The Probate Lawyer Blog

The Britney Spears Conservatorship legal battle has taken some interesting twists and turns.  I discussed some of them in my prior post about the case, including the attorney who claimed he had been hired by Spears to fight her father in court.  This lawyer, Jon Eardley, told the court that Britney's father, Jamie Spears, was wrongly controlling her and that she should have her legal rights to make her own financial decisions returned to her. 

Not only did Eardley lose, but Jamie Spears sought the extraordinary step of a restraining order against the attorney, seeking to protect Britney from him for years.  Yesterday, this request was granted.  A California judge issued an order preventing Eardley from trying to take any action on her behalf, including filing legal pleadings for her.  He was also ordered to stay at least 100 yards away from her and her kids, and refrain from all contact.  Eonline obtained a copy of the restraining order, which you can read here.

Eardley had tried -- unsuccessfully -- to force Britney to appear at the court hearing to help him defend against the restraining order request.  He argued that if she was well enough go on tour, she could appear in court and support his claim that she voluntarily hired him. 

One of the best seller authors/screen writers of all time, John Michael Crichton (of Jurassic Park and ER fame) died tragically of throat cancer on November 4, 2008 at the age of 66.  Some estimate his annual earnings before he passed at $100 million per year.  On top of that, two more novels are scheduled for posthumous release as part of a $30 million publishing contract.

Of course you'd expect that Crichton's estate plan included the most thorough and up-to-date legal documents ever created, right?  Not quite.

He left behind four ex-wives, a 20-year old daughter, and a wife six-months pregnant, Sherri Alexander.  He did what most adults should do; he worked with an estate planning attorney and executed a will and trust.  He even had a prenuptial agreement with Alexander that limited what she would receive from his estate.  But he made one crucial flaw that may cause his estate to be tied up in probate litigation for years to come.

In a previous post about the legal wranglings surrounding the Marlon Brando Estate, I discussed a couple of the highlights, including claims of a forged will, sexual harassment, broken promises and more.  Those were the tip of the iceberg.

A recent New York Times article discusses that, dating back to the time shortly before the legendary actor died at age 80, on July 1, 2004, his trust and estate have been involved in 26 different lawsuits.  The latest is a challenge initiated by his three trustees against the Broadcast Center Apartments in Hollywood for featuring a "'Brando suite". 

The trustees worry about the commercial value of Brando's name and image.  They are forming Brando Enterprises, with the goal of "protecting and managing the Brando brand."  Among the projects planned -- a condo complex in the South Pacific (ecologically friendly of course), with a price tag of between $50 and $100 million. 

Nina Wang was Asia's richest woman and one of the wealthiest women in the world -- with a larger fortune than the Queen of England, according to Forbes.  She died of cancer, without children, on April 3, 2007.  So who inherited this vast wealth -- estimated to be as high as $13 billion (U.S. value)?  Why, her feng shui master, of course.

Tony Chan was her personal consultant of all things feng shui.  Feng shui is an ancient Chinese philosophy of art and science that is used to balance the energies of the space people occupy to promote good health and fortune (at least, that's what I read somewhere).  Must be pretty powerful stuff, because Nina Wang signed a will in 2006 leaving the esteemed Tony Chan EVERYTHING. 

This will replaced a will from four years prior that benefited charity and family members.  So of course, the 2006 will was promptly attacked in court, launching perhaps the biggest will contest proceeding Asia has ever seen (or at least, Hong Kong).  They claimed that Chang used undue influence by convincing Wang that she'd enjoy eternal life (or at least a very, very long life) by signing the will.  Sadly, it didn't work -- she was 69 when she passed. 

Few things make good estate planning and probate litigation attorneys angrier than unethical trust kit companies that prey on senior citizens.  Many use false statements to encourage them to purchase estate plans, and more, without ever seeing an attorney.

