In an attempt to reach younger demographics, Attorney Robert Miller has created a YouTube series, “Estate Planning is not just for the wealthy.” Please watch, subscribe, and share at www.basiclaw4u.com
Former billionaire owner of the New Orleans Saints and New Orleans Pelicans, Tom Benson, passed away. He was on his third wife and there was an apparent fight with his daughter in 2015 over his mental competence regarding running these organizations. Yes, predictable result.
It should be noted that Wills tend to be made public because they are filed, and Trusts tend to remain private. Therefore, what goes into a Will is potentially important for the privacy of the family. In this case, the Will, which has been filed, appears to be a typical Pour-Over Will, which names the Trustee of his Revocable Living Trust as the benefactor of all his property. However, Mr. Benson did not stop there.
The Will goes on to provide provisions in the event that the Revocable Living Trust is held to be invalid. He specifically provides that his daughter, Renee Benson, and her children, Rita LeBlanc, Ryan LeBlanc, and all their descendants shall have no interest in his estate whatsoever. He also indicated that, in no way, would any of these individuals be appointed the Personal Representative/Executor.
Clearly, there were costs to his daughter in attacking his mental competence a few years before his death. To wit, she and her descendants were apparently excluded. Although we have not read the Trust, the provision set forth in the Will seems clear.
To put this in the Will, airs this dirty laundry against his said family members for the public to see. Mr. Benson left no doubt about his desire. Good for clarity – bad for family.
Finally, we cannot actually know how he intended to control and dispose of his one plus billion dollars, because those provisions will be more adequately set forth in his Trust. A Trust which is not filed for the world to see.
It is difficult to have an individual deemed incompetent. Moving forward with such an attempt is dangerous in the extent that it is never well-received by the elderly person.
Win or fail, you will probably harm your relationship with that person and, as indicated in this case, could have significant financial costs.
It is one of the most sensitive and difficult areas of estate planning when a parent is married to a new spouse. It seems like there is automatic friction between the children of the prior spouse and the current spouse, resulting in friction with the parent.
The moral is that one should move very slowly in challenging the competence of a parent that they believe is making decisions inconsistent with how the child thinks. In furtherance, I would advise a client to move very slowly in airing such dirty laundry in such a public way; although in this case, it appears very intentional.
A Trust can be private, a Will is not.
It is almost always better for the blended family to try to suck it up and love their parents, even if they don’t agree with all of their decisions.
I was reading a blog and a question was posed: is a Will valid if it was executed by a blind person? While that struck me as a silly question at first, upon reflection I realized it wasn’t a silly question after all, and it is one that many individuals might ask. The short answer is, of course it is valid. There are several reasons why a person could not properly execute a Will or Trust; nevertheless, whether or not a testator (the individual who has made the will) is blind or deaf are not included within the reasons that would invalidate a Will or Trust.
As you know, in my previous blog, I noted that a Will is essentially a letter to the judge that provides several things in Michigan, including: the appointment of guardian for minor children, the naming of a funeral representative, and the disposition of one’s assets. In order to have a valid will in Michigan, there are two basic requirements: 1) a person must be at least 18 years of age; and 2) they must have sufficient mental capacity.
In order to have mental capacity, a person must have: the ability to understand he/she is providing for the disposition of his or her property after death, the ability to know the nature and extent of his or her property, the understanding of the natural objects of his or her bounty (living relatives and descendants), and the ability to understand in a reasonable manner the implications and effects of signing the Will.
Assuming a person is 18 and has sufficient mental capacity, a Will (in Michigan) is valid if it is in writing, signed by the testator or in the testator’s name by some individual in the testator’s conscious presence and in the testator’s direction, and signed by at least two witnesses.
A couple interesting things to note here are that a witness to a Will in Michigan doesn’t necessarily have to witness the actual signing. If the testator acknowledges that it is his/her signature, a witness can be a witness on the Will. Also, a testator doesn’t actually need to sign the Will him/herself, it can be signed under his/her presence and direction. This exception can directly relate to the question of whether or not a blind individual can properly execute a Will. In the state of Michigan, a Will is still valid if it is signed by another individual in the presence and under the direction of the testator. If you have a blind client who is unable to sign there name on the document, the document can be signed for them as long as they are present, aware, and giving direction.
