Share

Interesting Cases

Thursday, June 20, 2013

Lessons From Huguette Clark's Estate

Huguette Clark passed away in 2011 at the age of 104, leaving in her will $300 million of her estate to charities, her nurse, her hospital, attorney and accountant. The last known picture of her was from 1930, and she lived a reclusive life as an heir to a family fortune.

Now, Ms. Clark's estate is embroiled in litigation with no end in sight. She had no close family members, only distant relatives. She wrote two wills, only a couple of months apart. The first one left part of her estate to the distant relatives, and the second will cut out the relatives.

Although Ms. Clark left a large estate of $300 million, we can all learn from the mistakes she made. For more information about the estate planning mistakes she made, check out this New York Times article here.


Monday, May 20, 2013

Michael Jackson's Estate

Last night's CBS 60 Minutes program featured a piece on Michael Jackson's estate. If you missed the tv program, check out the story by clicking the link below. Michael Jackson set up a trust for his mother to care for her during her lifetime, but the bulk of the estate will go to his three surviving children. Michael Jackson, now deceased, has made more money in the last few years than any living celebrity. Wow!

https://www.cbsnews.com/8301-18560_162-57585140/michael-jacksons-lucrative-legacy/


Tuesday, February 26, 2013

Gun Trusts

Why are individuals using trusts for guns today? Are they legal, and do they help individuals get around gun laws and exploit loopholes? The New York Times has an interesting article out this today about the use of gun trusts. Check it out here: https://www.nytimes.com/2013/02/26/us/in-gun-trusts-a-legal-loophole-for-restricted-firearms.html?pagewanted=all&_r=1&


Tuesday, June 19, 2012

BREAKING NEWS: Congress Considers Stricter Rules For Veterans Pensions Qualifications

Veterans pensions are available to veterans who are over 65 or disabled and have served in an active duty war zone. The program can provide the veteran, his or her spouse or kids several thousand dollars per year. There are strict limitations on income and resources. However, the program has never had a “look back period” like Medicaid, meaning you can transfer assets to a trust or out of your name to qualify immediately for this benefit.

However, as a result of the apparent abuse of this program, Congress is considering establishing a look-back and penalty periods for pension claimants who transfer assets.

Read more about the story here:  https://www.nytimes.com/2012/06/06/us/veterans-pension-program-is-being-abused-report-says.html?_r=2&ref=us


Tuesday, June 05, 2012

Pennsylvania Filial Responsibility

What is filial responsibility? It's an old (but existing) law in Pennsylvania that allows nursing homes to come after children of parents in nursing homes for unpaid bills. It's an unpopular law that made more sense hundreds of years ago. 

Recently, a case was decided in the Superior Court of Pennsylvania that awarded $100,000 to a nursing home, collected from an adult child of a mother who was under care for less than a year. It was a strange case, and very few cases are on the books under this law. But this is a concern for elder law practitioners. My view is that this case will probably (hopefully) result in changes in the law. 

An expert on filial responsibility discusses the developments in this 4 minute video. https://www.youtube.com/watch?v=cD-vLRK3vmc&feature=youtu.be


Monday, May 14, 2012

Estate Planning & Online Accounts

Who gets access to your online accounts after you die?

You may have a plan for what to do with your physical belongings after you die, but what about your online accounts? In today's social media-dominated world, a person's digital presence lives on online even after he or she is gone. But who has the right to access those accounts? States have begun addressing this issue with new digital access laws.

Under current Facebook policy, if an account member dies, Facebook will remove the account at the request of family or put it into "memorial status," but it is very difficult for family members to get access to the account itself.  Family members may want access to a deceased loved one's account to read messages left by friends or to have the ability to contact the deceased's friends. 

Under Facebook's policy, the estate can have access to a download of account data as long as it has prior consent from the deceased or if it is mandated by law.

Such mandates are beginning to appear.  In 2010, Oklahoma became the first state to pass a law giving estate executors the power to access, administer, or terminate the online social media accounts of the deceased. Two other states -- Nebraska and Oregon -- are now considering similar laws. Under Oklahoma's law, the executor automatically has the power to act on behalf of a deceased individual and access a Facebook, Twitter, or e-mail account. The executor does not have to go to court to get access to such accounts.

While states grapple with this issue, it may be a good idea to provide some instruction in your will on how to deal with your online accounts once you die. Contact your attorney to determine if this is something you should add to your will. In addition, online services have also popped up that help people pass on the digital keys to their online lives.


Monday, May 14, 2012

Reverse Mortgage News

Reverse mortgage borrowers are getting younger, and that may not be a good thing.

The age of reverse mortgage borrowers is dropping, according to a new study by MetLife. Unfortunately, reverse mortgages come with risks, so younger borrowers need to be careful.

Reverse mortgages allow homeowners who are at least 62 years of age to borrow money on their house. The homeowner receives a sum of money from the lender, based largely on the value of the house, age of the borrower, and current interest rates. The loan does not need to be paid back until the last surviving homeowner dies, sells the house, or permanently moves out.

