Posted by: Katie May
Beyonce Knowles / Dale Jr. / Al Gore / Gisele Bündchen / A-Rod / Hugette Clark.
Wait, Hugette Clark?
We are all familiar with the first few names on the list, or at least some of them! Not many of us, however, know who Hugette Clark was and are probably wondering what she has in common with the more easily identifiable names or nicknames on the list. The common thread is a roughly $300 million estate. (All celebrity information from celebritynetworth.com).
Hugette was the last living daughter of William A. Clark who amassed a fortune mining copper. Hugette did not live her life in the spotlight, like Queen Bey, despite her fortune. After her death, at age 104, and after spending 20 years living in a hospital rather than in one of her three beautiful homes, she will join the others in the spotlight as her $300 million estate is subject to trial beginning in September.
The problem? Hugette, executed two wills in her lifetime, signed only a month apart but with completely different dispositive provisions. When she died, each of these wills were offered as her “final” will by different parties. One group of beneficiaries is made up of Hugette’s 21 distant relatives, who would be the primary takers under her first will. The second group is her caretaker, who received an increased bequest in the second will, her goddaughter and a foundation to be established, all of whom were named in the later-dated will. Throw in the government’s interest in estate taxes and a charitable art gallery and you have yourself a prime time fight!
While most of us don’t have $300 million for our designated beneficiaries to fight over, we all have something. We most likely do not want our family, friends or favorite charities to be fighting over whatever it is that we have after our deaths; therefore, we should all learn a few things from Hugette’s estate struggles.
Preventing Fights Over Personal Property:
Parents are usually the glue that holds a family together. However, clients will often tell us that their children all get along and that they are confident that there will be no fighting. For the most part, clients think the best of their children even when they should know better. It is the curse of a parent! There are also other family situations that brew litigation, including second marriages or the disinheritance or favoritism of a child. It is always wise to have parents make clear and definitive decisions regarding property distributions so that there is nothing for children to fight over.
Many clients believe that they have nothing to fight over. Again, it is often items of little monetary value that cause the most drawn-out and most expensive court battles. Addressing items such as a wedding ring or other items of jewelry, a piano, or a special rug, will avoid some of the litigation that can ensue when a loved one passes away.
Sometimes it is prudent to choose an independent third party to administer your estate. If you are aware that there are family tensions among your children or loved ones, bringing in a neutral party is another way to cut through the emotions involved. Loved ones are less likely to challenge the decisions made by an independent third party due to the cost involved, process in place and fiduciary standard owed by the independent party to the other beneficiaries.
Bequeathing Specific Items:
It is wise, when determining who should get what to be sure the individual who is to receive the item actually wants it! In the case of Hugette, one will provides that an art gallery receive a gift of a specific Monet painting, valued at $25 million, while the other will makes a cash gift of $3 million to that gallery. Some believe that the art gallery is now getting involved because they would rather get the cash and don’t really want the Monet. The end result of this dispute will determine the ultimate value of the estate tax owed as the charitable deduction will be affected. Speaking with the individual or entity that is to receive the property is important to ensure that your overall estate planning objectives will be met.
Another consideration is to determine the best way for your loved one to receive a gift of cash. The amount of the gift, age of the loved one and financial savvy of the individual should all be considered when making this determination.
Physicians Determination of Capacity:
As previously stated, Hugette lived to the age of 104. She executed both wills at age 98. I am not aware if a doctor contemporaneously provided an opinion as to Hugette’s testamentary capacity at the signing of either or both wills, but it would have been wise to have that done.
Attorneys have an ethical duty to affirmatively determine if the client has the requisite capacity to execute the document presented. Capacity is a funny thing. Different levels are required for different legal situations. A client may have capacity in the morning, but not in the afternoon. Memory loss is does not necessarily indicate a lack of capacity. A diagnosis of dementia may mean the individual lacks capacity or it may not. Individuals are often aware of their declining capacity and are very good at concealing its extent. Certain medical conditions, such as a urinary tract infection, can be a catalyst. As you can imagine, capacity is a difficult thing to determine and is therefore easily challenged.
If there is any doubt regarding an individual’s capacity or if the situation is one that increases the likelihood of litigation, such as unequal distributions or a disinheritance, it may merit getting a doctor’s certification of capacity before signing the documents to prevent or defeat a legal challenge down the road. It is difficult to go back in time to obtain evidence of capacity, so it is important to be proactive and properly document a condition.
Contacting an attorney who practices in the area of estate planning and/or elder law to assist with your estate plan ensures that your objectives are met and wishes carried out. Don’t let your name be added to the list of celebrities!