In addition to the above, a Will is valid as a holographic Will whether or not witnessed if the material portions of the Will and the signature are in the testator’s personal handwriting.
Finally, even if a writing does not comply with these rules, it is still valid if it can be established “by clear and convincing evidence” that the testator/descendant intended the document or writing to constitute a Will.
Now, about Trusts: can a blind person also properly execute a Trust? What many people do not appreciate is that a Trust is substantially different than a Will. In Michigan, a Trust can be valid even if it is oral. The standard, however, is “clear and convincing evidence.” The absolute worse way to establish a Trust is to do so orally, as it will be subject so much interpretation and disagreement that in practice it may have little meaning.
Formally, Michigan provides statutory methods for creating a Trust, these include: a transfer of property from one person to another person during the transferor’s lifetime for the benefit of someone other than the recipient, declaration by the owner of the property that he/she is holding this property as a trustee, exercise of discretion over a certain property, a promise by one person to another whose rights under the promise are to be held in trust for a third person. Of all the requirements stated above, there is nothing requiring a Trust to be in writing, notarized, or witnessed. However, in order for a Trust to be created, all of the following must apply: the maker has capacity, the maker has the intention to create a Trust, the Trust has a definite beneficiary, the trustee has actual duties to perform, and the sole trustee and sole beneficiary are not the same person.
As long as the Trust has the above requirements and the maker has the above requirements, vision is not required.
The basic issue in determining whether a Will or a Trust is properly executed is whether there can be clear and convincing evidence establishing a creation. Beyond that, the only requirements are that the person must have had the appropriate mental capacity and be at least 18 years of age. For a Will, there must be a writing, but not for a Trust.
When there are special issues, whereas a person is blind, it would be smart for an estate planning attorney to have the Will or Trust read to the client, and, in my view, have the execution videotaped. If it is a lengthy document, as some Trusts can be, I would recommend having the Trust translated to braille and the key portions of the Trust concerning distribution and the naming of fiduciaries read to the testator. If the document is translated into braille, this not only allows the testator to review the document with ease, but allows them to ret
ain a readable copy for reference.
These are good ways to establish clear and convincing evidence that the person who is executing either a Trust or Will has sufficient mental capacity and understands the implications of creating these documents, with or without being able to physically see the documents themselves. As noted above, taping the execution of these documents would create clear, visual evidence that the testator understands the property they possess, understands what these documents are set forth to accomplish, who their relatives are, and would provide evidence that the testator personally authorized the execution of these documents. All of these things can be accomplished even if the testator lacks the ability to see.
Nevertheless, in the case of trusts, it is best to create writings. Oral trusts, though valid, are often openly interpreted and subject to much disagreement amongst family members, especially when these trusts contain provisions that create an unequal distribution of assets. As noted before, reading the documents to the testator or having them translated into braille are the most secure option.
So, the question is, can a blind person properly execute a Will or Trust? The answer is simple: absolutely.
When a person dies without disposing of their assets through a Will or Trust their possessions are called an “intestate estate”. Michigan, like Prince’s home state of Minnesota, has a statute which provides guidance on how to dispose of a person’s estate when there is no Will, Trust, or estate plan in place.
If Prince died in Michigan it would be handled similar to Minnesota. Because Prince had no surviving spouse, no surviving children, and no surviving parents his estate is divided between his parents’ children. This would include his full siblings and half siblings.
So how does this really work? In Michigan, the answer to the intestate law’s have a step-by-step process depending on who survives.
If there is a surviving spouse, that spouse gets the first $150,000.00 plus one half of the balance of the remaining intestate estate if the decedent has surviving descendants. If the decedent has no descendants but a living parent, the surviving spouse gets $150,000.00 plus three fourths of any balance of the estate. If no surviving spouse, then the entire estate passes to descendants.
The descendants of a person dying with no Will or Trust receive that portion of the estate that does not go to the surviving spouse, by representation. Meaning the children will share in equal shares, and the grandchildren will share at their level in equal shares.
