaying distributions for its own benefit and sued.
A jury recently came down with the verdict that included $4 billion in punitive damages.
It is very likely courts will greatly reduce this punitive damage award, since the Supreme Court has previously ruled that punitive damages must be proportional to actual damages.
Nevertheless, this case highlights an important point.
Estate administrators can be held liable, if they do not faithfully carry out their duties.
The jury in this case believed that the bank was guilty of fraud, breach of fiduciary duty and breaking a fee agreement.
JPMorgan is a sophisticated entity that should have known better.
Reference: Bloomberg (Sep. 26, 2017) "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."
Court orders body of famous artist be exhumed.
A judge has found enough basis for the claims of a Spanish woman, claiming she is the child of Salvador Dali, that the body has been ordered to be exhumed from its current resting place underneath a theater in Dali's hometown, so DNA testing can be performed, according to the Washington Post in "Judge in Spain orders Salvador Dali's body exhumed for paternity test."
Dali, who was well known both for his eccentric art and lifestyle, was not known to have any children. However, one Spanish woman claims that she is Dali's child.
The only problem is that she cannot prove her claims, since Dali passed away in 1989 at the age of 85.
The woman makes her living as a professional tarot card reader, so perhaps she could prove her paternity by reading the cards. However, she refuses to do such a self-reading. Instead, she has asked the Spanish courts to intervene.
It is not clear what the woman hopes to gain from the testing. Dali's estate has long been closed and all of his valuable artwork donated to the Spanish government.
Even though the artwork is valued at hundreds of millions of dollars, it is unlikely the woman could lay claim to any of that money. For her part, she seems uncertain of what she wants, if Dali does turn out to be her father.
She has only stated that she wants "what corresponds to her."
Reference: Washington Post (June 26, 2017) "Judge in Spain orders Salvador Dali's body exhumed for paternity test."
The executor of an estate must make decisions on protecting heirs.
Katie May, a former Playboy model may have suffered injuries during a photo shoot and went to a chiropractor for treatment.
She later died and the coroner determined the treatment injured her artery and cut off blood flow to her brain, according to TMZ in "Playboy Model Katie May Estate Sues Chiropractor...Your Treatment Killed Her."
May's executor and the father of her child is suing the chiropractor for wrongful death on behalf of the estate. Even if he did not personally believe the coroner's report that the chiropractor was responsible for May's death, he would likely have an obligation to sue.
While this is an unusual case in that it features a Playboy model and an apparent death at the hands of a chiropractor, it illustrates something important. Executors have duties to the estate and some of those duties can be challenging.
It is for this reason that executors are advised to get the assistance of estate attorneys to help carry out their duties.
Reference: TMZ (June 14, 2017) "Playboy Model Katie May Estate Sues Chiropractor...Your Treatment Killed Her."
An estate can become complex, when a person passes away and leaves debt.
Most people have not gotten rid of their debt entirely when they pass away, according to Market Watch in "What happens to your debt when you die?"
Approximately 73% of people in the U.S. pass away while still in debt. The average amount of debt is $61,554, but that average goes down to $12,875, if mortgage debt is not included.
Because you are likely to pass away while still in debt, it is important to understand what will happen to that debt, to make sure it is not a burden on your family.
If it is debt that you alone are responsible for, then your estate will pay the debt out of any available funds before any assets are distributed to your heirs. If you estate does not have enough assets to cover your entire debt, then most types of debt die with you.
However, there are exceptions.
For example, any family member who still lives in a house with a mortgage would be responsible for the mortgage payments, if he or she wishes to stay in the home.
An estate planning attorney can advise you on creating an estate plan that meets your unique circumstances, including not passing on debt to your family.
Reference: Market Watch (May 29, 2017) "What happens to your debt when you die?"