I suggest anyone interested in the topic take a look at Danny Meeks' Pet Trust Law Blog. To the best of my knowledge, this is the first blog on this topic.
The Indiana Court of Appeals held in Hoesman v. Sheffler (pdf) format that a debtor is not a necessary party to a fraudulent transfer suit (pages 8 -9). Hoesman involves a trustee converting money in a trust. Those thinking of a trust with a relative should read this case. Cases like Hoesman are why I recommend an institution instead of an individual as trustee.
The Court of Appeals also discusses the issue of getting value for an alleged fraudulent transfer (pages 10- 12) and the "badges of fraud" (pages 12 - 15). Reading the discussion at page 10 -12 about good faith purchasers, I am of the opinion that this case will bear directly on Indiana's assignment for benefit of creditors statute.
The opinion also discusses IC 30-4-3-22(c) and the priority of liens.
I keep saying that everyone needs to think about advanced directives: a power of attorney, healthcare power of attorney, and a Living Will. I am now intrigued by an idea I found via You and Yours Blog's Family Contracts to Make Siblings Get Along for the Care of Aging Parents in the Dallas Morning News Caring for pops: Put it in writing:
"To manage that familial strife, Mr. Hofheinz has come up with what he calls a 'memorandum of understanding' between siblings. The contract spells out each adult child's responsibilities and holds that person accountable for them."It is a good idea and one worth contemplating.
Credit Wake Forest Law School's Elder Law Clinic with a compact collection of links to books, articles, and newsletters relating to estate planning and elder law.
No, it is not legal advice but legal information. Like this blog, it is a place to start your legal research and not its end.
Some good ideas from TLD's General Counsel Blog:
A buy-sell agreement is one option (which won't be discussed here in this post) and setting up an estate plan is another option often considered. If you set up an estate plan to include a revocable living trust, you can assign or transfer your business interest into your trust and specify what happens to that share of the business interest.
One common approach for married couples is to transfer the business interest to the trust and allow the surviving spouse to manage the interest and upon the death of both spouses, the interest is then transferred to the surviving children either in equal shares or to the child who is most interested in the business interest (for whatever reason). Additional language can be included depending on the type of business interest involved and what your wishes are in case something happens.
Regardless of how much I say this is not a forum for providing specific legal advice, I still get asked for legal advice. Frankly, the following comes close to being a good general question and does raise an interesting issue:
Do you think it is a conflict of interest for a spouse of one the siblings to be the financial planner for the Mother's Investment portfolio and the Mother and sibling’s Investment LLC?Conflicts of interest cover a very broad swath of intellectual territory. The writer did not provide enough facts to really get a good start into that territory. Details are needed - the kind that come from a conversation and not from e-mail.
Today's Washington Post published Hey, It's Your Funeral. I find it a bit on the lightweight side and a bit on the eccentric side. I cannot imagine many building their own coffins. As a lawyer, I think emphasizing an ethical Will over estate planning and a Last Will and Testament is a bit silly.
The article made two points I cannot quibble (much) over.
"Create an end-of-life planning kit. Include everything personal about you, from the simple (name and Social Security number) to the more complex (your pet's veterinarian, your funeral wishes, whether you want to be an organ donor, the locations of important documents)."Pre-planning the funeral ought to have been by you. Funeral wishes need not be followed. I will repeat that a power of attorney and a healthcare power of attorney are necessary documents. Get them.
Know the legal issues. Understand what is and is not required at the time of death. Your postmortem options depend on where you live. In most states, embalming is not required, and your family need not go through a funeral home. Families can file the death certificate themselves, hold a funeral at home and transport your remains to an appropriate resting spot without intermediaries. This depends on your state's right-to-disposition laws, which govern who is able to deal with your body.
I read Key to business longevity: Keep it all in the family from The Indianapolis Star as providing an example of business succession planning - its successes and its need:
Bill Howe, a 75-year-old San Diego-based family-business counselor with SCORE, a nationwide business mentoring agency, said he started or created five businesses in specialties that range from plumbing to signs to water filtration that his children eventually took over.
