Ask Liza: Everyday Estate Planning

Liza: My mother has a life insurance policy and that's it. She has no property anymore except for a few odds and ends - she lives with my family. Does she need a will? Yup. It's true that your mother's life insurance policy will go directly to the people she's named as beneficiaries for her policy, but what about those odds and ends?

Creating a will lets your mother name an executor, who will file her last tax returns, notify social security and the state department of health after her death, cancel her cable subscription, and deal with her overdue fines at the library. It's just good house keeping and will (no pun  intended) make it easier for you to tidy up her affairs after she's gone. More than that, you may not know everything about your mom--some of those odds and ends may surprise you. 

Having a will in place will make it possible for you to deal with whatever she leaves behind. My very own Dad, for example, left my sister and I an oil and gas lease in Oklahoma (we call it 'the gusher') that we had NO IDEA he owned. Wills aren't complicated, she can do one herself using Nolo's online Will or Nolo's Quick and Legal Will book. And here's something else she needs: a Durable Power of Attorney and an Advanced Health Care Directive. These documents will help you to take care of her when she gets sick. The Power of Attorney allows you to take care of her financial matters: the Advance Health Care Directive gives you the authority to make medical decisions for her if she can't communicate directly with her doctors. You can make both of these using Nolo's WillMaker, and local senior centers can often help you get free forms to fill out as well.

Liza: I live in California. Can I get my Will pre-validated? No, you can't. Though I can see why you might want to. Pre-validating a will lets you make sure that your Will won't be challenged in court after you die. Instead, you can get a probate court to declare it valid while you're alive, which is handy, since you're actually around to tell the court that it's exactly the way you want it to be if anyone makes a fuss after being notified of what you intend to do. But so far, only a few states allow pre-validation: Alaska, North Dakota, Ohio, and Delaware. Cynically speaking, it's such a good idea that my guess is lawyer lobbies are trying to block it elsewhere, since it would potentially cut down on probate fights after death (and that's what's called a meal-ticket for attorneys.) If you want to read more, here's a good article from FA (Financial Advisor) magazine.

Senator Kennedy's death this week from malignant brain cancer highlights the limits of medical treatment. He received the best medical care possible, and still died in little over a year from his cancer -- the most common form of brain cancer, one with no effective treatment.

At the same time, by all accounts, his last year was mostly a good one, filled with family, attention to the things that mattered most to him, and the opportunity to die where he wished to be.

It's a last year that many would hope for. But not all are able to enjoy. Sometimes it takes an advocate within the medical establishment to help families find peace and comfort at the end of life. Not all doctors are trained to deliver bad news at all, let alone to do so tactfully and with full recognition of what it means.

The New York Times recently ran a long article about a branch of medicine dedicated to helping more people end their lives with dignity and comfort. If you or your family find yourself dealing with end of life care, find out if there's a palliative care physician available in your health plan, and take advantage of their training. Their focus is on comfort at end of life, not aggresive medical intervention that will ultimately only prolong, not prevent, death.

To learn more about palliative care, see Long-Term Care, by Joseph Matthews (Nolo).

This week, Michael Jackson's will was filed in the probate court. It was surprising, actually, that someone with his assets died with only a will. In California, it is common for those with property (even just a home) to create a living trust so that their assets will pass to their heirs without the cost and delay of a probate proceeding.

There are times, though, when probate can be an appropriate place to settle an estate, and Michael Jackson's might be the poster child for these cases -- when there are messy creditor claims to sort out. Like a bankruptcy court, a probate proceeding is place where creditors and their claims (and we won't even mention the guardianship issues being raised right now) can be sorted out by a court, in a set period of time and with finality.

The AP has published a good article if you're trying to sort out whether a will or trust makes more sense for your family. Briefly, though, if you live in a state (like California) where probate is expensive and time-consuming, if you want to leave everything to your kids, if you own a home, and if you don't have complex credit issues, a trust is generally a great long-term investment.

For practical, straightforward recommendations on estate planning options, see The Mom's Guide to Will and Estate Planning, by Liza Hanks (Nolo).

Michael Jackson left behind a tangled financial web, sure to take many years and many lawsuits to sort out. But he also left behind three young children (aged 12, 11 and 7) and, apparently, no valid will (at least, one has not yet been submitted to the Los Angeles County Probate Court as of this post). Today, June 30, his mother, Katherine Jackson, has been appointed as their temporary guardian. Hearings will be held on July 6 and August 3rd to determine if she'll become their permanent guardian.

Since this (to put it mildly) is getting a lot of media attention, here's the legal background:

A guardian is in charge of a minor's care and custody, which means their food, clothing, shelter, education and medical needs. A guardian has to be appointed by a court order -- it's a kind of custody order really, granting someone other than a parent legal authority over a minor's care. If there's an emergency, a court can grant a temporary guardianship quickly.

But between now and the hearings, Katherine Jackson will have to do her best to find and notify Deborah Rowe, the mother of Jackson's two eldest children (his youngest was born to a surrogate mother who presumably waived any parental rights as part of the surrogacy).  At the hearing, a judge will consider what would be in the best interest of Jackson's children. The notification of the children's mother is required in order to make sure that she has a chance to object to the guardianship at that hearing -- ordinarily, a parent has precedence over anyone else unless there are unusual circumstances, which abound here.

If Michael Jackson's will is found, and proved to be his valid last wishes, and the nominated guardian is not Katherine Jackson, the named person may contest the guardianship proceeding, too. But ultimately, it will be up to the judge to sort out the competing claims and decide what's best for the children.

It is reported that the petition also requested that Katherine Jackson be named the temporary guardian of the children's estate,  which means the person responsible for safeguarding Jackson's assets for the benefit of the children -- but this was rejected. AP also reports that Katherine Jackson has filed to be named the administrator of Jackson's estate -- the person who must inventory and appraise the estate's assets and manage them during what's likely to be a long and complicated probate proceeding.

