Paul O. Dillon, Attorney at Law

Another Celebrity Estate Dispute: Tony Bennett

The velvety-smooth voice and charm of Tony Bennett will long be remembered by several generations, since it spanned nearly eight decades. Hopefully, the estate battle now underway, reported in a recent Kiplinger article, “What We Can learn from Tony Bennett’s Estate Dispute” won’t take as long.

In 1994, Tony Bennett created a trust, naming himself and his son Danny as co-trustees. The trust was partially funded. His wife, Susan, and children, Antonia, Danny Dae, and Johanna, were all listed as beneficiaries. Upon his death in 2023, Danny became the sole trustee.

In June 2024, Johanna and Antonia filed a lawsuit saying Danny didn’t account for all trust assets and sales or other transactions about the trust assets. They also said he received personal benefits from these transactions.

Danny was more than a trustee—he was also his father’s manager. Benedetto Arts, LLC was formed to hold certain properties and estates. Danny was named manager of the LLC, and all of the children and the family trust held membership interests.

According to Tony Bennett’s will, any tangible property not transferred to the trust was to be distributed to his children equally. This included property, pictures and assets bearing his likeness.

The lawsuit alleges that before Tony Bennett died but after he was diagnosed with Alzheimer’s, Danny sold items of his father’s memorabilia as well as his name and likeness. He received large commissions through RPM Productions, a separate company Danny owned. The lawsuit further alleges that Danny received loans of $1.2 million from his father.

Transparency among siblings is critical. Especially when large amounts of money are at stake, siblings need to be able to communicate with each other openly and honestly. Once litigation begins, it has a way of growing, leading to expenses and family discord.

Professional or corporate trustees should be considered with large estates. A professional, non-family member with no personal stake in the estate would have been a better option to manage the complex structures involved in the Bennett estate. Having one child serve as personal manager, trustee, LLC manager and also being a beneficiary made it next to impossible to avoid any conflict of interest.

As Tony Bennett’s competency decreased, the potential for conflicts of interest increased. Even if Tony Bennett was competent for some transactions, he may have been susceptible to coercion or undue influence.

Even if you’re not a world-class singer and entertainer, working with an experienced estate planning attorney and other impartial professional advisors is necessary to prevent litigation and family fractures.

Reference: Kiplinger (Aug. 2, 2024) “What We Can learn from Tony Bennett’s Estate Dispute”

Why Do Older People Hide Money in Their Homes?

While this may sound absurd to a cash-free generation, some still take comfort in having stashes of paper money at home. We know one daughter whose mother kept rolls of bills in the freezer and another whose father kept a shoebox of $100 bills in the attic. If the person is known to be a bit eccentric, it may be amusing. However, it is only until the family realizes the difficulties this behavior may present.

For heirs finding these stashes while cleaning out the family home—or mistakenly tossing them—hidden cash inheritances can present a number of problems. A recent article from The New York Times, “When the Money Is Under the Mattress. Or in the Freezer. Or a Shoebox,” explains how this old-school savings plan can go sideways.

Large sums of money thrown in the trash are just one risk. If others learn about the cash stash, having so much cash on hand could lead to the home being broken into. If there’s a fire or flood, the money could be destroyed.

There are more risks: if siblings dispute their parents’ estate plan, a more aggressive person might take the money without telling anyone. If an adult child is the main caretaker while others live far away, there will always be some suspicion. Did they take some cash before sharing the rest with their siblings?

Placing substantial amounts of cash into a savings account can take advantage of the power of compounding interest, which is especially valuable over decades. The only thing cash hidden in a closet will gather is dust.

A cache of cash creates accounting and tax problems as well. There’s no ownership record for cash, so it’s impossible to determine who it belongs to. This can be especially problematic for families whose estates are close to the threshold of the federal or state estate or inheritance taxes. How do you account for $500,000 in cash and gold bars hidden in the home? This happened to an estate planning attorney interviewed for the article.

