Who Profits From the Sumner Redstone Situation?

The continuing battles over Sumner Redstone's competency in court and the media is not profiting shareholders in the companies that he owns, but someone is profiting from the situation.

The current fight over Sumner Redstone's competency and his decision to oust Viacom's CEO, Philippe Dauman, from his family's trust and holding company is something of a media circus and a three-way battle between Redstone, Dauman, and Redstone's daughter, Shari Redstone. The battle is not only being waged in court, but also in the media, both in the mainstream press and in the tabloids.

As it has been going on, Viacom's stock price has taken a severe hit to the dismay of shareholders. 

But, even if shareholders are not profiting, someone else is as the New York Post reports in "Sumner Redstone's legal saga has lawyers rolling in cash."

To the surprise of the judge in the case at a recent hearing 22 lawyers stood up to make an appearance. As costly as it is to have a lawyer appear in court, it is almost certain there is an even greater cost in paying all of the lawyers who did not appear in court but who are likely working on the case in the large law firms that represent the parties.

Public relations firms are also profiting from the situation as they have been hired to help control the narrative in the media.

A lesson to be learned from this situation is that it is extremely costly anytime an elderly person's competency has to be litigated in court. While it is unclear what could have been done differently to prevent the Redstone situation, many other competency battles can be prevented by making sure you have powers of attorney in place long before you might need them.

Contact a qualified Elder Law Attorney in Orange County at 714-525-4600 or call 951-264-5732 for our Corona Estate Elder Law Attorneys, or visit our website at www.OCElderLaw.com to help you with your California Estate Planning needs.

Reference: New York Post (June 11, 2016) "Sumner Redstone's legal saga has lawyers rolling in cash."

The Greatest of All Time's Estate

Boxing legend Muhammad Ali recently passed away. The details of his estate plan are not yet known, but he left behind a large estate and family.

With the passing of Muhammad Ali, a true sports icon has left the scene. At this early stage it is not yet known what type of estate plan he had, but since he had a long bout with Parkinson's disease, it is assumed that he did have a plan.

The Daily Mail recently reported on what is currently known about his estate in "Ali's family to spar over his $50million fortune: Fourth wife Lonnie will act as executor as his NINE children, exes and brother prepare to enter the ring for a slice of inheritance."

The known details include:

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It is believed that Ali's fourth wife, Lonnie, will act as the executor of his estate.

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  His known potential heirs include nine children, a brother and his ex-wives. However, it is not currently known which if any of them will inherit a portion of Ali's estate or how much. For that reason, it is not currently possible to know whether a challenge to his estate plan is likely.

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  It is estimated that Ali's net worth at the time of his passing was approximately $50 million.

·         Up until the time of his death Ali continued to earn money through the company he founded, GOAT LLC. However, he sold the majority of the company a few years ago and retained only a 20% interest in it.

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    His estate also includes property in Arizona and Kentucky. It is also possible that his estate will include memorabilia from his fighting days that could potentially be worth millions.

Marty Burbank knows how important it is for a person with Alzheimer’s Disease or Parkinson’s Disease to have an estate plan with a special needs trust. For more information about Estate Planning in Orange County or Corona, CA, please visit our website at www.OCElderLaw.com, or call 714-525-4600 to schedule an appointment.

Reference: Daily Mail (June 2, 2016) "Ali's family to spar over his $50million fortune: Fourth wife Lonnie will act as executor as his NINE children, exes and brother prepare to enter the ring for a slice of inheritance."

Same-Sex Partner Estate Tax Case

A recent ruling by a New Jersey tax court illustrates that the legality of same-sex marriage does not solve all estate difficulties for same-sex couples who were not able to get married previously.

In 2004 New Jersey passed a domestic partnership law giving same-sex couples who registered as domestic partners some of the legal protections married couples enjoy. For example, the law exempted a surviving partner from paying the state's inheritance tax, but not the estate tax.

New Jersey is one of the few states with both taxes and requires that the higher of the two be paid. Long time partners Rucksapol Jiwungkul and Maurice R. Connolly Jr. registered as domestic partners in that same year.

In 2007 New Jersey passed a civil union law exempting same-sex couples from both the estate tax and the inheritance tax. Jiwungkul and Connolly did not enter into a civil union as a matter of principle.

