Salt Lake City Estate Planning

Jimi Hendrix’s Estate Still Battling over the Rocker’s Money

Jimi Hendrix would be 75, if he was still alive.

The Express’ recent article, “Jimi Hendrix: Family feud over guitar legend’s £130million estate,” noted that Jimi died in London in 1970 at age 27.

His family has been counting the money ever since.

Nearly 50 years after Jimi’s death, he’s still one of the world’s highest-earning posthumous celebrities, earning more than $6.6 million last year. His $175 million estate remains a battleground. Jimi’s younger brother Leon, 69, has been battling the estate for the past 15 years, with three court cases awaiting trial.

Jimi’s estate is run by his adopted stepsister Janie.

Leon saw his brother’s formative years. Jimi’s first instrument was a ukulele from a garage sale.

He’s has felt plagued by conspiracies, since being cut out of his father’s will, which he’s contested.

Jimi died with no will and his then $66 million estate was inherited by his father Al. He drafted his own will, dividing the estate between his children and grandchildren. Leon claims that his dad was going to leave him $25 million in a trust fund, but in his final years Leon said his dad signed papers to cut him out of the will. When Al died in 2002, he left one gold record to Leon, while control of the Hendrix estate and its fortune went to Janie.

Leon sued to have his father’s original will reinstated, claiming that Janie had exerted undue influence on him.  However, she argued that Leon had been stripped of his inheritance because of his problems with drink, drugs, and crime. A court judge upheld Janie’s control of the estate in 2004, but three years later, Leon won a lawsuit giving him rights to Jimi’s likeness and image. When Leon produced Hendrix vodka, liquor, T-shirts and hi-fi speakers, she sued to stop him.

Janie is suing Leon for marketing Hendrix cannabis, alcohol and electronic goods, calling him a “serial infringer.” In addition, she’s brought an action to stop him from releasing a song on his new album that sounds like Jimi’s hit Foxy Lady, Leon claims.

Reference: The Express (November 25, 2017) “Jimi Hendrix: Family feud over guitar legend’s £130million estate”

If you have any further questions, please give our office to schedule a free consultation 801.438.7120!

Did Tom Petty Have a Healthcare Directive that Detailed His Wishes?

Tom Petty was reportedly taken off life support following the orders he had previously drafted expressing his wishes. However, most people don’t make provisions for their end-of-life care. As a result, the costs can add up.

When Tom Petty was found in cardiac arrest earlier in October, his family reportedly took him off of life support pursuant to a do-not-resuscitate (DNR) order he had drafted, reports CNBC in its recent article, “What Tom Petty's choices can teach you about end-of-life care.” Petty could have drafted the DNR due to a known health condition or out of general concern.

A do-not-resuscitate order is a form signed by a doctor and used when a person suffers from a serious advanced illness. The form instructs health-care professionals not to perform CPR. Another consideration is a do not intubate order, which instructs medical personnel not to insert a tube into the body for breathing.

Both DNR and DNI forms can serve as components of an advance directive, which is created by an attorney and takes effect, if you can’t speak for yourself.

That can be the situation of a chronic end-stage disease, terminal illness or persistent vegetative state. One type of advance directive is a living will, which stipulates the kind of medical care you want to receive, like tube feeding, dialysis and pain management.

A major part of this plan is communicating with your health-care agent or surrogate—the person whom you’ve designated to make decisions for you. This involves detailing what you’d want to happen if you lost the ability to communicate or process bodily functions like swallowing, bathing or other functions. When your health-care surrogate knows what's important to you, they’ll be able to make better decisions for you.

If proper provisions are not made in advance, the dispute can go to court. Doing the paperwork correctly means working with an experienced estate planning attorney, not merely completing a form on the Internet.

Reference: CNBC (October 17, 2017) “What Tom Petty's choices can teach you about end-of-life care”

If you would like more information or would like to draft your Healthcare Directive, give our office a call for a free consultation 801.438.7120!

Buffalo Gets New Smartphone App to Help Stop Elder Abuse

Dozens of providers and advocates recently spent a day learning how to use the new Legal Risk Detector App.