Cash hoarding can be a result of dementia and Alzheimer’s disease, which can cause paranoia. This makes people feel they need to hide valuables and cash to protect them.

Estate planning attorneys often recommend establishing trusts and taking other steps as soon as possible when adult children notice their parents' diminished capacity. A Power of Attorney and revocable trust could allow the child to manage the parents' finances.

On a practical level, preparing an estate plan and conducting a thorough inventory of all assets, including cash and valuables in the home, makes life easier for heirs. Focusing on finding hidden treasures while grieving the loss of a family member creates a complication for the family and may tarnish a legacy.

Reference: The New York Times (June 8, 2024) “When the Money Is Under the Mattress. Or in the Freezer. Or a Shoebox.”

How to Get a Conservatorship for a Parent

One woman felt she had no choice but to retain an attorney and petition the court for a conservatorship to manage her father’s finances. Her father had been targeted by a family acquaintance who tried to isolate him from his family. The acquaintance then married the widower and promptly took over his bank accounts. She was also appointed as the trustee of his revocable trust, as explained in an article from The Atlanta Journal-Constitution, “When it’s the right time to pursue conservatorship for your loved one.”

Conservatorship concerns the financial affairs of a person, managing assets and handling financial decisions for someone who cannot do so for themselves, whether from illness, injury, or other types of incapacity. A guardian is more concerned with the well-being and personal care of an incapacitated individual or minor, including day-to-day decision-making and healthcare decisions.

For the family situation mentioned above, the daughter researched ways to protect her father from losing everything. All resources pointed to conservatorship as the solution. The family was able to protect the father’s assets, including the nearly $200,000 eventually needed to provide round-the-clock medical care during his final year of life.

One daughter served as legal guardian, while a third-party county conservator managed financial matters. The pressure was relieved from the woman and her siblings by deferring the money management to a professional. Having a neutral third party handle finances allows the siblings to focus on their father’s care.

A conservatorship or guardianship is court-supervised and established when a person is deemed incompetent. By contrast, a Power of Attorney is a voluntary arrangement made while the person is still competent, offering a less intrusive alternative without court involvement.

In some situations, even when a Power of Attorney is in place, a court-appointed guardianship or conservatorship becomes necessary.

A conservatorship may become necessary because of significant mental decline from diseases like Alzheimer’s or a person’s inability to manage their personal or financial affairs. Anyone considering a conservatorship for a loved one must speak with an estate planning attorney. The attorney should have experience in probate courts, estate law, conservatorship and guardianship law and an empathic understanding of family dynamics.

People are advised to create estate plans as soon as possible, including executing an advance directive for health care and a durable power of attorney. If they lose their mental capacity without having executed a will, they leave themselves vulnerable to elder financial abuse.

Reference: The Atlanta Journal-Constitution (March 1, 2024) “When it’s the right time to pursue conservatorship for your loved one”

Planning for Cognitive Decline Is Part of Estate Planning

Estate planning attorneys work to protect clients by creating advance medical directives, appointing a power of attorney and sorting through trust agreements, explains an article from Kiplinger, “Is Your Estate Ready if You Experience Cognitive Decline?”

Most consider estate planning a tool for distributing assets after death. However, it serves many purposes during life, including planning for cognitive decline and incapacity.

As we age, our cognitive abilities may start to decline, which needs to be accounted for in investment portfolios. Many loved ones see this decline but aren’t comfortable speaking with family members about such a sensitive topic. Large financial institutions and skilled financial advisors have recognized this and created plans to prevent losses from poor decision-making. In addition to planning finances, meeting with an estate planning attorney and preparing for cognitive decline and incapacity is essential. Here are some of the topics to cover.

Appoint a Power of Attorney. This person will be responsible for making legal and financial decisions for you if you cannot. They need to be someone you trust implicitly with good fiscal skills.

Create a Living Will. It’s better to outline the medical treatment you’d want to receive if you cannot make these decisions while still competent. You can also designate someone else to make decisions on your behalf when you are incapacitated.

