Monday, February 24, 2025

Crypto and Estate Planning: One Man's effort to Recover $800 million in Bitcoin




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In this article we return to the saga of James Howells, the subject of a previous article on this blog, as he continues his years-long battle to get back a hard drive that contains a discarded bitcoin key currently worth somewhere around $800 million by offering to purchase a landfill in Great Britain in an effort to find the wallet before it closes down. James Howells had repeatedly requested that the Newport City Council, in South Wales, grant him access to the mountains of waste to find the hard drive that was accidentally discarded in 2013.  
When his repeated requests were denied, he offered to fully fund the excavation process and share 25% of the recovered Bitcoin with the Newport City Council.  When that offer was rejected, he filed a lawsuit to compel the Council to accept his offer.  The lawsuit seems to be in the vein of 'taxpayer" suits common in the U.S. where a taxpayer contests some official act or denial as wasteful of taxpayer dollars. That case, however, ended with a judge dismissing his claim holding that Howells had “no reasonable grounds” for bringing the claim and that there was “no realistic prospect” of success if the case were to proceed to a full trial."
Now, the city is planning to close the landfill for good.  
Whether this is a welcome or ominous development for Mr. Howells remains to be seen.  Mr. Howells has not given up, though, as he is now proposing to purchase the landfill. His plan involves either reclaiming and remediating the landfill and turning it into a park, or re-launching it as a landfill.  
Mr. Howell's predicament underscores the risks and challenges of cryptocurrency investing beyond just the risk of investment.  Digital currencies have digital or virtual 'keys" that must be protected.  For more information, please consider the following:

Tuesday, February 11, 2025

Second Marriage? FUND YOUR TRUST! A Pour Over Will is Subject to Spousal Claims



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A recent case provides an object lesson for those in a second marriage who either have a trust separate from their spouse, or have retained their original trust upon remarriage.  The case is also instructive regarding trust funding in general. 

Only a properly and completely funded trust protects your estate planning choices. A pour-over will does not magically repose assets in your trust upon death; it must be probated in order to be effective, at least in most states.  Probate means risk, cost, and expense. A pour-over will is subject to the same limitations, requirements, risks, costs, expenses, advantages and disadvantages and rewards as any will created where there is not trust.  One of these risks is spousal claims.

The Montana Supreme Court held that a widow could claim a spousal elective share of the deceased husband's estate, notwithstanding that her deceased husband’s will directed everything to his trust, and, by implication, even if the trust provides a substantial share to the surviving spouse. In Silverwood v. Tokowitz (Mont. No. S-23-0114, January 12, 2024).

Carol Tokowitz was married to her husband, Neal Tokowitz, for 30 years before he died. Mr. Tokowitz left behind surviving children from a previous marriage. He had a pour-over will that funded a revocable living trust. His will did not name his wife or anyone else as a beneficiary, but, as is customary, directed assets only to the trust.

Mr. Tokowitz's executor, Mr. Silverwood, filed a petition to probate the will, suggesting that some assets or property were not owned or controlled by the trust.  Mrs. Tokowitz asserted her rights to the elective share of her late husband’s estate under the Wyoming spousal elective share statute.

An elective share is a term used to describes a proportion of an estate which the surviving spouse of the deceased may claim in place of what s/he was left in the decedent's will. It may also be called a widow's share or statutory share, or described as an election against the will, or a forced share.  In Ohio it is governed by Ohio Revised Code 2106.01 (last accessed 2/10/2025), and is often described as a surviving spouse "taking" against the will.  In Missouri, it is governed by Section 474.160 of the Revised Statutes of Missouri (last accessed 2/10/2025).

The Wyoming spousal elective share statute provides that a married person domiciled in the state must provide a spouse at least an elective share subject to distribution in the will. If, as in this case, the surviving spouse is not a parent of the decedent’s surviving children, the elective share is a quarter or twenty-five (25%)of the estate.

