In the continuing saga of Anna Nicole Smith, a federal appeals court has ruled that she, and now her estate, is not entitled to any of her late husband, J. Howard Marshall's millions.
For an excellent write up of the case, see my fellow Florida Probate attorney and blogger, Juan Antunez's post here.
In recent weeks, one of the most frequent search terms that have brought people to my website has been some variation of "IRS Publication 559." This is a guide from the IRS that tells Personal Representatives and Executors how to prepare the income tax returns of decedents whose estates they are administering. Obviously, people need it to prepare the tax returns that are fast coming due.
The IRS just released the 2010 edition, which is to be used to prepare tax year 2009 returns. It is located at the link below.
http://www.irs.gov/pub/irs-pdf/p559.pdf
One of the most important decisions you can make in preparing your estate planning is who will be the fiduciaries. This includes the personal representative(s) (also known in some places as the executor) of your estate, and the trustee(s) of your trusts.
Today, I want to talk about the other side though. Let's say that someone has appointed you Trustee of a Trust established for their wife, their children, or other members of their family, and you decide to accept. Being a Trustee could be a major job and certainly carries with it significant responsibilities.
The Trustee has a duty to administer the Trust for the benefit of the beneficiaries. As such, the Trustee has a duty of loyalty to the beneficiaries, a duty of impartiality, a duty of prudent administration, a duty to inform and account to the beneficiaries, and a duty to prudently invest the assets of the trust.
On the plus side, the Trustee is often to be paid fees for their work on behalf of the trust from the trust's assets.
On the minus side, there is a danger of being sued for breach of fiduciary duty of you mismanage the assets.
In New York, the widow of a New York City attorney was sued by his children (her stepkids) because she invested the entire family trust with Bernie Madoff. It should be an interesting case to watch, but I think she's going to lose.
A lesson to take from this. If you are a trustee, make sure you diversify the trust's assets.
Dennis Kennedy has written a fantastic article for the American Bar Association's magazine, Law Practice Today. The article, entitled "Estate Planning for Your Digital Assets" sets forth a simple five-step plan to manage your digital estate.
I had previously written about Estate Planning and Digital Assets, in which I was critical of companies like Legacy Locker, because I believed (and still do), that they could impermissibly bypass the probate process, and cause conflicts as to which of a decedent's beneficiaries is entitled to certain online accounts.
Dennis's article does not mention those services, but instead, instructs testators and attorneys how they should do it themselves. According to the article the five step plan is:
1. Inventory Your Digital Assets.
2. Identify Appropriate Help.
3. Provide for Access.
4. Provide Instructions.
5. Give Appropriate Authority.
For more, see Dennis Kennedy: Estate Planning for Your Digital Assets.
Yesterday at my networking group meeting we were visited by a woman who runs a video production company catering towards attorneys. As she was introducing herself to the group, she stated that among the services she provides was filming depositions and allowing people to film video wills.
At which my ears perked up.
Video wills?
I obviously didn't want to interrupt or embarrass her in front of the group, but I was curious exactly what she meant and I went up and spoke with her after the meeting. Sadly, it was exactly what I feared.
One of her services is filming people speaking in front of the camera and saying, "I so and so want to give my bank account to my daughter and. . . " Not writing, but speaking.
Oy vey.
In Florida, video wills are invalid. Inadmissible. Worthless.
Section 732.502 of the Florida Statutes provides, in part that "every will must be in writing." No exceptions.
I'm not talking about recording the signing ceremony, which I'll write about another time. But if your only will is a video will, it's no different than not having any will at all.
I'm going to take a little detour from writing about estate planning to write about being an estate planning attorney, and different ways that I find clients and generate business. This post is a modified response that I wrote to the Solosez Listserv. Solosez is an email discussion list hosted by the American Bar Association for attorneys who are either solo practitioners or are members of small firms. Not just estate planners, and not just Florida attorneys, but attorneys all over the country and the world, practicing in all fields. It's a great resource for the solo practitioner, and a warm and supportive community.
Earlier today a colleague posted the following message:
"Does advertising in bulletins, Yellow Book and Mailing etc. work? I am
advertising in three different church bulletins for 6 months now and I
have not received a single client. I have also mailed 100s of
postcards but nothing from that either. I am giving up on advertising.
Is their a best way to advertise estate planning practice?
I am so confused and lost.
Help!"
