Jarvis Law Office

Advance Planning to Help Your Executor

It’s an unfortunate fact that once you pass away, it will be someone else’s responsibility to wrap up your affairs. This can be a daunting and arduous task for your executor if he or she does not know where your important documents are kept, what types of financial accounts you have, or how to access everyday things like your internet passwords or home security PIN number. Providing directions to your executor in the event of your death can make a very difficult time a bit easier, and will go a long way to helping your estate close in an orderly, efficient fashion.

A list with all of your information is the best way to give your executor what he or she needs to take care of your estate. This list should include locations, combinations, or anything else related to:

• Home security systems
• PO boxes
• Home safes

The list should also include information about safe deposit boxes, including the bank where it’s held, the box number, what’s in the box, and the location of the box keys. You should also ensure that your executor is authorized to access the box.

Consider making a list of all of your financial accounts and policies, as well as information about their ownership status (solely- or jointly-owned) and beneficiary designations. In addition, you can provide passwords to your online financial accounts, as well as any email accounts or social media accounts. Keep in mind that as your passwords change and accounts are opened or closed, you will need to update your list. It’s a good idea to review your list anywhere from quarterly to yearly, depending on how many changes you’ve made.

Now, it’s important to note that you do not have to hand this information over to your executor before you pass away, especially if you have any privacy concerns. The information can be given to your estate planning attorney to be kept safe with your other estate planning documents. You can then tell your executor to contact the attorney in the event of your death to retrieve the information and begin settling your estate.

If you’d like more information about advance planning to help your executor, or if you’d like to have your existing estate plan reviewed by an experienced Ohio estate and elder law attorney to ensure your affairs are in order, please contact our Ohio elder law office at 877-653-3450 to schedule a complimentary initial consultation.

Sotheby’s Appraisal Draws Fire from Judge

A recent court case involving the IRS and art work appraised by Sotheby’s, drew the ire of the judge, according to The New York Times in "Don't Blame the Russians, Tax Judge Tells Sotheby's Expert."

The value of artwork in an estate has to be determined for wealthy estates for estate tax purposes.  Therefore, estates employ expert appraisers who give their estimates for what the art would likely fetch at auction. This can create problems, if the art later sells for much more than the appraised value.

In a recent case, it seems a painting was valued by Sotheby's at $500,000 and that was the value given to the IRS. However, four years later, the same painting sold at auction by Sotheby’s for $2.1 million.

The appraiser explained that the primary reason for the discrepancy was that Russian collectors bid the piece up, since they are attempting to get their hands on artwork.

The judge did not believe that and instead determined that Sotheby's had intentionally low-balled the appraisal value to curry favor with the estate, so the auction house would be used when the painting was later sold.

Reference: New York Times (April 23, 2017) "Don't Blame the Russians, Tax Judge Tells Sotheby's Expert

Scholars May Learn about Baldwin's Personal Life

The lack of information about James Baldwin’s private life is about to change, according to The New York Times in "James Baldwin's Archive, Long Hidden, Comes (Mostly) Into View."

Scholars interested in James Baldwin have always had a difficult time learning the details of his life. This is because his estate has kept Baldwin's archives, including the notes and letters that he wrote, from the public. 

Thus, the man behind the published works has remained elusive.

The estate has reached an agreement with the Schomburg Center for Research in Black Culture, a division of the New York Public Library, to house Baldwin's archives and to make them available to scholars for research.

However, the estate is still seeking to preserve some of its privacy.

Letters between Baldwin and four correspondents will be kept off limits for 20 years.

Reference: New York Times (April 12, 2017) "James Baldwin's Archive, Long Hidden, Comes (Mostly) Into View."

Families of Boat Crash Victims Sue Jose Fernandez Estate

It is uncertain what happened the night that Miami Marlins star pitcher Jose Fernandez and two other men died in a boating accident, but the uncertainty has not delayed the families of the other two men from claiming that Fernandez was responsible, according to FOX News in "Families of men killed with Jose Fernandez file lawsuits."