The probate court granted Mrs. Tokowitz her spousal share.  Mr. Silverwood and a trustee, Randy Green, (hereafter referred to simply as "Mr. Tokowitz's family")  argued that she was not entitled to take a spousal elective share and that taking an elective share should prevent her from receiving anything from the trust. In essence, Mr. Tokowitz's family was arguing that granting her an elective share, on top of a percentage of the assets in the trust estate permitted Mrs. Tokowitz to receive more that Mr. Tokowitz intended her to receive.  Indeed, given an elective share of the probate estate, it is likely that Mrs. Tokowitz's total inheritance exceeded that which she would have received if all assets had been reposed in the trust at death.  A hypothetical illustration follows:

The probate court declined to make any ruling regarding disposition of the trust estate.  Mr. Tokowitz's family appealed. 
Mr. Tokowitz's family first argued that although Mr. Tokowitz was a Wyoming resident, he was not domiciled in Wyoming full-time.  A domicile is a legal residence where a person intends to stay. A person can have many residences but only one domicile. The Supreme Court rejected the argument.  The petition to probate the will (filed by Mr. Tokowitz's family) will stated that he was a resident of Park County, Wyoming, but the pour-over will stated that he was domiciled there. According to the court, since the will presented evidence that the decedent’s domicile was in Wyoming, Mrs. Tokowitz met her burden of establishing a Wyoming domicile. The burden then shifted to Mr. Tokowitz's family to disprove the statement in the will, and they failed to show that Mr. Tokowitz was domiciled elsewhere. According to the Supreme Court, it was sufficient that the probate court implied that Mr. Tokowitz was domiciled in Wyoming when the will was created and executed, and applied Wyoming law to determine Mrs. Tokowitz's elective share.  In other words, the probate court did not make an explicit "finding" regarding Mr. Tokowitz's domicile.    
The Tokowitz's family's next argument concerned the amount Mrs. Tokowitz would receive under the trust. They asserted that the probate court should not have given her the elective share because it did not know whether she would receive more or less than a quarter of the estate under the trust. The Supreme Court dismissed the argument holding that the trust’s terms are not relevant to the probate estate. The spousal elective share statute solely pertains to the will. Mr. Tokowitz’s will only left his property to his trust and did not name his wife, which effectively entitles her to the spousal elective share statute.
Finally, Mr. Tokowitz's family claimed that the property was not subject to probate because the will poured all assets and property into the trust. Property that passes by way of a pour-over will, however, is part of the probated estate and subject to the spousal elective share. Assets that transfer through a pour-over will are not exempt from the probate estate, or its rules and regulations simply because they estate assets ultimately repose to a trust.
The Supreme Court held that the lower court did not err when it declined to rule on Mrs. Tokowitz’s interests in the trust, holding that once the assets pass to the trust, they become non-probate assets. The Supreme Court could find no  case law or statutory authority supporting a ruling on non-probate assets in the probate case.
The Supreme Court of Montana held that the district court correctly allowed Mrs. Tokowitz to take a spousal elective share, and that the lower court rightly determined that it lacked jurisdiction to rule on claims arising from the trust.
This case became very complicated by the circumstances and the law.  One assumes the value of the assets warranted appeal to the Montana Supreme Court. All of the complexity, cost, and expense would have been unnecessary if the property and/or assets were funded to the trust prior to Mr. Tokowitz's death. 

Friday, January 17, 2025

Planes, Trains, and Automobiles- In or Out of a Revocable Living Trust?


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In the video above, I discuss a recent MSN.com article entitled "Five Items to Leave Out of Your Revocable Living Trust."  (the article link is already broken, but there is an image in the video, and you can also view the article online here (last accessed 1/18/2025); you will have to scroll down past the first few articles). 

The author writes as follows:

         "Vehicles. Whether it’s a ’63 Corvette, Harley chopper or prop plane, all that’s required to pass it on is a simple written instruction to transfer the title to a beneficiary. In a trust, you’re exposed to lawsuits over accidents that involved the vehicle." 

Generally, I disagree. Vehemently.

In the video, I discuss the following:

1. Articles, publications, seminars, and presentations should never be construed as legal advice

2.  The author suggests that only a simple written instruction is necessary to transfer a title to a beneficiary, which statement is misleading or incorrect.

