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Celebrity Estate Plans Series, Part 3 of 4: Jay Leno’s Case No Laughing Matter

For the last two weeks, we’ve discussed celebrities and how they planned (or didn’t!) for their deaths. In this third installment of our four-part celebrity series, we discuss a topic that no one wants to consider as it may seem to be a fate worse than death: incapacity. Unlike death, not everyone will become incapacitated. Yet, it’s an essential part of your future planning because if you do become incapacitated, you want to have made your choices well before that occurs. To illustrate the importance of planning for incapacity, we’ll examine the real-life court case involving Jay Leno and his wife, Mavis. I assure you, it is no laughing matter. A comprehensive Life & Legacy Plan can provide reassurance and peace of mind, and we’ll explore its benefits in this context. 

The Leno case highlights what happens when you or a loved one becomes incapacitated and what can happen if you have not planned in advance. From the Leno case, we can learn several lessons, including 1) What incapacity is and what it is not, 2) What a spouse can and can’t do with the other spouse’s financial affairs, and 3) How you can end up in court with all your affairs becoming public knowledge. We’ll address all three topics here, emphasizing why these matter, even for tf us who have never hosted “The Tonight Show.”

Let’s start with the basics: what do we mean by discussing “incapacity”?

What Incapacity Is and What It’s Not

If you become incapacitated, you’ve lost the ability to make sound financial, medical, or legal decisions for yourself. You may even make harmful decisions or be unable to communicate at all. Incapacity can result from several circumstances, including a tragic accident, a serious, end-of-life illness, or aging-related challenges, such as dementia or Alzheimers. Like death, incapacity can strike at any time and any age. Once it does, it’s too late to get your affairs in order, and your loved ones will be stuck in a mess. This is why planning for incapacity is not just a good idea, it’s a necessity. 

This may seem obvious, but stay with me: It’s important to note that incapacity occurs while you’re alive. I say this because estate planning, to some degree, has much to do with timing. You can have a plan and create documents that deal with your incapacity. However, that plan and documents become null and void once you die, and another document is needed.

This matters to you: If you’re like many people, you’ve heard of a document called a Power of Attorney. You may even have authority for an aging relative under a Power of Attorney. In my practice, however, I’ve found that most people don’t realize that the authority granted under that Power of Attorney ends as soon as the person granting the power dies. So, while you may be able to access your loved one’s checking account to pay bills while they’re alive, that ends immediately at death if your access was under a Power of Attorney. You must then get separate authority – from a court if assets are not held in a trust – to handle the remaining assets after death. In simpler terms, the legal documents you have in place for incapacity may not be enough, and you could end up in court if you’re not prepared.

This means your incapacity planning and post-death planning must work together so the transition is handled smoothly and with as much ease for your loved ones as possible. And that brings us to the Leno case.

So, What Happened In the Leno Family? (And What It Means for You)

Mavis Leno, Jay’s wife of more than 40 years, is battling dementia and has reached the point where she can no longer handle her financial affairs. So, Jay had to go to court (essentially filing a lawsuit against his wife) to be able to manage her finances. After a few months, the court ruled and gave Jay the requested authority.

That’s essentially the entire story. But we can’t stop there! Even from just three simple sentences above, several key takeaways exist. 

Here are the highlights:

Even though they were married, Jay did not have automatic authority to manage Mavis’s finances. And neither will you if you’re married and your spouse has separate assets. Any assets or accounts you own are your property and your property alone. Marital status is irrelevant. And, if you don’t have advance planning in place, your spouse could need to go to court and sue your “estate” to get appointed and be able to take control of your assets. 

Leno had to file a lawsuit (against his wife) to gain control of his wife’s finances. 

That’s the process, no matter what State you’re in. If you don’t have advance planning and you become incapacitated, someone will need to go to court to get authority, even if you have powers of attorney in place. And it will cost time (a few months in most cases) and money. While waiting for the court to rule, you won’t be able to pay your spouse’s bills using their money (or they may spend away, unaware of what they’re doing). That leaves you with two options: 

You can pay the bills with your money and then get reimbursed later. This may be fine, especially if you have the financial means. But if you don’t have immediate access to cash, say your spouse paid all the bills from their account, this could mean trouble and potential asset loss. Or, bills simply go unpaid. Maybe you can explain the situation to the financial institution, and they will be patient while the court process plays out, but this doesn’t always happen. 

