Wills in the News: The Thomas Kinkade Affair

by rperez on August 23, 2012

I just read a fascinating story in Forbes, about the battle over the estate of the famous painter Thomas Kinkade.  This is high drama, worthy of a soap opera!  It has a little of everything – a celebrity, lots of money, and an epic fight between the jilted wife and the girlfriend.  Here’s the story, in a nutshell:

At the time of his death, Kinkade was separated from his wife of 30 years, and living with his girlfriend, with whom he had a relationship for the last year and a half of his life.  The wife submitted a will for probate that Kinkade had signed in 2000, leaving an estimated $12.5  million in assets to a living trust that he had set up in 1997.  Most of Kinkade’s remaining assets – including original art works, copyrights, and shares of his retail art business – were reportedly included in the trust already.  (Unlike a will, which is a matter of public record, a living trust is private.)

The girlfriend has challenged the will, and submitted two handwritten documents for probate, claiming that the painter left her over $66 million in assets, including various art works, cash, and a house/studio valued at $7 million.  These documents, if authenticated as Kinkade’s handwriting, could be considered a valid “holographic” will.  The will contest raises a number of estate planning issues, which we can all learn from.  Here are some of the main points:

  • When two different documents meet the legal requirements for a will, the more recent document controls.
  • One of the handwritten documents supposedly left $10 million in life insurance proceeds to the girlfriend.  Unfortunately for her, even a valid will doesn’t control insurance proceeds – they go to the designated beneficiary on the policy.  (This subject deserves a post of its own – coming soon!)
  • You can’t give away something in a will which you don’t own.  Once you transfer ownership of assets to a living trust, it is the trust document that controls them, not your will.  Similarly, in a community property state (like Texas), you can only give away your own share of the community property – not your spouse’s.
  • If you have conflicting or ambiguous documents in your estate plan, your beneficiaries should be prepared to spend a lot of money (and time in court) to sort it all out!

This story shows why it is important to have a clear and consistent estate plan in place.  A knowledgeable estate planning attorney can help you save your family and loved ones a lot of trouble down the road!

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Do you need a will?

by rperez on May 4, 2012

If you are like most people, you probably don’t have a will – a recent study found that less than half of all adult Americans (only about 45%) have a will or other estate plan.  “Why do I need a will?” you might say, “If I die, won’t my spouse (or kids) get everything?”   Maybe – maybe not.

In Texas, if you die without a will (intestate), or if your will is declared invalid, everything you own at the time of your death – your estate – will be distributed according to the Texas Probate Code.  The law will determine your heir(s), based on how closely they were related to you by blood or marriage, and not by the nature or quality of your relationship with them.

Here is how it works.  Under Texas law, all of your property is considered either separate property or community property.  Separate property includes any property you owned before marriage, or which you acquired during the marriage by gift or inheritance, plus certain other assets (for example, damages awarded to you in a personal injury lawsuit).  Community property includes everything else – all property acquired by either spouse during the marriage that is not considered separate property.

Property is also further classified as either real property or personal property.  Real property consists of land and improvements to land (such as homes or other buildings), plus oil, gas and other mineral interests.  All other property, such as cash, bank accounts, investments, vehicles, jewelry, clothing and furniture, is classified as personal property.

If you were to die without a valid will or other estate planning document, this is how your estate would be distributed under the Texas Probate Code:

SRP = Separate real property

SPP = Separate personal property

CP = Community property (your share)

If you are: Your property will be distributed:
Single/divorced, with no children All to parents1
Single/divorced, with children All to children (in equal shares)2
Married, with no children SRP:  1/2 to spouse, 1/2 to parents1

SPP:  All to spouse

CP:    All to spouse

Married, and have children with surviving spouse SRP:  All to children (in equal shares)2

SPP:  1/3 to spouse, 2/3 to children

CP:    All to spouse

Married, and have children from another relationship SRP:  All to children (in equal shares)2

SPP:  1/3 to spouse, 2/3 to children

CP:    All to children (in equal shares)

1 If either or both parents are deceased, their respective share is divided equally between siblings

2 Surviving spouse retains 1/3 interest during his/her lifetime (life estate)

Dying without a will often leads to undesired results – you take the risk that your property may not be inherited as you would like.  For example, you may prefer to leave all of your property to your surviving spouse to provide for and take care of your children – but this may not happen without a will.  Having a will is a particularly important consideration in a “blended” family, where you and/or your spouse have children from previous marriages. You may be close to your stepchildren, and want to provide for them as well – but under the Texas intestacy statutes, they would inherit nothing if you died without a will.

Other disadvantages of intestacy include costs and delays.  A court proceeding will likely be required to determine your heirs, and an administrator may have to be appointed to settle your estate and distribute your property.  The process could tie up your assets for an undetermined period of time, and may also result in significant legal fees, court costs and frustration for your loved ones.

So, do you need a will?  The decision is yours…

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Welcome to my virtual law office!

April 9, 2012

Today is launch day – I am very excited to finally unveil my new website!   I am still trying to work out the best strategy to attract new clients – but the mere fact that you are reading this means that at least one person has found my site, so I am happy that you […]

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