Desert Estate Planning Law Blog : Palm Springs Estate Planning Lawyer & Attorney : Daryl Binkley Law Firm : Palm Desert, Indian Wells, Southern California

Very frequently I receive calls from people who are trying to locate a will or trust of their parent or loved one(s) who just passed away. They are not able to locate any trust documents or have any information about the attorney who created it. Once, after doing some research for a particular family, I found out that the attorney who created a trust had passed away before his client (then there was the job of finding where the deceased attorney's files went).

There are numerous cases of "lost wills." My personal favorite is digging around a person's property after they passed away, looking for a will that was supposedly buried in a container. Maybe a myth or legend, but it sets a graphic image.

Just this week I have a received a few phone calls about this exact issue. Families were trying to locate local attorneys who worked on trusts for loved ones by calling every attorney in the area. These random inquiries from other lawyers or loved ones make me think this is a problem for many people, or it might be down the road.

So what are some possible solutions for this problem? The following are tips to ensure that you or your loved ones do not fall into the abyss of lost documents:

Tips for Couples or Individuals Creating a Trust

• Give basic information that you created a trust to at least one or some of your loved ones. If you feel comfortable you might want to let them know of your wishes, desires and reasons why you made specific decisions about your assets.
   
• If your beneficiaries are also trustees, provide them with information on where the trust is located (especially if it is locked in the safety deposit box) and information on what they need to do if something is to happen to them. Also provide them with the contact information or business card to your attorney that drafted the trust. You might want to give a copy set to your trustee so they know all the details. Attorneys will have copies of client trusts in their files as well.

• If you don’t want your kids or beneficiaries to know the exact location of your trust or what the contents of the trust are, at least ensure they have contact information for the attorney that created the trust. Without this basic information, your kids /beneficiaries might be calling every attorney in the area trying to find this information. Or worse, they may need to pay another attorney to help them with this search.

Tips for Beneficiaries/Trustees of a Trust:

• Have a heart-to-heart talk with your parents or loved ones about their wishes and desires on how things should be handled in the case they are not around. If your parents don’t have any legal documents set up about their health care decisions and assets, you may want to suggest that they seek an estate planning attorney. Ask your friends and/or professional advisors for references or recommendations.

• If you know that your parent(s), loved one(s), or partner(s) have created a trust and that you are a beneficiary, ask them for the attorney contact information.

• If your loved ones are comfortable with it, they might even tell you where their estate planning documents are stored or even give you a copy of it.

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Coveted as the most glamorous event of the year in the Coachella Valley, the 22nd Annual “Palm Springs International Film Festival” will be starting this week. This will include a Black-Tie gala, screenings of films from all around the world, seminars and talks by directors, and a myriad of other events.

For a week or so, this would be the place to see some celebrities, see the movies and talk about their work and the upcoming Oscars.  Note the Film Festival is a result of "The Palm Springs International Film Society is a 501(c)(3) charitable non-profit organization whose mission is to cultivate and promote the art and science of film through education and cross-cultural awareness."

Much of what celebrities, such as Natalie Portman, Colin Firth and Ben Affleck, will wear and look like will be talked about in the press. But one aspect of what celebrities do regarding their assets might not be covered so much. Given so much attention they get in the news (and from the paparazzi) generally they do take some steps to make your search for where they live and what they own a bit harder. 

If you own a piece of real estate or two, or more (you probably know this already) it would be fairly easy for anyone to type in your name in google or many of the real estate websites (such as blockshopper.com) and find out what real estate you own and even a pretty good approximation of the purchase price (if the transaction was relatively recent). With one or more clicks of a mouse, google satellite map can show you how your house looks like and even what car you drive in front of your house. A little creepy, isn’t it? And apparently has caught some people in the aerial photos, too.

