Ronald Morton's Elder Law Blog

Forbes Reports No Dispute over McNair Estate

Contrary to predictions of controversy over the Steve McNair estate made here and elsewhere on the web, Forbes reports that no dispute exists between the various factions of the McNair family.  According to the report, everyone in the family is aware of the football player's wishes with respect to caring for his children, both from his current marriage and prior relationships, as well as caring for his mother.  The article also reports that the famous quarterback had previously commissioned the creation of two wills, but never executed them.  The article notes that under Tennessee law, his marriage would have invalidated one of them if it were signed prior to the marriage.  This would not have been the case under Mississippi law.  Under Mississippi law, a marriage does not invalidate a prior will, although a spouse can claim an equal child's share of an estate if he or she is not sufficiently provided for in the will.  Despite the apparent family harmony, at least for now, it is likely that the McNair estate will be strapped with significant estate tax liability that could have been minimized, or possibly completely eliminated, through proper planning. 

The High Cost of Failing to Plan

Steve McNair earned a reported $75 million during his 13 seasons with the Titans, and yet apparently died without a will. While it is unknown what his current estate is worth, it is almost certainly worth many millions. Under current estate tax law, the first $3.5 million of his estate going to persons other than his spouse is exempt from Federal estate taxes, and the first $1 million is exempt from Tennessee state estate tax.  As an intestate estate probated under Tennessee law, 1/3 of his estate will fall under the unlimited spousal estate tax exemption, but to the extent that the remaining 2/3 of his estate exceeds $1 million and 3.5 million, his estate will owe state and federal estate taxes of nearly 50%.  Had he drafted a will using a competent estate planning attorney, this estate loss could have been totally eliminated by leaving his entire estate to his wife, either in trust or outright.  His failure to plan will likely cost his loved ones millions.  On the brighter side, his family's loss is the IRS's gain. If you need to plan your estate, we are here to help.  Please feel free to call or email me if you have questions or I can assist with any of your estate planning needs. 

Nursing Home Ratings

US News and World Report has rated nursing homes around the nation.  Mississippi has 25 homes with a 5 star rating.  To see how a particular home that you are considering rates, click here.

Morton Appointed to MS Bar Committees

Ronald Morton has accepted appointment as Chairman of the Mississippi Bar's Technology Committee for 2009-2010.  Additionally, Morton has accepted a one year appointment to the Mississippi Bar's ethics committee. 

Millionaire Football Star Died Without a Will

Mississippi native and football legend Steve McNair died without a will, leaving the handling of his estate to the intestacy laws of Tennessee, the Tennesseeian reports.  His widow's petition to open the estate only identifies herself and their two sons, but omits his two other sons from a previous marriage.  Under Tennessee law, his surviving spouse will receive 1/3 of the estate, whether he has 2, 4, or more children. This result is different than if his estate had been probated in Mississippi, where his widow would only recieve an equal share with his children, which presumably is why the estate was opened in Tennessee.  It is a certainty that representatives on behalf of his other two children will intervene in his estate to ensure they recieve their share of the estate.  What is uncertain is whether other putative heirs will also assert claims.  Had McNair executed even a simple will, these issues would have been eliminated, and handled in a manner of his choosing rather than the courts. 

Qualifying for Medicaid in Mississippi

The following is a video blog post that reviews the requirements for qualifying for Mississippi Medicaid benefits.

Michael Jackson's Will Tells Us a Lot by Telling Us Very Little

The Will of Michael Jackson was filed in Los Angeles Probate court yesterday.  Michael Jackson's Will.  From the will we really learn very little about the ultimate distribution of Jackson's large estate.  The entire estate is payable into the Michael Jackson Family Trust.  It appears that this "Family Trust" is a revocable living trust, given the statement in the will that Jackson himself was the initial trustee and trustor of the family trust, and the fact that is was amended and restated in 2002.  Beyond that, the will names the executors, makes sure to disinherit his ex wife, and containes some boilerplate language dealing with taxes and probate in other states. 

What we do learn from the will is the significant privacy benefits of an intervivos trust.  Unlike a will, a trust is not required to be filed in the public records, so beyond knowing that a trust exists, we know nothing of the beneficiaries, or even the trustees, of the trust.  The probate records will eventually tell us what property passed through probate into the trust, but even that will not give us a complete record of Jackson's estate since we have no knowledge of what other assets may already be in the estate. 

There has been speculation that the trust divides the esate between Jackson's mother, children, and charities, but there is no way to confirm any of this without disclosure of the trust document, and that privacy is precicely why Jackson chose a trust to manage his estate.  In doing so, Jackson joined a long line of celebrities who handled their affairs privately through a revocable living trust, including Paul "Bear" Bryant, Frank Sinatra, John Lennon, and John F. Kennedy. 

Celebrities Die Just Like the Rest of Us, Only with more Public Disputes

Last week saw the sad loss of 4 entertainment icons.  Some of my earliest memories of TV with my fatherat the age of 4 were of watching Ed McMahon as Johnny Carson's loyal sidekick.  Farrah Fawcett was, of course, my favorite Angel every Wednesday night, even if only for a single season (but my mother would not let me get the poster). Michael Jackson's "Thriller" was the defining music of my junior and senior years in high school.  And Billy Mays, while arguably not in quite the same legue, has been a constant pitch man on infomercials for the past decade, with a sort of honest, if not annoying, characteristic about him.

This cluster of deaths should remind us all of our own mortality, and the need to get our affairs in order.  Ed McMahon was survived by his wife, as I understand it, and so I do not anticipate his estate to be controversial, although media accounts of his indebtedness may leave little in the way of a legacy.  Little is known about Farrah Fawcett's and Billy Mays estates at this time.  But Michael Jackson's estate promises to be a media circus even larger and more complex than those of James Brown estate and Anna Nichole Smith all rolled into one.  Initial accounts indicate that there will be a Will contest over the existance and validitiy of at least 1 will.  Already we have seen initial custody battles over the three Jackson children, with no doubt, more to come.  There will be numerous creditor claims, not the least of which will likely be from more alleged sexual abuse victims whose previously supressed memories will now be lifted as a result of his death, and can now come forward with their claims against the Jackson estate. 

Sadly, Jackson's estate presents a compelling case for planning.  Nothing in his estate is unique other than its scale and his celebrety status.  But every one of the disputes that has been or will likely be raised in the Jackson estate I have seen first hand in numerous estates of regular people right here in Mississippi, not all in a single case, to be sure, but the disputes themselves are actually altogether too common.  Just as these types of disputes are all subject to occur in the estates of regular people, they are all also avoidable, both by regular people and superstars alike, with a little bit of proper planning.  A parents wishes for custody of their children can easily be handled through a declaration of their wishes in their will.  Creditor claims can frequently be avoided through a device such as life insurance payable to an irrevocable life insurance trust, or payable into a family sentry trust, to protect ones legacy against creditors.  Estate taxes can often be addressed through an ILIT along with numerous other planning mechanisms. 

There are a couple of lessons in the deaths of these 4 to all of us.  Death comes to us all, and with a little planning,we can make our passing a lot easier on our heirs.