WIVB recently posted an article, “New App Aims to Prevent Elder Abuse,” that explains how the Center for Elder Law & Justice teamed up with the Erie County District Attorney’s Office and the Erie County Office of Senior Services in the Buffalo, NY metro area to introduce the app to those who work closely with elderly members of the community.

“This app is designed for Meals on Wheels people, home health aides, senior services workers and people who would be kind of the front line staff,” explained Karen Nicolson, Chief Executive Officer of the Center for Elder Law & Justice.

Those providers are sometimes the only individuals with whom home-bound seniors interact on a regular basis. Therefore, they can be the only people who recognize potential housing, consumer, financial exploitation or healthcare issues, provided they know the right questions to ask. That’s where the new app can help. The app is a comprehensive list of questions to ask elderly clients to help identify potential abuse. The questions are about everything from whether someone has been pressuring a senior to make changes to their power of attorney, to whether someone has been stopping them from accessing their money or health services.

The app also lets providers upload photos and documents, which are added to the report generated by the seniors’ responses. A report will give the referrals that the provider may need to help the senior.  It is automatically sent to the Center for Elder Law & Justice, when any legal risk red flags are identified.

The Erie County District Attorney said his office has seen a number of cases of financial and physical elder abuse this year, which he attributes to the fact that many seniors don’t have their children living nearby to monitor them. He hopes that awareness spreads about the app and its ability to help identify problems, so would-be abusers will reconsider taking advantage of elderly victims.

The app that was unveiled is only intended for use by providers and advocates who work with the elderly in the community. However, with a national grant, another risk detector app is in development that will be available to the public.

Reference: WIVB (October 30, 2017) “New App Aims to Prevent Elder Abuse”

If you want more information, please give our office a call for a free consultation, 801-438-7120. 

Millennials Set Kid’s Education above Their Own Retirement

The idealism of the millennial generation is readily apparent in Personal Capital’s latest survey of affluent families. The online survey of about 1,000 affluent investors, 18 or older with assets of $500,000 or more, discovered that millennials with children plan to spend more on their children’s college education and housing (including home purchases) than older generations.

Millennials are three times more likely to commit to defraying the entire cost of their child’s home purchase and two times as likely to contribute a full down payment compared with parents overall, the survey says. In addition, 70% say they’d place saving for their child’s education above saving for their own retirement. That’s a strategy that many experts don’t like because college can be partially financed with loans. Retirement can’t. In comparison, about half of all parents said they would adopt that strategy.

ThinkAdvisor’s recent article, “Here’s How Financially Naive Millennial Parents Are,” narrowed down PayScale’s starting salary rankings of 336 majors. Science and math are at the top.

In addition, roughly 56% of affluent millennial parents anticipate paying $100,000 or more for their children’s college education, compared with 42% of Gen X parents and 23% of baby boomer parents. A full 95% of millennial parents expect to help pay for their child’s graduate school education, with 60% providing $100,000 or more.  However, the generous plans among millennial parents—who are yet to reach age 35 years of age—may change in the future.

The survey also found that 40% of millennials don’t have a retirement account, but plan to retire in 15 years with $450,000 worth of investable assets. This is a view that’s even more idealistic than the findings of the survey. The latest survey said that among affluent parents overall, about 20% plan to support their children into their 30s, with 12% ready to continue that into their children’s 40s. Almost all (97%) plan to leave an inheritance to their children, with approximately 90% planning on leaving $100,000 or more to their heirs.

It’s apparent that affluent parents, across generations, are feeling more pressure from their children to provide longer-term support, with mothers experiencing that pressure more than fathers. For example, 64% say their children expect or will expect them to pay for college compared with 44% of fathers, according to the survey.

Reference: Think Advisor (September 26, 2017) “Here’s How Financially Naive Millennial Parents Are”

Suggested Key Terms: Estate Planning, Asset Protection, Inheritance

If you would like more information, please give our office a call for a free consult 801-438-7120!

 

“According to Personal Capital, 70% say they favor saving for their kid’s college over saving for retirement, a strategy advisors usually oppose.”

