May 2011 Archives

May 31, 2011

Madame Clark-Reclusive Heiress to Huge Fortune Dies at 104

french doll.jpgEstate planning in the news. This week, Huguette Marcelle Clark, heiress to her father's copper fortune, thought to be close to one-half a billion dollars, died at 104, after living for decades in New York hospitals. Reportedly, her accountant and lawyer were the only people in close contact with her. Her passion was for fine French dolls. No news yet on the fate of her fortune. Stay tuned. There will almost certainly be more on this story in the coming weeks. It has it all: a recluse; a fortune; close advisors; an estranged family; a vulnerable old person.
May 29, 2011

Joint Accounts and the Estate Tax

tax man.jpgDear Liza: If I have all of my $ assets (savings accounts, money market s, IRA' stock)) in joint accounts with my children, (excluding real estate) will these funds be exempt from any inheritance taxes upon my demise? Nope. Your children will inherit those assets from you as the surviving joint tenants, without having to go through probate. But all of the value of each asset will be in your taxable estate for estate tax purposes, unless your children can prove that they made contributions to those accounts. If they are owners in name only (which is quite common between parents and children) it's all taxed to you.
May 24, 2011

Did My Mom Have a Valid Trust?

trustee certfication.jpgDear Liza, My mother passed away last year. She had a living trust prepared in January of that year by an online provider of legal forms. Before she died, she had the abstract of trust and bill of transfer listing all properties to be transferred into her trust signed and notarized which I have a copy of. She did not have the declaration of trust signed or if she did I cannot find a copy. Is the living trust still valid? I am hoping that you can find that trust. It would make your job a lot easier. Have you checked with the online provider to see if they have a copy of what she prepared with them? Because if all that you can find is the trust abstract, which is usually an excerpt listing the trustees and their powers, you'd have to try and make an argument that the summary itself is a valid trust under state law, and I'm not too sure that would work. The requirements vary by state, but in general, a trust must state the Grantor's intention to create a trust; identify the property held by the trust; state the trust's purpose, and identify a beneficiary (these last two are probably not in that summary). (The Grantor must also have the legal capacity to make such a document, but that's not the issue here.)

I would check with a trust and estate lawyer in your state to see if there's any state law to support your argument that the excerpt itself, plus the document listing the properties to be transferred, could somehow be construed to create a constructive trust or somehow avoid probate via a court petition to that effect.

While I love providing people with information and tools to get legal work done on their own (obviously, since I write for Nolo) -- this kind of story just kills me. I've seen it too many times -- without guidance, people forget to sign the right thing, or do the required follow-up. Estate planning doesn't have to be complicated, but it does have to be done right. If you can't make the trust valid, and your mother didn't prepare a Will, then you'll have to get her estate probated and her property will pass via your state's intestacy laws (which state who gets what if there is no Will).