Discuss and plan for Long Term Care. What would your family need to do if you were diagnosed with Alzheimer’s disease or dementia and required care and supervision around the clock? Discuss living arrangements and finances to pay for care as part of your estate plan.

Create a plan for your estate. How will your wealth and assets be distributed after your death? Planning in advance saves your family from scrambling to figure out how you want your assets to be distributed, what bills need to be paid on your behalf to protect real estate property and what your wishes are for a funeral or memorial service.

These conversations are not easy or enjoyable. However, they are crucial to protecting yourself and your family from the unexpected and the inevitable. Making a plan for yourself and being prepared is the most you can do, and it’s also the only thing you can do. Talk with an experienced estate planning attorney to put your estate plan in place sooner rather than later.

Reference: Kiplinger (Feb. 7, 2024) “Is Your Estate Ready if You Experience Cognitive Decline?”

What Estate Planning Documents are Used to Plan for Incapacity?

The chief reason for a Power of Attorney (POA) is to appoint an agent who can make decisions about business and financial matters if you become incapacitated, according to an article “Estate planning in case of incapacity” from The Sentinel-Record. For most people, the POA becomes effective at a later date, when the person signs a written authorization to act under the document, or when the person is determined to be incapacitated. This often involves having the person’s treating physician sign a notarized statement declaring the person to be incapacitated. This type of POA is referred to as a “Springing POA,” since it springs from a future event.

The challenge with a springing POA is that it requires reaching a point in the person’s life where it is clinically clear they are incapacitated. If the person has not yet been diagnosed with Alzheimer’s disease or another form of dementia, but it is making poor decisions or not able to care for themselves, it becomes necessary to go through the process of documenting their incapacity and going through the state’s process to activate the POA.

For a more immediate POA, your estate planning attorney may recommend creating and signing a Durable Power of Attorney. This allows you to appoint someone to manage personal and business affairs immediately. For this reason, it is extremely important that the person you name be 100% trustworthy, since they will have instant legal access to all of your property.

A Power of Attorney can be customized to include broad powers or limited to a specific transaction, like selling your home.

This is not the only way to allow another person to take over your affairs in the event of incapacity.  However, it is easier than seeking guardianship or conservatorship. Another method is to place assets in a revocable trust, which allows you to maintain control of the assets while alive and of legal capacity. The trust includes a successor trustee, who takes over in the event you become incapacitated or die.

The successor trustee only has control of the assets owned by the trust, so if the purpose of the trust is planning for incapacity, many, if not all, of your assets will need to be retitled and put into the trust.

A properly created estate plan will often use both the Durable Power of Attorney and a Revocable Living Trust, when preparing for incapacity.

Sadly, many people fail to have these legal tools created. As a result, when they are incapacitated, the family must go to court to have a person appointed to manage their affairs. This is usually referred to as a “legal guardianship.” The proceeding to obtain a guardianship is lengthy and complicated. Once the guardianship is established, the guardian must file annual accountings with the court documenting how all of the funds are used. The guardian must also post a surety bond, designed to protect assets in case of improper use.

Guardianship and its costs and time-consuming tasks can all be avoided with a properly prepared estate plan, including planning for incapacity.

Reference: The Sentinel-Record (March 27, 2022) “Estate planning in case of incapacity”

What Should You do If It Is Possible an Elderly Parent Is Being Scammed?

New best friends and unusual transactions could be signs of elder financial abuse, which extends far beyond the robocalls purporting to be from the Social Security Administration or the IRS. The majority of elder financial abuse cases reported to agencies involve people known to their victims, including relatives, neighbors and so-called “friends.” Stealing a Social Security benefit or forging legal and financial documents, along with misappropriating cash, jewelry, and credit cards are part of the $36.5 billion cost of elder fraud, according to the National Council on Aging.

A recent article from AARP Magazine titled “Spot the Red Flats of Elder Financial Abuse” tells the reader what to look for.

