PA Law Blogs » Estate Law

Fight over Dennis Hopper’s $40 Million Estate Imminent

Michael Monheit — Mon, 21 Jun 2010 11:00:47 +0000

Actor Dennis Hopper recently died after a lengthy battle with prostate cancer. But according to an Associated Press news report, the battle over his $40 million estate is just getting started. The fight is expected to take place between Hopper’s fifth wife, Victoria Duffy, and his daughter, Marin. Duffy and Hopper were having problems and were separated for most of 2009, but did not get a divorce before his death.

Observers expect lawsuits in this case. One thing to consider is that Hopper and Duffy were married for 14 years, which is a “long-term” marriage by Hollywood standards. In the eyes of the law, since they did not get a divorce, Duffy is still Hopper’s wife, despite their brief separation and the problems that friends say they have been having over the years.

Matters surrounding inheritance and distribution of an estate can get out of hand in a hurry. An estate does not have to be worth millions or involve celebrities for a dispute to arise. It may be an uphill task to make everyone happy and satisfied in the end. However, those who are well-versed in estate law such as probate attorneys, strive to accomplish a fair and just compromise so that family members do not have to struggle with personal relationships and financial matters.

Mediation in Scranton Resolves Frazetta Siblings’ Estate Quarrel

Deborah Forrister — Wed, 28 Apr 2010 17:21:11 +0000

It is difficult enough for most siblings to get along without the issue of an elderly parent’s estate reaching its boiling point. While several arguments over an estate are directly related to money, in many situations, family members let their emotions, mistrust, or past experiences that have affected their relationships with other family members fuel disputes over the distribution of assets, property and finances. With communication out the window, reaching a resolution becomes more of a challenge and usually requires help from outside professionals.

The children of famous fantasy artist Frank Frazetta experienced their own family quarrel over an estate worth tens of millions of dollars. A New York Times report discusses the tumultuous months leading up to a final resolution that was reached after two days of mediation in Scranton, Pennsylvania. Apparently, multiple lawsuits were filed in Pennsylvania and Florida as the Frazetta siblings fought over their 82-year-old father’s estate. One of the Frazetta siblings had a lawsuit filed against him in Scranton in March by three of his siblings alleging that he illegally and improperly used their father’s name and art for commercial gain.

Frazetta’s work – some of the most well-known sci-fi and fantasy art covers and illustrations of over 150 books, comic books, album covers, movie posters and original paintings- was transferred to a company managed by the three siblings who sued their brother. In response to the suit that he had no right to market or sell Frazetta’s work, the sibling countersued in Florida just a week ago. The same sibling was found breaking into Frazetta’s museum in December, attempting to take 90 paintings insured for $20 million so that they could be kept safe from his siblings. After family members decided that they did not want to go forward with the case, the theft and burglary charges were dropped against the brother.

The Frazetta estate feud emphasizes how quickly matters surrounding inheritance distribution can get out of hand, and this is often the case whether or not an estate is worth millions. While it may not be a painless road ensuring that everyone is satisfied with how an estate is devised, those within the estate law field as well as probate attorneys make it their responsibility for a fair and just compromise to be made regarding the complex distribution of property from an estate.

Passing On Assets and Estate Recovery Claims

Deborah Forrister — Mon, 26 Apr 2010 16:18:19 +0000

Planning the distribution of an estate and keeping a will updated are necessary to ensure that specific wishes are carried out after a person’s passing. There’s no denying that several complexities are involved in this process, but it is essential to take the time to make sure that the division of an estate is organized. When devising a will, one of the most common concerns of a parent is ensuring that his or her child is able to become the owner of a property, such as the family home.

One family’s story relating to passing the family home over to a child is described in a Pittsburgh Post-Gazette article. The story mentions how an elderly individual’s need for nursing care funds from Pennsylvania’s Medical Assistance program can impose estate recovery claims against assets that a person wants to preserve for their child or children. In this specific case, a Pittsburgh elderly woman’s daughter – a single adult – gave up a job in California to take care of the mother. In doing this, the daughter is considered a “caregiver child.” While the mother can name her daughter the recipient of the house in her will, if the woman does so before her death and needs to receive care at a nursing facility, a portion or the entirety of her nursing care may eventually come from the value of assets distributed in her probate estate. If the state were to make an estate recovery claim for payments made by Medical Assistance and the woman’s probate estate ends up being depleted, the house that the woman wanted to leave to her daughter would have to be sold to compensate for the remaining funds.