While I am not going to print his name, for the purpose of this story it is important to know that he has a very Indian (from India) sounding name. I responded to him and I ended up liking what I wrote, so I thought I'd copy it here. The only change I'm making is to redact his name, and some slight spelling or grammatical fixes.
"I'm answering your questions in the order you presented them, but the most important thing will be number 3 below. So you might want to skip to that.
1) The yellow book works for PI attorneys, not for estate planning. I'm not looking for the type of client who looks for an estate planning attorney in the dead tree yellow pages. They aren't going to be willing to pay me what I want to be paid. Plus, anyone who looks for an estate planning attorney in the dead tree yellow pages instead of either going online, or getting a referral from a friend or colleague is going to be extremely unsophisticated. Again, not the type of client I'm looking for.
Plus, the dead tree yellow pages themselves are on the endangered species list. I don't know anyone who uses them for anything. (Yes, I know there are people here who do). Place your money elsewhere.
2) You mailed postcards to who? Random strangers? Are you allowed to do that under [State] law? You need to build your personal address book and database. Make notes about every single person and send them personal communications every now and then. All of these people should be people you have some sort of contact with.
3) Network, network, network. Did I mention that you need to Network? I just looked at my calendar and I have EIGHT different networking events, or personal one on one lunches or meetings this week. Join networking groups, referral groups, chambers of commerce, social, charitable, cultural, etc., groups. Go to everything. Talk to everyone. Never be without your business cards. Follow up with people. Send people random emails asking how they are doing. Stop looking for clients and start looking for referral sources. You want people to be comfortable referring you business, and they only will be once they get to know you.
4) If you're going to advertise, might I suggest targeted advertising? I may be going out on a limb here, but with a name like [Indian Name] I am going to assume that you are not a White Anglo-Saxon Protestant from Boise. Fair or unfair, there is still racism or at least culturalism in our society and until people know you, you aren't going to get any bites by putting an advertisement in the back of a church bulletin. How big is the local Hindi community? Why don't you, for starters at least, market solely to the Hindi and other Indian community. Go to all the events, place advertisements in their cultural and religious bulletins. People like working with people like them. I'm not asking you to pigeonhole yourself, but it's a start.
5) You got to be online more. Blog. Tweet. Interact on this and other listserv -- I've gotten some nice business from Solosez.
6) Did I mention that you have to Network?"
I have to admit that sometimes following my own advice can be difficult. There are only so many hours in the day and I have to do actual work for my clients too. But I think that the above is a good roadmap to establishing a successful estate planning practice.
Hmmm.... Maybe I should give up being an estate planning attorney, and instead teach other attorneys to do the above.
Nah.
This is an old story, but it's new to me. I stumbled upon it because there was a recent update on The Consumerist. The best summary of the case that I've seen is here, on Good Morning America's Website, in a story from May, 2008.
Apparently, in 1995, Sonya Ramos took her daughter to the dentist, which resulted in a $68 (that's sixty eight dollar) bill that was left unpaid. At some point, a collections agency sued her for the bill, which due to legal fees and other costs had increased to $950. Either she didn't know about the lawsuit or she ignored it, but from my perspective, it doesn't really matter. The collections agency that owned the debt won a default judgement. The judge then ordered the sheriff to sell some of her property to pay the judgement. According to the story, under Utah law (with which I am unfamiliar), because her home was "indivisible," it was sold to a buyer for $1,550.
The rest of the story and the follow ups are about her continuing efforts to reclaim possession of her home. If you are interested, read the Good Morning America story linked to above, or the most recent update to the story in today's Consumerist, which states that Utah Court of Appeals remanded the case to determine whether or not she had received proper notice of the sale and whether the sales price is grossly inadequate.
Wow.
I'm glad that I, and my clients live in Florida. Whether she had adequate notice of not, or whether the sales price is grossly inadequate or not, Utah law allowed her home to be sold because of an outside debt.
Unbelievable.
Let's take a look at the Florida Constitution:
Article X, Section 4 provides:
(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner's consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner's family.
In Florida, you homestead is protected from judicial sale and from creditors. Period. There are exceptions for debts related to the property such as your mortgage, taxes, and repairs to the house, but that's it. The state can't force the sale of your house to pay your other creditors (there are some minor exceptions regarding new homesteads and bankruptcy up to a certain limit, but that's for another post).
So if you're in Utah and facing the loss of your home because of some outside debt. Come to Florida! The weather's nicer, and your Homestead is protected. However, you can only have one wife.
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