This information was always in the public records—but now the Internet has made this search extra easy. So what are things celebrities might do to protect their privacy, and that you may research more about as to whether you would like to incorporate as well (although it may be somewhat cost prohibitive for normal people):

1.       Your home doesn’t need to be under your personal name, it can be under the name of a business entity—which might add an extra layer of privacy, and an extra layer of cost to your yearly budget. Note, this may or may not be incorporated into an Asset Protection plan, but for this discussion, we are using an entity, such as an LLC only for privacy purposes and NOT for Asset Protection (that would require many more Blogs to discuss).   So someone just searching under your name would not be able to find real estate (assuming you have used an additional “Manager” in the business entity to have capacity to hold legal title, which could be another entity within an entity).

2.       If you own many properties, such as rental properties you can utilize the LLC formation to manage one or all of them, or have multiple LLC’s and there are formations such as serial LLC’s. Each real estate property will then not show up under your name but the name of LLC. This is commonly used by serious and/or serial real estate investors—i.e. investors of commercial real estate.

3.       There is also the option of using trusts to create a layer of protection, but this is generally not done by the public. For example if the name of the trust is your name and you are the trustee that will not be much privacy. However, you could be more creative with the naming of the trust, and consider using another trustee named for the purpose of holding title. Another benefit of the Trust is that it is a probate avoidance device, so that upon the Trustor’s death (the person(s) that set up the trust), probate court proceedings should not be necessary. A probate involves court proceeding that are generally open to the public. 

4.       Check your online identities, google yourself periodically to see what shows up. If you have any social media sites (such as Facebook) check the privacy settings to ensure that your personal information stays intact.

Taking these steps can involve costs, additional administrative steps, and some other pitfalls. So anyone wanting to take any of these steps should seek legal counsel to discuss their personal situation. Further, this discussion is not about trying to protect your privacy to avoid creditors—that can be a serious mistake to attempt to do that—such as being fraudulent transfers.

Also on a personal note, my wife and I are excited to be attending some of the festivities of the PSIFF and to have donated to the underlying great non-profit organization. Attendance at many, if not all of the events includes a donation to the Palm Springs International Film Festival.  

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Apparently Michael Jackson nominated his mother to serve as the legal guardian of his kids in the event of his death, per his will lodged with the probate court and distributed through Internet sites. 

His will was executed in July 2002, 7 years ago exactly as of July the 7th.   The question I wonder is the following:  Does this will really reflect what he would have wanted for his children as of the past year or so?  Maybe it does. 

But given how much he seemed to change over his own lifetime across so many areas of his personality and persona, it is surprising that he hadn't changed his will more recently. 

So, essentially whatever he was feeling in July 2002, will now rule the lives of his children--through the choice of legal guardians, and potentially how financially he has provided for his kids in his trust, which may or may not have also been updated since July 2002.

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I blogged about Dr. Martin Luther King's estate dispute among his children back in October 2008.

And just this week, disagreement among the children was brought into the spotlight again. This time around DreamWorks Studios announced it will back out of plans to produce a movie about the Rev. Martin Luther King Jr., unless King's three surviving children settle their differences over the deal.

As stated in the recent news article:  "The latest public rift between Dexter King, the chief executive of the King estate, and his brother and sister -- Martin Luther King III and Bernice King -- erupted Tuesday, May 19 2009 after it was made public that Dexter King, 48, had finalized the deal with DreamWorks. Martin King and Bernice King have complained in court filings that Dexter King has acted independently for years on estate business matters, refusing to call a family meeting. Over the past year, angered over Dexter King's move to publish their mother's love letters, neither Martin King nor Bernice King has spoken to Dexter King, the source close to the family said.Dexter King, in a written statement Wednesday evening, said he has 'always upheld my duty' as CEO of the King estate to communicate with the others."

Years after Dr. King's death, the disputes are still going on with his estate and his legacy. In large estates, disputes among children might lead to contentious time consuming and costly litigation.  But even for those with moderate estates, contentious and expensive litigation can still occur.   It is better to create an overall estate plan that includes no contest provisions within the documents.  These provisions should help avoid and deter many of the costly lawsuits. 

I am sure there will be more updates on this matter...stay tuned...

