Indiana Court of Appeals Decides Man Incompetent and So Is His Contract

From The Indiana Lawyer comes Man wasn t competent to sign contract

The Indiana Court of Appeals affirmed a neighbor of a mentally ill man shouldn't have been able to purchase the man's farm because the man was incompetent when he signed the sales contract.

In James Nichols v. Estate of Ernest M Tyler, No. 45A04-0811-CV-640, the appellate court determined the trial court didn't err when it concluded Ernest Tyler was incompetent in February 2005 to convey his farm nor did it err by determining James Nichols failed to rebut the presumption of undue influence over Tyler with regard to the real property transfer.

I cannot but help raise my eyebrows at the fact that the attorney who drew up the Power of Attorney did not question Tyler's competency.

Meanwhile, looking at the actual opinion, there are some very important facts left out of the news report (pages 2 -3 of the opinion):

In March 2002, with the assistance of Shuster, Tyler formed a revocable living trust and transferred to the trust the real estate, including a 124 acre farm and a farmhouse valued together at about $1.5 million, which he had inherited from his mother. Nichols was the trustee of the trust and Tyler was the sole beneficiary. On February 8, 2005, Tyler signed a Direction to Sign Contract for Conditional Sale of Real Estate (the “Contract”), directing Nichols as trustee to sell his real estate held in trust to Nichols. Nichols took the property by another trust which he formed. Under the terms of the Contract, Tyler retained a life estate in the property, and Nichols was required to pay Tyler $200 per month until Tyler‟s death. Nichols was also responsible for paying all taxes, assessments, and insurance with respect to the property. Throughout the dealings between Tyler, Nichols, and Shuster, Shuster was never made aware of Tyler‟s mental health history.

Michael Jackson's Will...Why The Surprise?

I caught a few headlines that expressed surprise that Michael Jackson left nothing to ex-wife. I am thinking, why should he have? More importantly, notice Jackson use of a trust.

The Associated Press headlined the story much more sedately with Judge: Mom has temp control of Jackson's property

LOS ANGELES (AP) — A judge ruled Wednesday that Katherine Jackson will retain limited control of 2,000 items from Neverland until another hearing is held Monday.

Superior Court Judge Mitchell Beckloff called for a speedy compromise between attorneys for Katherine Jackson and the two co-executors of Michael Jackson's will — lawyer John Branca and John McClain, a music executive and a family friend.

"I would like the family to sit down and try to make this work so that we don't have a difficult time in court," the judge said.

The New York Times has some interesting points in its Jackson’s Will Could Set Off Legal Struggle:

A five-page will written in 2002 and filed in state court Wednesday by two executors who were once business partners of Mr. Jackson gives the entire estate to a family trust, and names his mother, Katherine Jackson, as a beneficiary of the trust and as legal guardian of the children.

***

It was not clear if the will filed Wednesday was the only one. With Mr. Jackson employing a revolving door of legal advisers and others over the years, Mrs. Jackson’s lawyer, Burt Levitch, did not rule out possibility of multiple wills.

But if the 2002 will is deemed valid and a trust receives all of Mr. Jackson’s assets, many of the details of his finances could remain secret. The trust documents are private.

You Got an Online Presence But What If You Die?

This little problem was in my mind when I ran across Legacy Locker (such as what would happen to this blog). This is how it describes itself:

The safe and secure way to pass your online accounts to your friends and loved ones.

Legacy Locker is a safe, secure repository for your digital property that lets you grant access to online assets for friends and loved ones in the event of death or disability.

Do give it a look.

What are you doing to protect your significant other if you die?

Give a look at Economic crisis heightens financial fallout for bereaved:

Researchers conclude that some financial difficulties following death of a partner can be prevented; others can be avoided. Policymaking must address the immediate circumstances of people experiencing bereavement. In the long term, enabling people to sustain paid employment throughout their working lives, occupational and private pensions, will help ensure an acceptable standard of living in retirement and protect people whose partner has died from financial hardship and economic decline.

Call a lawyer and get started.

Preparing for Estate Planning

Getting Ready for Estate Planning

The purpose of this site is to help you organize your thoughts and information before you see an advisor about an estate plan. Many people avoid estate planning because they think that the process will be overwhelming. We believe that the six steps provided here will help you get ready. These steps are frequently recommended by experts. They are:

1. Initiate the discussion
2. Take stock of the present
3. Develop objectives
4. Choose advisors
5. Consider alternatives
6. Review and modify

You can use the steps in any order, but they will probably make the most sense if you start with step 1 and proceed to step 6.

