No matter how well you think you know your loved ones, it’s impossible to predict exactly how they’ll behave when you die or if you become incapacitated. Of course, no one wants to believe their family would ever end up battling one another in court over inheritance issues or a loved one’s life-saving medical treatment, but the fact is, we see it all the time.

Family dynamics are extremely complicated and prone to conflict during even the best of times. And when tragedy strikes a key member of the household, even minor tensions and disagreements can explode into bitter conflict. When access to money is on the line, the potential for discord is exponentially increased.

The good news is you can drastically reduce the odds of such conflict through estate planning with the support of a lawyer who understands and can anticipate these dynamics. It’s so important to work with an experienced lawyer when creating your estate plan and never rely on generic, do-it-yourself planning documents found online. Unfortunately, even the best set of documents will be unable to anticipate and navigate complex emotional matters like this, but a good lawyer can.

By becoming aware of some of the leading causes of such disputes, you’re in a better position to prevent those situations through effective planning. Though it’s impossible to predict what issues might arise around your plan, the following is one of the most common catalysts for conflict.

Poor fiduciary selection
Many estate planning disputes occur when a person you’ve chosen to handle your affairs following your death or incapacity fails to carry out his or her responsibilities properly. Whether it’s as your power of attorney agent, executor, or trustee, these roles can entail a variety of different duties, some of which can last for years.

The individual you select, known as a fiduciary, is legally required to execute those duties and act in the best interests of the beneficiaries named in your plan. The failure to do either of those things is referred to as a breach of fiduciary duty.

The breach can be the result of the person’s deliberate action, or it could be something he or she does unintentionally, by mistake. Either way, a breach—or even the perception of one—can cause serious conflict among your loved ones. This is especially true if the fiduciary attempts to use the position for personal gain, or if the improper actions negatively impact the beneficiaries.

Common breaches include failing to provide required accounting and tax information to beneficiaries, improperly using estate or trust assets for the fiduciary’s personal benefit, making improper distributions, and failing to pay taxes, debts, and/or expenses owed by the estate or trust.

If a suspected breach occurs, beneficiaries can sue to have the fiduciary removed, recover any damages they incurred, and even recover punitive damages if the breach was committed out of malice or fraud.

Solution: Given the potentially immense responsibilities involved, you need to be extremely careful when selecting your fiduciaries, and make sure everyone in your family knows why you chose the fiduciary you did. You should only choose the most honest, trustworthy, and diligent individuals, and be careful not to select those who might have potential conflicts of interest with beneficiaries.

Moreover, it’s vital that your planning documents contain clear terms spelling out a fiduciary’s responsibilities and duties, so the individual understands exactly what’s expected of him or her. And should things go awry, you can add terms to your plan that allow beneficiaries to remove and replace a fiduciary without going to court.

Find an attorney who’s focus is on assisting you with selecting the most qualified fiduciaries; drafting the most precise, explicit, and understandable terms in all of your planning documents; as well as ensuring that your family understands your choices, so they do not end up in conflict when it’s too late. In this way, the individuals you select to carry out your wishes will have the best chances of doing so successfully—and with as little conflict as possible.

Dedicated to empowering your family, building your wealth and defining your legacy,

This week Tom Petty’s daughters escalated the battle over their late father’s estate by filing a lawsuit against Petty’s second wife that seeks $5 million in damages. In the lawsuit, Adria Petty and Annakim Violette, claim their father’s widow, Dana York Petty, mismanaged their father’s estate, depriving them of their rights to determine how Petty’s music should be released.

Petty died in 2017 of an accidental drug overdose at age 66. He named Dana as sole trustee of his trust, but the terms of the trust give the daughters “equal participation” in decisions about how Petty’s catalog is to be used. The daughters, who are from Petty’s first marriage, claim the terms should be interpreted to mean they get two votes out of three, which would give them majority control.

In April, Dana filed a petition in a Los Angeles court, seeking to put Petty’s catalog under control of a professional manager, who would assist the three women in managing the estate’s assets. Dana alleged that Adria had made it difficult to conduct business by acting abusive and erratic.

Since Petty’s death, two compilations of his music have been released, including “An American Treasure” in 2018 and “The Best of Everything” in 2019. Both albums reportedly involved intense conflict between Petty’s widow and daughters, over “marketing, promotional, and artistic considerations.”

In reply to the new lawsuit, Dana’s attorney, Adam Streisand, issued a statement claiming the suit is without merit and could potentially harm Petty’s legacy.

Destructive disputes
The fight over Petty’s music demonstrates a sad but true fact about celebrity estate planning. When famous artists leave behind extremely valuable—yet highly complex—assets like music rights, contentious court disputes often erupt among heirs, even with planning in place.

