Miami Probate Law Blog

Not the beneficiaries, according to critics. The common life insurance practice is coming under fire. "Retained-asset accounts" are the focus of investigations in New York and Georgia, and Florida estate planning attorneys are taking particular note of an inquiry by the U.S. House Oversight and Reform Committee.

A story published in the September issue of Bloomberg Markets magazine highlighted some of the risks involved with these accounts. A woman was named beneficiary of her mother's life insurance policy. When her mother died, the insurance company advised her to keep the payout -- over $100,000 -- in a guaranteed money market account. The company assured her the money was safe, and they sent her a "checkbook" so she could draw funds from the account.

Unfortunately, the woman's cousin forged checks on the account, making off with almost $50,000. The insurance company and the bank that handled the checks refused to cover the losses.

Unlike a bank account, a "retained-asset account" is not insured by the FDIC, nor is it subject to state and federal laws that require banks to verify signatures and cover losses.

Al Capone died in 1947. He had served his sentence for tax evasion and moved to Florida by then, broke and physically diminished. When he died, Capone had no known will. He had no tangible assets, of course, but he did have his mobster, St. Valentine's Day Massacre, "public enemy" reputation and his likeness to pass on. And that's causing a problem some 63 years later.

The current drama involves two legitimate descendants, Capone's granddaughter and his great niece, and a man who is claiming to be Capone's grandson.

The family generally tried to distance themselves from the Capone legacy. The great niece had been ostracized as a girl, and she claims she lost a job when the connection was discovered. Her father committed suicide when he was refused admission to the Chicago Bar -- refused admission even though he had never been involved in his Uncle Al's criminal enterprises.

The Florida Legislature recently amended a few of the state's probate laws, which now give Florida courts broad power to construe will and trusts in the absence of a federal estate tax. The Legislature amended Section 733.1051 of the Florida Probate Code and Section 736.04114 of the Florida Trust Code which now allows Florida Courts to exercise broad authority to "determine and effect the Testator/Settlor's probable intent in employing an inheritance formula, in the event such inheritances do not function correctly due to lack of a federal estate or generation-skipping transfer tax in 2010."

According to the Association of Corporate Counsel, "the statues allow Florida courts to consider the "terms and purposes" of the document, the "facts and circumstances" surrounding its creation and the Testators/Settlor's probable intent."

The father of deceased pop king, Michael Jackson, is appealing a probate court decision which ruled that Joe Jackson had no right to object to the appointment of two of his son's associates as executors of his son's will. Joe Jackson's lawyer filed papers at the Second District Court of Appeals in California last Friday to petition to overturn the decision handed down in November 2009 by a Los Angeles Superior Court judge.

According to the appeal, Joe Jackson is objecting to the appointment of entertainment lawyer John Branca and music executive John McClain as executors of his son's will and estate. Furthermore, Joe Jackson has accused both individuals of fraud and embezzlement, which the both strongly deny.

The Mayo Clinic announced today that a longtime patient left the hospital nearly $43 million in estate funds in her will and trust. The Rochester, Minn. based hospital giant announced this news today in a press conference. Juanita Waugh, a well-known Indiana businesswoman who died last February, left a majority of her estate to the Mayo Clinic; the hospital in which her and her parents had been patients for nearly 60 years. Waugh passed one day before she was to celebrate her 88th birthday.

Mayo expressed that this is the third-largest gift it has ever received. The clinic says it will use the money to fund educational programs on its three campus in Rochester, Jacksonville, Fla. and Phoenix, Ariz. Additionally, the clinic said some of the money will help fund construction of an educational conference center in Arizona and advance the Mayo's online tool, MayoExpert. The largest portion will go towards scholarships in the Mayo Graduate School.

In our last blog post, we highlighted the importance and benefits of starting estate planning dialogue with one's aging parents.

Below you will find 8 tips from estate planning experts, Alexandra Armstrong, a financial planner and Deborah Jacobs, author of Estate Planning Smarts, on how to address the estate tax and planning topic with your aging parents.

Starting any type of estate planning discussion with your aging parents can be a tough and awkward conversation. Some parents may misconstrue your intentions and believe you are mainly interested in preserving your own inheritance. Despite this almost as bad as the "birds and the bees" conversation, helping your parents understand the current complexities of the current estate tax can help him plan and decide where they want their estate funds to go after they pass.

This conversation is especially important this year, since the federal estate tax does not exist this year due to a legal oversight. However, next year the estate tax returns and if a family has more than $1 million in estate assets, those assets will be taxed unless congress takes action to change it. Many legal professionals warn that due to the complexities of tax rates and estate tax in general, if the wrong wording is contained in a will, a spouse or love one could be left with nothing or even worst left to the wrong individual(s).

In one of our last blog posts entitled "Large Florida Estate Goes to the Dogs," we highlighted the facts of a popular ongoing Florida probate case where a deceased woman left almost $3 million dollars in estate funds to her three Chihuahuas, instead of her only surviving child. Many read this article and thought, really?!

But it shouldn't be surprising that individuals are increasingly adding their four-legged friends into their overall estate plans. According to a recent article, "Americans are projected to spend an estimated $45.4 billion in 2009-2010 on their pets, up from $34.4 billion in 2004." So naturally, it would be logical to think that people would set up pet trusts to ensure their furry friends will be taken care of after they pass. In many cases, their animals do in fact outlive their owners.