Death and Taxes - The Blog

The Public Administrator

This article gives a nice introduction to the role of the Public Administrator in the probate process.  The article focuses on California, but the same general idea applies in Illinois.  Simply put, the public administrator handles estates when a person dies and no one comes forward to do the job.  Section 13-4(a) of the Illinois Probate Act (755 ILCS 5/13-4(a)) has the full story (emphasis added):

When a person dies owning any real or personal estate in this State and there is no person in this State having a prior right to administer his estate, the public administrator of the county of which the decedent was a resident, or of the county in which his estate is situated, if the decedent was a nonresident of this State, may take such measures as he deems proper to protect and secure the estate from waste, loss or embezzlement until letters of office on the estate are issued to the person entitled thereto or until a demand for the removal of the personal estate from this State is made by a nonresident representative pursuant to the authority granted by this Act. When letters of office are issued to the public administrator, he has the same powers and duties as other representatives of decedents' estates appointed under this Act until he is discharged or his authority is sooner terminated by order of court.

The Cook County Public Administrator has a webpage, located here.  For those readers interested in purchasing real estate out of probate, you may find the page worth your while -- the Public Administrator sells real estate via public auction four times a year.

Premarital Agreements and Disclosure

Premarital agreements are becoming more and more common, but they are still controversial -- a lot of people are horrified by them.  However, even if you are one of these people, I think you can find value in one part of the premarital agreement process: where each spouse discloses his or her financial information to the other.  I would take this a step further, and also do what Mary Hunt, the founder of DebtProofLiving.com, suggests in an article in today's Wall Street Journal:

Ms. Hunt advocates sharing credit reports before marriage, which can reveal a runaway spender.  "It's more important than a blood test.  It's a character reference." 

This piece of advice comes in an article written by Jeffrey Zaslow, entitled "Financial Infidelity: When It's OK To Shop Behind Your Spouse's Back."  The article is well worth reading (as is most everything Mr. Zaslow writes) -- you can find it here (subscription required).

Follow-up on John G. Kenedy Jr.

Last September I blogged about an attempt to re-open the estate of Texas rancher John G. Kenedy Jr.  Mr. Kenedy's estate was closed many years ago, but Ray Fernandez (the grandson of Mr. Kenedy's maid) sought to reopen the estate, to try and prove that his mother was Mr. Kenedy's daughter.  According to this article from the Washington Post, state District Judge Manuel Banales has denied Mr. Fernandez's request.

Celebrity Prenups!

Monday night I was flipping around on the TV, and came across a show entitled "Celebrity Prenups" on VH1 -- here is a link with more info.  The show was a bit ridiculous (are reporters from Modern Bride and US Magazine really experts on prenuptial agreements?), but made some interesting points.  Essentially, celebrity prenups fall into three categories: good, bad, and really bad (aka non-existent).

Good: Donald Trump's attorneys evidently have more skill than his hairstylists.  Mr. Trump has been divorced twice, and both prenups have been upheld.

Bad: Steven Spielberg's prenup with Amy Irving didn't hold up because Ms. Irving wasn't represented by an attorney.  (That the prenup was written on a napkin also probably didn't help matters.)  There's also a question of whether Britney Spears' prenup with Kevin "K-Fed" Federline would be invalidated if the two divorced -- the prenup was signed on the day of their wedding (a definite no-no).  The prenup appears to have so confused and disoriented Mr. Federline that he wound up wearing a tracksuit with the words "Pimp Daddy" on the back to the actual ceremony.

Really Bad (aka Non-Existent). For a show about celebrity prenups, this program sure spent a lot of time discussing parties who took a big hit because they didn't sign a prenuptial agreement prior to marriage.  Falling into this category: Michael Douglas (with respect to his first wife, Diandra Douglas) and Harrison Ford (with respect to his second wife, screenwriter Melissa Mathison).  Jessica Simpson may also be added to this list in the near future.

Welcome Taxalicious

Last week I stumbled across Taxalicious, a new tax-related blog.  It's worth checking out -- with Taxalicious and Joe Kristan's Tax Updates, you can get your tax information with a nice dose of humor and personality.  A favorite recent post from Taxalicious is "Morans get caught in IRS dragnet" -- check out this link (gotta love that pic!).

The Inheritance Surprise?