To learn more about guardianships, see Nolo's Establishing and Maintaining a Guardianship FAQs.

This week, a woman called my office and asked if her father could submit a copy of a will to the probate court. An elderly friend of his had recently passed away; during her lifetime she had told her father several times that the will was located in a certain desk drawer. But when he went to look for it after she'd died, all he could find was a copy. No one could find the original.

Rules vary state to state, but generally, if all you can find is a copy of a will, you should still submit that to the probate court. The thing is, you'll have to prove to the court that this is the authentic last will of the person who died and that there wasn't some other original will floating around. To do so, you'll probably have to call witnesses who can testify about the circumstances under which the will was made and provide evidence that the will was never revoked.

None of that is easy -- or cheap. The easiest way to avoid leaving your heirs with this kind of hassle is to make sure you -- and a trusted family member or friend -- know where your original documents are and to keep them in a safe, and accessible, spot.

For a complete guide to collecting and organizing important papers and information, see Get It Together: Organize Your Records So Your Family Won't Have To, by Melanie Cullen and Shae Irving (Nolo).

In what's starting to seem like a series on the ways in which powers of attorney can cause heartache -- or worse, elder abuse -- comes a story out of St. Louis. The heirs of one of the last surviving Munchkins from the film The Wizard of Oz, Mickey Carroll (real name, Michael Finocchiaro), are suing his caretaker, Linda Dodge, claiming that she and others took advantage of the actor in his final years.

The heirs claim that Mr. Carroll, who died Thursday, May 7, signed powers of attorney transferring power over his property and health care decisions to Dodge when he was unable to understand what he was signing. They further claim that Dodge then kept him isolated, spent his assets, and kept the money that Carroll made from appearing at events.

Dodge counters that the dispute is just a "family squabble" and that she took good care of Carroll.

To learn more about financial powers of attorney, see Nolo's article Financial Powers of Attorney: Do You Need One?.

People often ask me what to do with their estate plans when they move to another state. Here's the answer: if you think you're going to be in that new state for a while, it makes sense to update your estate plan to reflect that state's laws.

It's not that your estate plan will be invalid in another state. With the exception of gay marriage (in some states), contracts signed in one state are valid in another. But it can create inconvenience for your heirs if they have to administer an estate under, say, California law, if a parent died while residing in Georgia -- especially if the kids live in Georgia too.

Also, powers of attorney, which are important legal documents granting another person the right to act on your behalf with respect to property and health care, are created by state law, and your rights, especially with respect to health care decisions, vary from state to state. For that reason, and additionally because banks and doctors like working with forms that they know, it's a good idea to at least create new powers of attorney if you move to a new state.

For a comprehensive guide to estate planning essentials, see Plan Your Estate, by Denis Clifford (Nolo).

This week in New York a trial opened in which, Anthony Marshall, the son of famous socialite Brooke Astor, who died in 2007 at the age of 105, stands accused of exploiting his mother's diminished capacity to steal cash and property worth a whopping $198 million.

The prosecution claims that Marshall, and co-defendant (and attorney) Francis X. Morrissey, had Ms. Astor sign papers and make changes to her will that increased Marshall's share of his mother's estate. In addition, Marshall stands accused of paying himself $500,000 a year as Astor's financial adviser and transferring her property to himself.

The case was prompted, the Washington Post reports, by a court petition filed by Philip Marshall, Astor's grandson. The petition alleged that his father was robbing Astor and "neglecting her health and hygiene."

What can the rest of us learn from this mess? First, family members should pay close attention to their elders and make sure that they are comfortable, safe, and well-taken care of. Second, family members should carefully scrutinize the financial well-being of the elderly and question any suspicious transactions or property transfers.

If you suspect that someone is taking advantage of an elderly family member, find out how they've gained access to that person's finances. If your loved one still has capacity (the ability to understand what they're signing), they can make a responsible person their agent for finance using a durable power of attorney for finances. The agent can then block the evil-doer's access to the money. If an elderly person no longer has mental capacity, you'll have to go to court and petition to be named that person's legal conservator or adult guardian to protect their finances. 

For more information on preventing abuse of powers of attorney, see the article Elder Financial Abuse: Power of Attorney Scams.

Us estate planners often hear from unhappy beneficiaries after there's been a death -- especially when they are surprised by last minute changes that give large assets to people other than themselves. Here's one for the record books.

A nasty will fight in Georgia is on its way to that state's Supreme Court for the second time. Deceased millionaire Harvey Strother made a will in 1988 that left the bulk of his fortune to his wife and children. But in 2000 and 2003 he made changes to the will that left choice pieces of real estate to his mistress, Anne Melican.

One amendment gave Melican, his mistress of seven years, a monthly allowance of $7,900, and a second gave her a Marco Island, FL, condominium and health insurance. A third gave her a condo in Cape Cod, MA, a Florida boat slip and a Florida property for her son.

Strother's family, represented by former Governor Roy Barnes, argues that Strother was incapacitated by alcohol at the end of his life and that he was conned into making the gifts. At the trial, a friend testified that when he saw Strother in December 2003 -- shortly after he made the final changes to his will -- he was drunk, wearing a diaper, and filling a 16-ounce plastic cup from a box of wine.

The Melican side argues that "no one could control Strother, not even his closest relatives."

Both sides are appealing a jury verdict that found for Melican on two of the gifts and for the Strother family on the other.

Let this be a  cautionary tale to all of us: Do what you want with your last will and testatment. But if you're going to surprise your family, work with your attorney to do it properly (and don't run around town with boxes of wine).

For information and guidance on creating or changing your will, see Estate Planning Basics, by Denis Clifford (Nolo).