The potential for such disputes is significantly increased for blended families like Petty’s. If you’re in a second (or more) marriage, with children from a prior marriage, there is always a risk for conflict, as your children and spouse’s interests often aren’t aligned. In such cases, it’s essential to plan well in advance to reduce the possibility for conflict and confusion.

Petty did the right thing by creating a trust to control his music catalog, but the lawsuit centers around the terms of his trust and how those terms divide control of his assets. While it’s unclear exactly what the trust stipulates, it appears the terms giving the daughters “equal participation” with his widow in decisions over Petty’s catalog are somewhat ambiguous. The daughters contend the terms amount to three equal votes, but his widow obviously disagrees.

Reduce conflict with clear terms and communication
It’s critical that your trust contain clear and unambiguous terms that spell out the beneficiaries’ exact rights, along with the exact rights and responsibilities of the trustee. Such precise terms help ensure all parties know exactly what you intended when setting up the trust.

What’s more, you should also communicate your wishes to your loved ones while you’re still alive, rather than relying on a written document that only becomes operative when you die or should you become incapacitated.  Sharing your intentions and hopes for the future can go a long way in preventing disagreements over what you “really” wanted.

For the love of your family
While such conflicts frequently erupt among families of the rich and famous like Petty, they can occur over anyone’s estate, regardless of its value. When planning your estate, make sure to work with an attorney who’s willing and able to make an effort above and beyond simply drafting legal documents for you. That alone can dramatically reduce the chances of conflict over your estate and bring your family closer at the same time. And if you have a blended family (meaning children from a prior marriage), take your time and do things right so your family doesn’t end up bitter and embattled, like Tom Petty’s.

Dedicated to empowering your family, building your wealth and defining your legacy,

Like me, you probably spent lots of time with family and friends over the holidays. And I hope, like me, that time reminded you of just how important and special these relationships can be.

Though you might not realize it, estate planning has the potential to enhance those relationships in some major ways. Planning requires you to closely consider your relationships with family and friends—past, present, and future—like never before. Indeed, the process can be the ultimate forum for heartfelt communication, fostering a deeper bond and sense of intimacy, and prioritizing what matters most in life.

Here are just a few of the valuable ways estate planning can improve the relationships you cherish most:

1) It shows you sincerely care
Taking the time and effort to carefully plan for what will happen to you in the event of your incapacity or death is a genuine demonstration of your love. It would be far easier to do nothing and simply let you family and friends figure it out for themselves. After all, you won’t be around to deal with any of the fallout.

Planning in advance, though, shows that you truly care about the welfare of your loved ones. Such selfless concern and forethought equates to nothing less than a final expression of your unconditional love.

2) It inspires honest communication about difficult issues
Sitting down and having an honest discussion about life’s most taboo subjects—incapacity and death—is almost certain to bring you and your loved ones closer. By facing immortality together, planning has a way of highlighting what’s really important in life—and what’s not.

In fact, our clients consistently share that after going through our estate planning process they feel more connected to the people they love the most. And they also feel clearer about the lives they want to live during the fleeting time we have here on earth.

Planning offers the opportunity to talk openly about matters you may not have even considered. When it comes to choices about distributing assets and naming executors and trustees, you’ll have a chance to engage in frank discussions about why you made the choices you did. And that may just be the first step in actively addressing and healing any problems that may be lurking under the surface of your relationships.

3) It builds a deep sense of trust and respect
Whether it’s the individuals you name as your children’s legal guardians or those you nominate to handle your own end-of-life care, estate planning shows your loved ones just how much you trust and admire them. What greater honor can you bestow upon another than putting your own life and those of your children in their hands?

Though it’s often challenging to verbally express how much you love your family and friends, estate planning demonstrates your affection in a truly tangible way. And once these people see exactly how much you value them, it can foster a deepening of your relationship with one another.

4) It creates a lasting legacy
While estate planning is primarily viewed as a way to pass on your financial wealth and property, it can offer your loved ones much more than just financial security. When done right, it also lets you hand down the most precious assets of all—your life stories, lessons, and values.

In fact, the wisdom and experience you’ve gained during your lifetime are among the most treasured gifts you can give. Left to chance, these gifts are often lost forever. Considering this, our planning process includes a means of preserving and passing on these intangible assets.

We guide clients to create a customized video in which they share their most insightful memories and experiences with those they’re leaving behind. This not only ensures our clients are able to say everything that needs to be said, but that their legacy carries on long after they—and their money—are gone.