The idealism of the millennial generation is readily apparent in Personal Capital’s latest survey of affluent families. The online survey of about 1,000 affluent investors, 18 or older with assets of $500,000 or more, discovered that millennials with children plan to spend more on their children’s college education and housing (including home purchases) than older generations.

Millennials are three times more likely to commit to defraying the entire cost of their child’s home purchase and two times as likely to contribute a full down payment compared with parents overall, the survey says. In addition, 70% say they’d place saving for their child’s education above saving for their own retirement. That’s a strategy that many experts don’t like because college can be partially financed with loans. Retirement can’t. In comparison, about half of all parents said they would adopt that strategy.

ThinkAdvisor’s recent article, “Here’s How Financially Naive Millennial Parents Are,” narrowed down PayScale’s starting salary rankings of 336 majors. Science and math are at the top.

In addition, roughly 56% of affluent millennial parents anticipate paying $100,000 or more for their children’s college education, compared with 42% of Gen X parents and 23% of baby boomer parents. A full 95% of millennial parents expect to help pay for their child’s graduate school education, with 60% providing $100,000 or more.  However, the generous plans among millennial parents—who are yet to reach age 35 years of age—may change in the future.

The survey also found that 40% of millennials don’t have a retirement account, but plan to retire in 15 years with $450,000 worth of investable assets. This is a view that’s even more idealistic than the findings of the survey. The latest survey said that among affluent parents overall, about 20% plan to support their children into their 30s, with 12% ready to continue that into their children’s 40s. Almost all (97%) plan to leave an inheritance to their children, with approximately 90% planning on leaving $100,000 or more to their heirs.

It’s apparent that affluent parents, across generations, are feeling more pressure from their children to provide longer-term support, with mothers experiencing that pressure more than fathers. For example, 64% say their children expect or will expect them to pay for college compared with 44% of fathers, according to the survey.

Reference: Think Advisor (September 26, 2017) “Here’s How Financially Naive Millennial Parents Are”

What to Do with a Large Inheritance?

We all have wished for a million dollars.  However, what if you really received a big chunk of cash?

A large inheritance for some may be the largest sum of money for which they’ve been responsible. There can be considerable pressure to use those assets wisely or in the manner that their predecessor would have wanted. Here are some things you should think about to wisely put those assets to work, courtesy of The Times Standard Business in “Business Sense: Inheritance — At a loss for your recent gain?”

Your inheritance is likely due in some way to well-prepared estate planning. That said, it’s a good time to secure those assets so they continue on the path you want, in case you pass away before the assets are used. Ask a qualified estate planning attorney about a trust or will, and if you have an estate plan, a large inheritance is good motivation to review the documents to be certain it’s up-to-date.

If you have minor children, it’s essential that you create an estate plan. This is because children under 18 can’t legally take outright possession of assets. Talk to an estate planning attorney about trusts and wills, guardianship, powers of attorney and maybe maintaining separate property.

Be sure you have an adequate cash cushion for emergencies. This is usually three to six months of your expenses, depending on your situation.

A question of many recent inheritors is to whether or not they should either pay down debt or invest, and it really depends. Speak with your tax professional prior to putting a significant amount of your new funds towards your home loan or other major debts, because your money may be better off in an investment portfolio or tax-deferred retirement accounts.

When you have your estate planning, tax planning and emergency cash situation settled, you’ll have an idea of how much can be invested. How to invest is the next issue. You should work with a professional to discuss your specific circumstances.

Reference: (Eureka CA) Times Standard Business (September 30, 2017) “Business Sense: Inheritance — At a loss for your recent gain?” 

If you would like more information, give our office a call for a free consultation, 801-438-7120! 

Iowa Senator Proposes Elder Abuse Legislation

The (Cedar Rapids IA) Gazette’s recent article, “Grassley elder abuse legislation awaits Trump's signature,” says that one of the main reasons for the legislation is the case of a Cedar Rapids couple who spent more than $40,000 buying nutrition-related supplements of dubious value. Senator Chuck Grassley of Iowa said the legislation would increase penalties and improve coordination at the Justice Department and Federal Trade Commission.

