Letting Software or Online Service Plan Your Estate: Is It Worth the Risk?

There are several websites that offer customized, do-it-yourself wills and other estate planning documents. These computer-based services appear to offer the consumer a cost-effective and convenient alternative to visiting an Estate
Planning or Elder Law attorney. Or do they? Is online estate planning worth the convenience and initial savings? How do the documents created compare to those that a qualified attorney would produce?

To answer these questions, ElderLawAnswers asked two experienced Estate Planning and Elder Law attorneys to evaluate three leading online will preparation and estate planning programs: Nolo’s Online Will, BuildaWill, and LegalZoom. Their findings and ElderLawAnswers’ conclusions are presented in a five-page whitepaper that is available for free on ElderLawAnswers website.

The conclusion: “We conclude that while online estate planning could possibly work for people who have little or no property, small savings or investments, and a traditional family tree, the significant remainder of the population should not rest easy using one of these programs and should instead consult with a qualified Estate Planning attorney. In other words, in all but the most commonplace Estate Planning situations (and only an attorney can determine what is “commonplace”), do-it-yourself estate planning programs can be a risky, and often quite costly, substitute for in-person planning with an experienced estate planning attorney.”

I encourage you to read the whitepaper and see for yourself. Common issues with these type of estate plans include oversimplification. For example they do not explain the complexities of naming too many decision makers to serve at the same time, nor do they explain why a minor child or an elder parent may not be a good choice to name as an agent. They often overlook tax laws. Its important to remember that each State’s probate laws and tax laws vary. Further, mixed marriage situations are never a good fit for these programs. Additionally, users may miss powerful opportunities to sheild a child’s inheritance or plan for a special needs child. Finally, there is the issue of liability. Who do you hold accountable if a mistake was made?

In my office alone, I have several consultations per month where I assist clients in backing out of poorly drafted, do-it-yourself estate plans, and into something that makes sense for them and their families. Its very important to remember that there are no one-size-fits-all when it comes to planning one’s estate but that the utmost care should be placed in choosing the right person (Estate Planning or Elder Law Attorney) to help you, and not the right computer program.

Rodrigues Case and Pending Massachusetts Legislation make Homestead Protection for Trusts a Reality (Finally!)

On February 23, 2010, the US Bankruptcy Court in Massachusetts finally did what the Massachusetts state legislature has been unable to do for years: the court ruled that the Massachusetts Homestead Exemption is applicable to an owner whose property is in a revocable trust. Since this decision, In re Rodrigues, Bankr. D. Mass. Case No. 09-11960-JNF, the legislature has been working to pass a new statute that will replace Massachusetts General Laws, chapter 188, the statute concerning homesteads. The legislature is very close to passing a new law. Today we will review the Rodrigues decision, the pending Massachusetts legislation, and how it may be beneficial to you.

Olga M. Rodrigues and her now deceased husband purchased a home in September 1979. Mr. Rodrigues died in 1994, and Mrs. Rodrigues became the sole owner of the home. Shortly thereafter, she transferred the home into a revocable trust where she was the trustee and her children were the beneficiaries of the trust upon her death. Once the home was transferred into the trust, Mrs. Rodrigues no longer owned the legal title to the home; at the point, she only owned equitable title. In April 2008, less than a year before bankruptcy proceedings were filed against her, Mrs. Rodrigues executed a Declaration of Homestead and recorded the declaration in the Bristol County Registry of Deeds. The declaration stated that she owned, possessed, and occupied the home as her residence and homestead under the Massachusetts General Laws, chapter 188. This declaration was only partially correct because she did not actually own the home, but she did possess it and she was occupying it.

Currently, the law dealing with the Massachusetts Homestead Exemption states that a homestead interest “may be acquired … by an owner or owners of a home or by one or all who rightfully possess the premise by lease or otherwise.” M.G.L., c. 188, §1 (2007). Although Mrs. Rodrigues was no longer a legal owner of the home, when she recorded her Declaration of Homestead, she rightfully held possession of the home and evidenced her intent to occupy the premises as her principal residence. Judge Feeney, the bankruptcy court judge in this case, held that Mrs. Rodrigues’ actions satisfied the Massachusetts law concerning homestead and that she had validly exercised her homestead exemption. The result of this case has encouraged the Massachusetts state legislature to rewrite M.G.L., c. 188, to make it clearer and include language about trusts and the homestead exemption.

Going forward, the proposed law moving through the state legislature specifically uses language allowing a trustee of a trust containing real estate to make a declaration of homestead for the person or persons occupying the premise. The law states that the person claiming the homestead exemption must prove that he or she is using or intends to use the home as his or her principal residence. If this law passes, holding your home in a trust may be a safe way to protect it from unsecure creditors. Please visit the current text of Senate Bill 2401, An Act Relative to the Estate of Homestead.

Michael Jackson’s Estate Plan Manages to Keep Some Private Matters Private

The media has been covering Michael Jackson’s death quite extensively and many regularly scheduled programs will not air tomorrow as his memorial service is broadcast live around the world. News outlets are digging, trying to answer many questions surrounding his untimely passing, including estate and guardianship issues involving his children. However distasteful, it isn’t surprising that Michael Jackson’s Will was made available for anyone to see online within hours of it being filed with a Los Angeles Probate Court.

Ever wonder what a pop icon’s Will looks like?

Shocked that such an intimate document is available for public reading? Don’t be. Wills become public documents when they are filed at the local Probate Court.

So what did we learn from his Will?

• His ex-wife, Deborah Rowe received nothing,
• He named his mother, Katherine Jackson, to act as guardian for his children and their estates  if he died while they were minors.
• The successor guardian, if Katherine can’t serve in that role, is none other than Diana Ross!! (Huh?!)

So what do you do if you don’t want all your estate planning wishes to be read and scrutinized by anyone, including the media? How do you maintain your privacy? You create a Revocable Living Trust in conjunction with your Will. Michael Jackson did and you don’t need to be a superstar to have one drafted to protect your family.

Jackson created the Michael Jackson Family Trust, which is referenced in his Will. Both were signed in 2002. These are the most recent estate planning documents Jackson executed that have been presented to the court, to date. There is a chance that more recent documents will surface in the near future. In Massachusetts, anyone holding a Will of a deceased person has 30 days to file it with the appropriate Probate Court.

So how much money did Michael Jackson have? Who gets his real estate and assets under the Will? His entire estate was  transferred to the Michael Jackson Family Trust, a private document that is not scrutinized by anyone other than his named trustees.  Arguably, not even the Probate Court in Massachusetts would be involved had he been a resident. Logically, his three children are would-be beneficiaries, but no one knows for sure because the Trust is a private document.

So, despite all the media kerfuffle that has occured since Michael Jackson’s passing, the King of Pop has managed to keep some private matters private through proper estate planning, something even the average American should consider.

So when is a Will not enough? Want to know if a Revocable Living Trust is right for you and your family? Set up a consultation with Vickstrom Law to review your family’s specific needs.