Several families in Pittsburgh may encounter similar estate predicaments to the one mentioned in the article. In 2005, the federal Deficit Reduction Act was created, allowing a five year “look-back period” when a home is transferred before a benefactor’s death and upon their entrance into a nursing facility and application for Medical Assistance. A “transfer penalty” is created based on the value of the transferred house. However, when a child is recognized as a “caregiver,” basically taking on the full-time responsibility for their parent, federal law makes an exception to imposing a transfer penalty when the house is transferred. This is simply called the “caregiver child” exception.

Similar to this Pittsburgh family’s situation, a child has to have lived with their parent for at least two years right before the parent enters a nursing facility in order for a “caregiver child” exception to be made. In addition, it must be proven that without that care, the parent would have needed to enter a facility years before. Some individuals will seek assistance from an estate attorney or an elder law attorney to make sure that appropriate paperwork is filed accordingly or that a physician’s affidavit is collected which cites how the child’s care for their parent kept them out of a nursing facility.

Estate Tax Exemption and Heir Liability

Deborah Forrister — Thu, 15 Apr 2010 00:47:25 +0000

While several philanthropists donate money and artwork to museums out of the goodness of their hearts, there often is also a tradition of giving, a sense of pride, and at least some incentive in the form of tax deduction. However, with the current ambiguity of estate tax in our country at this time, museum directors are left wondering just how influential little or no inheritance taxes will be on donations for those with heir liability in mind.

A recent Huffington Post article discusses the effects of there being no inheritance tax for 2010 in relation to museum donations and people devising their wills. While many museum donors are drawn to providing gifts so that they can lower an heir’s tax liability, which works out beneficially for museums, without an inheritance tax for 2010, this incentive’s power diminishes. According to the article, Congress did not pass legislation last year that would reform the transfer tax system. The Economic Growth and Tax Relief Reconciliation Act of 2001 made it so that estate tax exemption slowly increased from $675,000 in 2000 to $3.5 million in 2009. Although the House of Representatives passed a bill that would solidify estate tax levels of 2009 with $3.5 million excluded and a 45% tax rate, the Senate did not act in time, thus repealing an estate tax for 2010.

So with there being no current inheritance tax while the future of exemption value remains undetermined, some donors may find their previous plans altered along with the legalities of their estates and wills. It is important to note that while an estate may not be obliged to pay federal estate taxes in 2010, certain state estate taxes may need to be paid by an estate. That is why no one should disregard inheritance tax liability or state estate tax, since some states gather either one or both of these taxes. Most state estate tax exemptions amount to $1,000,000 or lower. In other cases, an heir may need to pay a specific state inheritance tax.

As citizens await a decision from Congress, those establishing or revising their will may want to divide their will to adhere to financial conditions in the current year and what they would want for after 2010. And while developing a firm understanding of inheritance tax is quite the challenge, the gift of giving to help support non-profits and museums hopefully will not be lost.

The Difference Between Wills

Michael Monheit — Mon, 12 Apr 2010 16:00:30 +0000

Wishes that pertain to distribution of a person’s estate after death are outlined in a Last Will and Testament, more commonly known as a will. A will specifies how the estate is administered and who should be the personal representative of the deceased. It should not summarize the final wishes for medical treatment since it’s not read until after a person’s death. For that, a living will must be made.

A living will specifies what you want your end of life treatment to be. For example, some seriously ill patients would rather die peacefully and not prolong their life with machines. Others want every medical intervention possible done to prolong their life. A lawyer can draft a living will or a person can download a form from the Internet.

The living will should be filed with the hospital closest to the patient or the hospital at which the patient is given care, given to the family doctor and kept with the patient’s important papers. If the patient is terminal and is at home, it is advisable to keep a copy in a place that it can be quickly reached in the event that emergency personnel, such as paramedics, are called. Without access to the living will, paramedics must provide life-sustaining treatment regardless of the patient’s wishes.

Along with the living will, it is prudent to prepare a durable power of attorney for healthcare. In this document, you give authority to make healthcare decisions on your behalf should you not be able to make those decisions yourself. Make sure that you discuss the document with the person you have chosen as your proxy to be sure that the person wants the responsibility and understands your wishes.

While it is difficult to think about your mortality, having your affairs in order does make it much easier on your loved ones during such an emotional time. With a living will and durable power of attorney for healthcare in place, your preference for end of life care is followed. The Last Will and Testament addresses your estate distribution upon your death. Your family will have the comfort of knowing that your wishes were respected.

Should You Avoid Probate?

Michael Monheit — Fri, 26 Mar 2010 10:00:17 +0000

It is advisable to prepare a will so that the administration of your estate upon your death goes smoothly for family members and beneficiaries. A will is a legal document that specifies how the deceased’s assets are distributed after he or she dies. An executor is appointed by the deceased to help carry out his or her wishes.