“Exploiting and defrauding seniors is cowardly, and these crimes should be addressed as the reprehensible acts they are,” the 84-year-old Grassley said. Legislation that the Senate Judiciary Committee chairman sponsored with Sen. Richard Blumenthal, D-Conn., will send a “clear signal from Congress that combating elder abuse and exploitation should be a top priority for law enforcement.”

The Elder Abuse Prevention and Prosecution Act of 2017 passed the House of Representatives and the Senate by voice vote. One of the challenges of protecting seniors from scams is that technology changes quickly and “criminals are constantly coming up with new scams,” Grassley said. “None of us are completely immune.”

Grassley explained that six million seniors are victims of abuse and exploitation each year. In 2016, Karl and the late Marlene Sibert of Cedar Rapids were among them, spending $44,000 on nutritional supplements over a period of twenty months for health and nutrition-related products, when her mother was hospitalized. Their daughter, Karla Sibert, became aware of the spending and contacted the Iowa Office of Attorney General’s Consumer Protection. She filed a formal complaint. The investigation discovered telemarketers’ handwritten notes indicating that Sibert’s mother had “memory” issues and her father had “dementia,” according to Attorney General Tom Miller. Luckily, in the Sibert’s case, the telemarketer complied with his office’s demand to repay the money the couple spent on the supplements.

Grassley called those who exploit seniors “cowardly” and said those crimes should be prosecuted “as the reprehensible acts they are.” Even though elder exploitation may not be a “prominent or popular issue,” Grassley said it’s “an important kitchen table issue for America’s seniors, families and caregivers.”

The legislation will improve the nation’s response to these crimes, Grassley said, and will help families across America by equipping law enforcement, seniors, and caregivers with better training and tools to deter crimes and hold perpetrators accountable.

Reference: The (Cedar Rapids IA) Gazette (October 5, 2017) “Grassley elder abuse legislation awaits Trump's signature”

If you need help with an Elder Law case, give our office a call for a free consultation, 801-438-7120!

Famous Folks Who Wrote Their Kids Out of Their Wills

According to a copy of his will, Jerry Lewis “intentionally excluded” all six of his children with his first wife Patti Palmer. Therefore, they will inherit nothing.

People Magazine’s recent article, “Jerry Lewis and 10 Other Celebrities Who Left (Or Plan to Leave) Their Kids Nothing,” explains that Lewis’s potentially vast estate will be passed to his widow, SanDee Pitnick, and the second in line to inherit his fortune, if something happens to his wife, is his 25-year-old daughter Danielle. The rest of Lewis’s seven kids will join the club of other famous children not getting a dime from their famous parents:

Mickey Rooney had a strained relationship with his wife and children for some time before his death in 2014, at the age of 93. There was infighting within the family right after his death, with his children bringing a lawsuit asking that his will be invalidated, claiming the legendary actor faced “undue influence” when he signed it just before his death. Seven of his eight surviving children weren’t named as beneficiaries to his estate, which was valued at just $18,000, a small sum for one of Hollywood’s most iconic stars. The estate would be potentially worth more in the future because of licensing rights and memorabilia (including an Oscar). However, his fortune had been diminished from years of mismanagement. The beneficiary was Mark Aber, Rooney’s stepson and caretaker in his final days. The other children claimed that Aber and the estate’s executor, attorney Michael Augustine, Rooney’s court-appointed conservator in the last years of the actor’s life, took “advantage” of him.

In another lawsuit, Rooney’s estranged wife Jan also contested probate of the actor’s will, claiming it “blatantly misquotes the terms of the settlement agreements [previously] reached between Janice Rooney and Mickey Rooney.” In fact, the battles were so intense that Rooney’s body had to be refrigerated for two weeks after his death, while his family fought in court over burial arrangements. By 2015, the last of Rooney’s children had dropped her objections, and his final will and testament stood as written.

In another case, one year after his death, The Tony Curtis Estate held an auction to sell off memorabilia and other items he owned. The estate raised more than $1 million during the online auction—all of which went to his widow and fifth wife, Jill Curtis. A portion went to the couple’s charity, according to Forbes. But Curtis’s five children, including actress Jamie Lee Curtis, received nothing from the sale. Forbes reported that Curtis had rewritten his Will and Trust just a few months before his death to exclude all his children. Like Lewis, Curtis reportedly listed all children by name, stating that he wished to intentionally disinherit them. No reason was given in the will.