3.  Beneficiary and Transfer on Death Designations may sometimes work to avoid probate, but they have limitations and risks, and do not constitute a 'plan' to avoid probate (see links below).  

4. The liability issue raised by the author makes no sense for most revocable living trusts settled in most states.

5. The author assumes that the only purpose of a revocable living trust is to avoid probate, which is untrue, and assets outside of a trust do not serve and may impair lifetime planning benefits of a trust:

    • Consistent and competent lifetime management of assets is a lifetime planning objective best accomplished with a trust.
    • Guardianship avoidance is a lifetime planning objective best accomplished with a trust.
    • Protection of assets from a court-appointed guardian is a lifetime planning objective that can only be accomplished with a trust.
    • Aging in Place Planning is a lifetime planning objective that can only be accomplished with a trust.
I acknowledge in the video that there are always exceptions, and that the author may not have actually been considering revocable living trusts when drafting the article, but generally I disagrees with the headline and conclusion of the author regarding planes, trains, and automobiles. 

Consider additionally the following: 

I urge you to attend an "Aging in Place Planning" presentation by signing up for an upcoming live webinar.  You can find these periodically on my blog or on the events page of the firm's Facebook page.  You don't need to wait, however, for a scheduled event; there is a recorded version available here: https://bit.ly/Aging-in-Place-WorkshopYou might also consider inviting your children and trusted advisors to attend.


 

Saturday, November 2, 2024

No Lift Policies? Will Your Institutional Care Provider Pick You Up When You Fall?

 


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In this video, Attorney Donohew discusses a Washington Post investigative report about "fall assist" 911 calls from assisted living and other institutional care providers, and the prevalence of "No-lift" policies. 

'

According to  the Washington Post

"[l]ift-assist 911 calls from assisted living and other senior homes have spiked by 30 percent nationwide in recent years to nearly 42,000 calls a year...That’s nearly three times faster than the increase in overall 911 call volume during the same 2019-2022 period, the data shows." 
The article notes this practice is particularly prevalent in Illinois, and why the increasing number of calls is causing controversy. 


Thursday, October 31, 2024

Pennsylvania's Controversial and Pernicious Filial Responsibility Law- Repeal, Rescue, or Worse?

 


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This video is based in large part on a recent article authored by Professor Katherine C. Pearson, Filial Friday: Modification of Pennsylvania's Filial Support Law Passes House Unanimously (last accessed 10/31.2024).  Professor Pearson is also the author of of the seminal law review article on the subject of filial responsibility, Filial Support Laws in the Modern Era: Domestic and International Comparison of Enforcement Practices for Laws Requiring Adult Children to Support Indigent Parents (last accessed 10/31/2024).  Therein, Professor Pearson wrote:

Indeed, as set forth in Section V of this article, case reports and news reports from Pennsylvania demonstrate a potentially significant trend, where third-party creditors are using filial support laws to compel payment or cooperation by adult children to cover their parents’ costs in nursing homes or similar care settings. While the Pennsylvania trend is echoed in at least one other state, South Dakota, Section VI of this article demonstrates that a lack of national consensus in application of filial support laws can create inconsistent results among U.S. states, which may increase the potential for results that seem surprising or unfair. 

The following are links to articles on this blog regarding filial responsibility laws: 

The following are links to articles describing legal mechanisms by which nursing homes attempt to create filial responsibility even in the absence of filial responsibility statutes: 
Additional Resources: 

Finally, in the video I refer to a CMS policy paper that advocates enforcement or adoption of filial responsibility. I cannot find the link to that paper, but am searching for same.  The paper was, in my opinion, the culmination of an effort that included a 1983 administrative interpretation of Medicaid regulations which permitted state Medicaid administrators to "require adult family members to support adult relatives without violating the Medicaid statute." See,  Medicaid Manual Transmittal No. 2, HCFA Pub. 45-3, no. 3812 [New Developments 1983 Transfer Binder], 3 Medicare & Medicaid Guide (CCH) 5f 32,457 (Feb. 1983).  I will supplement when I locate the paper. 

