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Picking someone you “Trust” for Estate Planning: The Sad Cases of Elder Exploitation

Elder Financial Exploitation: Undermining Estate Planning

Ward Knutson was entrusted to help his mother with her estate planning needs.  Instead, Mr. Knutson allegedly stole over $800,000 from his mother, Doris Knutson, 87, for his personal benefit.  This reportedly included supporting his gambling habits, phone sex,  and luxury cruises.  Mr. Knutson was recently convicted in Hennepin County District Court and sentenced to pay over $100,000 in restitution and to server 20 years of probation.  Mr. Knutson only avoided a prison sentence because the judge wanted to give him the opportunity to pay his mother back.

The stories are too familiar.  They seem to pop up almost daily.  An often vulnerable elderly person selects a family member who they trust to administer their financial or personal affairs.  These cases highlight the importance of both properly drafting legal documents and obtaining oversight regarding how they are administered.  But perhaps most important of all, it underscores the importance of selecting someone you trust and who will work with your best interests in mind.

Estate Planning Documents and the Persons You Appoint

The trust issue is especially relevant if you’re considering creating any of the following:

  • Will (you’ll appoint a personal representative)

  • Trust instrument (you’ll appoint a trustee)

  • Financial power of attorney (you’ll appoint an attorney-in-fact)

  • Health care directive (you’ll appoint a health care agent)

In all of these estate planning situations you may be appointing someone to handle your affairs.  Whether as a primary fiduciary or as an alternate, it’s critical to pick someone you can trust.  Don’t take the decision lightly. Consult family and friends you trust, financial professionals, and an attorney.  These individuals will help you both personally and legally examine all of the relevant factors to your situation.  This will allow you to make the most informed choice possible for how you manage your affairs.

Disclaimer

All of the materials available in this blog is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain legal advice with respect to any particular issue or problem. Use of and access to this blog does not create an attorney-client relationship between Majeski Law, LLC and anyone who uses it.

No Will, but a Way … Same-sex partner gets inheritance

This November a voter ballot will be held in Minnesota to determine whether to pass a State Constitutional amendment that defines marriage as only between a man and a woman. Amidst this backdrop, Thomas Proehl married James Morrison in 2008 in California.  While living in Minnesota, Mr. Proehl died in 2011 without a will.  The final judicial order can be found here.

In Minnesota, if there is no will or other estate planning devices, a spouse is normally first in line to take property.  However in Minnesota, which has adopted the Defense of Marriage Act (DOMA), same-sex marriages are not legally recognized.

The Case: Mr. Morrison “Wins” without a will

Hennepin County District Court Referee George Borer ruled that Minnesota’s DOMA law does not prohibit same-sex partners the right to inherit.  So, Mr. Morrison “won” in the sense that he did finally get property rights.

However, he spent over a year muddled in the court system, wasting his time and money.  His personal business was aired out publicly, whether he liked it or not.  And perhaps most importantly, he had to go through all of this in an uncontested case.  In other words, no one was opposing Mr. Morrison’s claim on the property and he still had to endure significant legal roadblocks.

The purpose of this piece isn’t to make any kind of statement one way or another regarding same-sex marriages.  Instead, this is just another example of unexpected problems that can arise when individuals don’t make an adequate estate plan. 

Whether it include a will, the proper trust instruments, a health care directive, a power of attorney, or any other transfer on death documents, a properly drafted estate plan is critical to help your successors avoid these kinds of transfer problems.

Disclaimer

All of the materials available in this blog is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain legal advice with respect to any particular issue or problem. Use of and access to this blog does not create an attorney-client relationship between Majeski Law, LLC and anyone who uses it.

Minnesota Trust Account Dispute: Three Little Words and 4.3 Million Dollars

The Supreme Court of Minnesota, the highest court in the state, recently delivered its opinion* on an eleven year-long dispute.  On one side of the legal dispute was the deceased wife’s widowed husband who served as the personal representative of his wife’s estate.  On the other side was the trustee of a revocable trust account the wife had set up before she died.

The Trust Account: $4.3 Million

The major issue before the court was whether language in the trust compelled the trustee to pay off the wife’s legal debts.  The trust contained over $9 million in assets at the time of the wife’s death.  Her debts totaled over $4.3 million.  Over the eleven year process, the issue bounced around courts of several states.  The parties were unsuccessful in reaching any settlement agreement.

The Trust Account: “My legal debts”

The trust contained a provision that read that it should be used to “pay … my legal debts.”  The court conducted an extensive analysis of “my legal debts”.  This included how the phrase tends to be used in wills and trusts.  The court concluded that the trust language did not compel payment of the debts from the account.  The husband lost and could not use the trust assets.

This case demonstrates, among other things, the importance of even small details in drafting estate-planning documents.  It also shows  how important it is to make every effort to make sure one’s wishes are clear and the language used in estate planning documents accurately reflects those wishes.

 Disclaimer

All of the materials available in this blog is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain legal advice with respect to any particular issue or problem. Use of and access to this blog does not create an attorney-client relationship between Majeski Law, LLC and anyone who uses it.

* – See “In the Matter of: The Pamela Andreas Stisser Grantor Trust Under Second Amendment and Restatement of Trust Agreement dated June 6th, 2001” – Filed August 1st, 2012, A101646.  Link to the text of the case can be found here.