Huguette Clark, whose copper-baron father died in 1925, died in New York recently, leaving a will that devises most of her property to charities, gives a substantial gift to her lawyer and accountant, and completely disinherits all of her family members, reports MSNBC.
As if this alone didn't make the estate rife for a fight, Joel Schoenmeyer notes in his "Death and Taxes" blog that the attorney, who was also named co-executor of the will, cut off Clark's relatives from contact with her in 2005. Meanwhile, the accountant co-executor . . .yeah - he's a convicted sex offender, of the distributing-lewd-materials-to-minors stripe.
The DeKalb County, Alabama, bar association has sued to prevent the website legalzoom.com from doing business in that state, a local newspaper reports.
The case will turn on the proper interpretation of Alabama's unauthorized practice of law statute, which I will not attempt to unpack here. I will, however, express sympathy with attorneys who are annoyed at LegalZoom and services like it.
The most profound issue with a form book (via online service or otherwise) is that use of the forms can create a tremendous false sense of security while potentially devastating problems linger unaddressed. I once gleaned from the web the case of an individual whose father made a LegalZoom will and died assuming his estate plan was properly made.
Much to the dismay of the son, it was not: LegalZoom, it was alleged, didn't remind the father to properly title his bank accounts such that they pass pursuant to the will. The result was that in excess of a hundred thousand dollars went to the wrong heir because that heir's (and not the son's) name was on the joint bank account.
So to the query "isn't a LegalZoom will better than no will at all," my usual reply is "no."
Georgia's trust law has become more onerous for trustees. Whereas in the past, you could leave property in your will to a trustee whom you (get ready) trusted to manage it well without much supervision, the default rule now is that trustees must make at least annual reports to the trust's beneficiaries of their doings. Furthermore, there is a new requirement that beneficiaries be informed of their rights in trust within 60 days of its becoming irrevocable (as when the maker of a will dies).
Of course, under the old, pre-2010 law, any testator could make a will with the above requirements, but few did. By altering the default rule, the Georgia legislature now requires that we opt out of the new reporting requirements. What are some reasons we might? For one reason, as stated, many testators (i.e., makers of wills) simply trust their trustees to report when and if necessary. Another reason to opt out: many trustees are non-professionals, family members of the testator, who serve only grudgingly and don't want extra paperwork every year at tax time.
So for those who would opt out of the new requirements, I have crafted the following two will provisions. Each attempts to eliminate a more onerous reporting requirement of the new law without doing away with the common law rule that fiduciaries must still use due care and report if and when necessary (or, as under the post-2010 regime, upon request.)
My provisions are below. I invite comment.
F. WAIVER OF TRUSTEE'S NOTICES. No Trustee serving pursuant to any provision of this Will shall be required to give the notice set forth in Georgia Laws 2010, Act 506, § 1 and codified in O.C.G.A. § 53-12-242(a) (as such statute may be amended and revised up to the date of signing of this Will) to the beneficiar(ies), qualified or otherwise, of any Trust created hereunder unless, under exceptional circumstances, prudence and reasonable fiduciary duty would so require, as when (by way of non-exclusive example) the failure to give notice would substantially impair a legal right of a beneficiary and the Trustee has actual notice of such impairment. Notwithstanding anything in this paragraph, any Trustee may give any notice to any beneficiary that seems reasonable and prudent in his or her discretion.
G. WAIVER OF TRUSTEE'S ANNUAL REPORTS. No Trustee serving pursuant to any provision of this Will shall be required to give the annual reports set forth in Georgia Laws 2010, Act 506, § 1 and codified in O.C.G.A. § 53-12-243(b)(1) and (b)(2) (as such statute may be amended and revised up to the date of signing of this Will) to the beneficiar(ies), qualified or otherwise, of any Trust created hereunder unless, under exceptional circumstances, prudence and reasonable fiduciary duty would so require, as when (by way of non-exclusive example) the failure to give such report would substantially impair a legal right of a beneficiary and the Trustee has actual notice of such impairment. Notwithstanding anything in this paragraph, any Trustee may give any report to any beneficiary that seems reasonable and prudent in his or her discretion. Nothing in this paragraph shall be construed as a waiver of the reporting requirement upon reasonable request codified in O.C.G.A. § 53-12-243(a).
The ABA reports today that the estate of Rosa Parks (of civil rights bus-riding fame) owes some $243,000 in legal fees to the two court-appointed lawyers handling it.
The fee amount was made public by a court filing in the Michigan Supreme Court seeking leave to appeal the order granting the fees.
Most publicly embarrassing, perhaps, to the two attorneys appointed is not the fee amount but the fact that they have acquired the intellectual property rights to use the Parks name in lieu of cash payment of a portion of their attorney fees.
The article appears to state that virtually all of the cash value of the estate has been used up in attorney fees. This Michigan case is yet another example of a rule that is true in Georgia as well: the relatively low cost of paying a competent estate planning attorney on the front end rather than the tens of thousands (or more) the heirs may lose in attorney fees after the testatrix dies.
Though they cost a substantial multiple of your average plumber's fee per hour, specialized estate planning attorneys often save a complex estate an amount of money that is several times greater than the planning attorney's fee.
The Georgia Supreme Court handed down the case of Cabrel v. Lum last term, which contains an excellent elucidation on Georgia law of year's support and can be found here.
I particularly like this holding because it illustrates again why Georgia's doctrine of year's support is not simply a convenient way of administering an estate, as many lawyers (and some probate judges) would have it.
In particular, the Georgia doctrine of year's support contains the common law rule (nowadays somewhat bizarre but in our agrarian past, perfectly sensible) that minor children receiving set-aside property lose all right to income from that property upon 1. their marriage or 2. their attaining the age of majority. During the lifetime of the surviving spouse, all such income can be used for her benefit, and the income of the minor children "is limited to that which remains after all minor beneficiaries have attained majority and the surviving spouse is no longer in life." Cabrel v. Lum, S11A0212, 2011 WL 2119403 (Ga. May 31, 2011)
In essence, year's support creates a bizarre form of trust for minor-child beneficiaries - not at all like anything you'd see from a properly administered (or probated) estate.
The looming estate litigation bomb.
The baby boomer generation is retiring, and their parents are leaving us. We are poised to witness the greatest transfer of wealth from one generation to another (and then another) the nation has ever seen. And with it: millions of lawyers' billable hours in estate litigation.
What will be the single largest issue litigated? My money is on "undue influence." Undue influence in making a will - like fraud - invalidates the will completely. When a large beneficiary of an estate occupied a confidential relationship with the testator and takes a portion to the exclusion of his natural heirs, undue influence is almost always an issue.
The one mistake to avoid.
Sometimes, claims of undue influence are inevitable and must be litigated. (It's a rare set of children that simply allow their octogenarian father to leave his entire estate to his twenty-five-year-old wife of three years.) But other cases unfortunately see their day in court because of poor planning from the outset.
In Georgia, “[w]here a person  obtaining a substantial benefit under a will  occupies a confidential relationship toward the maker of the will and  is not a natural object of the maker's bounty, a presumption of undue influence arises if  it is shown that the will was made at the request of such person.” Bryan v. Norton, 245 Ga. 347, 348, 265 S.E.2d 282, 283 (1980).
A presumption of undue influence would be a terrible thing to face in court:
Tanner Pittman, LLC is a West Georgia law firm that specializes in estate services, civil litigation, and legal transactions.
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