Monday, April 25, 2016

Prince May Have Died Intestate and Estate Estimated Worth Is $300 Million

Los Angeles City Hall Turns Purple In Honor of Prince
The untimely passing of music superstar Prince even gets to estate and probate attorneys who grew up on his music. One of the first questions estate and probate geeks ask is about his estate planning since he owned copyrights to his music, has a valuable public brand and name, and had an estate large enough to be subject to estate tax

The Los Angeles Times reported that Prince's estate is rumored to be worth over $300 million and that he may have died intestate (without a will or trust). While hard to imagine, it is not unusual. This would mean his sister would inherit everything as his closest heir regardless of whether he had a live-in companion or other people he wanted to provide for. 

If you have not done your estate planning, you're not alone. It is natural to put it off. Being in Los Angeles, we have had celebrity clients and Us Magazine is right in that celebrities are "like you and me." This is easy to put off since it involves planning and preparing for a time when we will not be with our loved ones. One meeting I had with a celebrity for estate planning, required me to not mention the word "death" in the meeting. Of course, I complied. Why? The important thing is helping clients have peace of mind and having the satisfied feeling that one's affairs are in order. 

Posted by Henry (Hank) Moravec III
Email: hm@moravecslaw.com
Office: 626-793-3210
Moravec, Varga and Mooney

Saturday, April 23, 2016

What Happens When Trust Real Property Is Only Listed on a Schedule to a Trust but No Deed is Signed? Trust Litigaton, Appeal And Court of Appeal Decision Reversing Probate Court's Ruling.

A recent California Court of Appeal decision, Carne v. Worthington (4/13/16), shows how disputes over trusts happen if one is not careful in executing and recording all the deeds to property that are to be part of a trust. It also shows how a relative can try to take advantage of a failure to record a deed and how trust litigation happens and can take years to resolve.

This case involves a dispute over the ownership of real property located on Via Regla formerly owned by decedent Kenneth Liebler. Kenneth, who passed away in October 2012, had executed a revocable trust in 1985 and the Via Regla property was transferred to the 1985 Trust.

Kenneth then executed an irrevocable trust in 2009 (the “2009 Trust”) which stated, “I transfer to my Trustee the property listed in Schedule A, attached to this agreement.” The sole asset listed on Schedule A was the Via Regla property.

However, Kenneth did not transfer title to the Via Regla property by a deed from the 1985 Trust to the 2009 Trust. This was an apparent oversight. 

After Kenneth passed away, his daughter Melanie Carne filed a petition to confirm the validity of the 2009 Trust.  A grandson, Dillon Hasting, opposed the petition and argued that the 2009 Trust was not valid because Kenneth had not properly transferred title to the Via Regla property and that property was the only asset in the trust. Nancy Worthington (Kenneth's former live-in companion) also opposed the petition on similar grounds. 

The trial probate court ruled in favor of Worthington and Hasting which meant the Via Regla property would not be left to the daughter. Daughter Melanie filed an appeal. The Court of Appeal reversed the trial court and ruled in favor of Melanie. The appellate court held that the language in the 2009 Trust was sufficient to convey the property to the 2009 Trust, and Kenneth was not required to execute a deed.

The appellate court reasons that while Kenneth did not own the property individually at the time of the transfer, his signature on the 2009 Trust was sufficient to convey title from the 1985 Trust to the 2009 Trust because the 1985 Trust was a revocable inter vivos trust, he owned the property as sole trustee of the 1985 Trust, and he had the power to transfer real property owned by the 1985 Trust. 

This case is interesting because the law has been moving towards confirming property listed on a Schedule A as trust property ever since the famous Heggstad case. It has now become settled that if title to a piece of real property was in the name of a person, a Schedule A to a trust or a general assignment to the trust was sufficient to transfer title to the trust, even if the person never got around to actually executing a deed.  This is because the Trust, Schedule A, and/or general assignment is evidence of the intent of the person.  This was not always the case, for years the Courts simply held:  no actual transfer = no transfer.  Heggstad was a watershed ruling because many people intend to have all of their property in their revocable trust but can either forget to transfer the property or forget to transfer it after a refinancing. 

