Tag Archives | Will

The beach delivers an estate planning lesson (it’s not all sand and surf!)

If there’s one thing I have learned, it’s that life can teach us a lesson at any time and any place.  One of those teachable moments happened to me recently while I was on a vacation at the beach with my husband (and law partner!), Jeff.

Let me start by saying that I am one of those moms who is very strict about sunscreen.  My kids do not go swimming or play outside for very long without a healthy coat of sunscreen.

But Jeff and I found ourselves on the beach on a very overcast day.  I know that clouds don’t prevent sunburns.  But we were also sitting under our very own tiki hut.  The thought of sunscreen entered my mind, but quickly left because we were “safe” under the tiki hut.

So there we sat — in the “shade” on a cloudy day — and read our legal books for hours and hours.  How did our little beach adventure turn out?

Sunburn.  Lots of it.  Jeff got the worst of it because he is very fair skinned.  But I didn’t escape scot free.

The tiki hut gave us a huge false sense of security.  We felt incredibly safe because we had taken some steps, even though they weren’t enough.  In a sense, the cloudy skies and tiki hut prevented us from taking the truly effective steps that we needed to take to protect ourselves.

I run into the same thing all the time when talking to people about their estate plans.

  • The people who told me they got a Will to avoid probate (but a Will actually guarantees probate)
  • The parents who were very proud that they named guardians in their Will (but had done nothing to address who would care for their kids on short notice or if they were injured but not killed)
  • The adult children who took money from their elderly parent’s accounts to reimburse expenses they had incurred (but they hadn’t kept proper records so their parent’s eligibility for Medicaid long-term care coverage was put in danger)
  • The people who tell me their estates won’t have to pay estate taxes (but they didn’t include the value of their life insurance policies when they added up their estate)
  • And many other stories we hear…

Each of these people felt a false sense of security because they hadn’t been properly educated by their attorney (or had gotten documents without seeing an attorney at all, such as from Legal Zoom).  We are strong believers in education because good decisions are only possible by having the full picture.  That’s why we became National Preparedness Coalition Members.

If Jeff and I had the full picture, we wouldn’t have had to stay inside for three straight days of our “beach vacation” because of a serious sunburn.  But the stakes are much bigger in estate planning.

So, get a head start on National Preparedness Month.  Ask yourself, have you fully investigated what you need to do to protect yourself and your family?  Or are you living under a false sense of security?  If you have any questions about your plan, call me and let’s talk about it.

But don’t just think about your own family.  If you believe someone you know — a friend or family member — has a false sense of security, take the initiative to send them this email.  Tell them to get prepared — and get their plan checked out.

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An estate planning lesson…from a dancing TV show?

The 10th season of Dancing With The Stars is in full swing now on ABC.  There’s even more excitement than usual around the Kabbe household because our local Olympic hero Evan Lysacek is competing!  And, yes, I do mean the whole household.  Even my husband (and law partner), Jeff, watches!

Saying that Evan is local is an understatement.  He is not only from Naperville, but he is from our neighborhood.  He went to the same elementary school and middle school as our children now attend (and he went to the high school our children will go to, but I am really trying not to think about high school yet).

Last week we began wondering how much the stars got paid to appear on the show.  I had heard rumors that some of the stars (such as this season’s Pamela Anderson) went on the show primarily to make money.  So the obvious question was, “how much?”

Well, it wasn’t even ten minutes later and Jeff had found the answer.  During Season 8, the stars earned $125,000 just for appearing on the show.  The stars could also earn up to $240,000 more by making it to the finals.  And what about winning the whole competition?  The only reward for that appears to be the mirrored ball trophy.

How do we know all of these details?  Usually reality TV shows include a pretty tight non-disclosure agreement forbidding the participants from talking about the show and their contract.  That’s why we don’t hear much about how shows like Survivor and The Bachelor are actually produced.

But Season 8 on Dancing With The Stars was different because Olympic gymnast Shawn Johnson was one of the stars.  What made Shawn different from previous competitors is that she was a minor (she was 17 when she competed, having just turned 18 in January).

