Patinelli & Chang, LLP

Why You Need an Estate Attorney

When a loved one passes away, it is a good idea to get the assistance of an estate attorney, if for no other reason than to deal with all of the paperwork.

The government has many things it is very particular about.  However, you are not likely to notice one of those things very much. That is that property all needs to be traceable to a particular owner or owners.

This is important to the government for tax purposes. However, as you do not generally get all your property at one time, it is not always that noticeable. It is not a lot of paperwork for most individual pieces of property.

When someone passes away, things change. Then there is a lot of property that needs to change ownership and there is a lot of paperwork that needs to be done at once, as U.S. News & World Report discusses in "How to Deal With the Paperwork Scramble After a Spouse Dies."

It is easy to get overwhelmed and make costly mistakes when there is that much paperwork to fill out and file in such a short period of time. Those mistakes require even more paperwork and time to fix. People who are grieving and who do not know all the things that need to be done, make these mistakes all the time.

There is a good way to avoid most mistakes. Hire an estate attorney who can help with the process. The attorney knows what needs to be done and has staff to help with the paperwork.

Reference: U.S. News & World Report (June 19, 2018) "How to Deal With the Paperwork Scramble After a Spouse Dies."

Michael Jackson Estate Sues Disney

The Michael Jackson estate has seen so much litigation that it should probably get bulk discounts for court and lawyer's fees. The latest litigation has the estate suing the Walt Disney Company.

There might never have been a more contentious estate than that of Michael Jackson. Every few months, just when it seems things have died down, the estate is back in the news because it has been sued or is suing someone itself.

The latest case is over a documentary produced by the Walt Disney Company. In the documentary, footage of Jackson's children was used and short clips of two of his songs were also included. The estate claims this is copyright infringement and that Disney did not even ask permission to use the material.

Disney claims it did not need permission, because it was making a documentary. TMZ reported on this case in "Michael Jackson Estate Sues The Walt Disney Co. You've Got Balls For Exploiting MJ's Kids!!"

The estate does have a duty to protect any copyrights entrusted to it. If someone were to make a movie and use an entire Michael Jackson song in it, then the estate would need to file a lawsuit, if the song had been used without permission. However, in this case the estate might be a little overzealous.

Copyright does allow for the use of material without permission, if that use falls under the fair use doctrine. Doctrine normally does allow for short clips of material to be used and more material can be used, if it is done for educational purposes.

Reference: TMZ (May 30, 2018) "Michael Jackson Estate Sues The Walt Disney Co. You've Got Balls For Exploiting MJ's Kids!!"

The Failure of James Brown's Estate Plan

James Brown intended for his estate to give millions to poor children. However, he passed away 11 years ago, and the children have still not received anything.

It is not clear how much the estate of legendary soul singer James Brown is worth. The estate claims it is worth about $5 million.  However, some experts estimate that it could be worth as much as $100 million.

It is clear is what Brown intended to do with his wealth. He had a carefully crafted estate plan that was intended to give millions to poor children throughout Georgia and South Carolina.

Brown passed away in 2006 but his estate has not given any of the money to the children. Instead the estate is still bogged down in numerous lawsuits and remains unsettled, as The New York Times reported in "Why Is James Brown's Estate Still Unsettled? Ask the Lawyers."

The main source of the dispute appears to be a family feud with Brown's children and grandchildren on one side and his widow, who is the estate administrator, on the other side. Numerous lawsuits have been filed.

In perhaps the biggest lawsuit, the children and grandchildren allege that the widow has cut inappropriate side deals for the copyrights to Brown's music. These copyrights are where the bulk of the estate's value likely is found. They also allege in another lawsuit that the widow was not even married to Brown, because she was allegedly also married to another man.

It is safe to say that this dispute is unlikely to end soon. The biggest losers here are the children who would otherwise be receiving assistance.

Reference: New York Times (Feb. 4, 2018) "Why Is James Brown's Estate Still Unsettled? Ask the Lawyers."

Arthur Miller's Archives

A fight over the archives of the late author Arthur Miller pitted two deep-pocketed educational institutions against each other.

Arthur Miller passed away in 2003.  However, literary scholars still have not had the opportunity to review his archived journals, notes and letters.

Why?

The dispute over where those archives should go has only recently been settled.

During his life, Miller had a close relationship with the Harry Ransom Center at the University of Texas at Austin. On a couple of different occasions, Miller sent the center several boxes of his archive to the Ransom Center for safe-keeping.

