Gerald Kessler  was a wealthy businessman. He founded a successful supplement company. He also married a successful actress more than three decades younger than he was. Her name is Meadow Williams.  

 Except, she was already married and apparently did not get a divorce. At least not really. Also, there are some allegations of something that we see pretty frequently in our society, a campaign to alienate the rest of the family.

It is much more difficult for a spouse to be found “manipulating” another spouse. However,  here we have a spouse that was not really a spouse.   The press release also points out that this fairly well-known actress who is on social media never actually announced that she was getting married to a much older man. She pretty much kept it secret.

Here is the press release.

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When it is the trustee that is doing the litigating, it is the assets of the trust that is being depleted. The beneficiaries obviously, are not going to be happy about this. other than timely settle a case (if this is even in their power) what else can they do?

 Well one plaintiff decided that they should sue the attorney for the trustee. Not their own attorney,  but the attorney for the trustee because the beneficiary felt litigation was “unnecessary.”  Dolinger v. Murphy 2015 Cal. App. Unpub. Lexis 6344 

One remedy available to defendants is the Anti-SLAPP  statute.   A SLAPP  is a strategic lawsuit against public participation, and we are against that.  This would be say a corporation  filing a lawsuit against environmental organization that is against the corporation polluting.  being a lawyer representing a client is  petitioning activity and is definitely covered under this statute.

It seems somewhat on however that somebody would go through the trouble of filing a lawsuit against  somebody else’s lawyer. However, one of the interesting things about this case is the plaintiff was in pro per. She was  not represented by an attorney  and did this on her own.  There was an amicus curiae attorney  that evidently took  her side however.  The attorney in this case represented himself.  

 I do believe one thing that a lot of attorneys are cognizant of is the fact that these cases are incredibly taxing on beneficiaries.    It is obviously best to have a good estate plan, marry well and not too often, have children that get along.   Much of the time, expect some depletion of the estate through litigation. That is just a sad fact.

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When families want to do a “simple” plan in figure last will and testament is about as simple as it gets, that is not the case at all. Last wills can be every bit as complex as revocable living trusts. Similarly, revocable living trust can be just as simple as wills, perhaps even more simple.

Now there are other aspects to revocable living trust that provide them with greater flexibility, particularly when it comes to incapacity planning. However, that is a topic for a future blog post.

My main point here is that we tend to get caught up in names of documents and what it is that they do. It is not incredibly important that you have a last will and testament or that you have a revocable living trust, in and of itself. What is important is what is inside these documents and how they benefit you and more importantly, how they benefit your family.  

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If you leave your estate to your children and there is a dispute between the beneficiaries and whomever it is that you entrusted with their assets, the assets could easily go to attorneys, sometimes nearly all of it. The same is true and divorces, made worse in large part because the assets are of the living, who usually earned them, as opposed to the deceased.

I do not represent people going through a divorce as an attorney (I always refer them away and will continue to do so). People who go through divorces tend to have the most negative experiences and “winning” is usually impossible for either side. I like to win in Estate Litigation if I can, or preferably get an early settlement. Families will frequently spend far more on attorney’s fees fighting over items that could be purchased for a lot less than what they would pay an attorney. I do routinely represent clients in inheritance disputes however. While these disputes are sometimes resolved through mediation,

What is most damaging, particularly about divorces is how public the whole spectacle is. If you did not know what to do with your day, and wanted to be entertained without a television, spend the day in Family Court. You can spend all day and watch once loving and respectable families destroy themselves, while becoming poor doing it. Of course in addition to being undignified and expensive, it is stressful, not just on the adults but children and everyone else in that particular circle.

Not all marriages can stand the test of time and it is perfectly normal for them to end. Sadly, we do not end them in a private and dignified way. Let’s change that!

I now offer mediation services for the purpose of resolving disputes privately and in a dignified way. Mediation is a voluntary method of alternative dispute resolution or the parties resolve things by mutual agreement. It is useful to have a neutral 3rd party who can evaluate the situation as a neutral and not as an advocate. This is not the same as hiring a lawyer. While many people who resolve their disputes through mediation have a lawyer, many do not. Right now, I am only offering the services for inheritance and family related issues.