If there are no surviving descendants, the intestate estate goes to the decedent’s parents equally. If no descendants and/or no parents survive the decedent, then the estate would go to the descendants of the parents. This is the apparent situation for Prince’s estate.
If there are no surviving descendants, parents, or descendants of a parent, we then look to the descendants of the grandparents.
Remember, if there is a surviving spouse we are dealing with one-half or one-quarter of the intestate estate, however, if there is no surviving spouse then this descendant portion would be dealing with 100% of the intestate estate, as is the case with Prince.
State of Michigan:
If there is no surviving spouse, no surviving descendants, no surviving parents, no surviving descendants of parents, and no surviving descendants of grandparents, the intestate estate would pass to the State of Michigan.
Having been an attorney for over forty years, I can safely say that the above “estate plan” is typically not the distribution scheme that any of my clients have chosen. However, unlike some aggressive lawyers and financial planners, the state is not standing nearby ready to take the money at first instance. Really what this means is when the citizens of the State of Michigan fail to provide a Will or a Trust for their own assets and wealth, there is an estate plan that politicians have already prepared for you and it is called “intestate succession”.
Do not let the state dictate your personal disposition scheme; instead see an estate planning lawyer and make your own determinations of distribution scheme. Most estate planning lawyers will also work to avoid unnecessary probate and work to make the process much more palatable for your survivors.
See your estate planning attorney today!
Robert C. Miller is a Saginaw attorney focusing on business litigation, succession planning as well as wills and estate planning. He has been a lawyer since 1983 admitted to practice law in Michigan, California, and the United States Supreme Court. In addition he is also a CPA (Certified Public Accountant) and an AEP (Accredited Estate Planner).
About two weeks ago, our governor signed into law an act known as the “Fiduciary Access to Digital Assets Act”. This is in response to the uncertainty that surrounds the ownership of electronic information in such places as social media, Facebook, Flickr, Cloud, etc. I commented on this issue in 2014 here and I am happy to say Michigan went further than what was being discussed two years ago.
This law allows a fiduciary (someone acting on a behalf of and for the benefit of others) under a Power of Attorney, a Personal Representative (executor to a Will), a conservator, or a trustee to gain access to and control digital assets of the decedent/ward.
It should be noted that a “fiduciary” is under the highest standard of care for his/her conduct. This empowerment is focused on the original owner of the digital asset/electronic information (“decedent”) and making sure his/her will is carried out. A fiduciary’s duties include the duty of due care, the duty of loyalty, and the duty of confidentiality.
A digital custodian, (the person, business, or corporation that carries, maintains, processes, receives, or stores a digital asset of a user) is required to disclose to the fiduciary the content of an electronic communication and to disclose to the fiduciary a catalog of electronic communication sent or received. However the original user may provide limitations to this which the digital custodian will follow.
In short, if a decedent used an online tool to provide specific direction to a digital custodian, this has the highest priority and will override the request of a fiduciary. Also, if a decedent has given specific instructions in his/her will or trust concerning limitation or availability to a fiduciary, this also overrides the request of a fiduciary. However, a fiduciary’s request without an online tool or specific limitation will override the general terms of service agreements that a user normally must agree to prior to using online digital asset services.
The law specifically indicates that once a fiduciary makes a formal request a digital custodian has 56 days to comply. Failure to comply will allow the fiduciary to file a petition and otherwise apply to the court for an order directing compliance.
Our legislature created a definition of digital assets which allows us to utilize our standard estate planning, wills, and trust mechanisms. They went beyond that and provided the rights with the digital custodian in a fashion as if they were the original user – just like traditional estate planning, Will, and Trust law.
While the laws have now been improved my counsel remains the same. Make sure you deal with your digital assets during your normal estate planning. If you are doing a Will, include broad, specific authority over your digital assets to your Personal Representative, unless restrictions are in order. The same for a trustee and a Trust. The point is we now have a voice and should utilize it. See your Estate Planning Lawyer today!
Robert C. Miller is a Saginaw attorney focusing on business litigation, succession planning as well as wills and estate planning. He has been a lawyer since 1983 and is admitted to practice law in Michigan, California, and the United States Supreme Court. In addition he is also a CPA (Certified Public Accountant) and an AEP (Accredited Estate Planner).