Shawn’s contract with Dancing With The Stars had to be approved by a judge because minors don’t have the same ability to enter into contracts as adults.  And the second that contract was filed with the court, it became a public record.

It’s the same deal with probate.  Far from avoiding probate, having a will actually guarantees probate (with the exception of some estates under $100,000).  Your will and a complete accounting of your assets will become part of the public record.

Now, it’s unlikely that reporters from TMZ are going to be digging through your court records after you pass away like they have done with Michael Jackson’s estate.  But you may have your own reasons for wanting to keep your family, friends, and neighbors from learning the details of your assets and what gifts you made.

That’s just one of the reasons why more and more people are turning to living trusts for their estate plans:  trusts are private.

If you have only a will, I encourage you to investigate the benefits offered by a living trust.

In the meantime, don’t forget to vote for Evan on Dancing With The Stars!

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Is your estate worth $800,000?

How much is your estate worth to you? I don’t mean how big it would be. I mean, how much is it worth to you to have your estate handled the way you want it to be?

On Friday, we learned that Bartley King’s estate was worth $800,000.

Bartley King died on July 5, 2004. He left behind a son, two daughters, and fifteen grandchildren. Four years before Bartley died, he had executed a new will. This new will named his daughter Folan as the executor and primary beneficiary.

Bartley’s son (Robert), his other daughter (Helen), and nine of his grandchildren filed a lawsuit complaining that the new will and other estate planning steps Bartley took in 2000 were invalid. Their central arguments were that Bartley lacked the mental capacity to change his will and that Folan had taken advantage of Bartley and convinced him to change his will in her favor.

The trial was held in January 2007, and Folan won. The trial judge found no credible evidence that Bartley lacked the capacity to change his estate plan. From the victory, Folan became entitled to receive Bartley’s $1.2 million estate.

But first she had to pay her lawyers.

Folan hadn’t hired just any lawyers. She had hired K&L Gates, a mega law firm with 35 offices and 1800 lawyers scattered around the globe.

A law firm like K&L Gates doesn’t come cheap. Despite the case being rather straightforward (the trial judge said it wasn’t “overly complex”), K&L Gates had a total of 18 attorneys and paralegals on the case.

The final tab for those 18 expensive professionals? $710,321.50

Throw in another $95,868.47 in costs (things like copies, legal research, and travel), and the total came to $806,189.97.

Folan spent over two-thirds of her father’s estate defending a lawsuit from her siblings, nieces, and nephews (and perhaps even her own children — that’s not clear from what I have read).

Of course, that’s not the end of the story. The trial judge originally awarded Folan $574,321.50 in attorneys fees and costs — to be paid by her brother, sister, and other relatives who had sued! This past Friday, the Massachusetts Supreme Judicial Court overturned the award and asked the trial court to reconsider.

So where is all this leading?

It’s anyone’s guess how the fees will shake out. But it doesn’t really matter what the final bill is for Folan or how much her relatives have to pay.

The tragedy has already happened. All they’re doing now is sorting out how much it will cost and who is going to pay for it.

Anyone who is thinking of treating some children or family members differently than others may be faced with the same difficulties.

There’s no right or wrong way to handle the situation. Any solution is going to be based on family history, personalities, and some judgment calls.

But there is one step you can take that will almost certainly help, creating a living trust.

In Illinois, your spouse and children must generally be given a copy of your will — even if they aren’t named as beneficiaries or are specifically disinherited. And the entire process of executing the will is played out in open court, for everyone to see.

How much you had (or didn’t have). Who got what. Anyone can go find those things out.

A trust, on the other hand, is private. You aren’t required to provide a copy of your trust to your children or anyone else who might be interested in your estate plan. No one will know anything about how your trust works except your trustee and your beneficiaries.

It’s just another one of the advantages of using a living trust over using only a will — the ability to plan your estate in privacy, and hopefully in a way that won’t ruffle anyone’s feathers.

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