Jackie Chan. No, he’s still alive and well.  However, he has publicly stated that he will disinherit his only son, Jaycee, after his death. Chan told the media in 2011 that half of his then-$130-million fortune would go to charity—and the other half would not be going to his kid.

Like Chan, Sting said that his children wouldn’t be getting an inheritance. He told England’s Mail on Sunday newspaper in 2014 that he wasn’t planning on leaving any trust funds for his kids. “I told them there won’t be much money left because we are spending it,” he reportedly said.

After selling the Star Wars franchise to Disney for $4.5 billion in 2012, George Lucas, a father of four, said the proceeds from the sale would be donated to charities to improve education. TV talent judge Simon Cowell, the father of a three-year-old son, said he doesn’t believe in passing on wealth from one generation to another, according to Time. Instead, he said he plans to leave his estimated $500 million fortune to charity, something benefiting “kids and dogs.” Ted Turner, estimated to be worth $2.2 billion, set up the Turner Foundation to provide grants for environmental causes. It’s set up as a family foundation, so his children can be involved in charitable work. Canadian businessman and investor, Kevin O’Leary, also a judge on the ABC series Shark Tank, said in an interview that he won’t pass any wealth to his kids.

Berkshire Hathaway mega billionaire Warren Buffett has not been quiet about his distaste for leaving an inheritance to his family. He pledged to give away 99% of his estimated $78 billion fortune to charity, and has encouraged other billionaires to give away at least 50% of their wealth through The Giving Pledge. Microsoft founder Bill Gates said that he thinks leaving his vast fortune, estimated at over $80 billion, to his three children would be wrong. Inspired by Buffett, he plans to leave most of his fortune to charity, including his own, The Bill & Melinda Gates Foundation.

Reference: People (September 22, 2017) “Jerry Lewis and 10 Other Celebrities Who Left (Or Plan to Leave) Their Kids Nothing”

Court Decision Cautions Against Net Gifting

Even with a solid estate plan, fluctuating family relationships or unexpected illness or death can hamper an estate plan and result in undesirable transfer tax consequences, reports BNA Bloomberg in its recent article “Net Gifts: When Estate Planning Goes Wrong.”

In Estate of Sommers, the decedent made lifetime gifts to his three nieces by transferring artwork to an LLC and then membership interests to the nieces over a two-year period to take advantage of valuation discounts and annual exclusion amounts. The nieces signed an agreement stating that they’d be responsible for any gift taxes on the gifts of membership interests (otherwise known as a net gift).  The decedent then remarried his ex-wife and died five months later.

Before his death, the decedent started a lawsuit against his nieces arguing that the gifts were not completed gifts. After the court held that the decedent made completed gifts, the nieces paid the gift tax liability of $274,000. Because he gifted the membership interests within three years of his death, both the value of the membership interests and the $274,000 gift tax payment was included in the value of the decedent’s gross estate. But the executor of the decedent’s estate, the surviving spouse, claimed that the gift tax payment was deductible.

The court held that the gift tax payment wasn’t deductible because “an estate is entitled to deduct a claim under §2053(a)(3) only to the extent that the amount owed exceeds any right to reimbursement to which payment of the claim would give rise.” The court found that the estate would have had an enforceable right to reimbursement from the nieces, if they hadn’t paid the gift tax. The court found that the nieces served only as conduits, and the decedent was the ultimate gift tax payer. If not for the three-year claw back, the decedent would’ve withdrawn from his potential estate, the value of the taxable gifts and the amount of tax on the gifts. The gross-up rule is necessary to prevent such excess value (the gift tax on the net gift) from escaping, and, therefore, the decedent’s estate from circumventing, the transfer tax system.

Net gifting can be a very valuable and effective estate planning tool, if done correctly. Talk with your estate planning attorney to understand the potential for risks involved in making net gifts.