Saturday, October 26, 2024

The Hidden Dangers of Spousal Neglect: A Cautionary Tale for Seniors Without Advance Directives


Imagine this all-too-common scenario: A devoted spouse, now in their 80s, becomes the sole caregiver for their partner, who is battling dementia and frailty. The caregiver, overwhelmed but determined to honor what they believe are their loved one's wishes, skips medical checkups or neglects basic needs, thinking it's what the ill spouse would have wanted—"no fuss, no hospitals." Tragically, the ill spouse's condition worsens, leading to emaciation, pneumonia, and death. The surviving spouse, acting out of love and assumption, faces criminal charges, not for malice or intent, but for failing to act. This isn't fiction; it's the essence of a landmark 2024 Kansas Supreme Court case,
 State of Kansas v. Carol Sue Burris (Kan. No. 123,650, March 15, 2024), 
where a wife was convicted of reckless second-degree murder and mistreatment of a dependent adult for neglecting her husband's care. 

The ruling serves as a sobering reminder for seniors and spouses: without clear advance directives or other legal documents, even well-intentioned inaction can lead to devastating legal consequences. For readers of the Aging in Place Planning and Elder Law Blog, this case highlights the urgency of proactive planning to protect autonomy and prevent such tragedies, especially amid the rising prevalence of elder abuse, which affects up to 5 million seniors annually, according to the National Center on Elder Abuse. Tools like advance directives, supported decision-making (SDM), and powers of attorney can provide the 'cover' needed to navigate caregiving without fear of prosecution. This article unpacks the Kansas case, its emotional and legal ramifications, and actionable steps to shield your marriage and independence.

The Kansas Case: Love, Neglect, and the Legal Duty of Care

Carol Sue Burris, 69 at the time of her 2017 trial, was her husband Michael's sole caregiver as he deteriorated from an array of health issues. Michael, once a robust man, became bedridden, emaciated, and unable to self-care, yet Carol withheld medical intervention.  What if she believed it aligned with his preferences?  In at least one instance, after a hospitalization, and there were three toward the end of Michael's life, Michael actually demanded to return home, amid allegations of her neglect and refusal to provide him with necessary medical care. The hospital honored his request and returned him to his home, and to conditions that had already, in the eyes of experts, threatened his health and safety.   

Neighbors and home health aides raised alarms, but Carol blocked access, leading to an Adult Protective Services investigation. During the third and final hospitalization, Michael's death from pneumonia, compounded by severe malnutrition, prompted charges under Kansas law (K.S.A. 2022 Supp. 21-5417), which criminalizes mistreatment of dependent adults through neglect by those with a "legal or contractual duty" to provide care.  The evidence presented at trial was horrific. Read the decision if you must, understanding that the description of Michael's condition is shocking, traumatizing, and heartbreaking. 

Carol did not testify, but her interview was introduced to the court.  She offered little explanation for her actions and inaction, other than excuses for why she could not do more.  A statement that she could not afford to pay third parties because she needed money for her care painted her as unfeeling, despite the fact that consideration of spousal support is baked into federal law, compromising the Community Spousal Resource Allowance (CSRA) for determining Medicaid eligibility.  It doesn't appear from the court's recitation of facts, however, that the jury was advised that this consideration of support is lawful, even if not morally defensible.  It doesn't appear that Michael's motivations for returning home to such horrific conditions were explored, so one can only speculate whether he, too, was concerned that the cost of his care might harm his wife. 

Before proceeding, know that our framing of the facts of this case is not a reflection of an opinion as to Carol's guilt or innocence.  It reflects an appreciation that, as horrific as they were, and accurately portrayed by a prosecutor and a family horrified over a premature death with needless suffering, the facts might not accurately depict the intentions of the two people most intimately involved.  Another way to consider the case is to assume that you and a spouse made similar decisions or bargains, with similar horrific results, believing that result to be right; would you have foreseen the possibility of criminal conviction?  The issue is whether aging in place, without considering the costs or the legal bases for decisions, might create unanticipated legal peril?  The answer is a resounding 'yes.'    
 