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There are moments in life when you become keenly aware of how fragile life is. 
 
Just this week, the story about Natasha Richardson unexpected death from a seemingly minor accident reminded everyone of that.  A mom full of life, energy, and utter vitality with a wonderful family.   No one would expect her having an accident like this.

Yet life seems to hit us with unexpected surprises....While living in LA, I was made aware of this anytime I was stuck in traffic because of a big accident on a freeway. When I saw ambulances rush to the scene I would wonder about the victims and how a tragedy would affect their families, and of course immediately think about what if that was me.  How would my family even find out I was in an accident, would I still be alive when they found out, what if I became paralyzed or incapacitated.

In the past year, I was at the gym one Friday evening, when a young man had just got off an elliptical machine, about two machines over from mine, and then to my shock he started to go down slowly, and seemed to me to be suffering some sort of seizure. After noticing that he seemed to be in a safe spot,  I ran to the front desk to get help, after the staff went to aid the person--I called 911. The paramedics came and he went to the hospital that night.  And to think he was probably between 25 and 35.

After experiencing these type of events, I would think of my loved ones and call them immediately to ensure that they are OK. Or just to say I love them.  Once I became a dad, the desire to protect my daughter, to ensure she would be OK if anything were to happen to me grew exponentially.  

Questions as to what would happen if my wife and I were in an accident at the same time, came to me more than once.  And answers that I found, as to what would happen if there was no legal planning in place, were shocking to me....Most families with young kids have not done any legal planning to prevent disaster if the unexpected occurs.  And for those few who did a will or a living trust, didn't address issues of guardianship particularly important for minor children.   
 
As parents, my wife and I wanted to bring those issues up with local parents and are very pleased about our first workshop taking place on Sunday March 29th at My Gym, Palm Desert.

The Binkley family:  myself, Bella, Ana  (Photo taken at My Gym)

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As I was reading the latest news on yet another feud between the three living children of the Rev. Dr. Martin Luther King, I couldn't help but think: is this feud he and his wife Coretta, could have ever imagined happening to their legacy and estate? 

Giving the historical speeches on peace and togetherness, it is a sad commentary that his family has become so litigious, and as David J. Garrow, "a Pulitzer Price-winning biographer of Dr. King" puts it in the article, "Unfortunately, all of the children seem to regard their father's legacy as first and foremost an income maximization opportunity for themselves."  Also from the article, An attorney for King Inc., L. Lin Wood said essentially that some of the children "are engaged in what can fairly be described as self-destructive behavior.  It's a scorched-earth policy. And unfortunately they've tarnished the legacy of Dr. King."
 
The latest battle involves the estate of Coretta Scott King, Dr. King's wife who passed away in 2006.  Reportedly there is a $1.4 million book deal with the Penguin Group at risk.  Previously the battle between the children was over the control of their father's estate, that of Rev. Dr. Martin Luther King. 
 
And even though issues of these various feuds are a bit different--one is over whether Coretta Scott really wished to include personal letters in a potential upcoming book and another one is over the mismanagement of Dr. Martin Luther King's estate--the real issues here are over various views the children have regarding the wishes of their parents.  Without adequate and specific instructions left by Corretta, the children are now using their own recollections and opinions about what should be done regarding the book deal.  And to make matters worse they disagree.
 
Many times people think they don't need to worry about estate planning because they believe their family can work things out.  The thought is something like this:  "Let them deal with it, they'll do just fine--their all family."  However, if there is no estate plan in place, then distributions can degrade into costly lawsuits, or even worse--physical shoving matches.

The best policy is to be specific with your distributions to loved ones.  And if appropriate, include instructions on how you would want anything else handled after you are gone. 

Also, when it comes to setting up Trustees for a trust, in addition to family members you can include a third party trustee, or a corporate fiduciary trustee.  A trustmaker should be extremely selective in selecting a third-party trustee, but they can be helpful when the situations between loved ones are tense when you are still alive--and they will probably get much worse after you are gone.