He appears to have made it clear in his correspondence, that he wanted the Ransom Center to be the permanent home for the archives.

Despite that preference, Yale inspected the archives and offered Miller's estate $2.7 million for them.

After a heated dispute, the Ransom Center matched the offer, as The New York Times reported in "Inside the Battle for Arthur Miller's Archive."

The problem appears to have stemmed from the fact that Miller never formally left his archive to the Ransom Center.

No estate planning document was created making his preference legally binding. Therefore, his estate fulfilled its duty to maximize the amount of money it could get for the works.

It is not clear that they have that much value commercially, even if they do contain some letters and discussions about Miller's second wife, Marilyn Monroe.

The educational institutions were willing to pay for the prestige of housing the archives of the celebrated playwright.

Reference: New York Times (Jan. 9, 2018) "Inside the Battle for Arthur Miller's Archive."

The Challenge of Compensating Shooter's Victims

 

Despite his higher than average personal wealth, there are significant challenges to making sure that all of Stephen Paddock's victims are properly compensated.

It still is not clear why Stephen Paddock decided to commit mass murder by shooting at Las Vegas concert goers from his hotel window. He was relatively well-off and had not been in trouble as far as anyone knows.

Despite the mystery surrounding his motivations, his victims and their families would like to be compensated for his actions.

The good news is that his estate is worth approximately $5 million. That money would ordinarily go to his mother, since Paddock is not known to have had an estate plan.  However, Paddock's family has indicated they have no interest in his estate.

The bad news is that there are so many victims, it will be difficult to compensate them all, as The New York Times reports in "The Las Vegas Gunman Was Rich. Will His Wealth Go to the Victims?"

There are some challenges to making sure that all the money goes to the victims.

The first is that the estate could be rolled into an existing victims' compensation fund that has already raised $22 million.  However, all of the victims might not be eligible for compensation under the fund's rules.

The second challenge is that many victims are filing independent claims and lawsuits to the estate.

The case is very complicated and the attorneys who are working on it need to be compensated for their time, but not so much that there is nothing left for the victims.

Reference: New York Times (Dec. 23, 2017) "The Las Vegas Gunman Was Rich. Will His Wealth Go to the Victims?"

 

Jerry Garcia's Estate Difficulties

It is not always the best idea to name a close family member to be the executor of your estate. It can cause problems, as was the case for Jerry Garcia's estate.

It probably never should have been assumed that Jerry Garcia's estate administration would go smoothly, after he passed away in 1995. At first, it did seem that maybe there would not be any major problems.

However, Garcia passed away after being married three times, having four children and having one stepchild.

Even after his third wife threw the first two wives out of his funeral, it did not necessarily mean the estate administration itself would go wrong. No one challenged his will, for example.

The big mistake came when the third wife, Debra Koons, was chosen to administer the estate, as the Wills, Trusts & Estates Prof Blog discussed in "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."

The problem for Garcia's estate is that his other heirs objected to many of the decisions that Koons made. They felt she was acting in her own interests and not in the best interests of everyone.

This led to constant family squabbles and made the estate administration more costly and time-consuming than it needed to be.

The problems should have been anticipated.

It would have been wiser to have an independent professional hired to handle the administration of the estate. That might not have been a solution to all of the problems, but it would have taken much of the family drama out of the situation.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 12, 2017) "The Wrong Executor Can Make Family Drama Worse, As Jerry Garcia's Heirs Discovered."

Bank Hit with $4 Billion in Punitive Damages

For its role in administering an estate, JPMorgan was sued for damages by the widow and two stepchildren. A jury awarded the plaintiffs $4 billion in punitive damages.

Max Hopper is not a well-known figure.  However, he became a wealthy man during his time as an executive at American Airlines.

He was best known for creating an innovative reservation system.

At the time of his death, his estate was valued at $19 million.

Unfortunately, he did not have an estate plan.

The bank JPMorgan was chosen to administer his complex estate. However, Hopper's widow and her stepchildren grew angry at the way the bank was handling the estate and accused it of delaying distributions for its own benefit.

They sued in a Dallas court.

A jury recently came down with a verdict.

JPMorgan was ordered to pay the plaintiffs $5 million in actual damages and $4 billion in punitive damages, as Bloomberg reports in "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."

It is very likely courts will greatly reduce this punitive damage award,  since the Supreme Court has previously ruled that punitive damages must be proportional to actual damages.

Nevertheless, this case highlights an important point.

Estate administrators can be held liable, if they do not faithfully carry out their duties.