The court process is set up for conflict, and the more conflict there is, the longer the process will take. In Leno’s case, he and Mavis have been married for over 40 years, and it’s their first and only marriage (relationship goals, right?). Given this fact, it’s reasonable to assume that no one challenged Jay’s request. But what if one of them had been married before and had children from the prior marriage? And what if one of those children wanted to ensure they got their inheritance and didn’t want the step-parent to have any control over the money? Sadly, this happens all the time. When it does, the case can go on and on, meaning court costs go up, and the assets in question could be at risk due to the time delay.

Leno’s personal and family information became public knowledge, but not because he’s famous. In most States, you must disclose your address, your family members and their addresses, and information about the financial assets. The Leno family’s story is available for all of us to read, not because he’s famous, but because they had to go to court. 

This can be problematic because scammers are paying attention. They tend to pay particular attention if you (or someone you love) are vulnerable, especially if you’re older. I could write books about how often older people fall prey to these scams. And they’re all disturbing.

So, what have you gleaned from these insights so far? If anything concerns you, know there is a much better way this could have been, and this better way lies within your reach. 

A Life & Legacy Plan Keeps Your Affairs Private and Your Family Out of Court and Conflict

A Life & Legacy Plan solves the problems that left Jay Leno having to sue his wife’s estate to get access to her accounts. With a Life & Legacy Plan in place, you would have a seamless transition from capacity to incapacity and then to death. There’s no time delay; assets can be immediately available if needed. A Life & Legacy Plan can also keep you and your loved ones out of court and conflict, saving time and money and keeping all your affairs private.

When you work with me to create your Life & Legacy Plan, we’ll ensure your plan stays updated throughout your lifetime. This is critically important because if your estate plan doesn’t reflect your current life circumstances, the time you need won’t work. That means you end up in court, just like the Leno family; for context, most attorneys ensure your plan stays current. But I’ve seen too many plans fail because of this; we’ll review your plan at least every three years and make updates as necessary. 

We’re Here for You Throughout All Of Life’s Changes

Incapacity planning is more crucial than ever, especially with cases of dementia on the rise. According to Alzheimer’s Disease International, over 55 million people worldwide currently have dementia, and that number is expected to increase to 78 million by 2030. Whether you’re diagnosed with dementia, another severe illness, or a terrible accident that results in your incapacity, a Life & Legacy Plan will help ensure you’re prepared, no matter what happens.

We help you create a Life & Legacy Plan so that your loved ones stay out of court and conflict and have a plan that works when you (and they) need it. Once you’ve created your plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, and your personal information kept private. 

Contact us today!

This article is a service of Res Nova Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning™ Session.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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Celebrity Estate Plans Series, Part 2 of 4: Vanilla Ice Has Thoughts

This week, we’re continuing to look at the lives of four celebrities and how they’re preparing for the inevitable (or didn’t!). Last week, we examined Michael Jackson’s planning and the holes in his plan that resulted in his family being embroiled in court and conflict for 15 years and counting (if you missed it, go back and check it out!) in this second article of our 4-part celebrity series, Vanilla Ice chimes in with his estate planning experience, advice, and lessons learned on a video he posted to his YouTube channel. He has a lot to say! 

Vanilla Ice (Really) Hates Estate Taxes

Vanilla Ice shares the story of his buddy Mark, whose parents owned a sprawling property in Palm Beach, Florida. When they passed, Mark and his siblings sold the estate, expecting to be set for life. However, estate taxes ended up taking over 80 percent of their profit. Ouch.

Vanilla Ice calls this tax a “generational wealth killer,” he’s not wrong. Estate taxes can sneak up and bite a massive chunk of your wealth. And the thing is, with a proper estate plan, this doesn’t have to happen! The key is to educate yourself. Knowing what you’re up against helps you plan smarter so that more of your hard-earned assets reach your heirs. 

