Archive for July, 2011

Nothing is certain but death and taxes, and where those two intersect — wills and the estates people leave behind when they pass — there’s supposed to be some certainty as well. Wills are supposed to be final. But unsurprisingly, sometimes heirs and potential heirs don’t see them that way. A $100 million estate left to the “wrong” people can cause court battles over estates that can last years.

Not every famous estate fight is over money, though. One notorious battle that made headlines around the world was over what should happen to the body, particularly the head, of famous baseball slugger Ted Williams.

Here’s a snapshot of a couple of the most notorious cases.

1.  Anna Nicole Smith versus J. Howard Marshall II

Value of estate: $1.6 billion
Amount contested: $300 million
Feuding parties: wife and son

J. Howard Marshall amassed a fortune of approximately $1.6 billion as an oil tycoon. In 1994, when Marshall was 89 years old, he married Anna Nicole Smith, a former stripper who gained fame as a Playboy Playmate. She was 62 years his junior, which prompted some people to speculate that Smith only married Marshall for his money. Smith always denied those accusations.

The marriage lasted for 14 months, ending when Marshall died. Anna Nicole Smith was completely left out of Marshall’s will, which left the majority of his fortune to his son, E. Pierce Marshall. Smith claimed that her deceased husband had promised that he would leave her half of his fortune, but that Pierce had prevented him from doing so through forgery, fraud, and false imprisonment. Smith passed away 2007. The case is before the U.S. Supreme Court for the second time since 2006.

2.  Brooke Astor

Value of estate: $198 million
Amount contested: N/A
Feuding parties: son and grandson

Brooke Astor was a wealthy New York City socialite and philanthropist who passed away in 2007 at the age of 105. Her only son, Anthony D. Marshall, was the executor of her $198 million estate until 2006. That year, Marshall was accused by his son, Philip Marshall, of defrauding Astor in the late stages of her life and stealing millions of dollars from her. Although Astor died, the case is ongoing. Anthony Marshall was found guilty of a number of fraud and conspiracy charges, as well as first-degree grand larceny, and was sentenced to 1 to 3 years in prison in 2009. The case is under appeal.

3.  Ted Williams

Value of estate: N/A
Amount contested: Williams’ body
Feuding parties: three children

The circumstances surrounding baseball great Ted Williams’ will are truly bizarre. In 1996, Williams signed a will stating that he wished to be cremated and to have his ashes spread out at sea. After his death, however, the executor of his estate claimed that Williams wanted to be cryogenically frozen. Two of his children supported this action, citing a piece of paper Williams had signed in which the three all agreed to be frozen so that they would, according to an article from the AP, “be able to be together in the future, even if it is only a chance.” His eldest daughter fought against the disposition of his body, but gave up after running out of money. Williams is currently frozen, with his head separated from his body. His son died of leukemia in 2004 and was also frozen.

See full article from Daily Finance here:

It happens more often than you would think is possible – the caregiver hired to care for your parent secretly marries the parent and claims a chunk of your inheritance!

Although no one tracks the numbers of such marriages, lawyers who handle estate-related litigation say they are seeing increasing numbers of “predatory unions,” as life spans increase and dementia becomes more common.

How could families be duped into not knowing their own parents had married? In one case, an adult daughter left her elderly father in the care of a longtime friend while she took a short vacation. In one week, the friend married the father, started transferring assets into joint accounts and named herself his pension beneficiary. The children learned of the marriage a month later. When they confronted their father, he recalled nothing about it.

In another case, a hired caretaker secretly married her charge of nine years about a year before his death. She told his children about it the day before his funeral.

In most states, the inheritance rights of widows and widowers trump any estate plan—even if the new spouse wasn’t named in the will, and even if the marriage took place shortly before the death of someone unable to recall a few days later that they said “I do.”

Distance often exacerbates the problem. It is tough to supervise workers in a parent’s home from afar. Before you hire anyone, extensive background checks are crucial, along with making sure any paid caregivers are bonded and insured.

If the parent is diagnosed with dementia, one defense against fraud is a durable power of attorney—a legal arrangement that helps older people turn over management of their finances to a family member or others—assuming he or she can still execute one. If used, it is a good idea to require all of the adult children’s consent for transactions over a certain dollar amount.

That way, you can make sure that no one in the family falls sway to the hired help—or takes advantage of the situation himself.

Another defense: having your parent put their assets in a trust. If the assets involved are worth less than $5 million—and you set it up this year or next, when there is no gift tax on that amount—make the trust irrevocable, meaning it can’t be unwound during the parent’s lifetime. If you use a revocable trust, make sure the paid caregiver doesn’t know about it, she says.

You can read more at Unholy Matrimony – How to Fight Back.

David and his wife, Gloria, take care of his 94-year-old mother Mary, a retired teacher. She was widowed in the 1960s and lived on her own until a few years ago. But when her eyesight started failing, they moved her from her home to theirs.

Mary Ruth is blind now but she’s still pretty self-sufficient. She climbs the stairs and dresses herself, although David and Gloria lay out her clothes. She’s started showing signs of dementia, so they make sure she takes her medication as directed. And Mary Ruth’s lawyer suggested that she enter into a contract to pay David and Gloria for the care they give her.

Family members are often initially uncomfortable with setting up an agreement that they will be paid for care given to a family member. But elder law attorneys often suggest this as a planning strategy because it is one of the few ways that elderly individuals can make sure that the care giving children will inherit something in case the parent needs expensive nursing home care in the future.

But there’s a catch. Unless the contract is carefully written to comply with local state rules regarding caregiver contracts, the money paid to a family caregiver will be considered a gift, causing a delay in qualification for the Medicaid benefit.

In other words, Medicaid may not pay for care for months – or even years – because it considers dollars given to a family member to be money that could have been saved to pay for nursing care. But if both parties sign a contract before the family caregiver starts the job, Medicaid accepts that as an employment agreement.

For an adult child who is in a position of care giving this can satisfy the needs of both the parent and the child. The parent would have had to spend more money to hire a third party to provide these services and the caregiver child can be compensated for the services. I’ve known caregiver children who have lost income because they had to cut back on the number of hours they work and this is a way to mitigate their lost income.

Read more at Getting Paid to Look After Elderly Relatives.