Once a person dies, the will goes to probate. Probate is the court’s method for validating a will. The process includes identifying the deceased’s assets, having the assets appraised, paying off any debts and distributing inheritance to the heirs.

Not all estates have to go through probate. For example, in California, $100,000 of property can pass from one person to another without probate.

The person responsible for handling probate is usually the executor. If the deceased had not appointed an executor, the court may assign a family member or a personal representative to assume the role.

If an estate is not complicated and does not have much debt, the estate can usually avoid probate. However, if there is a lot of debt and complicated issues, probate may make sense. The attorney who prepares your will can advise you on how to create a plan to avoid probate, which may change as you age and your life situations alter.

Challenging the Estate During Probate
An heir or someone who would normally be an heir can challenge a will during the probate process. Reasons for challenging a will could be:

Fraud
Undue influence
Duress
Coercion
Insanity

Taking a page from the rich and famous as an example of fraud, undue influence, duress and coercion, Brooke Astor’s socialite son, Anthony D. Marshall, decided to challenge her will before probate and even before his mother’s death. The New York Times reported that Marshall was recently sentenced to jail for coercing his mother into signing codicils to her will assigning a major portion of her fortune to him.

If you have a substantial estate, preparing a well-thought out will eases the burden of your estate distribution upon your death. Your wishes are set forth in a legal document, which lets the probate court oversee the process as the executor carries out your wishes. If you have a small estate, probate court can be avoided as long as your heirs and beneficiaries agree on the estate distribution.

Challenging a Will

Michael Monheit — Fri, 19 Mar 2010 22:42:25 +0000

A will is a document that provides for the distribution of your estate when you die. Probate is the process of validating the will in surrogate court and administering the estate. It includes defining an executor or personal representative if the deceased did not appoint one. In almost all cases, a will goes through probate without any problems.

A will can be challenged if it is missing one of the necessary elements. The elements necessary for a will to be valid (in most states) are: the maker of the will or testator must be at least 18 years old, of sound mind, and created the will without any undue influence. The will needs to be dated and signed by the testator in front of two witnesses. A testator can only have one will at a time. Any new will revokes the prior will. If there are additions that need to be made to a will, the testator creates a codicil to the will. A will should also appoint an executor or personal representative.

When a Will is Challenged
Challenging a will means, the validity of the will is being contested. A beneficiary or someone who should have inherited from the estate can challenge a will. Common grounds for challenging a will are:

Coercion
Fraud
Insanity
Lack of sound mind
Undue influence

Recession Fuels Challenges
According to an article in Yahoo News, the current recession has instigated family disputes and will challenges. Additionally, reduced assets and real estate values have decreased the amount of assets to split among heirs. The amount of lawsuits has dramatically increased, especially with extended family members and multiple marriages.

If you want to avoid having your will challenged after you are gone, follow the steps outlined in Yahoo News—make sure you have a good attorney, choose the right executor, make your wishes are known and keep your assets in your name.

Death and Taxes?

Michael Monheit — Wed, 17 Mar 2010 21:48:52 +0000

Just when we thought we had federal estate taxes figured out, they have been repealed. Well, estate taxes are repealed for this year, anyway.

If someone dies during 2010, his or her heir will be receiving an inheritance tax free. This came about because the Senate failed to act on an estate tax proposal by the House of Representatives to keep the tax at its 2009 level. The proposal by the House also included a rate cap of 45% for estates worth more than $3.5 million. There is also no generation-skipping transfer tax, which was a way to avoid children having to pay estate tax by transferring the tax to their grandchildren.

Another change in 2010 estate taxes is a lower gift tax. An heir can receive up to $1 million without paying federal gift taxes. For gifts over $1 million, the gift tax is now 35%.

In a recent Star Ledger article about 2010 estate taxes, it was noted, “estate tax could be reinstated. Congress could do something this year, possibly retroactive to Jan. 1 and go back to the $3.5 million exclusion with a top rate of 45 percent on anything after that.”

Opponents to the estate tax debacle have said it’s unconstitutional to make the tax retroactive. The quicker that Congress can fix the estate tax dilemma, the better for everyone.

What This Means to You
Your estate will still have to pay state taxes. In any event, taxes can complicate any estate even if you do not have to pay them. The 2010 estate tax repeal may not affect you, but it brings up a valid reminder that everyone needs to have an estate plan. Update your documents, review your assets and ensure that your children’s needs are taken care of. In addition, do you have a durable power of attorney that can carry out your wishes? If not, see an estate-planning lawyer and get one.