Education is the most important part of estate planning. That’s why my planning process begins with a Life & Legacy Planning Session, where you’ll get the plain and straightforward education you need to make wise decisions about your planning, including how to keep your family out of court and out of conflict, minimize taxes, and ultimately create a plan that works for you and the people you love, when they need it. 

So, first lesson: if you suspect your family could pay estate taxes at your death, don’t wait to plan. There’s way too much at stake. Call us, and let’s get you to know about the kind of planning you want and need for yourself and the people you love. 

Vanilla Ice Thinks Life Insurance is Cool

(“Ice” and “cool” – get it? Sorry, I couldn’t resist.) 

Life insurance isn’t just for covering funeral costs – it’s a secret weapon in estate planning. Vanilla Ice suggests “maxing out your life insurance” to give your kids as much money as possible. What makes life insurance “cool” is that death benefits aren’t subject to income tax, meaning your heirs can get more bang for your buck than if you were investing the money you’d put into life insurance premiums into just about any other asset class. 

It’s worth considering what Vanilla Ice suggests here. When you take out a life insurance policy, the payout can cover any necessary taxes, probate fees, and debts, ensuring your heirs receive the lion’s share of your assets. Life insurance can help with short-term needs, like paying off a mortgage, or it can serve your family’s long-term needs, like maintaining the lifestyle to which they’re accustomed.

When you get educated via our Life & Legacy Planning process, we’ll look at your life insurance, whether you have the right amount and the right type, and ensure you are 100% clear on what it might mean to “max out your life insurance” and if you really should do that. We’ll consider whether you need more insurance, less insurance, or a different kind of insurance based on your family dynamics, assets, and what you want for the people you love after you leave.

Second lesson: If you want to be cool, plan to buy the right type and kind of life insurance.

Ice Says Trusts Are Not Just for the Rich and Famous (and He’s Right!)

Trusts might sound like something only the super-wealthy need, but they’re an intelligent tool for anyone looking to protect their assets. 

Ice mentions irrevocable trusts specifically. These types of trusts let you transfer assets to a beneficiary while removing the assets from your taxable estate, ensuring your assets aren’t subject to estate taxes. Any assets in an irrevocable trust are protected from legal judgments and creditors IF you do it correctly and in the right jurisdiction. If it’s something you are interested in, contact us, and we can talk. In the video, Ice jokes about putting his classic car collection into a trust and setting rules, such as his kids can lease but not sell the cars. This protection ensures your heirs benefit from it, but don’t squander the assets. In other words, even after death, you can determine how your assets will be used. And if you want to protect them for future generations, you can. This is one way to create generational wealth. 

So now we’re up to our third and final lesson: If you want to protect and preserve your assets for generations, take Vanilla Ice’s advice and utilize trusts in your planning. 

Put Vanilla Ice’s Advice Into Action Today

Vanilla Ice’s video brings forward lessons everyone can benefit from. By understanding your options, including how taxes and life insurance impact your family and assets specifically, and considering using well-counseled trusts, you can safeguard your assets and ensure they benefit your loved ones the way you want. To quote his classic hit, “Ice Ice Baby,” ‘Anything less than the best is a felony.’ Take these lessons from Vanilla Ice to heart, and start building a solid estate plan today. Your future generations will thank you for it. 

We help you create a Life & Legacy Plan rooted in education and clarity so your loved ones stay out of court and conflict and your assets are protected. Once we’ve created your plan, you can rest easy knowing you’ve done the right things for the people you love most.

Contact us today!

This article is a service of Res Nova Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning™ Session.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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Celebrity Estate Plans Series, Part 1 of 4: Michael Jackson

What is it about celebrities that always draws us in? For whatever reason, we just can’t resist a good, juicy celebrity story. So, for the next few weeks, we will look at the lives of 4 celebrities and see what we can learn from their stories. 

This week, we’re turning the spotlight on Michael Jackson. Even if you aren’t old enough to “Remember the Time” when Michael Jackson was dominating the charts, by the end of this article, you’ll see that he left holes in his estate plan that we can learn from.

Now, let’s dive in and learn how to avoid the same fate for your loved ones. 