I see nothing wrong with this list, check out the site, but more importantly - start working on your estate planning.

Probate: No Will but Joint Tenancy

What happens if a person has no Will but everything is either in Joint Tenancy or a named beneficiary.

The law calls joint tenancy a non-probate transfer. The same with insurance or 401(k) accounts that have a named beneficiary.

However, not all property has a title or a contract that creates a joint tenancy or beneficiary. That property passes by way of the intestacy statute. Take a look at Indiana's intestacy statute and decide if you like how the statute divvies up your property. If you do not, then make an appointment for a Will.

Remember, if you want more information about retaining me for a case, please give me a call at 765-641-7906.

Online Resource for Elder Law: Legal News from the AARP

I suggest checking out the AARP's Legal Advocacy page for news and case law updates. The site has a national focus rather than an Indiana focus but which may still be useful. I would say the page is probably more useful for non-lawyers than for lawyers who are practicing elder law full time.

Online Resources: Wills

Today, a small collection of resources for Wills and estate planning. Findlaw, and Cornell's Legal Information Institute have pages on Wills and estate planning that (I think) give good information to the general public (and there may be some things here for you lawyers reading this post).

Will, Wills, Lawyer, Attorney, Law - FindLaw for the Public

The "Wills" section of FindLaw's Estate Planning Center provides an overview of the different types of will documents, information on requirements for making a will legally valid, tips on updating your will, and much more.

Estate Planning | LII / Legal Information Institute

An estate is the total property, real and personal, owned by an individual prior to distribution through a trust or will. Real property is real estate and personal property includes everything else, for example cars, household items, and bank accounts. Estate planning distributes the real and personal property to an individual's heirs.

Estate planning is the process by which an individual or family arranges the transfer of assets in anticipation of death. An estate plan aims to preserve the maximum amount of wealth possible for the intended beneficiaries and flexibility for the individual prior to death. A major concern for drafters of estate plans is federal and state tax law.

Wills and trusts are common ways in which individuals dispose of their wealth. (See Estates and Trusts). Trusts, unlike wills, have the benefit of avoiding probate, a lengthy and costly legal process that oversees the transfer of assets. Sometimes, though, it will be useful to make inter vivos gifts (gifts made while the donor is alive) in order to minimize taxes. The Federal Gift Tax exempts certain levels of lifetime gifts. (See Estate Tax)

Wills: An Overview - Estate Planning and Probate

Wills are the most common way for people to state their preferences about how their estates should be handled after their deaths. Many people use their wills to express their deepest sentiments toward their loved ones. A well-written will eases the transition for survivors by transferring property quickly and avoiding many tax burdens. Despite these advantages, many estimates figure that at least seventy percent of Americans do not have valid wills. While it is difficult to contemplate mortality, many people find that great peace of mind results from putting their affairs in order.

Wills vary from extremely simple single-page documents to elaborate volumes, depending on the estate size and preferences of the person making the will (the "testator"). Wills describe the estate, the people who will receive specific property (the "devisees"), and even special instructions about care of minor children, gifts to charity, and formation of posthumous trusts. Many people choose to disinherit people who might usually be expected to receive property. For all these examples, the testator must follow the legal rules for wills in order to make the document effective.

Needing an Elder Law Attorney?

Eldercare.com has a good article on why and how to choose an elder law attorney in Do I Need an Elder Law Attorney?:

For now, let's push aside popular conceptions of lawyers and face the fact that lawyers serve a very important role in our society. An elder law attorney can be invaluable in helping ensure that your loved one is cared for in the best possible way, and that her best interests are considered when it comes to sticky and complicated issues involving the law. Sometimes the best person to have on your side is an attorney with expertise in your area of need, not to mention a full understanding of your situation. Although the services of an attorney are not always necessary, you're well advised to seek a consultation if you're uncomfortable with any aspect of your decision-making.

An elder law attorney may be helpful or necessary:

* When doing long term planning such as estate planning or creating trusts
* If you feel there has been a violation of your rights, but you are somewhat uncertain
* When reviewing official documents or contracts
* In an emergency, when you feel as if you need to make quick decisions
* If you or a loved one has been denied benefits by Medicare, Medicaid or Social Security
* When drafting wills, advance directives, power of attorney or other legal documents
* If you feel your elder has been abused in any way
* For the oversight or administration of wills, estates or benefits
* In the dispute of insurance claims or settlements

Estate Planning for All Ages

I have tried to convince many people that they need a Will (at least) for more years than I care to admit without much success. Now, I would suggest they take a look at CareGuide's

What Kind of Estate Plan Is Right for You?:

We've sorted our tips into broad categories of family situation and age. As they say, check all that apply. But keep in mind that age is an imprecise proxy for life expectancy, which is affected by all sorts of other factors--heavy smoking while participating in extreme sports and driving a motorcycle, for example. It's up to you to add or subtract a few years, based on your health and lifestyle.

