Estate Litigation

Do NOT Sit on Your Estate Plan (especially if it’s in the couch) – Learning From Aretha Franklin

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After five years and a family battle over two handwritten wills left by the singing legend Aretha Franklin, a jury ruled that the later executed will – found in the cushions of Ms. Franklin’s couch – was her validly executed will.

While we all Respect (1967) Aretha Franklin, you need to Jump to It (1982), Rock Steady (1972), and Think (1968) Who’s Zoomin’ Who (1985) to prepare an estate plan that doesn’t eat up five years of time and legal fees. The estate planners at SYK are saying, “Call Me” (1970) and “Break It To Me Gently” (1977) to put your affairs in order. In short, Do Right Woman, Do Right Man (1967) and you will soon be on the Freeway of Love (1985).

Carrie Fisher: Some Early Thoughts on Her Estate

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Carrie Fisher

May the Force be with you Carrie – you were one of the brightest stars.

The entertainment world lost an iconic legend today. Carrie Fisher, best known for her role as Princess Leia Organa in the Star Wars films, passed away this morning after suffering a heart attack on December 23, 2016, while on a flight from London to Los Angeles. In addition to her Star Wars role, Ms. Fisher starred in many other films, and also authored several books, plays, and screen plays. She recently published her autobiography, The Princess Diarist.

From a legal perspective, it is far too early to analyze Ms. Fisher’s estate to any degree. However, one can make a number of observations:

  • Fisher was not married at the time of her death, but was survived by one child, her daughter, actress Billie Lourd, age 24. Ms. Lourd therefore would be Ms. Fisher’s sole natural heir.
  • Fisher was married for a short time to singer, Paul Simon. Ms. Lourd’s father is talent agent Bryan Lourd. However, Ms. Fisher and Mr. Lourd were never legally married. Therefore, neither Paul Simon nor Bryan Lourd would be an heir to Ms. Fisher’s estate, absent an express bequest in her will or trust.
  • Fisher was the child of two entertainers, the late Eddie Fisher and Debbie Reynolds. Eddie Fisher died in 2010, and was survived by four children, including Carrie Fisher. Presumably, Ms. Fisher was a partial heir to Eddie Fisher’s estate, although few details of that estate appear to be public. However, Ms. Reynolds is still living and will likely leave her estate to her surviving son and Ms. Lourd.
  • Fisher was a California resident, so her name and likeness will be protected by the California Celebrity Rights Act for another 70 years. However, her depiction of Princess Leia was apparently transferred by contract to Lucasfilm Ltd. when she starred in the first Star Wars film at the age of 19.
  • Along with her other principal Star Wars actors, Harrison Ford and Mark Hamill, Ms. Fisher agreed to take a percentage of the movie’s profits, plus a take of TV screenings, re-releases and more. Therefore, these residual profit rights will presumably be inherited by Billie Lourd.
  • Carrie Fisher was involved with a number of charitable causes during her lifetime. Her will or trust may therefore include bequests for charitable causes.
  • While Congress and the new administration are considering a repeal of the federal estate tax, any such legislation will likely be effective no earlier than January 1, 2017. Therefore, the portion of Ms. Fisher’s estate that exceeds the 2016 estate tax exemption amount of $5.45 million will be subject to a federal estate tax at the rate of 40%.

Because of their notoriety, the estates of well-known celebrities are often illustrative of many issues that many people face in their estate planning. Only time will tell if important lessons will emerge from the Estate of Carrie Fisher.

Competency Can be Tricky: Don’t Rule Out the Nonagenarian

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The brain is a challenging maze and competency blends medicine and law in a complicated fashion.

Sumner Redstone, at 92 years-old and the controlling shareholder of his $40 billion media empire, Viacom Inc. and CBS Corp. has accomplished a lot. And a court recently ruled he can continue to make his own decisions, including deciding who should be his health-care agent.

This ruling disappointed (to say the least) his former girlfriend and longtime companion, whom he had evicted last fall and removed as his health-care agent, before also removing her from his Will, in which she was to inherit $70 million in cash and real estate.

Although a speech therapist had to interpret Mr. Redstone’s impaired speech, the judge was swayed by the video deposition in which Mr. Redstone made it clear that he wanted his ex-girlfriend out of his life and preferred his daughter to be his health-care agent. The judge remained unconvinced by an expert witness who failed to overcome the presumption of capacity.

