Stan Lee’s Tangled Web of Estate Planning


Summary

  1. How are we going to organize and simplify my assets?
  2. What sorts of accounts and trusts will we use and how will they be managed?
  3. How will you work with my trusted contact, while I’m well, and after I’m sick or deceased? (And for those unsure, how can I pick the right trusted contact, such as a family member or professional?)
  4. How do you determine cognitive decline in an individual? And what practice would you take if you thought my ability to answer questions and manage my funds was diminished? What would you do once you’ve made this determination?
  5. How else do you practice checks and balances during the financial planning or estate planning process, and during the monitoring of my assets?
  6. How often will we review beneficiary agreements and estate planning documents?
  7. Do you work with a team of professionals, and in what capacity? How often will I work with them too?
  8. Should we ever include my family members or other beneficiaries in our conversations, and when?
  9. Do you have any references I could speak with?

[Edited transcript]

Janice:             I can summarize Stan Lee’s Estate in two words, hot mess. That’s really what this entire article is saying. So you know Stan Lee, Captain America, Spiderman, really cool. But he did pass away at 95. His wife of nearly 70 years, that’s amazing. She passed away in 2017. He was also as I’m sure you heard in the news, accused of some inappropriate behavior. And not to mention, we’re talking lots of different accounts of missing money. They mentioned here $1.4 million dollars missing from a bank account and 85 … I’m sorry, $850,000 stolen to purchase a condo.

Janice:             So we’re just riddled with financial drama and personal drama in what … I’m not sure how long that went on for, but it seems like a pretty long time. So what they’re saying here is that these complications could lead to a mess in the estate. We don’t know at this point, it’s all speculation of what kind of documents did he have? What kind of setup … what kind of plan did he have? So it could be really interesting to watch this unfold I think, what do you think?

Anthony:            Yeah, I mean I think the point of this is just sort of a could’ve, would’ve, should’ve. And the author is talking about the nine questions Stan Lee could’ve asked when hiring an advisor to help understand what could have been done to avoid all this. Is that about right about the tone or tenor of this?

Janice:             Absolutely. Yep. Yes, and they do say that he went through quite a few different attorney’s and financial planners. So he’s had his share of people. So there may lots of … and again, it’s all speculation. There may be lots of documents floating out there that they’re going to have to sift through when they’re conducting his estate. So they jump into these nine questions, which I feel … very open-ended questions to really get you to think. There are no answers, so there just the questions of like …

1. How are we going to organize and simplify my assets?

Janice:             Well, in Stan Lee’s case, I don’t know how you’re going to organize anything if there’s documents all of the place. We’ve got missing money. We have different accounts. It could be a mess. How would you suggest somebody organize and simplify their assets?

Anthony:            Yeah, so let’s do this. I’ll answer for Stan Lee, based on what limited information we have. So when you have $1.4 million dollars go missing from a bank account … or what was the other example? Somebody took …

Janice:             $850,000 to purchase a condo.

Anthony:            Right. So it just feels like there’s a lot of loosey goosiness with money and that happens. I’ve seen that happen way too many times. What happens is when folks get on in year and they’re beginning to feel more vulnerable, I’ve seen them add different people to different accounts. Almost like diversification. So they feel like, okay my son is on my checking account and my nephew is on my brokerage account. In this way, I have a lot of different people who can help me out in case I need help from different folks if my son is on vacation or something.

Anthony:            The problem with that is it gets really messy and really disorganized. It’s just kind of … it gets … too many cooks in the kitchen or too many hands in the cookie jar. So one way you might want to avoid that or solve for that is to put everything into a trust or at least one organized type of account. You know, you have all the power and responsibility centralized with yourself and with your co-trustee, possibly an attorney or professional who doesn’t have a stake in taking money out of your account.

Janice:             That’s very important, yes.

Anthony:            But the important thing is, because it’s all centralized, there’s total accountability. There’s no question who took that money. You know, who had access to the money. All fingers point to your co-trustee and that co-trustee bears the burden or bears the responsibility and the risk of making sure he or she does a good job managing your affairs.

Anthony:            So you need to choose wisely, but again, all the liability points to that person, so there’s no question, there’s no doubt, what happened to that money.

2. What sorts of accounts and trusts will we use and how will they be managed?

Janice:             A trust is one option. Have your information and your documents … are you centralized and using a third party professional. Making sure that person knows what they’re doing. These are big accounts. This is not chump change. This is pretty big stuff. And like you said, that third party, that person is held accountability. And in your case, you’ve done this how many hundreds of times?