Same-sex marriage became legal in the state in 2013 and the two made plans to wed according to Bloomberg BNA in "Same-Sex Partner Not Spouse for New Jersey Estate Tax Break."

Six days before the planned wedding Connolly passed away unexpectedly. Jiwungkul was the executor of the estate. In that capacity he paid approximately $100,000 to the state for the estate tax.

Later he filed an amended tax return and asked to have the amount refunded, claiming that he should be exempt from it. The state refused and the case went to tax court.

The law in the case was clear. As Jiwungkul was a domestic partner he was not entitled to the estate tax exemption. The court could have granted him an exemption by citing extraordinary circumstances, but the judge declined to do so.

The case illustrates that same-sex couples still need to be mindful about what different legal statuses mean for their estates.

No matter what your preference is, if you have a family and/or significant other, you should have a trust in place for when the time comes. For more information or to meet with an estate planning attorney in Orange County, please visit our website at www.OCElderLaw.com, or call 714-525-4600 to schedule a private consultation. We have offices conveniently located in Fullerton and Corona.

Reference: Bloomberg BNA (May 17, 2016) "Same-Sex Partner Not Spouse for New Jersey Estate Tax Break."

Executor Duties and Errors

The duties of the executor of an estate are well known by industry professionals, but not always well known by the laypersons who are appointed as executors. This leads to those executors making common mistakes that would be easily avoidable had they sought professional advice.

It is common for people to name a close relative or friend to be their estate's executor. Most people do it without thinking about it too much; it is just the way things are done.

However, when that friend or relative performs his or her duties avoidable mistakes are often made because they are not familiar with the process and do not seek professional advice.

The National Law Review discussed some of these mistakes in "Common Pitfalls Made by Executors of Estates," including:

·         Many executors fail to get proper certification from the court before beginning their duties. A court must grant approval of the executor's assignment before the executor has legal authority to act.

·         Executors often fail to notify all potential heirs to an estate and instead only notify those people mentioned in the will. This can lead to claims against the estate.

·         Executors should open a bank account for the estate instead of using their own personal accounts.

·         Executors often do not resist the temptation to distribute estate assets before claims against the estate are paid. This is especially troubling if assets are distributed before taxes are paid and can lead to personal liability for the executors.

·         Executors are required to keep detailed and accurate records about how they handle estate assets. Many do not do so.

Bottom line: Consult with an experienced estate planning attorney in Orange County to help you select an appropriate fiduciary and get his or her permission before making it official. For more information, visit our website at www.OCElderLaw.com, or call us at 714-525-4600 to schedule an appointment.

Reference: National Law Review (May 13, 2016) "Common Pitfalls Made by Executors of Estates"

Baby Boomers' Retirement Mistakes

If you want to leave an inheritance for your children and grandchildren, it is important to make sure that your assets are not all spent in your retirement. That requires good retirement planning. Unfortunately, Baby Boomers are collectively making a lot of mistakes.

The best estate plan in the world can be rendered completely useless if there are no assets for the estate to distribute. A trust, for example, is just a piece of paper if there are no funds for the trustee to manage and distribute to beneficiaries.

Despite this truism many Baby Boomers are not properly planning for their retirements, which is a good way to make sure that their estates will lack assets.

Fox Business recently wrote about some of these mistakes in "Baby Boomers' Retirement Woes Summed Up in 5 Statistics."

These mistakes include:

·         Social Security – 59% of Baby Boomers are planning to rely heavily on Social Security. The problem is that Social Security benefits are not designed to provide a full income and they may need to be cut in the future.

·         No Savings – 45% of Baby Boomers do not have any retirement savings at all.

·         Postponed Plans – 30% of Boomers report that they have had to postpone their planned retirements due to lack of savings.

·         Stopped Contributions – 30% of Baby Boomers stopped making regular contributions to their retirement accounts. It is important to make contributions even if you do not think you need any more money in the accounts.

·         Debt – 44% of people over the age of 65 still have debt that needs to be paid off. Debt payments cut into the amount of money they have for living expenses.

This is not good news for Baby Boomers or the children expecting to inherit from them. Luckily the estate planning lawyers at www.OCElderLaw.com can help! Whether you’re a parent trying to plan your estate, or if you’re a child trying to protect your inheritance, call our elder law attorneys in Orange County at 714-525-4600.

Reference: Fox Business (May 15, 2016) "Baby Boomers' Retirement Woes Summed Up in 5 Statistics"