Contact us for more information or if you need to resolve a dispute.

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Community property (along with a wide range of things I do not like) won’t go away any time soon, so I guess we have to deal with it.

First of all, a definition is in order. Community property is property owned by a “community”- which is to say two people who are usually married but could also be registered domestic partners or cohabitants who agree to own property that way. The idea that everything you own through your skill, labor and effort is owned by the community. If you mow your neighbor’s lawn and your neighbor pays you $20, then $10 is essentially your spouse’s money. Perhaps more accurately 50% of every penny is community property. Since everything is shared, none of that $20 is really your own. If you use that $20 to buy a used couch from the garage sale across the street, then that couch is not completely your own. Half of it belongs to your spouse.

While it is nice to be married, I kind of like the idea of having my own stuff. Unless you get a gift or inheritance, you do not really get your own stuff.

Well this can be changed of course. People can get marital property agreements and change the nature of their property. They can agree to own their property the way they want. However community property is the default way to own things, and defaults are powerful things.

Another powerful force keeping property as community property, other than inertia, is the Tax Code. The US Tax code provides a remarkable benefit to couples that own their property as community property. Upon the death of a spouse, the deceased spouse (actually any deceased person) gets their property “Stepped up” when it comes to the basis calculation so that the heirs can typically get property without paying a capital gains tax. The unique benefit in having property owned as community property is that this rule applies to the community property owned by the surviving spouse as well.

So if that $20 couch appreciated in value to say $40 upon the death of the first spouse, the $10 increase for the deceased spouse’s share would not be subject to the capital gains tax. The increase attributable to the surviving spouse would not be subject to the capital gains tax ether, as it would also be “stepped up.” This is different from the result you might get if it were two unrelated people who partnered to own ½ a used couch each.

Some people would rather have their own used couch than have a step up in basis for their surviving spouse’s half after their death.

Another downside is that families are complicated things, or they often are. Some people get divorced; get into blended families and so forth. Community property ownership in some circumstances, and particularly when combined with other common arrangements, can be completely toxic and can lead to long-term bitterness and litigation.

If I had my way, and I don’t, people would just have their own stuff.

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This is the typical “I am a serious tax lawyer” way of looking at Estate Planning: If there is an Estate Tax, there is a problem. If there is no Estate Tax, don’t worry about it. Worse yet, planning for the Estate Tax may (emphasis on may) result in additional income taxes. So don’t worry about it and pay less in taxes to boot. A great deal no?

There is a central assumed goal of all estate planning in this myopic world of Estate Tax planning: That the spouse wants to give everything to the surviving spouse. Everything. Why? Because they love each other, the spouse gets everything. There are consequences to this assumption. Those often result in a whole heap of injustices.

Depending on the age a person dies at, the chances of remarriage are actually really good. Even the elderly get remarried all the time. Estate Litigation is a constant stream of stories involving people who get remarried, causing problems for large numbers of people, many of whom lawyer up after the death of a surviving spouse.

While people can plan any way they want, an assumption of everything to the surviving spouse is often a self-fulfilling prophecy. It does not contemplate that perhaps spouses want to look after not just their spouse, but also their children. Also, the goal of looking after a spouse and children is not necessarily mutually exclusive. If you simply leave everything to the surviving spouse, it is often mutually exclusive. I have written before about Cinderella, or any number of similar stories about wealth being used as weapons meant to oppress children.

While a huge chunk of disputes in Probate Courts involve blended families, the real tragedy is how often no dispute can ever be filed by those who feel aggrieved, because there is no “right” to inheritance and there is this underlying feeling in American society that giving everything to the surviving spouse, even if it is the third spouse the guy married at the end of life after he already had adult children, is justice. This is absurd. Our Estate Planning bar should know better. I don’t just recommend using a bypass trust. I recommend planning for justice. This is not just the right thing to do, but it is a real wealth preservation strategy.

The post Why the Bypass Trust is not irrelavant in Estate Planning appeared first on AhmedShaikh.com.