Anthony:            Right. And so you also want to avoid what I always see, adding a power of … bank accounts, at least in New York, can have many types of designations. There are bank accounts with joint owner. There are bank accounts with a power of attorney attached. Things called pop and trusts, ITF or in trust for accounts. TOD, transfer on death. There are all sorts of accounts you can set up. That’s not estate planning. That’s just putting people fingers in your money.

Anthony:            Set up a proper trust with an attorney if you want that sort of centralized and accountability that we talked about earlier. Not just adding people’s names willy nilly to your accounts.

Janice:             So what I’m hearing you say over and over is get a professional that knows what they’re doing to help you setup this [inaudible 00:06:27] plan?

Anthony:            Pretty much.

3. How will you work with my trusted contact, while I’m well, and after I’m sick or deceased? (And for those unsure, how can I pick the right trusted contact, such as a family member or professional?)

Janice:             A professional’s always best, just because there’s no affiliation and you know … like you said, you’ve done this hundreds of time, you know what you’re doing and you know the rules. But if it’s somebody else, a family member or the attorney that’s going to handle your estate or planning, fare with the person that you’re putting as the contact?

Anthony:            I mean the best … there’s no universal answer here. The best answer’s just to get somebody that’s independent, objective and I guess, professional or just normal professional nice person, who’s not going to antagonize your daughter or your nephew, whoever they might be dealing with.

Janice:             Right.

Anthony:            But objectivity …

Janice:             [inaudible 00:07:35].

Anthony:            Yeah, but objectivity is huge because if you appoint … if you have two kids and you make one the executor and the other not, you’ve created imbalance right there. You’ve created resentment between your two kids. Assuming that’s not your goal, why not have an independent third party so that everyone … all of your loved ones at least, are on equal footing.

4. How do you determine cognitive decline in an individual? And what practice would you take if you thought my ability to answer questions and manage my funds was diminished? What would you do once you’ve made this determination?

Anthony:            Obviously this is a very, very touchy topic. So first I’ll point that there’s two different standards of cognitive decline. One is the standard of whether or not you can make your will or revise your will. And in New York, that’s actually a really, really low standard. And I think, to summarize a case from the New York courts, this is not verbatim, but it basically says that you can be a drooling, raving lunatic for the majority of your life, yet have a moment of clarity when you had the requisite cognitive abilities to change or update your will.

Anthony:            So it’s a pretty low standard.

Janice:             Well.

Anthony:            Yeah. As long as we can prove in that moment where you signed that you were good, the rest of time you could be … I don’t want to use an example, but very, very unwell.

Janice:             Very unwell. Wow, that’s interesting.

Anthony:            Now, alternatively, for more day to day things or setting up a trust, the standard’s a little higher. You would have to have what would be the amount of mental capacity to sign a contract, a non-will contract. And that’s more what I think regular people think on a day to day basis as being mentally able. Just what’s the day of the week, who’s our president, things like that, right?

Janice:             Okay.

Anthony:            And I just kind of gave you an answer. There’s a couple of just general benchmarks for questions that you can ask, both from a legal and a medical standard perspective of what constitutes somebody who is in their right mind I guess you would say.

Janice:             Right.

Anthony:            So that’s not something that you need to really suss out on an attorney by attorney basis. And what would we do if your funds are diminished? You know, before we get to that point, we would have set up a plan for who would be in charge of your funds and how the funds would be managed for your benefit. Most likely a trust or some sort of guardianship or custodianship. But again, it varies by state and by situation.

Janice:             So it’s about having that plan.

5. How else do you practice checks and balances during the financial planning or estate planning process, and during the monitoring of my assets?

Janice:             So we’re using Stan Lee’s tangled web to ask nine questions that we are to ask during our own estate planning. So number five was how else do you practice checks and balances during the financial planning or estate planning process and during the monitoring of my assets? Again, I go back again, I keep saying that that professional would know how to checks and balance it throughout the entire process.

Anthony:            So some people want checks and balances in the forms of two co-executors or two co-trustees. And that can work, but in my experience that actually causes more problems, because if there’s a deadlock than nothing happens.

Janice:             Right.

Anthony:            So great, now …

Janice:             Then you’re stuck.

Anthony:            Exactly. The reason I like an individual professional executor is two reasons. Okay. The reason you want an individual is the reason I talked about before. If you get a deadlock than you have to go to court to resolve these deadlocks and there’s no motion. You want things moving along, because otherwise … or even with motion, it is very slow.