"One of the things that happens with a business is the founder doesn't know when to get out of the way. They hang on and hang on and hang on. I don't have that problem," he said. "There's the pleasure of your kids taking it over."
Danner has no succession plans for Burford Printing. No heirs are interested.
"That's unfortunate . . . but I want the best for them," he said.
From what The New York Times' reports, the James Brown estate has problems:
Even The New York Times has trouble not stepping into the luridness of it allMr. Brown’s estate was already the subject of a raft of lawsuits and squabbling involving his children, grandchildren, children whose paternity has been asserted but not yet proved, three wives and a companion who says she was his fourth wife.
Now, a lawsuit filed Tuesday by two court-appointed trustees of his estate accuses his longtime business managers, including a retired judge, of stealing millions of dollars from Mr. Brown. The suit, filed in South Carolina state court, also accuses the law firm of Greenberg Traurig, one of its lawyers, and a South Carolina bank of breach of fiduciary duty, negligence and conspiracy to defraud the legendary soul singer.
Indiana's Department of Revenue has the tax forms for Indiana's inheritance and fiduciary taxes here: Inheritance Tax and Fiduciary Forms. These are in Adobe's PDF format and some in the fill-in format for PDF. (If you do not have the Adobe Reader, there is a link on the page to Adobe for downloading the software. And get it. You will need it for almost all government forms.
A project for another day: converting the inheritance schedules into a HotDocs template. It is not in the fill-in format and who has a typewriter in their office these days? Not me.
Indiana law declares how one inherits a funeral plot.
Generally, the buyer owns what they purchase ("...the burial rights in a lot, plot, burial space, crypt, or niche...") with two exceptions. First, the buyer has "more than one (1) interment, entombment, or inurnment space" and has have a spouse at the time of purchase. See IC 23-14-39-2 and IC 23-14-39-3. The spouse loses this right upon divorce unless the decree of dissolution provides otherwise. In twenty years of practicing law, funeral plots never figured into any of my divorces.
Where more than one person purchases burial rights together, the law presumes they have a joint tenancy (a tenancy by the entirety for married persons)with rights of survivorship. Note this: the law does not change if the person purchasing the burial rights are of the same sex. By creating a joint tenancy with right of survivorship, these burial rights pass to the survivor without need of probate. See IC 23-14-40.
If the owner has no wife or joint tenant, the owner can pass through the owner's probate estate (whether dying with or without a Will). The statute has several exceptions making quotation of the statute easier than paraphrasing:
IC 23-14-42-4 Upon the death of the record owner of the burial rights in a burial plot, the burial rights pass as part of the estate of the owner if:Bottom line: another person can inherit burial rights either as joint tenant or through a probate transfer.
(1) the record owner did not dispose of the burial rights by:(A) a specific devise in the last will and testament of the record owner; or(2) the burial rights have not become vested in another individual under IC 23-14-39 or IC 23-14-40;
(B) a written designation or transfer of ownership recorded with the cemetery under section 2 or 3 of this chapter;
(3) the burial plot does not become a family burial plot under IC 23-14-41 before the instrument referred to in subdivision (4) is recorded with the cemetery; and
(4) an instrument that:(A) is prepared in accordance with IC 29-1; and
(B) documents the person or persons entitled to become the new record owner or owners of the burial plot and to receive the burial rights as part of the deceased record owner's estate;
is recorded with the cemetery.
Estate planning includes funerals? Yes. Medicare exempts pre-paid funeral plans from the money the federal government can grab. If nothing else that ought to make them attractive to the public.
Can I just put all that in a Will? No. The Will sees probate after the death and not before.
Does a lawyer set up a funeral trust? No, you can do that through a funeral director. See FUNERAL PLANNING on the Indiana Funeral Director Association's website.
Reading Funeral costs can be headache for families unprepared in the Muncie Star-Press brought all this to mind.