Carol was tried, convicted, and sentenced to 125 months.  

Carol appealed her convictions for reckless second-degree murder and mistreatment, arguing she had no affirmative duty to act, her inaction wasn't criminal, and prosecutors had inflamed the jury with unlawful remarks. The Kansas Supreme Court disagreed in its March 15, 2024, ruling. The court held that Carol's marital relationship, voluntary assumption of caregiving, and role as sole provider created a "clearly defined legal duty" under common law and statute. Failing to summon care or provide necessities wasn't just an oversight; it was a criminal omission, akin to the "termination" of vital support. The prosecutor's comments were deemed fair advocacy, not error. Carol's 10-year sentence was upheld, a stark example of how decisions, unguided and unsupported by documentation, can cross into liability.

This isn't isolated; it's a window into spousal neglect's gray areas. Without directives, caregivers like Carol act on assumptions rather than provable directives. The ruling echoes broader trends: neglect is the most common elder abuse form, often by family, and 1 in 10 seniors faces it, per the National Center on Elder Abuse.

Why This Hits Spouses Hard: The Emotional and Legal Trap

For spouses, caregiving is often a sacred vow, but without "cover" from advance directives, it becomes a minefield. Emotionally, it's devastating: the survivor grapples with guilt, grief, and public scrutiny, as Carol did amid family rifts. Legally, the "duty of care" arises from marriage (common law) and voluntary assumption, turning omission into crime, reckless murder if it foreseeably causes death. No directive means no proof of shared wishes, leaving the caregiver exposed to charges like mistreatment or manslaughter.

In the absence of documents, courts presume a universal duty to summon help, overriding the argument that "he wouldn't have wanted it." This "termination of care" can feel like the fulfillment of a promise, seem to others like betrayal, and be seen by the law as endangerment. For aging couples, it risks the survivor's freedom, assets (via fines or asset forfeiture), and family harmony, potentially triggering guardianship or imprisonment for the accused spouse.

Would the Outcome Be Similar in Missouri and Ohio?

Yes, the result would likely be similar or even harsher in Missouri and Ohio, where spousal duty of care is firmly established in elder abuse statutes, treating neglect as criminal omission by those with a "legal or contractual duty."  

In Missouri (RSMo §565.184), abuse includes "intentionally failing to provide care, goods, or services to an elderly person," with penalties up to class A felonies for causing death. Spousal relationships create this duty, and voluntary caregiving strengthens it. Like Kansas, Missouri courts hold that marriage and assumption of care impose affirmative obligations; failure leading to harm (e.g., pneumonia from neglect) could yield reckless homicide charges, with 10+ year sentences. 

In Ohio (ORC §5101.60-5101.72), neglect is "failure to provide services necessary to avoid physical harm," criminalized under abuse laws with misdemeanor to felony penalties. Spouses have a common-law duty, and voluntary caregiving creates liability; reckless failure causing death mirrors Kansas's second-degree murder. 

In both states, the lack of "cover" from directives would leave the spouse vulnerable, as assumptions don't shield against "duty to act."

Safeguarding Your Marriage: Proactive Steps for Spouses

This case is a call to action: Directives aren't just paperwork, they're your spousal shield. Here's how to protect your partnership:
  • Draft Joint Advance Directives: Create a supplemental directive nominating each other as SDM supporters, specifying home care preferences and dementia guidance. Include a "spousal duty clause": "My spouse shall provide or summon care per my wishes, documented here, without liability."
  • Use Powers of Attorney and Trusts: Nominate your spouse as primary agent in GDPOAs, with backups. Trusts can fund home care and include anti-guardianship provisions, as in our "SDM-Driven Supplemental Advanced Directive."
  • Incorporate SDM for Daily Support: Designate supporters for collaborative caregiving, reducing burnout and providing witness to your wishes, and support for your caregiving spouse and family.
  • Plan for Dementia and Neglect: Add clauses like: "In case of incapacity, prioritize home-based care; my spouse's actions per this directive are protected from liability."
  • Seek Professional Review: Consult an elder law attorney to ensure enforceability; the costs are $500-2,000, but it saves far more in crises.
For Missouri and Ohio residents, leverage state APS hotlines for guidance, and review our "Handy Link - Reporting Ohio Adult Abuse or Exploitation" for support.