It is believed that Fernandez got into an argument with his girlfriend, and to calm himself down, decided to go boating late at night. Two of his friends went with him. In the dark, they did not see a pier and rammed it, capsizing the boat. All three men died.

It was revealed that Fernandez had large amounts of alcohol and cocaine in his system. The investigation is still open, as authorities have thus far been unable to determine which of the men was driving the boat.

An attorney representing both families has filed lawsuits on their behalf against Fernandez's estate. Both lawsuits are requesting $2 million in damages.

An attorney for the estate has indicated that a settlement is not likely, given the uncertainty about who was driving the boat. Clearing up that mystery could go a long way in determining whether these lawsuits have any chance of success.

Reference: FOX News (Feb. 11, 2017) "Families of men killed with Jose Fernandez file lawsuits."

Descendants of Peggy Guggenheim Continue Estate Battle

Vanity Fair recently detailed the saga of the fight to gain control of the Guggenheim art collection in "The Bitter Legal Battle over Peggy Guggenheim's Blockbuster Art Collection."

The saga begins with the death of Peggy Guggenheim in 1979, when she bequeathed her collection of 326 valuable paintings and sculptures to the Solomon R. Guggenheim Foundation so that it could be put on display and made available to the public six days a week.

The descendants have continuously claimed that the foundation violates the terms of the donation and have asked courts to revoke the gift because of those violations. The foundation denies the charges.

The descendants have lost four times so far, most recently when they lost an appeal in 2015. However, they continue to persist in their claims and it appears this battle has no end in sight.

The descendants have always maintained that they are fighting to make sure Peggy Guggenheim's wishes are followed. However, since the art collection is one of the most valuable in the world, the idea that they might also be interested in the money cannot be entirely dismissed. This notion may have legs, since their efforts have thus far failed to convince the courts that the foundation is not fulfilling the terms of the donation.

Battles over valuable assets are common in estate administration, and even more so when the valuable assets are not inherited by family members who might want them.

Reference: Vanity Fair (Jan. 5, 2017) "The Bitter Legal Battle over Peggy Guggenheim's Blockbuster Art Collection."

Jurisdiction when Americans Own Foreign Property?

A recent case out of Alabama illustrates the problem of jurisdiction when American citizens with holdings in foreign countries pass away, as discussed by the Wills, Trusts & Estates Prof Blog in "Case Summary on Estate Property in Foreign Jurisdiction."

In this case, a woman from the U.S. had been living in London and passed away there. Her nephew filed to administer her estate in Alabama, where the woman appears to have been legally domiciled in the U.S. and where personal property belonging to the estate was located.

A will was also separately submitted to probate in London.

As part of the process for handling these two cases, the Alabama administrator hired solicitors in the U.K. in order to represent him in the U.K. probate case. The parties were able to settle all of the disputes, other than how the administrator should pay the British attorneys.

The administrator asked an Alabama court to order all of the beneficiaries living in Alabama to put any money they received from the London case into escrow until that could be resolved. That request was granted, but one of the beneficiaries filed for a writ of mandamus with the Alabama Supreme Court to block it. They did and stated that the Alabama courts had no jurisdiction over the property in the London case.

Reference: Wills, Trusts & Estates Prof Blog (Dec. 9, 2016) "Case Summary on Estate Property in Foreign Jurisdiction."

Prince's Estate Is Awash in Controversy

Often times, people choose not to get an estate plan because of the perceived cost. However, the cost of NOT having an estate plan can also be pretty high as TMZ reports in "Prince Lawyers Haul in Millions off Death."

The administrator of Prince’s estate has submitted a legal bill for the court's approval. It is requesting that the estate pay legal fees in the amount of $2.3 million to various attorneys who have worked on the case so far. The requested fees only cover work done between July 1st and September 30th.  Since administering the estate is nowhere close to being finished, the final legal bill will be much more than that.

With an estimated worth of at least $200 million, it was known that it was going to be expensive to handle Prince's estate. However, it would have been far less expensive if the musician had taken the time to get an estate plan.