The heart of the matter
Estate planning doesn’t have to be a dreary and depressing affair. When done right, it can put your life and relationships into a much clearer focus and ultimately be a tremendously uplifting experience for everyone involved. Contact us today to learn more.

Dedicated to empowering your family, building your wealth and defining your legacy,

Probate-court-hearingMany people think that if they die while they are married, the law dictates everything they own goes directly to their spouse or children. They’re thinking of state rules that apply if someone dies without leaving a will. In legal jargon, this is referred to as dying “intestate.” In California’s case, the specifics will vary depending on the type of property held and the number of children you have, if any. However, the general rule is that your spouse will receive a certain share and the rest will be divided among your children.

Now that may seem like, “So far, so good,” right? Your spouse is getting an inheritance and so are the kids. But wait. Here are some examples of how the intestacy laws can – and do – fail many common family situations.

First off, if both parents of minor-aged children die intestate, then the children are almost always left without a legal guardian. Kids won’t automatically go to a godparent, even if that’s what everyone knew the parents had intended. Instead, a court will appoint someone to be the children’s guardian. In such situations, the judge may not make the decision that you, as a parent, would have made. In fact, sometimes the judge appoints the last person you would have wanted to have custody of your children.

It’s important to note that when it comes to asset division, in most cases, state intestacy law presumes that a family consists of a husband, wife, and their natural-born children. But, that’s not the way all families are structured, and things can become legally complicated for those other families quickly.

According to Wealth Management, one analysis counted 50 different types of family structures in American households – 50! Almost 18% of Americans have been remarried, and through adoption and stepfamilies, millions of children are living in blended families. The laws just haven’t kept up, and absurd results often occur for these types of families if they’ve relied on intestacy as their estate plan. For example, stepchildren that you helped raise (but didn’t legally adopt) may end up with no inheritance, while a soon-to-be-ex-spouse may inherit everything from you.

Of course, with proactive estate planning, you can control your assets and essentially eliminate the risk of these crazy results.

Also, keep in mind that intestacy provides no asset protection or preservation benefits. Without any protections in place, an estate’s assets are vulnerable to creditors, lawsuits, and others who may claim entitlement to the property. These claims would take precedence over the statutory requirements for inheritance. In other words, the family won’t be first in line; they’ll be last. They’d only be able to inherit the scraps and leftovers.

The best way to safeguard and pass along what you’ve worked so hard to build is to do your own estate planning rather than leave things to the laws of intestacy. Protect yourself, your family and your assets by talking to a qualified estate planning attorney today.

Dedicated to empowering your family, building your wealth and securing your legacy,

Marc Garlett 91024

same sex couples 91024Blended families, unmarried couples, assistive reproductive technology (ART) and same-sex marriages all challenge the traditional concept of “family” – at least as it’s been known for legal purposes.

Significant changes in the way we define family culturally means families are often left without the valuable protection they need, in the event of a death or incapacity of a loved one.

As these legal definitions and our personal situations expand, so do the priorities of the modern estate plan.

No longer is estate planning just for the wealthy, who wish to save money on their taxes; it’s for all of us who want to ensure our legal system recognizes and protects the one’s we love.

For example, if you are in a life partnership you may be “married” in the eyes of your community, but not in the eyes of the law. As such, your partner would have no legal right to see you or make decisions on your behalf, if you were hospitalized.

Even if you are married, your spouse or partner would not be able to access your financial accounts without court intervention, without proper legal planning in advance. And, if you are not married, the Court is unlikely to give a non-legal spouse access and would instead appoint a professional fiduciary before allowing your unmarried partner access.

If you are part of a blended family (meaning one or both spouses have children from a prior relationship) or have children who aren’t biologically both yours and your spouse’s (or non-spouse partner), you need to include provisions in your estate plan that clearly define the inheritance rights of all children, biological or not.

It is vitally important that you clearly state any legally established relationships between you, your spouse (or non-spouse partners and loved ones) and your children, biological or otherwise, to ensure your wishes will be carried out in the event of your death or incapacity. If you do not do this, your kids could end up in the care of someone you would never want and taken out of the home of the non-biological parent they are living with.

Whatever your family’s configuration may be, estate planning is your chance to safeguard the people you love and your assets on your own terms and per your own definitions. With the uncertainty of the current political and social climate, developing a carefully crafted plan tailored to your family’s needs is more important now than ever.

Dedicated to empowering your family, building your wealth and delivering your legacy,
Marc Garlett 91024

kelly-clarkson-91024Starting a new family is always exciting and even a bit scary. This natural apprehension can be enhanced when a couple creates a blended family. Bringing children from different parents together presents challenges – and those challenges are multiplied when the couple have new children of their own.