The categories are:

You're 25 and Single
You're Paired Up, But Not Married
You Have Young Children
You're Middle-Aged and Know the Names of at Least Three Mutual Funds
You're Elderly or Ill.

Nothing at all wrong with their categories - quite a sensible grouping. That estate planning changes with time is quite correct. Please give me a call, if you would like to schedule an appointment to talk about estate planning.

Wills and Executing Them

What scares most about online/do-it-yourself Wills is the execution of the Wills. Execution meaning the signing of the Will. Screw this up and a perfectly written Will becomes trash. (on the other hand, a poorly written Will does not get saved by a a perfectly executed Will signing).

Take the time to read Will Execution Ceremony from ProfessorBeyer.com before doing your own Will.

One of the most crucial stages of a client’s estate plan is the will execution cere­mony — the point at which the client memorializes his or her desires regarding at-death distribution of property. Unfortunately, attorneys may handle this key event in a casual or sloppy fashion. There are even reports of attorneys mailing or hand-delivering unsigned wills to clients along with will execution instructions. See Hamlin v. Bryant, 399 S.W.2d 572, 575 (Tex. Civ. App.—Tyler 1966, writ ref’d n.r.e.). Some attorneys may allow law clerks or paralegals to supervise a will execution ceremony. This practice is questionable not only because it raises the probability of error, but because the delegation of responsibility may be considered a violation of professional conduct rules proscribing the aiding of a non-lawyer in the practice of law. See Palmer v. Unauthorized Practice Comm. of the State Bar, 438 S.W.2d 374, 376 (Tex. Civ. App.—Houston [14th Dist.] 1969, no writ). An unprofessional or unsupervised ceremony may provide the necessary ammunition for a will contestant to successfully challenge a will.

Since the earliest recognition of the power of testation, some type of ceremony has accompanied the exercise of that power. Will ceremonies help demonstrate that the testator was not acting in a casual, haphazard, whimsical, or capricious manner by furnishing proof that the testator deliberated about testamentary desires and had a fixed purpose in mind when making the will. The ceremonies also provide evidence that the will was actually made by the testator, by impressing the act on the minds of witnesses.

A proper ceremony, coupled with sensitive and tactful counseling by the attorney during the entire estate planning process, may make it easier for clients to cope with the inevitability of death. Unfortunately, attorneys have been accused of showing “little concern about the therapeutic counseling that goes on in an ‘estate planning’ client’s experience.” Thomas Shaffer, The “Estate Planning” Counselor and Values Destroyed by Death, 55 Iowa L. Rev. 376, 376 (1969). You need to remember that many clients make only one will during the client’s entire life and that the psychological effects of confronting death are strong. Even if you conduct scores of will ceremonies each

The only way to make sure that you have a properly executed Will is to get a lawyer. Of course, opinions vary.

A slightly different estate planning: Pets

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.

Collections: Fraudulent Transfers, New Case from the Indiana Court of Appeals

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.

A New Idea to Aid in Caring for Aged Parents

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.

Online Resources: Estate Planning and Elder Law

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.

Small Business Estate Planning

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.

Remember that trusts are a tool. I do want anyone to think they are the only tool. Another tool may be the answer in another situation. In other words, one size does not fit all. The important things for business owners to do is to plan for the succession in their business and then take steps for carrying out the plan.

If you have an Indiana business and need legal counsel for estate planning, I am taking on new clients at this time.

Estate Planning; Conflicts of Interest and Undue Influence

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.

Generally speaking, a conflict of interest does not mean making a profit off of another. That would put all of capitalism into conflict with one another. When we know that another has an interest that is not completely our own, that is not a fatal conflict of interests. A fatal conflict of interest requires - in my opinion - both ignorance of the conflict and the one party's interest trumping the ignorant party's interest.

Undue influence requires some hold over another that makes the other act in ways that run counter to their interest. Where the rich, old man hooks up with the penniless, young woman who convinces the old man to give her all of her money makes a very good example of undue influence.

Funeral Planning

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.

I really cannot quibble with this:

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.

Business succession planning article

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.

Probate news: The James Brown Estate

From what The New York Times' reports, the James Brown estate has problems:

Mr. 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.

Even The New York Times has trouble not stepping into the luridness of it all