For only three months, of what certainly will be a long process, the legal fees alone have already eaten up 1% of the estate's value.

Not only is that a costly mistake but courts will now determine where the assets will go.

Even for estates much smaller than $200 million, the cost of not having an estate plan can still be very high. It can also add a tremendous amount of work and stress to loved ones in an already difficult time.

Reference: TMZ (Dec. 1, 2016) "Prince Lawyers Haul in Millions off Death."

Media Calculations See Prince’s Estate at $200 Million

Following calculations made by experienced journalists, the total value of Prince's estate is estimated at $200 million, according to the Daily Mail in "Prince's estate is worth at least $200 MILLION, court filing shows, thanks to his extensive catalogue, unreleased music and Paisley Park mansion."

This estimate is known because the Bremer Trust, administering the estate, recently submitted its current fees to the court. The group charges a monthly fee to administer estates based on the total value of the estate and a sliding scale. With that information made public through the court documents, reporters were able to calculate the estimated value of the estate.

It is possible that the actual value of Prince's estate is much higher. This could be a low, initial value for estate tax purposes. The estate has until Jan. 21, 2017 to file documents with tax authorities, unless an extension is requested.

Federal and state tax agencies might have different opinions about the total value of Prince's assets at the time of his death.

Prince died without an estate plan and under Minnesota law, his closet living relative will inherit the estate.

Just who those relatives are, has been the source of much speculation and several legal proceedings.

Reference: Daily Mail (Nov. 30, 2016) "Prince's estate is worth at least $200 MILLION, court filing shows, thanks to his extensive catalogue, unreleased music and Paisley Park mansion."

Woman Claiming to Be Prince’s Wife Steps Forward

The fervor caused by people claiming to be heirs of Prince has died down.  However, a new claimant has come forward with a marriage license and a will, according to TMZ in "Prince Woman Warns Estate ... Step Aside, I'm His Wife."

The woman, Claire Elisabeth Elliot, claims that she can prove her status as Prince's wife with a marriage certificate and a will. She is requesting that the current estate administrator be dismissed and that she be put in charge and named the sole heir. It is unlikely that the woman's claims are true.

She previously filed to be elected the President of the United States.

It should not take too long for the estate to dismiss this claim, but the lesson is that the estate should not have to deal with these claims at all.

By not having an estate plan, Prince left his estate vulnerable to these claims. Because the estate has to go through probate, it is easy for anyone to file a claim against it.

It would have definitely been much harder for these claims to have been made had the estate been kept out of probate. Without probate, people would have had to start lawsuits on their own rather than simply file a motion in the probate case. Also, without probate, the estate would have likely been handled privately, as opposed to everything happening in the case becoming part of the public record.

Reference: TMZ (Nov. 28, 2016) "Prince Woman Warns Estate ... Step Aside, I'm His Wife."

Prince Estate Becomes More Complex in Identifying Heirs

The list of potential heirs to Prince's estate has been narrowed down considerably as the judge in the case has thrown out many claims. However, that does not mean the issue of who will inherit a share of his fortune is entirely settled.

While the long list of possible heirs to the fortune left behind by Prince has been reduced, it has been potentially expanded by the laws of Minnesota, according to the Twin Cities Pioneer Press in "In Prince estate case, blood relation might be unnecessary."

Due to a unique feature in Minnesota's family law it is possible the descendants of Duane Nelson could be declared to be related to Prince and receive a share of his estate even though Nelson is not a biological relative of Prince.

Under Minnesota law someone who is treated as a child can be legally declared a child even if they are not biologically a child. Duane Nelson was previously thought to be Prince's half-brother through his father, but it now appears Nelson was not. Interestingly, Nelson’s birth certificate lists Prince's father as his own.

If the judge decides that Nelson is related under the law, then Nelson's three children have a claim to a share in Prince's estate. The law itself gives little guidance for the judge to make a determination, so it is not clear how the court will rule.

Reference: Twin Cities Pioneer Press (Sept. 29, 2016) "In Prince estate case, blood relation might be unnecessary."