The MetLife study found that younger borrowers are taking out reverse mortgages. Today baby boomers aged 62 to 64 make up 21 percent of reverse mortgage applicants. In 1999, only 6 percent of applicants were in this age bracket.  Of homeowners who are considering a reverse mortgage, 46 percent are under age 70.

This new trend toward younger borrowers could spell trouble. While reverse mortgages seem like a great idea, there are major downsides. The closing costs for the loans are much higher than for conventional mortgages, and younger borrowers receive less money because their life expectancy is longer. In addition, the borrower is still responsible for property taxes, homeowner's insurance, and maintenance. If the borrower runs out of money and can't pay the property taxes or homeowner's insurance, the loan will default, and the borrower could lose his or her house.

MetLife's study also found that most reverse mortgage applicants (67 percent) wanted to use the reverse mortgage to lower household debt compared to 27 percent who wanted to enhance their lifestyle and 23 percent who wanted to plan for the future. Instead of using a reverse mortgage to pay for health care that would allow borrowers to remain in their homes during their final years, borrowers are using reverse mortgages to cover short-term financial shortfalls. The MetLife study finds that strong reverse mortgage counseling is needed, and it cautions that homeowners need to consider whether to use their home equity to shore up their retirement financing or preserve this asset for major unexpected expenses in the future, such as health-related expenses that inevitably increase as people age.  (Funds for reverse mortage counseling were eliminated in last year's budget deal between Democrats and Republicans but have since been restored.) 

To read the MetLife study, click here.

For more information on reverse mortgages, click here.


Monday, May 14, 2012

Provision in Will to Kill The Cat Found Invalid

A case of estate planning for pets is decided in a Chicago court.

A Chicago judge has reversed a death sentence that has been hanging over Boots the cat for months.  The feline's owner, Georgia Lee Dvorak, died last Christmas Eve at age 76.  Dvorak left no survivors, and her will, written in 1988, included a provision directing that any cat or cats she owned at the time of her death be euthanized "in a painless, peaceful manner." 

But trust officers at Fifth Third Bank, which was appointed to manage Dvorak's $1.4 million estate, were reluctant to follow through on the will's terms when it came to Boots, age 11. 

The bank asked a Cook County (Chicago) probate court to set aside that provision of Dvorak's will.  In its arguments to the judge, the bank noted that Dvorak had left the the bulk of her estate to twelve animal-related charitable organizations.  They also cited legal precedents in which courts had spared other animals in similar legal predicaments, including two Irish setters in Pennsylvania who had been ordered destroyed in their owner's will, and horses in Vermont and Canada that had been similarly condemned.

The judge allowed the bank to search for a suitable home for Boots to live out the remainder of her life, and one was found.  Cats-are-Purrsons-Too agreed to care for Boots provided it could receive a $2,000 endowment.  On April 3, 2012, the judge ruled that $1,000 of Dvorak's estate could go toward the endowment, and the bank agreed to forego fees of $1,000, according to an article in the Chicago Tribune.   

In its fact sheet "Providing for Your Pet's Future Without You," the Humane Society of the United States warns that when a pet owner puts a request in a will that an animal be put to death, "that provision is often ruled invalid by the legal system when the animal is young or in good health and when other humane alternatives are available."


Monday, May 14, 2012

More Information on Reverse Mortgages

 

Reverse Mortgages

 

Under our "system" of paying for long-term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there's little public assistance for home care. Most people want to stay at home as long as possible, but few can afford the high cost of home care for very long. One solution is to tap into the equity built up in your home.

If you own a home and are at least 62 years old, you may be able to quickly get money to pay for long-term care (or anything else) by taking out a reverse mortgage. Reverse mortgages, financial arrangements designed specifically for older homeowners, are a way of borrowing that transforms the equity in a home into liquid cash without having to either move or make regular loan repayments. They permit house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home, or for nursing home care later on. The loans do not have to be repaid until the last surviving borrower dies, sells the home or permanently moves out.

In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. For example, a 70-year-old borrower with a $200,000 house in Westchester County, New York, would be able to receive a maximum loan of $110,723 (based on 2009 figures). The lower the interest rate and the older the borrower, the more that can be borrowed. To find out how much you can get for your house, use the AARP's reverse mortgage loan calculator.

Homeowners can get the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower's option, or in a series of regular payments, called a "reverse annuity mortgage." The most popular choice is the line of credit because it allows a borrower to decide when he or she needs the money and how much. Moreover, no interest is charged on the untapped balance of the loan.

Although it is often assumed that an elderly person would want to use the funds from a reverse mortgage loan for health care, there are no restrictions--the funds can be used in any way. For instance, the loan could be used to pay back taxes, for house repairs, or to retrofit a home to make it handicapped-accessible.

Borrowers who take out a reverse mortgage still own their home. What is owed to the lender -- and usually paid by the borrower's estate -- is the money ultimately received over the course of the loan, plus interest. In addition, the repayment amount cannot exceed the value of the borrower's home at the time the loan is repaid. All borrowers must be at least 62 years of age to qualify for most reverse mortgages. In addition, a reverse mortgage cannot be taken out if there is prior debt against the home. Thus, either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt.

