In a recent Pennsylvania Supreme Court case, In re: Estate of William K. McAleer, the state high court addressed the issue of whether Pennsylvania law recognizes the fiduciary exception to attorney-client privilege. Unfortunately, while the case yielded a decision for the parties, the court did not reach a majority consensus on the central issue, leaving fiduciaries and beneficiaries — and the trusts and estates practitioners who represent them — still unclear about how trial courts will handle fiduciaries’ objections to requests for information from beneficiaries on the basis of attorney-client privilege.
Pennsylvania recently became one of the last states to enact a law treating digital assets and electronic records as tangible property, which allows executors, trustees, guardians, and agents to access and manage the digital assets of decedents. Now beneficiaries have access to and may take possession of their loved ones' photos, music, videos, email messages, and other digital content that are hosted on social media platforms such as Facebook and Instagram and stored by tech giants like Apple and Google.
After temporarily lifting the requirement that notaries public be physically present to witness required signatures, due to the COVID-19 pandemic, Pennsylvania became the 30th state in the nation to make remote notarization a permanent option. Gov. Tom Wolf signed Act 97 into law on October 29, 2020. Effective immediately, Act 97 gives lawyers and their clients new avenues for getting important documents notarized, but still leaves unanswered some practical and legal questions about executing estate planning documents.
The COVID-19 outbreak and government-mandated shutdowns have made in-person meetings between attorneys and clients off limits. Clients seeking to update healthcare directives and rework trust, estate, and wealth-transfer planning in the wake of the pandemic can take comfort in the fact that technology enables phone calls, video conferences, and even electronic signing of documents, allowing attorneys to meet most of their clients' needs. But one key area -- the notarization of critical legal documents -- was unaddressed by the legislature in Pennsylvania until recently.
The death of Ric Ocasek in September at age 75 came as a shock to fans of The Cars frontman-turned-music producer. More surprises came in the days that followed. Ocasek, who had been recovering from a recent surgery at his Manhattan home, was found by Paulina Porizkova, his wife of nearly 30 years, when she brought him his morning coffee, reported the gossip column Page Six and many other media outlets. The lanky, 1980s icon with the dark sunglasses married the Czech supermodel in 1989 and the couple had two sons. By 2018, however, Ocasek and Porizkova announced they had separated.
At the end of Stan Lee’s life, the Marvel Comics creator found himself surrounded by many people. Various allegations of financial elder abuse were made before he died on November 12, 2018, at age 95. Lee left behind an estate valued at approximately $50 million. Earlier this year, a former business manager of Lee’s was charged with stealing money from the comic book legend in the year before Lee’s death. Authorities in Los Angeles reportedly charged Keya Morgan with theft, embezzlement, fraud against an elder adult, and false imprisonment of an elder adult. Morgan pleaded not guilty in June.
The U.S. Supreme Court recently ruled that a state does not have the right to tax a beneficiary's income from an out-of-state trust solely based on the fact that the beneficiary lives in the state. In June, the high court affirmed state court decisions that "in-state residence was too tenuous a link between the State and the Trust to support the tax." It also agreed that the tax, as applied, was unconstitutional because it violated the Fourteenth Amendment's Due Process Clause (North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, No. 18-457, U.S. Sup., June 21, 2019).
When Aretha Franklin died in August 2018, at age 76, the initial belief that she left no will, followed by the discovery of three wills in her Detroit-area home, foreshadowed the potential emotional and financial rollercoaster ahead for the family. One year later, the rollercoaster is rapidly gaining momentum. The Queen of Soul’s four sons are now battling over the appointment of Franklin’s niece as the personal representative of her estate, the validity of the wills, distribution of assets, and management of Franklin’s formidable musical legacy. At hearings over the summer, a Michigan probate court judge put the administration of the estate under court supervision, according to USA Today and other media outlets.
Two years after rocker Tom Petty’s sudden death, tensions between one of his two daughters and his second wife over the future of his estate have come to a head. Allegations of angry emails, unauthorized decision making, and misrepresentations to the press about who’s in charge of the estate have led to delayed projects, increasing animosity among family members who won’t back down, and, most recently, litigation.
Elder abuse has been steadily increasing in Pennsylvania for the past decade, with 28,633 reports of abuse received by the state in fiscal year 2016-2017, according to the Pennsylvania Department of Aging. The increase in the number of elder abuse reports in Pennsylvania is likely the result of both the aging population and efforts to increase awareness of elder abuse by local, state, and national advocates for the elderly.
Stan Lee was revered as the genius behind the creation of a pantheon of superheroes who righted wrongs and defended the weak. But he turned out to be the one who might have needed rescuing in his final years. Lee, the former head of the Marvel Comics empire, who personally co-created pop culture icons including Spider-Man, Black Panther, the X-Men and the Hulk, died on November 12, 2018, at 95. His estate has been valued at approximately $50 million. However Lee’s legacy has been clouded by accusations of financial mismanagement and elder abuse, levied against his daughter, friends, and business associates.
Fights Over Celebrities’ and High-Profile Individuals’ Post-Mortem Rights of Publicity Highlight the Need to Protect and Consider Intangible Assets in Estate and Tax Planning
Nine years after Michael Jackson's death, his estate and the Internal Revenue Service are fighting over the post-mortem value of the name and likeness of the late King of Pop. The dispute has been dragging on in tax court since 2013; a decision isn't expected until mid-2019. Among the disputes over the estate's value is the huge discrepancy in how much each side estimates Jackson's name and likeness are worth. The estate values Jackson's name and likeness at just $2,105, in light of the child molestation accusations that tarnished his image before he died. The IRS counters that the value is closer to $160 million, citing Jackson's long and very successful music career, according to *The Hollywood Reporter*.