It’s As Easy as “ABC” (and 1, 2, 3)

Before we look at the specifics of Michael Jackson’s story, let’s dispel a myth about estate planning: You need not be rich, philanthropic, or famous to need estate planning. You need estate planning if you own anything – even a bank account – and have people in your life you love. It’s as simple as that (dare I say it’s as simple as “ABC” and 1,2,3?). So, as you think about your estate planning, it’s time to “Beat It” past the misconceptions so your loved ones can empower you to do the right thing. 

Creating a Will Alone is a “Bad” Choice

So what happened in Michael Jackson’s case? His estate plan included a Will, which established trusts for his mother, Katherine, and his three children, Paris, Prince, and Bigi. 

Let’s stop because this setup already has an increased potential for conflict.

When your assets pass via “Will” (instead of via Trust), your assets must go through a court process called probate. Subjecting your assets and your family to probate can result in a long, time-consuming, public, and messy court process that can be unnecessarily expensive to resolve. 

A trust, on the other hand, bypasses the court process altogether as long as your assets are owned in the name of the trust when you become incapacitated or when you die. If your assets are appropriately transferred and retitled into the trust (called “funding” the trust), your estate can be administered privately and often takes less time than the court process. A trust can be set up and funded while you’re alive, thereby avoiding probate, or it can be a part of your Will. When it’s part of your Will, like in MJ’s case, it isn’t established or funded until after the court process. So, if you’re trying to keep your family from going through the court process, putting a trust in your Will completely defeats the purpose.

Since Michael Jackson’s assets passed via a Will, there have been ongoing legal matters in court, which still haven’t been resolved in the 15 years after his death. MJ’s family is embroiled in a dispute with the IRS, so the trusts he intended to create for his mother and children remain unfunded. Therefore, some of his assets cannot be transferred to them as he planned. It’s also highly probable that the legal disputes continue to cost the estate a lot of money. That’s money that otherwise would have gone to his mother and children. 

Taxes – A Potentially “Dangerous” Situation! 

The Jackson estate’s ongoing battle with the IRS is a stark reminder of the tax implications that can affect your plan and your loved ones. When it comes to taxes, you can’t think in terms of “Black or White.” If you intend to avoid as many taxes as possible, you don’t want to cut corners by doing your estate planning cheaply or independently. That could be “Dangerous!” 

Taxes can significantly reduce the value you pass on to your heirs, directly impacting your loved ones. So, our next lesson from Michael Jackson’s story is that the stakes are too high to attempt alone when it comes to saving money on taxes. Work with a professional who can advise you properly. We aren’t clear why Michael Jackson didn’t get the support necessary to minimize taxes and protect his estate from a long, drawn-out court process, but we know we can help you and your loved ones.

Avoiding the “Thriller” of Legal Disputes

The Jackson case also highlights the importance of choosing the right representatives for your estate. These are the people who handle your affairs after you’re gone (they’re called “executors” if there’s a Will or “trustees” if there’s a Trust). MJ’s family members have criticized the representatives for the way they’ve managed the estate. In particular, Katherine Jackson has alleged that the executors have been too frugal and are holding onto assets to maintain control. 

Conflict between your representatives and your loved ones is always possible. To help minimize the potential, we recommend you communicate your intentions to your representatives and loved ones during your lifetime. Consider holding a meeting so everyone knows your wishes and understands the intent behind your decisions. You may not be able to “Heal the World” on your own, but you can promote healing within your own family and prevent future conflict by opening the lines of communication now. 

Also, know that you don’t have to choose family members to be your representatives – even if you feel pressured. If you aren’t sure who the “right people” are, think about people you know who are trustworthy and capable of handling complex financial and legal matters. There’s also the option of choosing a professional representative, as Michael Jackson did, who might be more appropriate for your situation. 

Our two final lessons from Michael Jackson’s story are: 1) Communicate your wishes openly to your representatives and your family, and 2) Choose the right people to act for you when you no longer can. 

“You Are Not Alone” – We’re Here for You

By learning from the challenges faced by Michael Jackson’s family, you can ward off the possibility of a similar outcome for your loved ones. Your careful planning today can pave the way for a smoother transition of your assets in the future, ensuring that you can support your family after you’re gone rather than creating a mess for them to handle without you. 