The struggles of a local family trying to bury their loved one should serve as a cautionary tale when planning a funeral, funeral experts say.
Betty Randolph, 68, died Friday, Dec. 21. Her daughter, Shirley Morris, and sons Ronnie and Jerry Randolph, made arrangements for their mother's burial at Garden View Funeral Home.
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Because of the Christmas holiday, Garden View could not immediately verify whether Randolph's insurance policies would cover her burial costs. The funeral home allowed the family to have a visitation and funeral service for Randolph, but when the policies failed to cover those costs, Morris and her brothers didn't have the money to pay for her burial.
"We thought she had a $5,000 insurance policy, but it was no good because she had let it lapse," Morris said. "Another she took out in 2006 will only pay about $1,000 because she had to be alive two years to get full benefits."
The other option for families is to plan ahead, says Curtis Rostad, executive director of the Indiana Funeral Directors Association.Rostad encourages people to pre-pay for their funeral arrangements -- an option that alleviates the cost and stress of decision-making for family members after the person is deceased.
(The article also mentions that Indiana's township trustees provide money for funerals of low income people.)
Indiana law has two kinds of pre-paid funeral trusts. One funded by cash and the other by an insurance policy. I have an article dealing more specifically with the law here. I think (but have no evidence to back me up here) most people are using insurance policies to fund the funeral trust. For an example of a pre-arrangement program see MASTERCHOICE® FUNERAL TRUST.
Setting up a pre-paid funeral trust means going to the funeral home and selecting the sort of funeral you want. Before going to the funeral home, you should read the Federal Trade Commission's Funerals: A Consumer Guide. The FTC's Funeral Home Rule requires a funeral home to display a price list that includes all goods and services the funeral home will provide to the buyer. The funeral trust funds whatever the buyer selects.
The surviving spouse does not take everything.
If a spouse died with a Will, the law controlling this situation is IC 29-1-3-1. The surviving spouse takes one-half to one-third. How much the surviving spouse takes depends on if there are also children and if the children are from a prior marriage.
When a spouse dies without a Will, then IC 29-1-2-1 controls the issue. The same concept applies: how much the surviving spouse gets depends on if there are children and if the children are of a prior marriage.
If you do not like how IC 29-1-2-1 deals with your property, then you need to get a Will. If you have children from a prior marriage, you need a prenuptial agreement. If you are married, a post-nuptial agreement may be the solution.
If you wish to consult with me on a Will, or a prenuptial or post-nuptial agreement, please give me a call.
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From the Indiana Lawyer comes High court rules on estate issue:
"The Indiana Supreme Court ruled on a matter of first impression today regarding the disposition of an entire estate during life or death."
In the Matter of the Guardianship of E.N., Adult, No. 88S01-0703-CV-121, deals with the issue of whether the guardianship estate planning statute authorizes dispositions of a protected person's entire estate, not just "excess" assets, as defined in the statute.
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The Supreme Court today reversed the guardianship court's October 2003 order approving the guardian's modified estate plan. For several reasons, Justice Theodore Boehm wrote that the Indiana legislature didn't authorize transfers of someone's entire estate during life or death. The statute in question allows a guardian to dispose of "excess" principal or income, but E.N.'s trust disposed of all of his assets. If the legislature had intended to authorize dispositions at death, it would have authorized wills, trusts, or other estate planning tools to allow it.
Indiana Code 29-1-5-8 provides that with the exception of revocation upon divorce, no written will or any part of it can be changed or revoked because of the condition of the testator. The estate plan effectively revoked E.N.'s valid will, wrote Justice Boehm.
"The legislature is certainly free to authorize guardians to dispose of all property at the protected person's death, but as of now it has not done so," he wrote.
From New York's Sui Generis blog comes Trusts & Estates Horror Story.
The client finished the estate planning but his intended beneficiary did not. Think about it.
