Pennsylvania Estate Planning Lawyer & Attorney : Jakubik Law Firm : Serving Philadelphia, Chestnut Hill, Mt. Airy

The issue of competence is quite often at the center of will contests. Until it can be proved otherwise, the mental competence of the decedent is presumed. Rebutting this presumption is entirely the burden of the objectant to a will -- and it is a heavy burden to overcome, but sometimes there may be ways of accomplishing this.

Keep in mind that different levels of competence are required to execute different documents and instruments. While a minimal level of competence is needed to execute one's will (we take into account the fact that final plans may not be made until well after the eleventh hour, when a testator's medical condition may be grave), considerably higher requirements are set for the execution of deeds, powers of attorney, contracts, brokerage house documents, etc.

A major key to determining the competence of a decedent may be found in records of medical care and treatment from times contemporaneous with the execution of the documents which are in question. A recent revision to New York's Mental Hygiene Law allows distributees of decedents to obtain these records without waiting for the issuance of Letters Testamentary or Letters of Administration. This may be especially useful where an executor is slow to provide authorizations to obtain medical records --and may also allow a potential objectant to a will to have a better idea of the chance of success before engaging in costly litigation. Where an in terrorem clause is involved, this allows the gathering of vital medical information before objections are filed and before the clause becomes operative.

Hospital, nursing home and rehab center records may contain a virtual treasure trove of information. It is usually worth the investment of several hundred dollars to purchase them in those cases where you are absolutely sure that Uncle Larry was not in his right mind when he signed over his ranch to his absolutely adoring 22 year old home health aide who consistently maintains that, to pass the time, Larry used to explain complicated theories of quantum physics to her . These records contain daily --sometimes hourly-- records of treatment. They report all of the medications being administered , some of which may have definite impact on one's ability to make business or estate decisions. Sometimes these medications may also interact with each other causing unexpected mental and emotional effects.

Being hospitalized or residing in a nursing home for an extended period may , in and of itself, lead to a depression or produce a "hospital psychosis" where even the best and brightest of us become somewhat disoriented and may exhibit some signs of dementia. All of this is recorded in the nurses notes which accompany the doctor's entries. These notes are often an intimidating scrawl which defies deciphering by a non-medical person.

Spend the money. Hire a qualified forensic nurse-practitioner to review and analyze the records. Sometimes the road simply leads to a dead end but at other times the results may be awesome. These notes reveal the decedent's  comments and behavior when he or she was on powerful medications and left alone to ruminate for long portions of the day. Sometimes they  paint a totally different picture of the Uncle Larry everybody knew, loved and came to for advice. Either way, medical information properly analyzed by a professional will provide a much better vantage point from which to determine whether or not a challenge to competency is warranted.

Source: New York Probate Litigation Blog

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Phil Cubeta, who publishes a blog called "Gift Hub" had a post recently in which he discussed who ought o be involved, or "have a seat at the table," when a family constructs what Phil calls the "legacy plan," what some might more prosaically call a wealth transfer plan. Phil argues, very persuasively, I think, that grown children, typically the natural heirs of the family's planned wealth disposition, should be included in these discussions, but for a variety of reasons seldom are. As Phil states:

what a difference for the better it could make to include them before the plans are drawn. Children who are included will not "misread" the final documents as a critique of them. ("Daddy rules me from the grave through my trust officer because Daddy never loved me, never trusted me, and hated my boyfriend. He called my boyfriend a 'predator.' Why did Daddy do this to me? How did I deserve this? No one will ever love me for myself, only for my money. My peers just want to get a loan. No one can understand why I never had a job. Why should I work? My trust gives me more than I could ever make. I have done nothing all my life. I am a failure!")

In my view Phil is absolutely right. Estate planning is a family affair. I don't mean to say that your children need to know every jot and tittle, every last minute, confidential detail of the family finances (although they will learn them eventually, inevitably). But so many potential problems can be avoided if you share information,and yourplans, and the reasons for them, with your family as you formulate them.

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This past Sunday's New York Times contained an interesting story discussing ways to help teach your kids about teamwork and personal finance. The article stresses - and I wholly agree - that the lessons such exercises can teach are valuable for all children, regardless of your family's financial circumstances. You can read the Times article in its entirety below the fold.

Continue Reading...