It is one thing to have estate planning documents done, getting a buy-sell agreement or other kinds of arrangements, and it is another to plan to simplify the assets held in order to simply life and estate succession.

To beneficiaries, the best asset is not going to be a surprise to anyone: it is cash. There are almost no restrictions and you can buy things with it right away. Other assets are less valuable because they come with restrictions. The restrictions can just be annoying, like taxation making it less valuable, to severe ownership and transfer restrictions that in some cases, make it easier for some preferred family members or outside companies (such as trust companies) to oppress other family members.

In some cases, restrictions are by design. Some people do not want their financial legacy to be wasted on a series of bad investments or vanity projects that add no value to their legacy. Some people want to control their legacy long after they have passed on.

This is a separate conversation from “de-cluttering.” Some assets should be sold during the planning stage. This is not something an Attorney would necessarily direct, as much of it is personal preference. One bank account may not be a big deal, but 15 would be onerous. Having a whole lot of vacant land that does not generate any income may well be fine, or perhaps it may be time to consider converting the assets into cash if doing so is profitable. Selling assets when it is part of an estate (and there are many beneficiaries who want to cash out right away) would tend to diminish the size of the estate.

For de-cluttering, there are no hard and fast rules. However de-cluttering does not mean the same thing as having fewer assets (though it may mean that, however that is the subject of a different post.

For our report on 7 things to look for in your estate plan, click here.

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For opposite-sex couples, most of them at least, the Registered Domestic Partner status will not be available.  Such couples will need to secure their status through marriage or make alternative private arrangements through what is known as a cohabitation agreement.

Under California law, Registered Domestic Partners are treated the same as any other married couple.  This is not true for federal law purposes.

Some may wonder: now that the Defense of Marriage Act is unconstitutional, leading to federal recognition of same-sex marriages, and California recognizes them, why do Registered Domestic Partnerships exist?  It may well be that this institution will wane over time.  But at the moment, it appears to be personal preference.   The Estate Planning calculus is remarkably similar with the exception of taxation issues.

For our free guide, 7 mistakes to look for in your living trust, click here.

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However, they can still be important for those who a have smaller net worth (well over 99% of the country) as a gift tax return will need to be filed when individual gifts exceed $14,000 (this number is subject to change).

There are two different kinds of gift tax exemption.  One is the lifetime exemption is the same as the estate tax exemption.  If you were in the gift tax exemption say $500,000, your estate tax exemption will be reduced by exactly that amount.  The total for the estate tax exemption for 2014 is $5,340,000.  If you’re reading this in 2015 or subsequent year, the number will be different.

You can also give annual gifts.  In 2014 you are allowed to give up to $14,000 per person to anyone that you wish. For people with very large families, this can be a tremendously valuable exemption. This gift is tax-free to the person who is receiving the gift (gifts are not income).  However, simply giving gifts in cash is generally not advisable from an estate planning perspective, as it is inefficient.  I have previously written about the gift tax and it’s hazards here.

For our free guide, 7 mistakes to look for in your living trust, click here.

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California has recently added probate code §6452 that changes this. Not all parents are created equal anymore in California. Parents who have their parental rights terminated in a judicial action and those parental rights were never reestablished are not going to be regarded as parents. A parent who walked away from a child during the time when the child was in the age of “minority” (18) will also not get anything. Obviously, this sounds like it would require estate litigation of some sort to prove.

Another interesting aspect here is that a parent who does not “knowledge” a child can also be excluded.

This kind of statute leads to more questions than anything else. Keep in mind that by the time this reaches litigation, the child in question has died. All the allegations concerning whether or not a person was a good parent or a bad parent, if they walked away from the child if they “acknowledged” the child is going to come from testimony from 3rd parties may be self-interested. For example, an ex-wife for an ex-girlfriend who is the mother of the child and may have absolutely no idea what if any relationship the child had with the father. The relationship may have been secret in order to not offend family members.

What about the flip-side of this? Does a parent refusing to “acknowledge” a child mean that the child will automatically not receive an intestate share from his parent? No. In order for this to happen, the parent would actually need to disinherit a child. That is a completely different law that is still on the books.

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