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Executor Seeks to Resign from Role in Texas Lawyer’s Estate

Conference roomWhen the famous Texas attorney John O’Quinn died in 2009, he had over 1,200 automobiles—but no children and no heirs.

  1. Gerald Treece, who was a longtime friend of the late O'Quinn, recently filed a petition to resign as executor of O'Quinn's estate. He served in that role since shortly after O'Quinn died in October 2009 when he crashed into a tree going 60 miles an hour with his Chevy Suburban and his own private driver and friend in the passenger seat.

Texas Lawyer’s recent article, “Treece Will Resign as O'Quinn Estate Executor,” reports that an amended petition was filed on June 21 in O'Quinn's probate case.

Treece, vice president and associate dean of advocacy at the South Texas College of Law in Houston, informed the court that he wants to resign, despite that fact the administration of O'Quinn's estate is not finished, and there are the outstanding claims still pending, due to litigation.

The details of the April 6 settlement, which followed a one-day mediation, are confidential. But on June 6, the John M. O'Quinn Foundation filed an application with Houston Probate Court Judge Mike Wood to appoint J. Cary Gray, the managing partner of Gray, Reed & McGraw in Houston, as his successor.

The foundation contended that it’s necessary to appoint a successor to Treece to serve as successor independent administrator, "because claims against the decedent's estate remain and all of the assets in the decedent's estate have not been distributed." In addition, the foundation said that the alternate executors in O'Quinn's estate, both declined to serve as Treece's successor. One of them is the president of the board of trustees of the foundation, and the other is Bank of America.

Treece is asking for a "full judicial discharge" from all liability for all of the actions that he’s taken as executor. In his application to resign as executor, he noted that this would include all fiduciary fees. He also asked the judge to have the estate cover his attorney's fees and expenses relating to any litigation related to the estate. This would cover a lawsuit filed by O'Quinn's longtime companion against a funeral home seeking to get O'Quinn's body returned to Texas from Louisiana.

Reference: Texas Lawyer (June 23, 2017) “Treece Will Resign as O'Quinn Estate Executor”

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Penn State Football Coach’s Estate Looks to Settle Lawsuit

Conference roomThe estate of former Penn State football coaching legend Joe Paterno, along with former assistant coaches Jay Paterno and Bill Kenney, are suing the NCAA, its president Mark Emmert and former executive committee chair Ed Ray in Centre County Court in Pennsylvania.

The 2013 lawsuit alleges claims of commercial disparagement, defamation, tortious interference and conspiracy. These claims were based on the use of the Louis Freeh report commissioned by Penn State in the NCAA’s consent decree for sanctions with Penn State, concerning the university’s handling of reports of child sexual abuse by Paterno’s former assistant coach Jerry Sandusky.

Specially-presiding Senior Judge John Leete of Potter County recently granted a joint request by the Paternos and the NCAA to file under seal motions for summary judgment and response and reply briefs.

Wealth Advisor reported, in its article titled “Paterno Heirs Move Toward Closure,” that attorneys for both parties filed a joint motion, asking the judge to file under seal “forthcoming dispositive motions.”

That means they’d ask the judge to decide the case, as well as supporting, responsive and reply briefs for those motions.

“The parties anticipate that the motions, responses, replies and supporting briefs will contain portions that have been designated ‘Confidential’ or ‘Highly Confidential'” under a protective order issued by Leete in 2014, Paterno attorney Thomas Weber and NCAA attorney Thomas Scott wrote.

The parties will file redacted public versions at the same time as the sealed documents.

Paterno was fired as head football coach of Penn State in November 2011, after the Pennsylvania Office of the Attorney General revealed the grand jury presentment recommending charges against Sandusky. Sandusky had already retired from his position as the Nittany Lions defensive coordinator, and Paterno died two months later of lung cancer.

The consent decree was replaced, and most of the sanctions were repealed or terminated early. The Paterno estate alleges that the report and sanctions resulted in damage to commercial interests and values, and harmed the former assistant coaches’ ability to find similar work.

Reference: Wealth Advisor (June 19, 2017) “Paterno Heirs Move Toward Closure”

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Simple Estate Planning Tools

Old couple with computerWhen we look at the steps taken in our investing lives, the basics are simple. As working investors in the initial stages, the priority is accumulation and growth. Therefore, we participate in retirement plans such as IRA’s, 401-k plans, etc.

As Marco Eagle’s article, “Money Talks: Estate planning tools” explains, the next phase is the retirement stage, when the focus shifts from accumulation to preservation and maintenance of the nest egg.