Reference: BNA Bloomberg (September 14, 2017) “Net Gifts: When Estate Planning Goes Wrong”

If you need help establishing your Estate Plan, give our office a call for a free consultation, 801-438-7120! 

Don’t Fumble Your Future

As the new NFL season gets into full swing, there will be plenty of fumbles across the league. With that in mind, twincities.com recently posted “Your Money: 4 financial “fumbles” to avoid,” spotlighting four financial “fumbles” to avoid.

No Game Plan. Pro football players and their coaches spend hours looking at tape of themselves and their opponents to prepare for game day. Reviewing past games lets them more effectively and efficiently prepare for the next Sunday. The same is true with financial planning: reviewing past performance of certain asset classes and indexes, lets you forecast potential returns for your investments. That can help to dictate an appropriate withdrawal rate that works with your time frame.

Too Many “Hail Marys.” A Hail Mary or the long pass at the end of the game for a score is thrilling, but its success rate is 50-50 at best. Think of a Hail Mary pass like pursuing the hot stock—it can be fun to watch it go up, but its consistency is all over the board. It’s not a strategy for every play, if you want to see long-term, sustained success.  A diversified portfolio should instead be thought of as a well-planned game plan to take you down the field to the end zone. You’ll mix up runs, short passes and a few long bombs in an attempt to outsmart the defense. Your portfolio should also have a mix of asset classes and risk factors to withstand any market volatility.

No Backup or Second-String Team. Every position on an NFL team has a backup, in case of injury or other circumstances. The same should hold true for your financial plan. While it may appear to be rock solid, can it stand a “sack” from another recession? Create a contingency plan for every piece of your financial picture. You should be just as confident in your contingency plan, as in your primary financial plan.

No Specialists on Your Team. There is a reason why NFL teams have 53-man rosters and are constantly on the lookout for specialized positions. A wide receiver has different skills than a defensive end or a safety, and a punter has different skills than a quarterback, but they’re all essential for success. With your finances, you should have specialist knowledge in every area: Social Security, investment management, financial planning, estate planning, insurance and more.

You also need a “coach,” i.e., an experienced estate planning attorney, to help coordinate all of these special areas into a cohesive game plan.

Reference: twincities.com (September 9, 2017) “Your Money: 4 financial “fumbles” to avoid”

If you would like more information, please call our office for a free consultation, 801-438-7120!

Make Your Philanthropic Efforts Count

Most family wealth is earned and lost in just three generations. One way to thwart this, is to engage the members of the younger generation in philanthropic efforts to prepare them for future financial responsibilities, while at the same time passing on your family values of charitable giving.

The Pacific Coast Business Times, in its recent article, “Involve your children in philanthropy,” notes that the best way to involve your children in philanthropic activities, is to start early. You should identify opportunities at every age to include them in your family’s giving and volunteer work.  Many younger families are already giving of their time and money, with 84% of millennials making a charitable donation and 70% volunteering their time in 2014.

Creating a more formal charitable giving plan helps emphasize the impact of giving and can create a culture of philanthropy that will carry on the family’s legacy. Start by laying the groundwork with these ideas:

Document the family’s giving history. This will lead to better engagement by the family of your philanthropic strategy and help to build interest for family causes.

Create a family mission statement. Developing family mission statements can be valuable. Work with your children to define the family’s mission and purpose for giving, and use it to outline the principles and behaviors that will guide your charitable giving now and in years to come.

Include everyone in philanthropic work. Start involving kids in volunteer work and decision making, as early as possible. Allow children to direct philanthropic funds. You can ask your kids to select a cause they’re passionate about and encourage them to research charitable organizations to develop a plan focused on how they will use donation dollars. Do research on charities and then, as a family, discuss a charity’s merits to decide whether or not to donate your funds.

There are many ways to give, from volunteering time, donating directly to a charitable organization, or using donor-advised funds. Partner with an experienced estate planning attorney to learn the benefits and limitations of each strategy. That will help you better focus your resources to drive your family’s efforts towards philanthropic causes and maximize the impact of your generosity.

Reference: Pacific Coast Business Times (September 8, 2017) “Involve your children in philanthropy”

Call our office for a free consultation if you want more information, 801-438-7120!