Vickie Lynn Marshall?  Does anyone know who she is?  How about a big clue from her Will which is a public document filed with the Los Angeles Superior Court:  “I VICKIE LYNN MARSHALL, also known as Vickie Lynn Smith, and Vickie Lynn Hogan, and Anna Nicole Smith . . . .”

Yes, that Anna Nicole Smith.  The ex-model turned reality star that died at age 39 from an accidental overdose.  The one embroiled in a lawsuit with her late husband’s heirs regarding nearly a half billion dollars. 

Her Will provides examples of some general things that estate planning attorneys counsel about to the point that it makes us “blue in the face.” 

First, we generally recommend having a living trust prepared.  First, unlike a Will, it is not a public document.  Therefore, generally speaking, people like you and me cannot go online or to the county courthouse and obtain a copy of the document.

Second, make certain that there are not contradictory statements in your plan.  In one paragraph, she seems to indicate that she only wanted her son to inherit her estate:

            “Except as otherwise provided in this Will, I have intentionally omitted to provide for my spouse and other heirs, including future spouses and children and other descendants now living and those hereafter born or adopted, as well as existing and future stepchildren and foster children.”

This would seem to disinherit any future born children.  However, in the very next paragraph the Will used the words “child” and “children” interchangeably with regard to the distribution of her estate. 

Two things happened after Anna Nicole signed this Will.  She gave birth to a daughter, Dannielynn, and her son died.  Moreover, since her son died prior to her, her legal heir under California’s laws of intestacy was her daughter. 

Thus, my third major point is that people need to revisit their estate planning documents on a consistent basis.  Things change.  Heirs and beneficiaries change.  Even if they are the same individuals they themselves may change for the better or for the worse.  They may marry.  They may have financial success or they may demonstrate that they cannot handle money. 

Your finances may have changed.  That may cause you to think about the distribution of your estate.  In the event that your finances have increased to a great degree, it may involve some additional estate planning. 

Finally, the person or entity you selected to administer your estate may or may not be the person or entity you currently want to administer your estate.  You may have moved; they may have moved.  You may have had a falling out with them.  They may not have the “energy” to do it.  They may not be financially astute.  There are a variety of things that can happen.

Estate planning is important!  Treat it with the respect that it deserves.  Work with an attorney who devotes his/her time to this area of the law.

For those that are interested, the probate court judge in the Los Angeles County Superior Court, awarded Anna Nicole’s estate to her daughter. 

It has become easier for executors and administrators to open a probate in 2008.  The filing fee paid to the county court has been set at $320 (in Riverside County there is an additional fee of $15 to pay for the courthouse).  The other major probate fees are still due at the time they have always been due.  These include the fee for publication; the probate referee’s fee; and the fee for the bond, if any.

Prior to this year, the filing fee was based on an estimate made by the administrator or executor as to the value of the probate estate. Making an intentionally low estimate helped in the short run as the filing fee paid to the county was based on the estimate.  However, ultimately, the court received what it was due because the petition for final distribution would not be granted without a showing that the correct fees had been paid to the court.

The fee that the court ultimately receives is set by a fee schedule found in California Government Code Section 70650 and it provides:

$320 for estates or trusts under $250,000;

$385 for estates or trusts between $250,000 and $500,000;

$485 for estates or trusts between $500,000 and $750,000;

$635 for estates or trusts between $750,000 and $1,000,000

$1,135 for estates or trusts between $1,000,000 and $1,500,000.

The fees increase from there.

A benefit of this new rule is that it makes it easier for administrators and executors to begin the probate process.  Previously, they may have had to loan a large amount of the filing fee to the estate.  Now, virtually all of the time they will be able to pay these fees from the probate estate when the estate is in a position to close.

There has been a wrinkle thrown in as a state appellate court as recently found that the probate fee schedule violates the California state constitution.

Stay tuned!

Sometimes the famous have issues that our clients also face.  Frequently we receive telephone calls from throughout Southern California (including, but not limited to, Culver City, Inglewood, Brentwood, Marina del Rey) from adult children indicating that their mother or father is no longer able to manage their financial affairs. 

In Ms. Britney Spears’ case, it was the opposite from the normal situation.  Ms. Spears’ father and an attorney have been named co-conservators over her.  On February 1, a Los Angeles Superior Court judge granted a temporary conservatorship over Ms. Spears which was set to expire on March 10.  In early March, the Court extended the conservatorship until July 31.