Out-of-Character Spending. If your frugal mother’s credit card statement shows she is buying expensive items or making large withdrawals, contact the bank immediately to challenge the charges and consider shutting down the card. Unusual financial activity should be a red flag they are being scammed, especially if they have no memory of the transactions.

If possible, create a transparent system where both you and your parent can monitor finances. The more you can be involved with their record keeping, the less time a scammer can go undetected.

New Best Friends Who Seem Inappropriate. People who live alone and do not have any social outlets are vulnerable to offers of friendship, even if they come with financial requests. Some of these new friends will try to push family members away from their victim, another red flag to family members to step up contact and involvement. Isolation is a powerful strategy, as is creating a dependency for helping with everything from taking them to a doctor’s office to making trips to the bank.

Losing the Ability to Manage Money and Cognitive Decline. Alzheimer’s disease or other types of dementia can progress so slowly as to initially go unnoticed. People with dementia are extremely vulnerable to the wishes of people who are physically present with them. A welcoming friend who suggests handling their finances may be given the keys to the kingdom, without any notice to the family.

When a third party has access to an older adult’s private information, like Social Security numbers, account numbers or passwords, the victim can very easily be scammed. Set up their accounts to have a trusted family member named, so any changes require notification, wherever possible.

Mobility or Frailty Issues Are Vulnerable to Able-Bodied Scammers. An elderly person who cannot get to the bank and has not embraced online banking will welcome the help of a friend, even if the friend’s intent is questionable. People with physical or mental impairments should not be left to attempt to manage financial or legal matters on their own. Setting up automatic bill payments for recurring bills like rent, cellphone, utilities and other payments will make their lives easier and their assets safer.

Regular involvement with an elderly person’s life is the best deterrent. Just like bright lights and video cameras will send a thief to another house, the presence of family members in an elderly person’s life is the best deterrent to financial scams. People are least vulnerable when they are protected by a network of watchful, honest and caring family members.

Reference: AARP Magazine (February 28, 2022) “Spot the Red Flats of Elder Financial Abuse”

What Does It Mean to Be an Adult’s Legal Guardian?

The conservatorship battle over Britney Spears’ life and money is not typical of most guardianship and petitions brought by attorneys for families when a loved one is incapacitated and can’t care for themselves or make informed decisions. In most cases, by the time they reach out to an estate planning attorney for help, things have usually taken a turn for the worse.

According to the recent article, “Why the sensational Britney Spears case is atypical of most conservatorships” from Deseret News, families often wait until there is a crisis to start pursuing conservatorship. Starting the process before an emergency would be better, but it is difficult, as the family must face a harsh reality: their loved one has lost the ability to maintain a normal life.

Family members may have Alzheimer’s disease or another type of dementia but have not been formally diagnosed.

Elder financial abuse is also part of the conservatorship problem. If the family is involved in the person’s finances, they may see large checks being written to strangers or spending that doesn’t follow the person’s behavior.

In some states, a guardian controls the person’s living arrangements and medical care, while the conservator controls the person’s finances. Each state has its own laws, so families need to work with attorneys where their loved one resides.

In the Spears case, the court had to see evidence of incapacity, which seems odd for a person who has spent the last 13 years performing and earning millions. However, it is possible for a person to be incapacitated, while still maintaining some degree of functionality.

If Spears’ counsel can demonstrate that she has capacity to manage her own life, health and finances, and if it finds the reasons she needed conservatorship 13 years ago no longer exist, then it is possible the conservatorship will terminate. She will be able to run her life, manage her career and make financial decisions as she sees fit. Those decisions may not be what her father would wish, and there is certainly room for her to make mistakes, just as any other celebrity multimillionaire does.

The LA Superior Court judge suspended Jamie Spears as conservator, appointing a CPA as a temporary conservator until the next court hearing, scheduled for mid-November.

A protected person or an interested party has the legal right to petition a court to terminate a guardianship, if they believe the person is capable of managing their own affairs. Some states have laws serving as a “Bill of Rights” for protected persons, which outline the legal rights individuals have, even when they are under the care of a conservator or guardian.