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I have recently added new links to two blogs, both of which i have been reading regularly and have found rto be very informative. I strongly urge you to check out Michael Bonosera's Ohio Trust & Estate Blog, and Phil Bernstein's New York Probate Litigation Blog.

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That was the subject of this article in The Signal. The author of the article advocates for an annual review of your plan. While I thinIk that the frequency with which you need to review your plan, I unquestionably agree that regualr, careful review of your estate plan is essential. If your lawyer contacts you and suggests that he or she thinks a review of the plan might be a good idea, he's not just looking to earn an extra fee (and many lawyers, myself included, will conduct a regular review for no or minimal additional fee, depending upon the nature of the initial fee agreement), he's just being conscientious. Any estate planning lawyer that does not assist her clients with such regular, periodic reviews, is doing the client a serious disservice. The main reasons for doing these reviews were highlighted in the article in The Signal, and include:

• Changes in the character or scope of your assets - As time goes by, we all obtain additional assets, dispose of others and the value of what we own changes. It is important to assure that the plan that is in place is still appropriiate given these changes.
• Changes in the law - The laws that apply and affect your estate plan change frequently, including, but not limited to, the federal estate tax and any state taxes that apply. Regular check ups help to assure, among other things, that your plan maximizes the value of the assets you will pass on under current law.
• Changes in family circumstances - Births, deaths, marriages and divorces may impact how you want to dispose of your assets, or may have an unanticipated and undesired impact on the disposition scheme that you already have in place.
• Changes in your goals - It may be that the financial and other goals you had in mind when you first did your plan have changed. a periodic review of the plan provides you with the opportunity to assure that the plan that you have in place is best suited to meet these goals.

Estate planning is not a "one and done" deal. Your financial assets are not static, nor is your family situation. While an estate plan can, and should, be drafted so as to be flexible enough to accommodate changes in circumstances, not everything can be anticipated in or provided for in the initial plan. Do yourself, your family and your heirs a favor and regularly review your estate plan. If your plan is more than a year or two old and you have not performed such a review, contact your attorney.

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I have written here before on a couple of occasions about the disasters that often befall those who decide to forego professional advice and prepare their own estate plans. Please understand, I take no pleasure in the plight that such folks find themselves in. Rather, I think that highlighting such cases can help others make better decisions and, hopefully, avoid falling into the same traps. To this end, I recommend to you this post by David Goldman on his Florida Estate Planning Lawyer Blog, in which he brings to our attention a host of such do it yourself disasters, some of which I have linked to in the past, but some of which I have not. MMany thanks, David.

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A 40 percent contingent-fee agreement between New York law firm Graubard Miller and Alice Lawrence, the 83-year-old widow of real estate developer Sylvan Lawrence, was not unconscionable on its face, an appellate court said Tuesday, even though the agreement was executed in the final months of a decades-long estate litigation in which the firm had already received $18 million in hourly fees and three partners had further requested and received $5 million in "gifts."

In Lawrence v. Graubard Miller et al., a 4-1 majority of the New York Appellate Division, 1st Department denied Ms. Lawrence's motion to dismiss Graubard Miller's petition to compel payment of the contingent fee and said further proceedings would be needed to determine the propriety of the arrangement.

"[W]hile at first blush such agreement might arguably seem excessive and invite skepticism, before any determination regarding unconscionability can be made, the circumstances underlying the agreement must be fully developed, including any discussions leading to the agreement, as well as the prospects at that time of successfully concluding the litigation in favor of Mrs. Lawrence," Justice Richard T. Andrias wrote for a majority that included Justices David Friedman, George D. Marlow and Eugene Nardelli.

But in a blistering dissent, Justice James M. Catterson said he would not only have found the fee agreement invalid on its face but would also have referred the Graubard Miller lawyers to the Departmental Disciplinary Committee.

"Regardless of the procedural aspects of the parties' negotiations, no court can condone such an exorbitant fee," Catterson wrote.

Ms. Lawrence first retained the law firm, then known as Graubard Moskovitz McGoldrick Dannett & Horowitz in 1983, to represent her in a suit against Seymour Cohn, her late husband's brother, business partner and executor.

At the time of Mr. Lawrence's death in 1981, the brothers held a 12-million-square-foot real estate portfolio that included the former Port Authority building at 111 Eighth Ave. and a number of Wall Street office towers. It was estimated to be worth over $1 billion. Ms. Lawrence, who inherited 75 percent of her husband's interest, sought the portfolio's sale, but Cohn, who died in 2003, long opposed her.