Worthington moves the law moves a bit farther towards effectuating the intent of a person, rather than following the technical rules of how the property is held. 

Of course, the delay involved in probate litigation is the same as ever.  This decision, issued over three and one-half years after Kenneth passed away, also shows us how long these type of matters can take to resolve. 

Finally, remember to follow up on trust recording and use professionals so nothing falls through the cracks. Our office records the deeds so these type of oversights do not happen. A simple failure to record can have a significant impact on an estate. 

Posted by Henry ("Hank") Moravec III

Email: hm@moravecslaw.com
Office: 626-793-3210
Moravec Varga & Mooney 

Thursday, April 21, 2016

Technology and Online Tools Can Help Executors of Estates While Executor Works With Probate Attorney

Technology is making it easier to save and share information and the probate and estate administration world is no different. Clients can use Excel spreadsheets, Dropbox and other file sharing tools with us and beneficiaries.

The New York Times recently had an article "Online Tools Can Ease the Burden of Being an Executor of an Estate" and it recommended an interesting online database tool called EstateExec that has gotten good reviews. It is an interactive tool that allows an executor to list and track financial assets, personal property, debts and then share it online with a lawyer or other beneficiaries and family members. It also has timelines and checklists (so court hearings for approval can be entered) which provides a transparency to the process which helps others understand why it can take months in the probate court system.

While this does not eliminate the need for a probate attorney in an estate with assets, the will is complex or where there is a likelihood of litigation, it has good checklists and is a useful tracking device. It can also be helpful for very small estates that do not need probate court. 

Part of our practice is focused on using technology where possible to make it easier for our clients. Older clients are not as technology based but things are changing and we can take advantage of all the tools available to us to make probate administration easier and faster. 

Posted by Henry (Hank) Moravec III

Office: 626-793-3210
Email: hm@moravecslaw.com

Wednesday, April 20, 2016

Foreign Property Considerations In Estate Planning and Probate

In our practice, we have a significant number of clients who own real property or have bank account in a foreign country whether China, Mexico, England, Costa Rica, England, Canada or France or other countries. Our clients are becoming more global and mobile, especially when buying properties abroad for retirement, vacation or for their families.

One issue that arises with foreign property is the risk of double taxation. It is possible that when foreign property is transferred, U.S. estate tax will apply, but so will the tax of the foreign country. When a citizen of the United States dies and owns property in a foreign country, the property in the foreign country will be subject to U.S. estate tax if the estate is subject to taxation at all. There are treaties with certain countries which prevent the double taxation and give credit.

Another issue that comes up is multiple wills in different jurisdictions. Somestimes one last will and testament may ultimately revoke another. When ttwo wills are needed, it is important that attorneys from each country work and coordinate the estate planing and wills.

If there is no will or trust, in civil law countries, such as France, the property vests in the decedent’s heirs immediately upon the death of the decedent. This is unlike the United States and other common law countries, where there generally must be a personal representative or executor to transfer title or, at a minimum, some sort of court recognition of the death and transfer of property. 

For example, if a client owning property in France desired that property vest in a long time companion and there was no will or trust, the property would immediately vest as set forth under French succession laws. On the other hand, if the client wanted the property to vest in their heirs, then drafting a will in France to deal with the French property would be not be needed.  

We work with attorneys in other countries while advising clients with foreign property during the estate planning or probate phase. It is always best to address these issues during estate planning rather than going through the difficult and expensive process of dealing with them after death through the probate process. As we live in a more global society and smaller world, these issues are becoming more common. Don't forget to prepare for all your estate planning and probate issues, particularly when foreign real property is involved. 

