This is not just zip codes, but any other “personally identifiable information” (in California).  Typically, many people live in a zip code, and it may be that a large portion of a given retail establishment comes from two or three zip codes, which is not an address.  However the courts have ruled that through thousands of people share zip codes, it is very easy to use a name and zip code to retrieve an address, which certainly is personally identifiable information.  So if you can use it for an effective web search, the entrepreneur is in perilous waters.  This is true for email addresses and phone numbers.  

The ruling in Massachusetts has been the rule in California for a couple of years now, where there was a similar case governing specifically zip codes.  A business establishment can certainly collect zip codes (this happens all the time), the only real question is what the business does with it.  If it is used for marketing, this would be a cause of liability for a business.  It would certainly be a bad idea to assume customers will never know what you are doing.  It is not worth the risk.  

South Dakota made a recent change in their statute that covers court ordered payments on support.  This is not to help people get out of anything a court has already ordered or a settlement that has already taken place, but rather, future orders, which could provide divorced individuals who do their Asset Protection planning with some piece of mind.  

Here is an example of how it would work from Rapid City Journal:

Suppose that at the time a couple divorce, the husband had just started a construction company. It had more debt than assets and wasn’t making any money yet. Several years later, business is booming and he is well on his way to becoming wealthy. Even though his ex-wife was not involved in building the company, she might try to benefit from his post-divorce success by suing for a share of his assets. He could protect those assets by contributing them to a DAPT.

South Dakota is not unique in contemplating such a solution for a chronic concern that some divorced individuals have.  Post divorce Asset Protection planning should consider the statutes of the jurisdiction and how it addresses this particular problem as well as other potential risks.  We never want to discount future lawsuits, divorces from spouses that clients have not married yet as well as risks that come from children.  

A reminder of this comes from a recent case, highlighted by Attorney David Phelps of Michigan, regarding a business and two sons, which was subsequently mired in litigation and an expensive damages award.  

Here, the father placed one of his sons in control of the company he founded. After his death, a second son became increasingly “frozen out” of his job and the business. In the end, the lawyers are called in and litigation ensues. The second son was finally awarded $21.8 million in damages.

Inheritance is viewed as much more than money for children.  It is a symbol of dignity, of being part of a legacy.  It is also viewed as a weapon wielded by rivals in the family, as a way to show superiority, a way to oppress.  

Initial filings to be made public with the state should of course not include the name of the person who wants to be anonymous.  Furthermore, it may be possible to structure the assets so that they are not owned directly by the owner in the first place, but rather by a trust.  For example, a Domestic Asset Protection Trust (DAPT).

A DAPT is an irrevocable trust where the person creating the trust is a permissible beneficiary, but is protected from future creditors.  This is a viable option for many entrepreneurs.   The Trustee of the Trust can be someone other than the person actually operating the business.  This will not just be in the initial stages, but for years to come.

In general, a person should not own assets themselves in their own name.  This includes shares in a corporation and membership interests in a limited liability company.  Simply having a corporation own another corporation is inefficient and expensive (particularly with the minimum tax in California) if the only goal in doing so is to preserve anonymity.  

Fault here does not matter.  You worked hard to build up your estate, and you don’t want it to be wasted because a child has a problem with substance abuse, constant financial problems, trouble with the law, marital issues or a variety of other issues. Keenan Law in Connecticut made up their list which you can read here.  

The solutions can in fact vary widely, depending on the actual problem as well as the asset involved.  We would normally treat an IRA differently from a cash account and both of them would be very different from a business (you don’t want a child with a gambling problem in charge of the family business do you?)  

Estate Planning then needs to be focused on Asset Protection, not just for yourself, or maybe not for yourself at all (unless you want that) but on everyone else in the family.  Do not focus on the child and the child’s particular problems as if they will always be that way.  Because that is likely wrong, but don’t be blind to that possibility either.  

According to the Attorney quoted in the article, the decedent told him that these actors were friends of his.  They were not.  Not that it matters in this case, but if there were other family members they may have cause to challenge such a result in court through litigation.  Older people often do things in their estate plans that make no sense.  This could happen both to people who have lots of family or as in the case here, no family.

He left things public because he wanted them known.  This is common of course for people who do charitable planning, leaving gifts as part of their legacy, putting their names on the foundations they create, so that people know after they die what they cared about.  Most of the time people are public about this kind of thing during life though many people give large bequests after death.  

Some people extend this idea to people.  They can be public both in the cases of people that they love as well as people that they hate, making disinheritance of family members they do not like public.  

Charles Kuralt, who for CBS lived “on the road” for decades had a completely secret mistress who he wrote a letter giving her a Ranch.  This ended up public though perhaps he wanted it to be secret, in large part because there was a letter and no other planning and there was litigation (and an unhappy wife).  

People to wacky things on their deathbeds.  However giving all your money to a charity because you think it will allow you to go to heaven is probably not the craziest thing a person has ever done.  The state cannot be in the business of Judging a person crazy because he gave away all his money to a church.  Maybe that is what he really wanted to do and it is not unnatural at all.  Of course a court can get involved to see if there was fraud, duress, menace or undue influence.   This would be the same if the beneficiary was a charity or if it was a person who befriended old and sick people to get in the will.

Anyone who feels aggrieved because a will or a living trust has a large bequest to a charity would find that there is no clear answer immediately.  Sometimes suspicions are legitimate, though even if they are legitimate you need to evaluate what you can prove, and if you will actually be successful challenging the bequest when you go to court.  

As a matter of policy historically (and this has changed over time) we wanted to avoid having a person’s “dead hand” controlling the living.  Provisions that seem heavy handed on future generations, down to who they marry, what kinds of professions they can be in (usually the ones that earn the most are preferred), what political party they should volunteer for or what they can or cannot protest is now something that can be done in estate plans.  Indeed, all of these things are now done all the time.  But should they be?

In many ways, my job is is to counsel individuals and couples about their options and to make sure their values are incorporated into an estate plan.  However the world we will live in generations from now may not resemble one we can properly regulate in an estate plan.  At some point, we need to let go.