Conclusion: Love Protected by Law

Carol Burris's tragedy, a possible act of devotion twisted into an accusation, reminds us that without directives, even the best intentions lack legal armor. For spouses, it's not about distrust; it's about clarity amid chaos. By documenting wishes, you honor your vows while shielding your partner from unimaginable burdens. While this article has provided a thorough examination of spousal neglect risks and protection strategies, it is by no means comprehensive. The legal landscape evolves rapidly, influenced by state variations and individual circumstances that no single resource can fully capture. Therefore, readers must remain vigilant, consulting reliable sources such as state APS, AARP, and local elder law attorneys, and regularly evaluating their personal situations to identify potential risks. By combining awareness with tools like SDM agreements, POAs, and trusts, seniors and their families can better safeguard independence and thrive while aging in place. 

For ongoing support, consult a professional and stay informed.  Your security depends on proactive engagement.





Friday, October 25, 2024

Estate Tax Planning for 2026 Tax Changes: Modest Estates At Risk?




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The estate tax is a tax on the value of a person’s assets and property at the time of their death. Upon your death, if the total value of your estate is above a certain threshold amount, known as the federal estate tax exemption, the IRS requires your estate to pay the tax before any assets can be passed to your beneficiaries. Under current law, every year this exemption rises with inflation, but in any given year, politicians can change the amount of your coupon.  Worse, the exemption amounts currently in place sunset or expire beginning in 2026.  

In 2024, the federal estate tax exemption is $13.61 million for individuals ($27.22 million for married couples). Simply put, if you die in 2024, and your assets are worth $13.61 million or less, your estate won't owe any federal estate tax. If, however, your estate is worth more than $13.61 million, every dollar more than that will be taxed at a whopping 40% tax rate.

The current $13.61 million estate tax exemption is set to expire on Jan. 1, 2026, and return to its previous level of $5 million, which when adjusted for inflation is expected to be around $7 million.  Of course, we can't know whether Congress will step-in before to change the law, and we can't know if that change will be helpful or harmful to your current estate plan.  

Additionally, there are some inherent variables in your estate plan, in addition to the tax variables.  We don't know (1) when you will die, (2)  how much money you’ll have when you die, (3)  what the estate tax exemption will be when you die, and as importantly (4) how long,  legally or medically, you will be able to plan for yourself or change your estate plan. That’s why it’s so important to work with an attorney who will develop a long-lasting relationship with you and have processes in place to ensure that you are updated when the law changes and put strategies in place to protect your family, regardless of the amount of the estate tax exemption or the value of your assets.

In addition, the state you live in can also have an estate tax, separate and apart from the federal government’s estate tax. Fortunately, both states in which most of my clients reside, Ohio and Missouri, have neither an estate nor inheritance tax. Illinois, a state in which I am admitted to practice, but in which I no longer practice, is one of seventeen states that have an estate or inheritance tax. In Illinois, any amount of your estate over $4 million will be taxed at a graduated rate that goes as high as 16% based upon the 2024 tax rates. Eleven states, and the District of Columbia, have an estate tax, while five states have an inheritance tax, where they tax people who live in their state when they receive an inheritance. Currently, Maryland is the only state in the nation that has both an estate tax and an inheritance tax.

By using various estate planning strategies, you can reduce — or even eliminate all together — your estate tax liability. Some of the strategies are simple, but the more money you have, the more complex they’ll need to become, for example by using irrevocable trusts. Regardless of the method you employ, without question, these strategies can save your family from a massive tax bill, and are therefore well worth it the time and expense necessary to design, draft, and implement them.  I discussed many of these strategies in my previous article, Looking Ahead to 2026- Estate Tax Exemption Sunset and Current Planning Opportunities.

If you’d like to learn more, or need to get a plan in place to save your family from a major tax burden, give us a call. 

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