When Aretha Franklin died in Detroit on August 16, it was widely reported that she left an estate worth approximately $80 million – and no will. It’s a curious development in the story of a woman whose 60-year career started in her early teens and was known to have a firm grip on her purse strings. The legendary Queen of Soul died at age 76 after a long battle with pancreatic cancer, and was survived by four sons. Given the fights that frequently erupt among family members over the estates of celebrities who do actually leave a will behind, Franklin’s decision not to write a will could mean trouble in the future. Or maybe not.
Many pet owners would not hesitate to say they love their animals as much as the people in their lives. But a Pennsylvania court recently made it clear that while pets are not people, they must still pay taxes. A recent decision by the Chester County Orphans’ Court Division in Lesley G. King Estate clarified that Pennsylvania inheritance taxes must be paid on trusts established to care for animals after their owner dies and at what rate. The debate between the estate’s executors and the state turned, in part on use of the word “person” for Pennsylvania inheritance tax purposes.
One of this year’s most anticipated Broadway productions was at risk of being shuttered before it ever opened because of a fierce dispute between producers and the estate of the book’s author on which the play is based. A representative of the estate of Harper Lee, the reclusive author of To Kill a Mockingbird, sued producer Scott Rudin and his production company, Rudinplay Inc., alleging that the stage adaptation authored by Aaron Sorkin violated the licensing agreement Lee signed prior to her death in February 2016.
The John DeLorean estate is in a clash once again with the unaffiliated DeLorean Motor Company (DMC), this time over royalty payments that Universal Pictures (Universal) allegedly directed to DMC instead of to the estate for the right to use the iconic Back to the Future DeLorean DMC-12 on merchandise and advertising material. The suit, filed by DeLorean’s widow, revisits a settlement agreement reached in 2015 between the estate and DMC that divvied up intellectual property rights between the two parties. In the 2015 agreement, DMC received the rights to the DeLorean Motor Company’s name, trademarks, and logo. The estate received the rights to John DeLorean’s name and personal depictions. The 2015 agreement with DMC did not mention the prior royalty deal that John DeLorean entered into with Universal in 1989, which channeled to John DeLorean 5% net receipts from any merchandise and commercial tie-ins that featured the DeLorean time machine.
Charles Manson died on November 19, 2017, but the infamous murderer and cult leader remained frozen in the Kern County morgue until March 2018 as a bizarre dispute over his remains unfolded in court. The coroner’s office determined that a 2002 will presented by Michael Channels, a memorabilia collector and Manson pen pal, was “inherently suspicious.” The office then petitioned the court for direction on who should receive Manson’s remains. A separate court case to determine who will receive Manson’s estate is still underway in Los Angeles County, which also involves Channels’ suspect will.
In order to be a surviving spouse to inherit under the intestate laws (the statutory laws that apply when one dies without a will), a person needs to have been married to the decedent first. You might think this is pretty obvious, but a recent Orphans’ Court case dealt with the issue of what it means to be “married” in Pennsylvania. We’ve all seen the wedding announcements in the newspaper where the couple is married by a friend of the family ordained by an internet-based organization. But, is that legal in Pennsylvania? In some cases, yes; in other cases, no.
A Star with Strings Attached: The Story of Mickey Rooney and Identifying Elder & Power of Attorney Abuse
Mickey Rooney, the Hollywood child star who became an industry legend, appearing in more than 300 films during a career that spanned over 90 years, died allegedly a victim of elder and power of attorney abuse and financial exploitation – his estate having been allegedly wrenched from him by a family member that he had trusted. Sadly, this is not an uncommon occurrence among America’s seniors, and Rooney’s story demonstrates just how dire the consequences can be when the abuse goes unrecognized.
Huguette Clark, the youngest daughter of U.S. Sen. William Andrews Clark (1839-1925), a copper magnate, railroad builder, and one of the founders of Las Vegas, inherited one of the greatest fortunes amassed in the Gilded Age. When she died in 2011, at age 104, the reclusive heiress left behind more than $300 million—$25 million of which was eaten up by legal fees because of poor estate planning and an assailable will. Analyzing the facts surrounding this complex estate and the ensuing conflict reveals an array of lessons for all estate practitioners.
When pop superstar Whitney Houston died in 2012 at the age of 48, she left her entire estate to her only child, Bobbi Kristina Brown – who was just 19 years old, leading many to worry that someone so young would not be able to handle the money or the people who would inevitably prey on her for access to the money. Three years later, Houston’s daughter died without a will.
The “Hardest Working Man in Show Business” probably would have been exhausted just hearing about all of the infighting over his will. Eleven years after James Brown’s death, his estate is still a battleground for his heirs and would-be heirs. The infighting over Brown’s fortune may be a study in chaos, but there are some valuable estate-planning lessons to be learned.
Personality rights, also referred to as the right of publicity, protect against anyone who “appropriates the commercial value of a person's identity by using without consent the person’s name, likeness, or other indicia of identity for purposes of trade.” The level of protection provided varies from state to state, making it highly significant where someone dies. Uniform protection under federal law has been discussed, but there is currently no legal framework in place.
Appointing a corporate trustee to administer an estate can be a wise move in situations that call for an experienced, impartial referee, particularly when the estate involves millions of dollars, a large portfolio of assets, and a generous helping of family drama.
Litigation over the late Kirk Kerkorian’s $2 billion estate proves that when a lot of money is at stake, the provisions of a will and prenuptial agreement may be viewed as less than binding. Although this is a California case, it illustrates how the details involved in the execution of a prenuptial agreement can come back to haunt estate administrators.