Growth is a component of any retirement plan, but protecting your purchasing power during retirement is critical. You also want to generate a predictable stream of income during retirement, in order to avoid compromising your lifestyle.

The final stage of successful retirement planning is often overlooked: that’s the estate planning phase or the strategy of a succession plan to pass assets to your family. There are many estate planning tools that can be used to execute an estate plan. You can create a personal trust. Under this arrangement, your assets are transferred into a trust during your lifetime and then transferred by the trust at death. It’s important from both a tax standpoint and an allocation standpoint, regarding who receives what and how much. This is what your estate plan does for you and your family.

Work with an experienced estate and trusts attorney to establish your estate plan, so you can achieve your final objectives when passing assets to the next generation. Some individuals like the ability to exercise control with an effective plan to pass assets to their beneficiaries, without the need of trusts or probate.

There are many types of insured annuity strategies that will pass assets immediately to the beneficiaries, without the need of probate. Avoiding probate is frequently part of a strategy to make the assets available, immediately after the death certificate is issued.

Some see the foundation of their estate planning as the incorporation of life insurance. This lets the beneficiaries inherit assets, generally tax free. Avoiding a taxable event upon death is also appealing, based on both taxes as well as overall portfolio values. Talk to a professional about your situation.

Reference: Marco Eagle (June 11, 2017) “Money Talks: Estate planning tools”

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Don’t Over-Think Your Estate Planning

Old couple having coffeeThe psychological issues in deciding how to leave your assets can be the hardest part of the process, says Wilmington Biz in the recent article, “Keep Mental Hang-Ups From Sabotaging Estate Planning.” The issues can range from an aversion to thinking about death to complicated feelings about children, in-laws and other relatives.

There are some people who have an issue with deciding how to allocate their assets after they pass away. A common issue is emotional or moral paralysis. After they worked with their attorney to draft the documents, they freeze when it’s time to sign on the dotted line.

Another issue arises when a person is estranged from his or her children.

And there are those who—believe it or not—fear that somehow if they make a will, they’d die. It is sort of like if they ignore the inevitable, it will never happen. Crazy, right? Do you think that if you don’t draft a will, then you could live indefinitely?

Another challenging issue is the decision of a parent that makes them feel like they’re favoring one child over others. And there may be good reason: perhaps one can manage money better than another, or a child is married to someone the parents don’t like or trust or maybe the child has an addiction issue.

Because the emotional challenges make it hard for some folks to think straight about much of this, the best approach is to work with an experienced estate planning attorney who can take some of the emotional baggage out of the equation.

These conversations may indeed have psychological ramifications, especially where there is substance abuse, fear of dying or a sense of entitlement.

An estate planning attorney can help to create an analytical and logical approach to estate planning and financial preparation that will help with discussions about heirs and allay fears of the unknown.

Reference: Wilmington Biz (June 6, 2017) “Keep Mental Hang-Ups From Sabotaging Estate Planning”

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How Do I Collect as the Sole Beneficiary for a Family Member Who Lives Out-of-State?

Question markNJ.com’s recent article, “Inheriting money from out-of-state relative,” explains that with a power of attorney, you will be able to manage the family member's affairs during his lifetime, if he or she is unable to do so. However, a power of attorney stops at the death of the principal.

When considering the tax ramifications, there are two distinct types of taxes that may be imposed by a state where the person is a resident at the time of their death. An estate tax may be imposed on the estate of an individual before the property is transferred to the beneficiary. There is also the inheritance tax. This tax is imposed on certain individuals who inherit property from an estate. Whether a state estate tax or inheritance tax must be paid, is dependent on the laws of the state where the person was a resident at the time of death, not the state where the beneficiary lives.

The estate of a person who is a resident of New York and dies between April 1, 2017 and Dec. 31, 2018 is subject to a New York estate tax, only if the value of the estate exceeds $5.25 million. On January 1, 2019, the New York estate tax exemption will equal the federal estate tax exemption. It is anticipated to be about $5.9 million.

In some states, the relationship between the testator and the heirs may make them subject to an inheritance tax.

If the relative, for example, owns real property in New Jersey, there’s an inheritance tax of 15% imposed by the state on the value of that real property. When a person inherits the estate assets, there would be a step-up in basis for any appreciated assets. This means that there shouldn’t be any capital gains tax on those assets, if they’re disposed of for the date of death values.

Talk to a qualified estate planning attorney to understand the consequences for you and your family member's estate.

Reference: NJ.com (June 6, 2017) “Inheriting money from out-of-state relative”

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