Yesterday's New York Times featured an interesting article about inheritances.  The article -- written by Eduardo Porter and available here (registration required) -- makes it clear that most Americans shouldn't expect to receive a major inheritance.  The table included in the article tells the story:

-The total value of all U.S. inheritances rose to $190 billion in 2005.

-However, the value of the median inheritance has dropped from $42,167 (in 1965) to $29,221 (in 2005) -- these figures are adjusted for inflation.  The "problem"?  People living longer (which depletes asset values) and large post-WWII families (you'll have to share your inheritance with your siblings).

-Ninety percent of all estates have a value of $244,600 or less, and only 2% of all estates are worth $782,300 or more.

Two other interesting points from the article:

1. "By midcentury, $25 trillion will be passed from the old to their offspring."  Not to state the obvious, but that's a huge transfer of wealth.

2. "A big majority of U.S. households - 86 percent - do not expect to receive an inheritance, according to a survey by the Federal Reserve."  That may be true, but I sure have seen people's expectations change when a loved one dies and potential inheritance becomes reality.

Removing the Representative

Sections 23-2 and 23-3 of the Illinois Probate Act (755 ILCS 5/23-2 and 23-3) deal with the removal of an estate representative (executor or administrator).  Under §23-2, a representative may be removed for the following reasons:

(1) the representative is acting under letters secured by false pretenses;

(2) the representative is adjudged a person subject to involuntary admission under the Mental Health and Developmental Disabilities Code or is adjudged a disabled person;

(3) the representative is convicted of a felony;

(4) the representative wastes or mismanages the estate;

(5) the representative conducts himself or herself in such a manner as to endanger any co‑representative or the surety on the representative's bond;

(6) the representative fails to give sufficient bond or security, counter security or a new bond, after being ordered by the court to do so;

(7) the representative fails to file an inventory or accounting after being ordered by the court to do so;

(8) the representative conceals himself or herself so that process cannot be served upon the representative or notice cannot be given to the representative;

(9) the representative becomes incapable of or unsuitable for the discharge of the representative's duties; or

(10) there is other good cause.

The court can also remove a representative if he or she ceases to be a U.S. resident.

If I had to guess, I'd say that (4) -- dealing with a representative's waste or mismanagement of the estate -- is the most common reason why a representative might be removed.

In most cases, the party seeking removal (usually a beneficiary of the estate) will file a petition with the court, asking that a citation issue against the representative.  The citation will be served on the representative, who must appear in court on the date shown in the citation (known as the "return date"), and -- in the words of §23-3 -- "show cause why he should not be removed for the cause stated in the citation."

Ralph Haines Probate Litigation

Ralph Haines is described in this article as "West Virginia's top probate lawyer."  I don't know whether or not that's an accurate characterization -- it's possible that the designation just makes it more effective when the article's author (Steve Korris) states that Mr. Haines "blew his own will." 

Everyone loves a "cobbler's children have no shoes" story, but I'm not sure that this is such a story.  The problem doesn't seem to involve a mistake in the drafting of the Will; rather, the problem is that the sole beneficiary of Mr. Haines' estate (his daughter, Linda) and the executor (Pamela Kimble, formerly Mr. Haines' secretary) didn't get along.  (I will say that I have a question about why Linda Haines wasn't named as executor of the estate in the original Will, or why she wasn't at least given the power to replace an executor she didn't like.)

I encourage people to think carefully about the personalities involved when they select fiduciaries (agents under powers of attorney, guardians, executors, and trustees).  Did Mr. Haines do a poor job of that?  It's easy for us to say that, given that things didn't work out well -- presumably Mr. Haines didn't want "nearly a million dollars" from his estate to be spent on legal fees.  However, it's often difficult to determine how friends and family members will act after your death.  We have to approach these decisions thoughtfully, but with the realization that we can't know with 100% certainty how a fiduciary (or a beneficiary) will behave.  Choosing fiduciaries is an art, not a science.

More on Ghostwritten Blogs

Last week I wrote about blogs and ghostwriting.  My post was a response to an article by Edward Poll in this month's Law Practice Today.  Since the issue of ghostwritten blogs is a hot topic these days, I sent Mr. Poll an e-mail, asking if he'd care to share his thoughts on the matter.  Mr. Poll's response to my post appears on his LawBiz Blog, here.

In reply to Mr. Poll's response, I would make three points:

1. Mr. Poll states that "[i]f we had to do everything ourselves, we all would be sole practitioners," and then sets forth a number of situations he feels are analogous to using a ghostblogger.  For me, the question of whether a given type of work may be delegated involves thinking in terms of Expectation, Representation, and Relationship:

Expectation.  Could the client reasonably expect the attorney to do this work?  