It’s “Human Nature ” to want to avoid thinking about your death, much less plan for it. We get it. But we can live a more fulfilling life when we face our mortality. The good news is that you don’t have to deal with it alone. We’re here to support you every step of the way. 

We help you create a comprehensive Life & Legacy Plan from a place of education and intention so that your loved ones stay out of court and conflict and you can minimize taxes. Once you’ve created your plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, and your legacy preserved. 

Schedule a complimentary 15-minute consultation at Res Nova Law Firm to learn more. Contact us today!

This article is a service of Res Nova Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning™ Session.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

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COVID-19: McKean Smith Offers Immediate Arbitration and Mediation Services

McKean Smith Law Firm, with offices in Vancouver and Portland, offers arbitration and mediation services that are tailored to deal with the current COVID-19 restrictions.

“We have all experienced the effects that the COVID-19 pandemic has had on all businesses and the legal industry alike,” said Collin McKean, co-founder of the firm. ”With the recent closures of county courts and with many hearings and trials being rescheduled, the ability for the court to take part in any arbitration matters may be limited for the unforeseeable future.”

McKean and attorney Deanna Rusch are available on short notice for mediation and arbitration, with secure hosted remote videoconferencing and document collaboration capabilities, including arbitrating any hearing that the court is unable to handle based on court limitations. They offer:

  • Virtual meetings from the convenience of your own office space;
  • Private break-out sessions during mediation;
  • Document collaboration during mediation;
  • Arbitration recording; and
  • Electronic signatures using Adobe Sign.

Fees for Deanna’s mediation or arbitration services may be reduced where participants have lost their jobs or are first responders.

Questions?  Email them at clientservices@mckeansmithlaw.com, or call them at 360-502-7022.

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Divorcing After 55: Healthcare Coverage Before Medicare Eligibility

Getting divorced at any age is destabilizing and has consequences far beyond simply ending your legal marriage.  Often, one spouse relies on the other for health insurancecoverage.  The end of a marriage, therefore, also may result inthe end of that coverage.  

When the spouse losing coverage is over 55, however, losing health insurance coverage may not be an option. With Medicare eligibility up to 10 years away, it is important for anyone going through a divorce to proceed carefully and take whatever steps possible to maintain coverage. 

In Oregon, lawmakers have sought to bridge that gap. If you are 55 years or older and divorced, you may be able to continue your existing coverage until you are eligible to enroll in Medicare or another group coverage. To take advantage of that, the law requires you to notify the insurance plan administrator within 60 days of the entry of the dissolution judgment. You must then elect continuing coverage with whatever form the plan administrator provides. More information can be found here.

In Washington, however, no comparable law exists. Without such protection provided by law, you—with the help of your attorney—will want to consider more creative solutions for guaranteeing continuing coverage.

Jordan Jeter is an attorney at McKeanSmith.

For example, if you are negotiating a settlement with your spouse, consider asking for them to keep you on their health insurance plan until you are eligible for Medicare. If your spouse is unwilling or unable to continue coverage for you, consider asking—either in negotiations or at trial—for a higher monthly support amount or greater share of the marital assets to offset your increased healthcare expense amount.

Although a more unorthodox approach, some couples even choose to remain legally married so that one spouse can continue accessing the other’s health insurance coverage. These couples reach an agreement as to all the terms of their divorce but choose to put off finalizing the divorce until Medicare eligibility. 

If all creative problem-solving has failed, and you find yourself needing to obtain coverage after your divorce, you may be eligible for continuing coverage under the Federal COBRAlaw. COBRA allows a person who is divorced to continue theirexisting coverage for 36 months. Depending on how close you are to the age of Medicare eligibility, that 36 months might fill the gap. COBRA coverage, however, is expensive, and it is generally recommended that you try to get health insurance from other sources instead.

For more information on healthcare resources, please visit WAHealthPlanFinder.org or OregonHealthCare.gov. 

Contact the law firm of McKean Smith today for a consultation. Visit McKeanSmithLaw.com.

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