Over the next 20 years, some $350 million was distributed from the estate, but the litigation dragged on until a final settlement was reached in May 2005 by which Cohn's estate would pay Ms. Lawrence and her children $105 million. Graubard Miller is seeking 40 percent of this amount, or around $42 million. Ms. Lawrence has sought rescission of the agreement as well as the return of all previous fees on the grounds of unjust enrichment and breach of fiduciary duty.

Though contingent fees of such magnitude are not uncommon in personal injury cases, they are rarer in estate cases. Moreover, such deals normally date from the beginning of the litigation and are in lieu of hourly fees, meaning a law firm bringing a case on a contingent-fee basis normally faces a risk of nonrecovery.

But Graubard Miller's contingent-fee deal was signed in January 2005, only months before the settlement. The 1983 retainer agreement in effect prior to that only specified hourly billing. In his dissent, Justice Catterson said the contingent fee might have been reasonable if agreed upon at the beginning of the case or if the firm had agreed to refund its previous fees.

"Without the costs and risks generally associated with contingency fee arrangements, such a fee agreement is nothing short of plain greed," he wrote.

The contingent-fee arrangement was proposed to Ms. Lawrence by Graubard Miller partner C. Daniel Chill. In 1998, Chill had also allegedly asked Ms. Lawrence to pay him and two other partners multimillion-dollar "gifts," telling her that such payments were typical in longstanding attorney-client relationships.

Ms. Lawrence subsequently wrote a personal check to Chill for $2 million and also wrote $1.6 million and $1.5 million checks respectively to Graubard Miller partners Elaine Reich and Steven Mallis. At Chill's alleged request, she also paid $2.7 million in gift taxes. She is also seeking the return of these payments.

But the appellate court majority said the propriety of both the retainer agreement and the gifts depended upon Ms. Lawrence's capacity at the time she entered into it, and that her advanced age was not dispositive of the issue. In its decision, the court cited the recommendation of a referee appointed by former Manhattan Surrogate Renee Roth.

The referee, former Court of Appeals Judge Howard Levine, had concluded that there was no legal authority for finding a contingent fee unconscionable solely on the basis of its size and without any inquiry into the discussions between client and attorney.

Levine was also last month appointed one of the administrators of the late Brooke Astor's estimated $190 million estate. Tuesday, the Manhattan District Attorney's Office announced criminal fraud and larceny charges against Astor's son and his former lawyer.

In Ms. Lawrence's court filings, she claimed her capacity at the time she agreed to the contingent fee was diminished because of a recent surgery, for which she was taking pain medication.

Graubard Miller's lawyer, Mark Zauderer of Flemming Zulack Williamson Zauderer, said Tuesday that Ms. Lawrence was a sophisticated woman who had entered into the fee agreement with full knowledge. He said the firm was delighted with the 1st Department's decision.

"They affirmed Graubard's right to a hard-earned fee in a very complex case," he said.

Leslie D. Corwin of Greenberg Traurig, the lawyer for Ms. Lawrence, said Tuesday that he strongly agreed with Justice Catterson's dissent and felt the case should be decided on the law, with no need to elicit further facts. Though he said he was still conferring with his client on her options, he said the likelihood of an appeal was strong.

Source: Law.com

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Today's New York Times business section tells us of  the mysterious death in Florida of 44 year old hedge fund manager Seth Tobias this past September 4th. From all appearances, he had suffered a fatal heart attack and was found in his swimming pool. Initially, there were no suspicions raised by the death of this man who had controlled a 300 million dollar hedge fund and whose estate is estimated at about 25 million dollars.

Of course, large amounts of money can lead to king-sized claims. Mr. Tobias' four brothers have already filed a lawsuit against his widow Filomena amidst claims that she had drugged and murdered her husband even though she has not been charged with any crime. The Jupiter Florida police have not opened a criminal investigation --and are not likely to do so until the results of the medical examiner's toxicology tests are known.

Meanwhile, Florida subscribes to the doctrine that one cannot profit by one's own wrongdoing and therefore a killer cannot inherit from his or her victim.The stakes here will be extremely high in all respects --and it looks as if we will be treated to a lurid and exciting wild ride which will, incidentally, provide us with more than a few lessons in the law before it is over.

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