Reverse mortgages are somewhat underutilized now, but financial institutions, sensing an opportunity as the population ages and people live longer lives, are expanding their reverse mortgage programs.

The most widely available reverse mortgage product -- and the source of the largest cash advances -- is the Home Equity Conversion Mortgage (HECM), the only reverse mortgage program insured by the Federal Housing Administration (FHA). However, the FHA sets a ceiling on the amount that can be borrowed against a single-family house, which is determined on a county-by-county basis. High-end borrowers must look to the proprietary reverse mortgage market, which imposes no loan limits. On October 1, 2008, a new housing law took effect that increases the borrowing level on reverse mortgages. The national limit on the amount a homeowner can borrow is now $417,000. The limit can be increased to $625,000 in areas with high housing costs.

Is a Reverse Mortgage Right for You?

While reverse mortgages look like no-lose propositions on the surface, they also have some significant downsides. First, the closing costs for these loans are about double those for conventional mortgages. Closing costs on a reverse mortgage for the $200,000 home described above would be more than $10,000. These costs can be financed by the loan itself, but that reduces the money available to you.

Reverse mortgage payments also may affect your eligibility for government benefits, including Medicaid. Generally, these payments will not be counted as income as long as they are spent within the same month that they are received. If the funds are not spent, however, they could accumulate and push your resources over the allowable limits for Medicaid or SSI eligibility. In addition, payments from reverse annuity mortgages may be counted as income for purposes of Medicaid and SSI whether or not they are spent within the month they are received. This shouldn't be treated as income, since it simply involves withdrawing equity from one's home, but the state may view it differently since the funds come in a regular monthly check. In any case, you should consult with an elder lawyer in your state if you have any concern about how a reverse mortgage will affect your eligibility for federal benefits.

Also, bear in mind that if your major objective is to safeguard an inheritance for your children, a reverse mortgage may not be a good idea. As soon as the elderly person (or the survivor of an elderly couple) dies, it will be necessary to sell the home and much -- if not all -- of the sales proceeds will have to be paid to the lender. But if you have a pressing need for additional income and have no close heirs, or if you do not intend to benefit your children or your children don't particularly want to inherit the house, a reverse mortgage can be a way to supplement income, perhaps without jeopardizing Medicaid eligibility.

Reverse mortgages are complex products and borrowers are advised to acquaint themselves with the different options available and then carefully compare competing loan offerings. Following are two outstanding Web sites to get you started in that process:

  • You can learn the basics about reverse mortgages from the AARP's excellent reverse mortgage Web site. The site includes a calculator for estimating the loan for which a borrower would be eligible. Go to: www.aarp.org/revmort
  • For more details, background information, and supplementary materials, visit the National Center for Home Equity Conversion site at www.reverse.org

In addition, the names of FHA-insured lenders are available from the Federal National Mortgage Association (Fannie Mae), (800) 7-FANNIE.


Monday, January 09, 2012

Your Digital Assets

What will happen to your digital assets if you pass away?


Read more . . .


Saturday, December 03, 2011

The $400 Million Estate Will Contest

 

Estate Planning in the News: A $400 Million Estate

Who is Huguette Clark? She died earlier this year at 104, and left a $400 Million estate. She was definitely not part of the "99%"! In any case, Ms. Clark's estate is currently being litigated. Seems as though she had two wills. In one of them, she cut out her family and gave money to her attorney and accountant. Ms. Clark was a reclusive figure, and the most recent picture of her was taken in 1930. Learn more about this fascinating case here

Link: $400 Million Estate Being Litigated 

 


Archived Posts

2013
2012
2011
December
November
October
September
August
July
June
May
April
March
February
January
2010
December
November
October
September
August
July
June
May
April
March
February
January
2009

← Newer12 Older →


The Law Offices of Jeremy A. Wechsler assist clients with Estate Planning, Wills, Trusts, Asset Protection, Special Needs Planning, Powers of Attorney, Will Challenges and Probate/Estate Administration in Willow Grove, PA as well as Abington, Hatboro, Dresher, Horsham, Bryn Athyn, Huntingdon Valley, Fort Washington, Jenkintown, Glenside, Oreland, Warminister, Wyncote, Ambler, Elkins Park, Flourtown, Philadelphia, Warrington, Cheltenham, Gwynedd Valley, Jamison, Feasterville Trevose, Richboro, North Wales, Blue Bell, Lafayette Hill, King of Prussia, Collegeville, Oaks, Phoenixville, Oxford Valley, Langhorne, Penndel, Bristol, Fairless Hills, Bensalem Plymouth Meeting and Furlong in Philadelphia County, Bucks County and Montgomery County.



© 2013 The Law Offices of Jeremy A. Wechsler | Disclaimer
2300 Computer Avenue, Suite H-42A, Willow Grove, PA 19090 | Phone: 215-706-0200
Wills and Trusts | Powers of Attorney | Probate / Estate Administration | Special Needs Planning | LGBT Planning | Retirement Account Trusts | Estate Planning For Pets | Elder Law / Long Term Care | Retirement Planning | Life Insurance / Long-Term Care Insurance | About Us | Resources

FacebookTwitter

Attorney Website Design by
Amicus Creative