The brain is a challenging maze and competency blends medicine and law in a complicated fashion. Our country’s ageism tends to count out anyone over 65, but the judge in this hearing found otherwise.

Oregon First to Pass RUFADAA – Allowing Legal Access to Your Digital Assets

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Oregon becomes the first state to pass RUFADAA: The Revised Uniform Fiduciary Access to Digital Accounts Act.

SYK has been advising our clients, friends and colleagues about managing Digital Assets (your online accounts) for many years, lamenting the fact that the Internet was outrunning the law. We’ve been writing about it, testifying before legislators, speaking at seminars and encouraging everyone to prepare a VAIL – or Virtual Asset Instruction Letter. 

We are happy to report that there is new light on the issue. Oregon has just become the first state in the nation to pass RUFADAA: The Revised Uniform Fiduciary Access to Digital Accounts Act. Oregon Senate Bill 1554 was signed by the Governor yesterday and will become effective January 1, 2017.

This law is important in that while it allows for personal representatives, powers of attorney and trustees to have access to online accounts to perform their fiduciary duties, it also requires everyone to be proactive in affirmatively stating in your trust or estate plan that you grant such authority; otherwise, the online providers’ terms of service agreements will control. And those agreements often give the online provider all of the power, including the power to hit “delete” when they know someone has passed, which could destroy vital financial information or precious memories you had intended to share with those you leave behind.

So dust off that will or trust you prepared so long ago and call your estate planner; it’s time that your estate plan caught up with the Internet.

Attorney Victoria Blachly is a fiduciary litigator who has been working on digital asset legislation for six years, testifying before legislators and presenting at seminars throughout the U.S. The issue became very personal to her when she lost a young niece and saw how invaluable her social media was to the grieving family and friends she left behind. Victoria worked closely with one of SYK’s estate planners, Jeff Cheyne, and one of SYK’s business attorneys, Michael Walker, to pursue legislation that was initially hard fought by very large and well-funded online providers.

Blachly’s Article Featured in The American Bar Association Publication

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Congratulations to SYK attorney Victoria Blachly.  Her article “Uniform Fiduciary Access to Digital Assets Act: What UFADAA Know” was recently published in Probate & Property, a Publication of the Real Property, Trust and Estate Law Section.

Her article explores the issues that arise when a family member passes away, or becomes incapacitated, in an increasingly paperless society such as our own. Financial accounts, social media, person photographs, what happens to all of these things left behind online?

Victoria Blachly and VAIL Featured on The Bulletin

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The Bulletin, a publication of Bend and Central Oregon, authored an article featuring SYK attorney Victoria Blachly.  The article, titled “Estate Planning in a Digital World,” focuses on the Uniform Fiduciary Access to Digital Assets Act (Oregon Senate Bill 369), Virtual Asset Instruction Letters (VAIL), and understanding what happens to your digital life after you pass. In March 2015, Blachly spoke in favor of the act during a hearing held by the Senate Judicary Committee.  Read the full article on The Bulletin’s website.

Contact Samuels Yoelin Kantor to prepare or update your estate plan to include digital assets.

Undue Influence – Tripped Up in Court

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Recently a Missouri jury resolved a deceased real estate magnate’s estate by finding his socialite widow had used undue influence to gain control of his company. The “high-stakes drama” had a cast of characters, that included politically connected attorneys and allegations of a manipulative second wife that unduly influenced her ailing husband to change control of the ownership interest in his company just a few months before he died.  Although the wife claimed that the decedent’s children had not been attentive to their father in the years before his death, the particularly damning evidence was from the decedent’s long-time lawyer, who kept notes about his client’s deterioration and the wife’s “relentless yelling and screaming” over estate amendments.

The case emphasizes the incredible value of long-term relationships with good counsel.  I’m proud to work with attorneys that have represented some clients for decades, looking out for their interests all that time. It is an honor and a responsibility that we take seriously.

A Tale of Two Wills

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What do you get when you mix a reclusive heiress with a will disinheriting her closest relatives? Unfortunately, litigation.

The story of Huguette Clark, reclusive daughter of a copper magnate and former United States Senator, should serve as a cautionary tale for everyone; even those with an estate worth significantly less than her estimated $300 million.

