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Posts from the ‘Chicago Estate Planning’ Category

Swedish Court Rules Text Messages Do Not Constitute a Last Will and Testament

hndtxtAnother day, another attempt at a DIY will. If you recall, I’ve written about wills typed into an iPhone (Australia) or written on a tablet with a stylus (Ohio) being upheld, but have cautioned against relying on such outlier cases until the laws catch up to technology. Case in point: a decision out of Sweden, where, before committing suicide, the deceased sent text messages to his friends and family purporting to leave his assets to them after his death. The Swedish appellate court ruled that the text messages did not constitute a valid will.

This case is undeniably a tragedy, but does raise questions about other hypothetical scenarios. Let’s imagine you have a friend named Ben. What if he texted you and other friends and family several days before being killed in a car accident? Would such text messages be upheld as a valid last will in Illinois? Not a chance.

Recall that in Illinois, signing a will is a formal ceremony that must be done in front of two witnesses. These witnesses help establish the validity of a will once the person who created it is deceased and obviously can no longer speak to the circumstances under which the will was signed. Without witnesses, there is less certainty as to the deceased’s intent. In Ben’s case, was he in his right mind when he sent the texts, or was he under the influence of any substances (legal or not)? Did someone gain unauthorized access to his cell phone and send the texts? Did autocorrect change “I give you my ABBA albums” to “I give you my IKEA armchairs”? An unwitnessed will simply leaves too many questions unanswered.

But what if Ben devised a scheme whereby he texted his wishes, then had two witnesses text the same friends to confirm the “will” was witnessed, thereby complying with the witness requirement and outsmarting the sometimes archaic law of wills? Who’s to know if it would stand up in court, but estate planning attorneys would likely appreciate such creativity due to the mountain of work it would create to sort out such a mess.

The easiest route is to simply follow all of the statutory requirements when signing your will. Be creative at your own risk. At best, it could be awkward when an estate planning attorney blogs about your unique situation. At worst, a court may refuse to recognize your purported last will and distribute your assets in a manner you did not intend.

Celebrity Estate Planning Lessons: Paul Walker

lwandtThis month Forbes published a great article on Five Estate Planning Lessons From the Paul Walker Estate. Paul Walker died in a car accident on November 30, 2013. His last will was prepared in 2001, the same year as the release of the first movie in the Fast and the Furious franchise. He left behind a 15-year old daughter and an estate worth an estimated $25 million. The Forbes article explains the lessons well, but I wanted to expand on a couple of them.

First, kudos to Paul Walker for having an estate plan. Forbes listed this as lesson #4, but I think this is one of the most important takeaways from this tragic incident. He was 40 years old and in good health when he unexpectedly died. If he had procrastinated, or believed that estate planning was something that should be done later in life, it would have been too late. Mr. Walker gets extra credit because he prepared an estate plan in 2001 when he was only 28 years old. A 2011 study found that only 8% of Americans under the age of 35 have a last will, and that over 50% of Americans of all ages do not have a last will.

Second, Paul Walker left his assets in trust. One advantage of leaving assets in trust is that the deceased can dictate the terms under which the beneficiaries receive such assets. Many people do this to ensure their children won’t irresponsibly manage their inheritance if a parent dies when the children are still young. For example, the trust may state that one’s children may receive reasonable amounts from the trust for their health, maintenance, support, and education, and then the children may withdraw amounts from the trust at certain ages (for example, 1/3 of the trust at age 25, 1/3 at age 30, and the balance at age 35). We don’t know the terms of Mr. Walker’s trust because it’s not public record, however, imagine the alternative: his will could have left the remainder of his estate outright to his daughter. The result would have been that his daughter would inherit what was left of the $25 million after taxes and expenses on her 18th birthday. Working with a qualified estate planning attorney is immensely helpful in situations such as this as the attorney will assist you in tailoring a plan according to your circumstances and wishes.

Bottom line: don’t procrastinate, because you never know what life has in store.

Estate Planning For Your Pets

Estate Planning for PetsLet’s begin with the story of a cat named Boots. In December 2011, a woman in suburban Chicago passed away leaving no next of kin. She did, however, leave a will that she had signed 20 years earlier, which stated that any cat that she owned at the time of her death shall be euthanized and the remainder of her nearly $1.4 million estate be distributed to twelve different animal charities.

It seems as though provisions to euthanize pets stem from the well-intentioned (but perhaps misguided?) belief that no one will love and provide for a pet as well as the owner. However, there are steps one can take to ensure that pets will receive TLC after the owner’s death. Plus, judges simply don’t like killing animals, and often invalidate such will provisions because they are against public policy. Thankfully for Boots, lawyers intervened and arranged for her to be transferred to a no-kill shelter.

What are your options when you want to include Fido and Fluffy in your estate plan?

  1. Leave Your Pet to a Trusted Family Member or Friend.  The simplest way to ensure for your pet’s well-being is to leave him or her to someone that you trust to be a responsible and loving pet owner. It’s easy to add a simple provision to your will. For example, in my own will I leave my cat to my sister, and if she is unable to take my cat, then to my parents. Both already have my cat’s feeding and care instructions in my in-case-of-death roadmap, so I know my cat would have a loving home if I were to die before her.
  2. Leave Your Pet to an Individual or No-Kill Shelter along with a Specific Amount of Money. What happens if your friends or family have concerns about taking your pet? Perhaps they are worried about the financial commitment that comes with pet ownership. You can minimize this risk by adding a specific sum of money to your bequest.  For example: I leave my dog to my friend, Jane Doe, along with the sum of $10,000 if she accepts my dog. A potential disadvantage to this technique is that the use of the money cannot be enforced – once the friend has the money, she can do whatever she wants with it. Nothing is stopping her from spending the money on a tropical vacation instead of saving it to pay future vet bills. Or, what happens if it’s not feasible for your friends or family to take your pet? For the no-kill shelter, there is a concern about it not accepting an older animal because of the medical cost and lower probability of adoption, but including a donation with your pet can help. Some pet organizations even have specific programs that provide lifetime care for your pet in exchange for a monetary bequest. The Guardian Angels Pet Care Program at PAWS is an example.
  3. Establish a Pet Trust. When you think of pet trusts, you likely think of Leona Helmsley, who bequeathed $12 million in trust to her dog, Trouble (later reduced to $2 million by a judge). This is an extreme example–you don’t need to be wealthy to create a pet trust. Pet trusts are valid under Illinois law, and are exactly what they sound like: money is held in trust for the benefit of your pet during the pet’s lifetime. The advantage of using a trust instead of giving a specific amount of money is that the trust can be enforced in court if the trustee is not properly expending the funds for your pet. Of course, since the court has jurisdiction over the trust, it can also reduce the amount of the trust if it finds the amount substantially exceeds what is necessary to care for the pet. After the death of your pet, the balance of the trust is distributed to whomever you name as a remainder beneficiary.

Whichever choice you prefer, be sure to raise the issue of pets with your estate planning attorney (who really should raise the issue without you prompting him or her . . .).

As for Boots, her story has a happy ending.  She was adopted by a loving family several months after arriving at the no-kill shelter.