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The recent stories across the Internet about the status of Heath Ledger's estate is an opportunity for the rest of us to rethink our estate plans.  Besides the recently reported news about a lawsuit with an insurance company over a life insurance policy in his name, is the reports that Heath Ledger's daughter stands to inherit all of his wealth (if statements made by his father hold to be true into the future). Similar accounts have been reported in the local Desert Sun.

Previously, I thought the events surrounding Anna Nicole Smith's death made the ultimate fact pattern for law professors to stump law students for generations to come (well at least for a couple of years, right?).  Law school professors love to give a complex hypothetical that allow students to show off their knowledge of various legal issues and how different issues interplay with each other.  The entire saga of the Anna Nicole Smith estate is such a complex matter that its facts may have launched a thousand exams.

Then sadly comes Heath Ledger.  His passing involves a complex fact pattern of legendary proportions. 

Some of the complex issues include:  a foreign born movie star died at a young age (28), in a New York apartment, his will was executed in a foreign jurisdiction (Australia), the will was executed before the birth of his daughter in the United States, and reportedly a multi-million dollar life insurance policy is the issue in a case initially filed in the California Superior court (and has since been moved to a federal court). Whew! This is a loaded fact pattern, but the situation is one in which his family members currently find themselves.

From the Internet sources, it sounds like the family members will attempt to resolve issues with a positive outcome.  Although only time will tell if that remains the situation. 

Ultimately, the issues surrounding how his wealth will be distributed bring three mistakes of estate planning to the limelight:  1) Not updating your estate plan, 2) Inadequate estate planning, and 3) Danger of no estate planning.

Truly, the events surrounding Heath Ledger are very sad, however it provides a catalyst to discuss 1)  the various events that might occur in your own life that requires an update to your estate plan; 2) the pitfalls of an inadequate estate plan; and 3) if you don't have an estate plan, then the reasons why there is no time like the present to plan, even if you think you are too young to have an estate plan, or even not rich enough.

1)  The following life events or external occurrences should prompt a re-examination of your estate plan:  birth or adoption of a child or grandchild (or any person you want to provide for if a direct descendant or not), marriage of a key player in your estate plan (yourself or a beneficiary) death of a  key player in your estate plan (spouse, partner, and/or beneficiary), divorce of a key player in your estate plan (yourself or a beneficiary), change in financial holdings (such as closing financial accounts with one institution and reopening them in another), changes in real estate holdings, changes in tax laws, business transactions (starting a business, acquiring a business, or closing a business), and there are many more minor occurrences that would cause a prudent person to review their plan. Mr. Ledger did not update his estate plan at the happening of probably the most significant event in a person's life (in relation to estate planning)--the birth of a child.

2) The latest reports on the Heath Ledger estate exemplify the problem of an inadequate estate plan.  As stated it appears that discussions surrounding his daughter and other family members are going well, however a complete estate plan would not leave everything to chance.  A complete plan provides specific instructions, as to desired guardians over the financial aspects of his estate, how funds should be distributed to his daughter, in the short-term and long-term.  A complete estate plan would express his intent, and wouldn't keep the courts and loved ones guessing what to do next.  And for a movie star, only having a will would generally qualify as an inadequate estate plan.

3) Heath Ledger's story also dispels some myths about estate planning, such as "I am too young to have an estate plan."  Reportedly, Mr. Ledger was only 28 years-old when he died, and also reportedly his will was executed about 5 years prior to his death; making him about 23 when he first executed his will.  It is to his credit that he had done any estate planning whatsoever, given his young age.  Also, some people think they may not be rich enough to need an estate plan--this is where some other options come into play, such as the option of life insurance. For example, if you are a relatively young parent, that has not accumulated much wealth, then life insurance might be a strong option to help out loved ones if you die unexpectedly, like in an accident. Of course this is not something us parents like to think about, but nonetheless planning needs to be done.  It is far better to do something than to have nothing in place.

In the end, PROCRASTINATION is the killer of estate plans--don't let it happen to you!

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