One of these companies is being held accountable.  It calls itself "The Estate Plan" and according to the allegations of a class action lawsuit, it ran a scam as fraudulent and devastating as any.  It and 11 other defendants are being sued in federal court in Arkansas, on behalf of elderly citizens throughout Texas and Arkansas that have fallen victim.  Because the company, The Estate Plan, did not appear to defend itself in the case, the court entered a $16 million default judgment against it.  The case continues against the remaining 11 defendants.

According to this article in the Southeast Texas record, the company held seminars and attracted seniors through free lunches and dinners.  At these seminars, it scared seniors with misleading illustrations showing how estate taxes and probate costs can rob people of estates, leaving their heirs with next to nothing.  It then sold prepacked trust kits, which were purchased by the victims without any consultation with a lawyer.  Worse, the company gathered financial information about the trusting elderly people and then sold them annuities and other financial products without disclosing the costs and fees involved.

While this company operated in Texas and Arkansas only, the sad truth is that companies like this peddle these products throughout the country.  Here are some of the many problems they create:

1. No one should ever -- EVER -- buy a living trust or similar estate planning document without meeting with a qualified estate planning attorney.  Trusts are not "one size fits all"; everyone and every family is different.  Every living trust should be different too.  Any money spent on a prepacked trust is a waste.

2. Very few people need living trusts because of estate taxes.  The estate tax level in this country is so high that very few people will ever have to worry about it.  In 2009, the level is 3.5 million dollars (although this could change).  Plus, trusts don't avoid the estate tax; but they can help minimize it for those who qualify, but only if they are done properly.  There are many, many good reasons to have living trusts, but unfounded fears of losing estates due to estate taxes are not one of them, for most people.

3. The trust kit company in this case, like most, did not help people "fund" their trusts, but instead relied on "pour-over wills", which transfer assets into the trust after death.  How do these wills work?  By going through probate court.  In other words, this company did not even help people minimize probate court costs, which is one of the ways it scared people into buying their trusts.  By working with a good estate planning attorney, clients learn how to use trusts the right away and avoid probate court altogether.

4. The company also sold variable annuities and other unsuitable investments to seniors, after it had gained their trust and learned their financial information.  Sometimes, in the right circumstances, certain annuities can be good investments for seniors.  Other times, unscrupulous salesmen -- like those working with this company (according to the lawsuit allegations) -- misrepresent the financial products they sell to trick seniors into buying them.  Many of these annuities carry very high surrender fees which lock up the senior's money for 10, 15 or even 20 years.  This means that the seniors can't access their own money, often at times when they most need it, without paying huge sums in penalties (which can be as high as 25%).

The moral from this story should be obvious -- don't leave your future and your family's inheritance up to chance.  Trust kits are seldom worth the paper they are printed on.  Even the less unethical companies ignore the basic rule that only a qualified estate planning lawyer should help seniors (or anyone else) create wills, trusts and other estate planning documents.

And always watch out for annuities sold to seniors.  There are too many unsuitable annuities being sold by financial planners who seem reputable, but who don't always let seniors know what they are getting into.  If you have an elderly loved one who is considering buying an annuity, look closely, ask lots of questions, and if you have any concerns, have an experienced attorney look over the annuity before its purchased.  This is very important whether the annuity is sold through a trust kit company or elsewhere.

In fact, I and other probate litigation attorneys who have experience with these annuities can help seniors even after they've purchased an unsuitable annuity, if the family doesn't wait too long to get legal help.  Usually, it's not too late to undo the damage caused by a shady annuity that a senior citizen never should have bought in the first place.

When Dan found out he was going to inherit a fortune when his sickly
father died, he decided he needed a woman to enjoy it with. So, one evening he
went to a singles bar where he spotted the most beautiful woman he had ever
seen.

Her natural beauty took his breath away. 'I may look like just an
ordinary man,' he said as he walked up to her, 'but in just a few months, my
father will die, and I'll inherit 20 million dollars.'

Impressed, the woman went home with him that evening and, three days
later, she became his stepmother.

Women are so much better at estate planning than men.

Happy April Fools Day! 

[Thanks to Ronna for the great joke]