In finding that a conservatorship was warranted, the judge was bound by California Probate Code section 1800.3(b) which states:

            “No conservatorship of the person or of the estate shall be granted by the court unless the court makes an express finding that the granting of the conservatorship is the least restrictive alternative needed for the protection of the conservatee.”

Moreover, the California Probate Code also requires that the judge had to find that Ms. Spears was “substantially unable to manage . . . her own financial resources or resist fraud or undue influence.”

Hopefully, by July 31, Ms. Spears will be able to manage her own affairs and not require a conservatorship any longer.  In most cases, where the child becomes the conservator of his or her parent, it lasts for the remainder of the parent’s lifetime.   

Given that I do a pretty good bit of estate planning and elder law in my real job, I read with great interest this article from today’s New York Times.  It concerns lawsuits being filed by people who lost a great deal of money who claim that they should not be responsible for their actions because they are old. Not because they were mentally incapacitated, not because they were the victims of fraud, not because they were intimidated, not because they were forced to do so, not because they were taken advantage of by charlatans - but simply because they were old.

The subject of the article is 81-year old Joseph Pyle:

    Eight years ago, when Robert J. Pyle was 73 years old, he had about $500,000 in the bank and owned a house in Northern California worth about $650,000. He was looking forward to a comfortable retirement.

    Today, at 81, he has lost everything. Mr. Pyle, a retired aerospace engineer, now lives in his stepdaughter’s tiny, mountainside home in a room not much larger than his bed.

    By his own admission, Mr. Pyle willingly made every decision that led to his financial problems. He gave away large sums to people he thought were friends, and then, in need of money, sold his house at a deep discount to the first person who offered to buy it.

    Even so, he claims in a lawsuit that he should be compensated for some of his losses for a simple reason: he is old, and should not bear the full responsibility for his choices.

    “I still make pretty good decisions about most things,” said Mr. Pyle, who shows no signs of dementia. “But for others, I guess I’m not as sharp as I was before, and people take advantage of that.”

    For his part, Mr. Pyle wants to have it both ways — protection when he makes mistakes, and the right to make all his own decisions.

    “It would be complete overkill to take away my independence,” Mr. Pyle said. “So I made a few mistakes. Twenty-five-year-olds make mistakes all the time, but they don’t lose their right to make decisions. I helped build this country. I deserve more dignity that that.”

When you read the whole story, which is fascinating for me, both on a personal and professional level.

On the human side, it’s hard not to feel sorry for Mr. Pyle.  After his wife died he met a 40-something single mother who talked to him (she says there was a romantic relationship, he denies it) and made him feel good again, and seemingly took awful advantage of him.  He started giving her loans because she was struggling. He also bailed out her and her boyfriend when they got in criminal trouble and also co-signed loans for her and ended up paying creditors a few hundred thousand dollars on her behalf.

Then with his resources running dry and much of his savings used he refinanced his home to pay off his debts, but soon found he could not afford the new mortgage.

Finally, forced to sell his house, Mr. Pyle accepted the first offer he got (from an 18 year old mortgage broker) that he knew was about $110k less than value.

Unfortunately, Mr. Pyle’s story is more common than you might realize. I’ve often seen people his age, especially widowers who just lost their wives of many years, suddenly start spending money on the first person they meet after their spouse dies. Sadly for Mr. Pyle, the person he met only seemed to be interested in his money.

Many people Mr. Pyle’s age also will not share their financial situation with their children, either out of stubbornness or embarrassment, even though the children have their best interests at heart. And in many cases they may be totally adrift because the deceased spouse took care of all the bills. I’ve had clients in their 80’s who never wrote a check or paid a bill in their lives, and barely know where they have bank accounts.  Almost nothing breaks your heart as much as seeing just how sad and really lost these people are.

However, I don’t think that Mr. Pyle’s claims in his lawsuit should be given any merit whatsoever. By his own admission he knew exactly what he was doing every step of the way, and because of that he should bear the consequences of his decisions, no matter how heartbreaking.

If such a claim were allowed to succeed, it would create a slippery slope, and allow simply being over a certain age, to be a defense to poor decision making.  It also would diminish and take focus away from dealing with the real problem - people who purposely and criminally take advantage of the elderly.

Just a note of free advice - if you have an elderly parent or a relative that you are concerned about being taken advantage of, try talking to them about the subject and getting them to an elder law attorney or a reputable financial advisor. However, if they are stubborn or refuse to go and are competent to make their own decisions, there’s really nothing you can do.