Representation.  Did the attorney represent to the client that the attorney would do this work? 

Relationship.  Is the work related to the attorney's substantive law practice, or is it merely procedural?

Let's look at the situations mentioned by Mr. Poll -- I think most of them are distinguishable from the matter of the ghostwritten blog:

"When a rainmaker brings new business into the firm, the work is often done by other lawyers."  The fact that other lawyers are doing the work should be disclosed by the rainmaker, in his engagement letter to the new client and in the invoices to the client (which should show exactly what personnel did what work).  My post made it very clear that, while I think using a ghostwriter for your blog is probably a mistake, my bigger problem is with the failure to disclose the use of a ghostwriter. 

"When lawyers write briefs, frequently those briefs are edited by other lawyers, by secretaries and others."  I would add that associates frequently write entire briefs for the partners who employ them.  Once again, this should be disclosed to the client as discussed above.  If Andy Associate spends 15 hours writing a brief, which Penny Partner then spends 15 minutes reviewing before it's filed, Penny Partner has no business claiming that she wrote the brief.

"When clients pay bills, accounting folks make the deposits."  This is a very strange analogy.  Clients don't care who is depositing their checks -- there's no expectation that the attorney will do this, and it has nothing to do with anything substantive in the representation. 

"When a lawyer or law firm creates a marketing brochure, it is often a professional marketing person or copy writer who develops it --- not the lawyer, but for the approval of the principal lawyer."  This is probably Mr. Poll's best point, but I would argue that there is no expectation that the attorney is writing his or her own marketing copy, and (hopefully) no representation that the attorney did so. 

You could also argue that most marketing has no relationship to anything substantive.  I'd say that's the difference between regular marketing and blogging.  You probably wouldn't ask an attorney to put together a print ad campaign for her firm, but you also wouldn't ask a legal marketer to write blog posts about substantive areas of law. 

2. To me, a more analogous situation to ghostblogging without disclosure would be this one:

Abe Attorney is a solo practitioner who is meeting with an important new potential client.  The potential client asks for writing samples from Abe in his substantive area of practice.  Abe either doesn't have the time or the skills to prepare such writing samples, so he hires Lisa Lawyer to write them for him.   Abe doesn't tell the potential client that the writing samples were written by Lisa. 

I can't describe the above scenario as anything but a fraud perpetuated against the potential client.

3. Having worked at three law firms early in my career, I find it hard to believe that, as a practical matter, "delegating the work doesn't mean abdicating the responsibility."  If an attorney can't spare 15-30 minutes per day to blog, then I doubt the attorney can spare 5-10 (or more) minutes per day to review his ghostwriter's posts before they are put online.  Of course, this goes to the question of how we define responsibility.  Last week it came to light (on Ben Cowgill's Legal Ethics blog, here) that a legal blogger was posting materials supplied by Nolo Press on his blog.  I would presume that Nolo does not allow these materials to be altered or changed by the attorney.  If my presumption is correct, then how can the attorney fulfill his "responsibility"?  Is it sufficient to review (but not alter in any way) the posts he purchases from Nolo?  That strikes me as no different from saying that the attorney's responsibility is fulfilled when he writes the check to Nolo.

The New Money Magazine

I subscribed to Money magazine back in the go-go 90's, when it offered lots of investment tips.  Evidently the bursting of the tech bubble shook things up at the publication, since the new version of Money doesn't focus much on stocks and bonds.  I think that's a good thing, because the magazine now provides a lot of helpful information about maximizing your income and cutting expenses.  For instance, recent articles detail specific steps you can take to reduce energy costs and to take control of your credit score.

The April 2006 issue of Money arrived just a few days ago, and it has lots of goodies, including some articles that touch on estate planning and probate issues:

-an article on reverse mortgages, with a sidebar offering advice to those who inherit a house with a reverse mortgage;

-an article that discusses "What you need to ask yourself when you're asked to care for a loved one's children" after the loved one passes away; and

-an article on prenuptial agreements.

One downside to Money: it seems to have almost zero internet presence.  This appears to be the magazine's homepage, and it offers very little in the way of articles -- plus, the articles it does offer relate mostly to stocks and such.  That's a shame, since the new version of the magazine provides so much more.