Florida Estate Planning Lawyer Blog has a collection of cases where doing estate planning by yourself lead to trouble. Start with Do it yourself Estate Planning: Bad News Part 5 as it has links to other articles in the series.
You and Yours Blawg makes a really good point in its article, Do your heirs a big favor: Choose IRA (and other) beneficiaries.
Why is not looking at your IRA beneficiaries not wise? Because often the default beneficiary is the estate. From and IRA perspective, and estate is not a favored beneficiary. Human beings as beneficiaries have the right to stretch-out their inherited IRA's over a period of time - thus deferring any income tax on the dollars in the IRA. Estates as beneficiaries must have the entire IRA distributed within 5 years, thus triggering payment of all the income tax on the dollars.
Thanks to Wills, Trusts & Estates Prof Blog for pointing out this USA Today article Get yourself a will: Here's a way.
I am a bit more critical of the newspaper article than was the Wills, Trusts & Estates Prof Blog . Having usual depth of USA Today, the article explains very little about the do-it-yourself Will products featured in the story. Wills, Trusts & Estates Prof Blog's Self-Help Estate Planning Techniques Publicized faults the article for this:
I would, however, have been more comfortable with a stronger warning about the major problems that often arise when individuals do self-help estate planning. You could do open heart surgery on yourself, too, but that doesn't mean it's a good idea.I do love that phrasing of the last sentence. Reminds me of the television commercial where the surgeon is giving instruction over the telephone to the fellow about how to operate on himself. I would like a stronger warning, too.
Any adult of sound mind can draft a basic will on his own for a fraction of the cost of turning to a trust and estates attorney. It may not be the most comprehensive will, but at least you will have a legal document designating guardianship for your children, naming beneficiaries and specifying your last wishes. (At the same time, be sure to update beneficiary forms for any IRAs, 401(k)s and life insurance policies you have.)
VA Family Law Blog has a great post on why people need a Living Will. Even when you get past the specific Virginia issue that seems to prompt the article, I got to say the following reasons apply to Indiana. The only thing I would add is that not only is a Living Will needed but also a health care power of attorney as well as a durable power of attorney. (We call these things advanced directives.)
You might want to read all of Keeping government out of your death: Terri Schiavo is not the only reason you need a Living Will but here is one paragraph that caught my attention:
"Despite the enormous expense, live-televised drama and the emotional burden of the Schiavo case, plenty of folks still do not have Living Wills. A Living Will states what you want done in the event that you find yourself in a position like Schiavo. It takes the burden off your family. Some people say that they know their loved ones would do the right thing. They are confident there would be no family battle."All that is so true. I have been trying to educate my clients about the need for advanced directives for these very same reasons. I received nothing but silence. I do not quite understand the silence - I assume that no one really wants to be thinking about death or disability. The problem lies in a situation where a spouse is in a coma and action needs taken. Without a Power of Attorney, the costs for taking action grow geometrically. Maybe I just did not put all this as well as did the VA Family Law Blog:
Would you want to be deprived of food or water if you were in a persistent vegetative state? What about heroic measures, like resuscitation or a permanent electronic breathing apparatus — would you want those things used on you? What if you were terribly ill, like with end stage cancer or advanced Alzheimer’s disease? Talk to your loved ones about it. Then get a Living Will. Whether you want all efforts made, none or something in between, get this inexpensive legal document drawn up to make what YOU want clear for your family and the medical professionals who want to help you. It is the best way to prevent politicians and other officious intermeddlers from making you their political hay.
I found the following article on "Teklaw" blog from Indiana's Tim Kalamaros. He is a South Bend lawyer.
Here's an excellent living trust "fraud alert" by Indiana lawyer Jim Voelz, of Columbus Indiana, reprinted with his permission:
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"Don't purchase a living trust without getting advice from a competent and independent attorney. If you have a living trust that has been purchased as a result of a seminar or solicitation you should have it reviewed by a competent attorney. If it was sold to you through false and deceptive representations you may have a remedy under the Indiana Deceptive Consumers Sales Act."