The best source for information on conservatorship or guardianship is not the entertainment headlines, but from a local estate planning attorney who is familiar with the laws of your state and how this process works for regular people who are sincerely trying to help their family members.

Reference: Deseret News (Sep. 30, 2021) “Why the sensational Britney Spears case is atypical of most conservatorships”

Can You Protect Yourself or Loved Ones from Financial Elder Abuse?

In 2021, more than 6.2 million people in America live with some form of Alzheimer’s disease and need some type of memory care. At the same time, financial abuse and scams, especially those targeting people 65 and older, are on the rise, says the Better Business Bureau.

Individuals suffering from Alzheimer’s and other forms of dementia face unique challenges when it comes to financial elder abuse and scams, according to a recent report “Protecting you or a loved one from financial elder abuse and scams” from Idaho News 6. The increasing number of Alzheimer’s diagnoses increases chances of needing in-home, memory care or skilled nursing care at some point, making it increasingly important to plan ahead. When there is no advance planning, financial devastation and family stress occurs.

Planning starts with an experienced estate planning attorney who can help the family prepare these four basic documents:

• Last Will and Testament
• Financial Power of Attorney
• Health Care Power of Attorney
• Living Will/Advanced Directive

There are additional documents, depending upon the individual’s situation, including a Durable Power of Attorney, used to give another person the ability to make decisions for property, business and financial matters. In cases of future incapacity, this is extremely important.

Power of Attorney: This appoints an “agent” who can make financial decisions on behalf of the “principal.” The POA creates a fiduciary relationship between the agent and their principal, wherein the agent must act in the best interest of the principal, above their own interest. The selection of a POA is very important, since it is a big responsibility.

The Principal should also name a successor agent, in case the primary agent is not able or willing to take on their role. Understand the possibility of abuse of power by the agent before finalizing any documents. An agent who abuses their powers or reaches beyond their powers can be prosecuted.  However, it is best to make a good choice from the start and try to avoid problems.

Most of us get all the right protection in place for our homes, cars and have health insurance in place. However, the chances of needing long-term care for a dementia are actually higher than having your house burn down.

Planning for incapacity and protecting yourself and your family can be accomplished with the help of an estate planning attorney. Have the conversations with your attorney and your family early and get going.

Reference: Idaho News 6 (Sep. 14, 2021) “Protecting you or a loved one from financial elder abuse and scams”

What Steps to Take when Diagnosed with Alzheimer’s

A diagnosis of Alzheimer’s or any serious progressive disease takes some time to absorb. However, during the days and weeks after the diagnosis, it is important to take quick steps to protect the person’s health as well as their legal and financial lives, advises the recent article “What to do after an Alzheimer’s disease diagnosis?” from The Indiana Lawyer.

Here are the legal steps that need to be taken, before the person is too incapacitated to legally conduct their own affairs:

General Durable Power of Attorney—A person needs to be appointed to perform legal and financial duties when the time comes. This can be a family member, trusted friend or a professional.

Health Care Power of Attorney—A person must be entrusted with making health care decisions, when the patient is no longer able to communicate their wishes.

HIPAA Authorization—Without this document, medical care providers will not be able to discuss the person’s illness or share reports and test results. An authorized person will be able to speak with doctors, pick up prescriptions and obtain medical reports. It is not a decision-making authorization, however.

Living Will—The living will explains wishes for end-of-life medical care, including whether to prolong life using artificial means.

Funeral Plans—Some states permit the creation of a legally enforceable document stating wishes for funerals, burials or cremation and memorial services. If a legal document is not permitted, then it is a kindness to survivors to state wishes, and be as specific as possible, to alleviate the family’s stress about what their loved one would have wanted.

Medicaid Planning—Care for Alzheimer’s and other dementias becomes extremely costly in the late stages. A meeting with an elder law attorney is important to see if the family’s assets can be protected, while obtaining benefits to pay for long-term and dementia care.