As reported by the New York Times, Huguette executed two wills in 2005. The first left the bulk of her estate to her closest relatives. The second, executed just six weeks later, cut out her relatives entirely, leaving gifts instead to her goddaughter, doctor, accountant, lawyer, and a foundation for the arts (among others).

Executing such vastly different wills in such a short period of time left the door wide open to legal challenge. Each side now has to develop their own narrative for what happened, painting dueling images of the reclusive heiress: a resolute millionaire vs. a vulnerable invalid. Was she a stubborn, strong-willed individual that had been jaded by “minimal contacts” with her family? Or did doctors, nurses, lawyers, and accountants isolate and exploit a vulnerable 104 year old woman? The outcome of the case is uncertain. What is certain is that the “dirty laundry” of what was once one of America’s richest families will now play out in the public arena.

It didn’t have to be that way. Better planning could have significantly reduced the likelihood of claims for undue influence and/or diminished capacity.

The lesson? Consulting with litigation attorneys as part of the planning process can sometimes help prevent litigation.

Click here to read the full NYT article.

Reminder: You Can’t Sue Dead People

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A plaintiff recently received a painful reminder from the Oregon Court of Appeals that one cannot sue a deceased person – you have to name the personal representative for the estate.

After being badly injured in a car accident, the plaintiff sued the other driver, but when she filed the lawsuit she was unaware of one critical detail: The driver had already passed away.

It is well established under Oregon law that you cannot sue the deceased. Consequently, when the plaintiff discovered her mistake, she amended her petition and named the driver’s estate and the personal representative of that estate as defendants. The estate argued the amended complaint should be dismissed because it was filed after the two year statute of limitations period had expired.

The Oregon Rules of Civil Procedure (ORCP) allow for the late filing of an amended complaint, but only under certain circumstances. Under ORCP 23C, a party may amend a complaint if the claims in both the original complaint and the amended complaint arise out of the same “conduct, transaction, or occurrence.” When the amendment seeks to assert a claim against a new party, however, the rule imposes additional requirements: under those circumstances, the new party must have notice of the original complaint, and must know that, “but for a mistake concerning the identity of the proper party,” the new party would have been the subject of the original complaint.

Plaintiff argued she did not “change the party” against whom she was filing suit; therefore, the additional requirements imposed by ORCP 23C should not apply. The Court of Appeals disagreed: “When a plaintiff sues a person who has died, rather than the personal representative of the decedent’s estate, the plaintiff had chosen the wrong person to sue. She has not merely misnamed the correct defendant.” The court explained that the representative of an estate is a “distinct legal entity” from the person who has died.

Painter of light; writer of Wills?

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The family of artist Thomas Kinkade is doing what many families do after the loss of a loved one (particularly when the loved one is wealthy): “lawyering up” to fight over the estate.

Mr. Kinkade was an American painter who passed away in April of 2012. He referred to himself as the Painter of Light and he was America’s most collected contemporary artist at the time of his death. Mr. Kinkade left behind an estate worth over $60 million, a wife from whom he was legally separated, and a girlfriend who had lived with him for more than a year.

A probate court in Santa Clara, California is now faced with the following arguments: In one corner is the decedent’s wife (from whom he was separated), who is arguing for the administration of the formal estate plan the couple had prepared during their marriage. In the other corner is the girlfriend, who has presented two handwritten wills to the court that leave the girlfriend Mr. Kinkade’s home, his studio and $10 million to establish a museum to display Mr. Kinkade’s paintings. Will these holographic (handwritten) wills stand up in court? Stay tuned, as that remains to be determined.

What is certain at this point is that Mr. Kinkade could have saved his family loads of unwanted publicity (and legal expenses) if he had executed a formal plan that outlined his wishes for the museum and the gifts to his girlfriend. Handwritten wills may hold up in some courts; however an estate plan is more likely to survive challenges if the family takes the time to execute proper documents in accordance with the appropriate state laws. Mr. Kinkade should have also been advised to formally amend or replace his estate planning documents as his relationship changed with his wife.

Properly executing and updating estate planning documents requires an investment of time and money. Improperly prepared documents may force family members into making far more substantial investments to protect their rights after we’re gone. 

You can find more on the Kinkade dispute here:

http://news.yahoo.com/kinkade-estate-dispute-remain-public-now-202323026–finance.html

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