We launched a new program!

How this program may help ensure your estate plan will never let you & your family down at the critical moment

 

We hear it all the time when talking about estate plans—“I already have an estate plan in place, so I don’t have to worry.” But there are a few major things people don’t realize about estate planning that can put them at risk of not being prepared when the time comes. Plans need to be constantly updated, monitored and maintained on an ongoing basis. What was set up many years ago may not necessarily be current today. Asset changes, law updates and family changes can cause a well designed plan to fail when the time comes to “test” the plan much later.

 

If your plan includes Revocable Living Trusts (“RLT”) that were established to avoid probate, then were the trusts fully funded (i.e. were the relevant accounts titled to the name of the trust)? If you had planned for your beneficiaries to inherit in trust upon your (or your spouse’s) death, were beneficiary designation forms updated to make the trust(s) a beneficiary? We advised you during your signing that your asset spreadsheet should be updated by you every year, but do you understand when the documents themselves must be changed by the law firm? To ensure the documents work properly, you will need to keep in mind the changes in the law, purchases of new assets, changes in family structure such as marriage or divorce, births or deaths, relocations of your fiduciaries, and more. If you met with your attorney to draft and sign documents, received a nice looking binder filled with those vital documents, but then put it away in a safe place never to be thought of again during your lifetime, you may be at risk that your documents won’t accomplish what was originally intended. Failing to address critical life or asset changes by updating your new documents will jeopardize the entire plan you put in place. The number one reason estate plans fail is because they are out of date.1

 

Many good estate planning attorneys are concerned about how to ensure clients’ objectives are fulfilled and how to address ongoing updates long after the representation with the client has ended—we’ve joined an exclusive group of firms who have come up with an answer! We understand that your estate plan isn’t completed when you sign your documents and leave our office; rather, your estate plan is completed when your heirs are able to carry out your wishes set forth in the documents after you are gone. Therefore, we, as your estate planners, need to be available to you on an ongoing basis and remain involved throughout your lifetime to ensure that we maintain the integrity of your plan. This is why we are offering our Annual Membership Program (or AMP) to continue to take on the responsibility of monitoring and tailoring the plans that we have set up for you for the duration of your lifetime.

 

So if you are an existing client of ours and you created an estate plan with us, consider calling us so we can explain the benefits of AMP and how it can ensure that your plan still functions the way you intended. Additionally, please join us at our office on February 6th, 2020 at 6:00 pm for an AMP workshop where you can get more details of this program and find out how it can help you achieve peace of mind for you and your loved ones. But if you haven’t created your estate plan as yet—we hope you will choose us as your estate planning firm, as we will not only prepare superior quality documents but also stand behind our plans long after they are first created.

 

1. Bonazzoli, V. E. (2017). How an ordinary lawyer creates and sustains an extraordinary client care program. Parker, CO: Outskirts Press.

Why the Sensational Administration of Leona Helmsley’s Estate Matters For You

Leona Helmsley, a hotel owner and real-estate investor known by many as “The Queen of Mean,” died in 2007, leaving behind over $4 billion in assets. At first, it would seem like she did everything to leave her estate organized the way one is supposed to; she left a 14-page Will behind with little ambiguity as to how her sizable assets would be divided upon her death, neatly packaged into individual testamentary trusts for her grandkids to be set up after her death and to be paid out over time. And yet, the final Court ruling did not conclude until earlier this year in 2019—a full 12 years since her passing—due to various disputes by disgruntled beneficiaries.1 She had a Will, so why did the probate process take so long?

 

The answer comes back not only to the unusual size of her Estate, but also to the language of Mrs. Helmsley’s Last Will and Testament. While it was explicit in reflecting who would receive what amount of money and how, her intentions guiding such declarations were less clear. She had disinherited two of her four grandchildren, and yet her Will’s only mention of them was as follows:

 

“I have not made any provisions in this Will for my grandson CRAIG PANZIRER or my granddaughter MEEGAN PANZIRER for reasons which are known to them.” 2

This declaration was in stark contrast to the $12 million dollars left to her dog, Trouble, who she wished to have buried beside her (an impossibility due to New York State laws barring animals from being interred alongside human remains). This significant apparent inequity in pay-outs caused a foreseeable Will contest by the disinherited heirs, leading to a Court settlement on this issue in 2008.3 It’s possible that despite what she thought were clear instructions to disinherit her grandchildren, the lack of clearly laid out reasons for their omission and the large bequest to her pet opened up questions on the testator’s state of mind which ultimately resulted in a favorable outcome for the disinherited grandchildren.

 

Better foresight by Mrs. Helmsley and her drafting attorney of an inevitable Will contest and the Court’s possible ruling in favor of family members over pets may have prevented this situation. While Mrs. Helmsley’s Will was probated in New York, both New York and New Jersey allow Wills to be contested due to incapacity or undue influence even if there is a standard no-contest provision written into the Will. Full disclosure in a Will or better yet, setting up a Revocable Living Trust to ensure the courts are not involved, may have avoided this lengthy legal battle. Furthermore, a Revocable Living Trust would have kept all this messy family drama out of the public eye.

 

Of course, that’s not all there is to say regarding Leona Helmsley’s Will and the Estate Administration that followed; even at the end of probate, there was another issue regarding Executor compensation that was only finalized this past August. This matter was brought before the Court in 2016, and finally in 2019 the Court awarded $100 million to be divided equally between four Executors, with an additional $6.25 million to be paid to the Estate of the fifth Executor. This was over the objections of New York Attorney General’s office, which claimed that the compensation was an exorbitant amount and suggested it be cut by as much as 90 percent, based on a third party expert evaluation.

 

The Court upheld the Executors’ request for the $100 million fee, explaining that their efforts could not be accurately measured by an hourly compensation and that these Executors faced extensive challenges in dealing with the administration of the Estate. This decision resulted in fees paid to the Executors five times more than the original individual bequests included in the Will.

 

Was this decision in line with Mrs. Helmsley’s intentions? Most likely not. Generally, statutory laws dictate how much an Executor is entitled to as compensation out of the Estate barring any specific provisions about this in the Will. Therefore, if you have thoughts on how you would like your Executors to be compensated for their work, or if you would like to provide flexibility in their fees that the law does not, a specialized estate planning attorney can advise you on the best way to include such considerations in your Will.

 

Leona Helmsley’s Will, though it encompasses more assets than most of us are likely to have in our lifetimes, illustrates several of the nuanced challenges faced when writing a Will. Sandor Frankel, the attorney who drafted her Will, had nearly 40 years of litigation experience, but he was not an estate planning lawyer. This outcome for Mrs. Helmsley’s estate highlights the importance of working with a specialized Estate Planning lawyer who understands how to effectively deter Will contests and draft documents with the end goal of avoiding court intervention. Ensure that your Estate does not face these challenges after your passing by drafting your Will with a lawyer who understands how to plan for the needs of your unique situation.