Former American Idol star Kelly Clarkson recently added a new baby to her family. Kelly and her husband, Brandon Blackstock, have been married a little over three years. Kelly and Brandon already had a little girl together and Brandon brought two children into the marriage. So the new baby, Remy, brings the couple’s children to four.

The big risk of conflict for Kelly, Brandon and their children is that if Brandon dies before Kelly and specific and clear provisions are not made for Brandon’s children from his prior marriage, significant conflict could result between Kelly and her step-children that is totally avoidable with advance planning now.

Merging two families into one presents financial issues which can cause significant disruption later if a couple does not deal with them early on.

These significant issues include: differing opinions on prenuptial agreements, different financial goals, and different ideas about how assets should be handled after death. While these are not insurmountable problems, dealing with them upfront can prevent grief and hard feelings later.

A well-drafted prenuptial agreement can prevent later misunderstandings. Some people are concerned that asking for a prenuptial agreement shows they lack confidence in the marriage right out of the box. In truth, however, a prenuptial agreement actually protects both parties and the relationship by surfacing hard issues earlier rather than later.

This is particularly important in blended families, where the partners may have different expectations of how assets will be split if the marriage ends or when one of the partners dies. With skilled counsel (who actually knows how to counsel, not just draft documents), the prenuptial agreement conversation can actually create more closeness.

Newly married couples may also have differences of opinion about budgets and financial goals. These issues are generally magnified in blended family situations. One or both partners may have accumulated assets or debts before their marriage, so it is critical that both consider and discuss their full financial picture including assets, debts, cash flow, budgets, and goals.

It is particularly important that partners in blended families talk about what they want to happen with their assets when they die. Working with a Personal Family Lawyer specifically trained in counseling blended families will help the couple clarify and document their goals so there is not a fight between the survivor’s children and the survivor of the partnership after the death of the first to die.

Proper estate planning is always important, but it can be even more critical in blended families. If you have a blended family or are in the process of merging two families into one, prior planning can help you build a solid foundation for success.

Dedicated to your family’s health, wealth, and happiness,
Marc Garlett 91024

Casey Kasem 91024Casey Kasem, the celebrity radio host who counted down America’s Top 40 popular songs for decades, died on June 15 at the age of 82 and left behind an estimated $80 million fortune. He also left a family feud of biblical proportions between his surviving spouse and his three children from a prior marriage. And this is exactly why I do what I do — to help keep your family connected in love, not conflict.

Kasem married his second wife, Jean, who is 22 years his junior, in 1980. Together, they had one child, Liberty Kasem. Casey also had three children from a prior marriage: Kerri, Mike and Julie. The family was apparently in discord prior to Casey’s death; in mid-May, Mike and Julie filed a missing persons case with the Santa Monica police department saying they could not locate their father. At that time, Kerri was fighting with Jean over control of his care.

After Kasem died, news broke that his body had been taken from the Washington state funeral home and a judge awarded Kerri a temporary restraining order preventing Jean from removing his remains or having him cremated before an autopsy had been performed. Kerri hired a private investigator who says the body has been moved to Montreal, the hometown of a man that Jean has allegedly been involved with for the past two years.

A mess, right? And they haven’t even gotten to the money yet!

A little advance estate planning could have helped prevent this scenario, which is not uncommon when an older man with children from a prior marriage takes a second, significantly younger wife.

A recent WSJ Marketwatch.com article outlined four estate planning tools that could have helped head off this disaster:

Revocable trust. Placing assets in a revocable trust can help protect the trust owner’s wealth transfer wishes, and provides the flexibility to make changes as long as the trust owner has the legal capacity to make those decisions. Upon the owner’s death, the assets are dispersed as outlined in the trust without having to go through probate. A trust is also more difficult to contest than a will.

Life insurance. A life insurance policy can be a good way to provide for a surviving spouse while leaving the rest of the estate to children from a previous marriage, or vice versa.

QTIP trust. A qualified terminal interest property (QTIP) trust is used to set aside assets for a surviving spouse’s benefit while that spouse is alive. After the surviving spouse passes, the remaining assets in the trust are passed on according to the trust terms.

Family meeting. Having a family meeting so that everyone knows their beneficiary status and what will happen to the estate after the estate owner dies is a good way to head off conflict. An estate planning attorney can mediate these meetings, which is usually advisable when there is a potential for conflict.

One of the main goals of my law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation without conflict or court involvement. Call my offices today to schedule a time for us to sit down and talk about your family estate planning needs so we can identify the best strategies for you and your family to ensure you provide a legacy of love and financial security.