The jury in this case believed that the bank was guilty of fraud, breach of fiduciary duty and breaking a fee agreement.

JPMorgan is a sophisticated entity that should have known better.

Estate administrators with less experience would be wise to seek the assistance of an attorney to help them make sure they do not run afoul of the law.

Reference: Bloomberg (Sep. 26, 2017) "JPMorgan Ordered to Pay More Than $4 Billion to Widow and Family."

Exhuming Dali's Body

A Spanish court has issued an order to exhume the body of legendary artist Salvador Dali, almost a quarter of a century after he passed away.

Salvador Dali was well known both for his eccentric art and his eccentric lifestyle. He was not known to have any children, but one Spanish woman claims that she is likely Dali's child.

The only problem is that she cannot prove her claims, since Dali passed away in 1989 at the age of 85.

The woman makes her living as a professional tarot card reader, so perhaps she could prove her paternity by reading the cards. However, she refuses to do such a self-reading. Instead, she has asked the Spanish courts to intervene.

A judge found enough basis for her claims, that Dali's body has been ordered to be exhumed from its current resting place underneath a theater in Dali's hometown so DNA testing can be performed, as the Washington Post reports in "Judge in Spain orders Salvador Dali's body exhumed for paternity test."

It is not clear what the woman hopes to gain from the testing. Dali's estate has long been closed and all of his valuable artwork donated to the Spanish government.

Even though the artwork is valued at hundreds of millions of dollars, it is unlikely the woman could lay claim to any of that money. For her part, she seems uncertain of what she wants, if Dali does turn out to be her father.

She has only stated that she wants "what corresponds to her."

It is not unheard of to reopen an estate or exhume a body to prove that the deceased had a previously unknown child. In this case, however, it probably is not going to do any good for the woman, beyond learning whether Dali really was her father.

Reference: Washington Post (June 26, 2017) "Judge in Spain orders Salvador Dali's body exhumed for paternity test."

Model's Estate Sues Chiropractor

The estate of a former Playboy model is suing a chiropractor for wrongful death.

One of the many tasks that the executor of an estate has, is to assess whether anyone owes the estate any money or could be determined to owe the estate money, if sued. If the answer to either question is yes, then the executor has a duty to act accordingly and try to collect on behalf of the estate for the benefit of the heirs.

A recent example of this comes from the estate of Katie May, a former Playboy model. May apparently suffered injuries during a photo shoot and went to a chiropractor for treatment.

The chiropractor worked on her neck. She later died.

The coroner determined the treatment injured her artery and cut off blood flow to her brain, as TMZ reported in "Playboy Model Katie May Estate Sues Chiropractor...Your Treatment Killed Her."

May's executor and the father of her child is suing the chiropractor for wrongful death on behalf of the estate. Even if he did not personally believe the coroner's report that the chiropractor was responsible for May's death, he would likely have an obligation to sue.

While this is an unusual case in that it features a Playboy model and an apparent death at the hands of a chiropractor, it illustrates something important. Executors have duties to the estate and some of those duties can be challenging.

It is for this reason that executors are advised to get the assistance of estate attorneys to help carry out their duties.

Reference: TMZ (June 14, 2017) "Playboy Model Katie May Estate Sues Chiropractor...Your Treatment Killed Her."

Your Debt and Your Demise

Most Americans pass away owing debt. What happens to that debt after they pass away?

It is not a secret that most Americans owe money to someone. The people of the U.S. are used to buying things on credit and, as a consequence, they have debts.

Most people would like to be rid of all that debt by the time they pass away. Unfortunately, the reality is that most of them will not.

Approximately 73% of people in the U.S. pass away while still in debt. The average amount of debt is $61,554, but that average goes down to $12,875, if mortgage debt is not included.

Market Watch discussed this in "What happens to your debt when you die?"

Because you are likely to pass away while still in debt, it is important to understand what will happen to that debt, to make sure it is not a burden on your family.

If it is debt that you alone are responsible for, then your estate will pay the debt out of any available funds before any assets are distributed to your heirs. If you estate does not have enough assets to cover your entire debt, then most types of debt die with you.

However, there are exceptions.

For example, any family member who still lives in a house with a mortgage would be responsible for the mortgage payments, if he or she wishes to stay in the home.

What this means is this: you should not worry about most debt being a burden to your family. However, if you wish to ensure that your debt does not eat up the inheritances of your heirs, then you should do some estate planning to avoid that.

Reference: Market Watch (May 29, 2017) "What happens to your debt when you die?"