After the patient dies, there may be a claim against it from the state to recover Medicaid costs. By law, states must recover assets for long-term care and related drug and hospital benefits. All assets in the recipient’s probate estate are subject to recovery, except if surviving spouse, minor children, blind or disabled child is living or where recovery would cause hardship.

With good planning and the help of an experienced elder law attorney, the family may be able to mitigate claims by the government against the estate.

Reference: The Indiana Lawyer (Jan. 6, 2020) “What to do after an Alzheimer’s disease diagnosis?”

Trusts Make Sense Even When You Aren’t a Billionaire

Trusts are used to solve problems in estate planning, giving great flexibility in how assets are divided after your death, no matter how modest or massive the size of your estate, according to an article titled “3 Reasons a trust may make sense for your family even though your name isn’t Trump, Gates or Rockefeller” from Market Watch. Don’t worry about anyone thinking your children are “trust fund babies.” Using trusts in your estate plan is a smart move, for many reasons.

There are two basic types of trust. A Revocable Trust is flexible and can be changed at any time by the person who creates the trust, known as the “grantor.” These are commonly used because they allow a high degree of control, while you are living. It’s as if you owned the asset, but you don’t—the trust does.

Once the trust is created, homes, bank and investment accounts and any other asset you want to be owned by the trust are retitled in the name of the trust. This is a step that sometimes gets forgotten, with terrible consequences. Once that’s done, then any documents that need to be signed regarding the trust are signed by you as the trustee, not as yourself. You can continue to sell or manage the assets as you did before they were moved into the trust.

There are many kinds of trusts for particular situations. A Special Needs Trust, or “SNT,” is used to help a disabled person, without making them ineligible for government benefits. A Charitable Trust is used to leave money to a favorite charity, while providing income to a family member during their lifetime. A real estate trust can be used for real property.

Assets that are placed in trusts do not go through the probate process and can control how your assets are distributed to heirs, both in timing and conditions.

An Irrevocable Trust is permanent and once created, cannot be changed. This type of trust is often used to save on estate taxes, by taking the asset out of your taxable estate. Funds you want to take out of your estate and bequeath to grandchildren are often placed in an irrevocable trust.

If you have relationships, properties or goals that are not straightforward, talk with your estate planning attorney about how trusts might benefit you and your family. Here’s why this makes sense:

Reducing estate taxes. While the federal exemption is $11.58 million in 2020 and $11.7 million in 2021, state estate tax exemptions are far lower. New York excludes $6 million, but Massachusetts exempts $1 million. An estate planning attorney in your state will know what your state’s estate taxes are, and how trusts can be used to protect your assets.

If you own property in a second or third state, your heirs will face a second or third round of probate and estate taxes. If the properties are placed in a trust, there’s less management, paperwork and costs to settling your estate.

Avoiding family battles. Families are a bit more complicated now than in the past. There are second and third marriages, children born to parents who don’t feel the need to marry and long-term relationships that serve couples without being married. Trusts can be established for estate planning goals in a way that traditional wills do not. For instance, stepchildren do not enjoy any legal protection when it comes to estate law. If you die when your children are young, a trust can be set up so your children will receive income and/or principal at whatever age you determine. Otherwise, with a will, the child will receive their full inheritance when they reach the legal age set by the state. An 18- or 21-year-old is rarely mature enough to manage a sudden influx of money. You can control how the money is distributed.

Protect your assets while you are living. Having a trust in place prepares you and your family for the changes that often accompany aging, like Alzheimer’s disease. A trust also protects aging adults from predators who seek to take advantage of them. Elder financial abuse is an enormous problem, when trusting adults give money to unscrupulous people—even family members.

Talk with an estate planning attorney about your wishes and your worries. They will be able to create an estate plan and trusts that will protect you, your family and your legacy.

Reference: Market Watch (Dec. 4, 2020) “3 Reasons a trust may make sense for your family even though your name isn’t Trump, Gates or Rockefeller”