Posted by Henry (Hank) Moravec III
Email: hm@moravecslaw.com
Office: 626-793-3210

Sunday, April 17, 2016

Who Gets Grandma's Antique China? Do Not Forget the Minor Details and Sentimental Items in Estate Planning.

We have had two cases in the last couple of years where one of the attorneys from our office had to spend days sitting with the disputing relatives in estate cases while they took turns going through personal property and effects of their relative. 

Not only was this emotional for the parties but costly from a legal fee standpoint. The parties required it since without cousel present, it could not be accomplished for a variety of reasons.

A recent New York Times article by finance writer Paul Sullivan, When Dividing Assets the Little Things Matter (4/15/16) gives all of us a reminder and good ideas on how to not overlook the personal items that may not have as much monetary value as cash, real estate, securities but have sentimental value as well as some monetary value. 

When relatives go in and take personal property without agreement between the parties this can be a huge source of future conflict.  Photographs are often important, for example, but with scanning companies this can be taken care of as long as one relative has not taken the albums and refused to cooperate. 

This is something that one can do themselves by making lists, taking photographs or videos, etc. We find, however, that for our senior clients it is often overwhelming for them to do. We can send a paralegal or attorney to your home to assist the process which is then covered by the attorney-client privilege and is part of the estate planning process. This can even be done when parents or grandparents decide to downsize and move to avoid family disputes. 

For the do-it-yourselfers, there is a company FairSplit that has an interesting concept of having licensed insurance adjusters come to your home and take photographs and videos of all items and list them with price based on square footage. This company also has a less expensive online option where you do the listing yourself. 

As attorneys we can incorporate this and monitor it so the parties keep track and it is used for the final reports. With technology, there are a lot of tools that can make this entire process easier and less expensive. Lesson is though not to forget the small details and personal mementos, and get help to get it done. Advance planning and hiring someone is far less expensive than legal fees later and less painful than fractured families later. 

Posted by Henry (Hank) Moravec

Saturday, April 16, 2016

Frequently Asked Questions About Probate Mediation. How to Use Mediation as a Important Tool in Probate Cases.

Many clients understand the concept of going to court or "suing" someone, and that a lawsuit can result in a trial before a judge or jury.  However, not as many know that (i) in probate courts, which hear all estate and trust disputes, there is no jury, and (ii) there is a strong preference among the probate court judges that the parties attempt to mediate a matter before a trial will be scheduled. 

What is mediation? Well, in a non-legal sense any negotiation between two people can be called a mediation.  But in the context of a formal court proceeding mediation has a specific meaning, which is a commitment by the opposing sides to schedule a day (or series of days) to meet with a mediator and try to resolve the case in a confidential, non-binding process.

Mediation is a flexible and less formal process that may reduce the time, legal fees and costs often associated with preparing for and going through a formal trial. In our practice, we work on making our clients' position as strong as possible before the mediation process so that there is more leverage during negotiations. 

A trained mediator (often a retired probate judge or experienced probate attorney) acts as a neutral person who facilitates communication and assists parties in reaching a mutually acceptable resolution of all or part of their dispute. The mediator is not the decision-maker and does not resolve the dispute -- the parties do with the mediator's assistance. A written settlement agreement is drafted and signed at the end of the day so there is an enforceable agreement.

A mediator is often able to more fully explore the parties' underlying interests, needs and priorities. It is often conducted like shuttle diplomacy and the parties can tell the mediator "confidential' information not to be shared with the other side. Mediation may be particularly effective when family members have a dispute or when emotions are getting in the way of resolution. 

The attorneys participating are also key to the process. For example, I am also a tax attorney and many probates have tax issues in the background. There can be income tax, step up (or down) in income tax basis or estate tax issues. Sometimes with structuring on the tax side during mediations, taxes can be reduced and used to bridge any settlement gap. The certainty on the tax side can be an important benefit. Creative problem solving by the attorneys is key. Most of the time it is the well-prepared, knowledgeable, strategic and credible attorney who helps the mediator settle the case.