Janice:             It is a tedious, long process.

Anthony:            As Janice knows, having helped me out with probates already. But okay. So you want motion, but you want somebody … the individual executor trustee in and of himself is a check and balance, is because executors and trustees are personally liable for any shenanigans in the execution of their duties. So even if I’m a lawyer with malpractice insurance and all that, if I screwed up or stole money … not me, but some other, I’m great.

Janice:             Right.

Anthony:            That attorney could potentially have to pay out of their own pocket, meaning a lien on their house or out of their own savings for any mistakes that they made. So that’s the check. You have huge personal risk, right.

Janice:             Right.

Anthony:            And the reason you want it to be a professional executor is because professional attorneys, sometimes CPA’s, are keenly aware of these risks. So if you have a nephew or a cousin who’s serving as executor or trustee, that risk is on them, but they might not get it.

Janice:             They might not understand the gravity of that risk.

Anthony:            Exactly.

Janice:             Right.

Anthony:            So even though they have legal liability, they’re still just kind of lolly gagging around with the estate checkbook, just because they don’t really quite grasp what they should be doing and how it can impact them personally. They don’t understand.

Janice:             Correct. That’s correct.

Anthony:            That’s the reason why, I think.

Janice:             Absolutely.

6. How often will we review beneficiary agreements and estate planning documents?

Janice:             This is like the Olympics. Every four years you can revisit them, not by any length or take a lot of time, just look them over. If you talk to your professional and get … just make sure everything is fresh and up to date and that there wasn’t anything in between those four years that needs to be addressed.

Anthony:            So that four year rule Janice is something I recommend for some sort of mid-career individuals. If you’re 95 as Mr. Stan Lee was, it might be an annual thing. A little more frequently. Just things seem to change, health issues pop up. And just … it’s my experience that older clients want to look at them more and why not, you know?

Janice:             Okay. And based on what they were talking about is he had a lot of stuff going on in the years leading up to his passing. Would that be …

Anthony:            Yeah, just be aware that anything more than annually is a bit much, but showing a long audit trail of constant changes can actually reflect on how competent you were. I mean if you’re constantly changing your mind about stuff, that doesn’t look good to a judge at the end of the day. So you want to show some level of consistency.

Janice:             That’s a good plan.

7. Do you work with a team of professionals, and in what capacity? How often will I work with them too?

Anthony:            You want to work with someone who has a team. There are a lot of solo attorney’s out there, who are probably really intelligent and who are very experienced, but when they’re on vacation, that means nothing happens. That’s not comforting to you. You want … Estate planning, just like most things in this world, is getting very specialized. It’s really not fair to say that any one attorney can be good at estate litigation and will drafting and probate and administration. There’s just so many elements. I know most people don’t understand what those words mean, but my point is that there a lot of different subsections of estate planning and probate.

Janice:             Every one of those words is completely specific and is very complicated and has many moving parts.

Anthony:            Right. So it would be very tough to imagine any attorney who’s excellent at all of those things, right?

Janice:             Right.

Anthony:            So you want to work with somebody … For example, I would say my strength is executorship and reading the terrain, serving as that objective person for my clients. And then if it gets into areas such as litigation, where, okay look the heirs are going to sue each other. I have colleagues, a team of professionals, who I can bring in to really run the point on that. And you want to have somebody who will …

8. Should we ever include my family members or other beneficiaries in our conversations, and when?

Anthony:            Sure. It’s up to you. If you’re going to include them, include them all. Like I said, bias, or the appearance of bias can cause huge problems later. So if you have four kids and unless you’re just hard … you’ve made the hard decision to completely exclude one or some of them, include all of them in all conversations. But yes, aside from that, having these conversations while you’re doing the planning, well before you’re on your deathbed or anything like that, that’s fine.

Anthony:            Setting up the expectations way in advance is very useful. Just be aware that people forget and people’s memories are flawed, so if you’re going to do this, don’t think okay, now it’s good, they’ll always remember that I said that. That’s not necessarily the case. You might have to reinforce.

Janice:             And make sure it’s in writing. Not just anything verbal.

9. Do you have any references I could speak with?

Janice:             I interpreted this as do you have references or other clients that I could speak with about your work? That would be my interpretation of that. How do you feel about that one?

Anthony:            Yeah. That’s kind of useful.

Janice:             Yeah.

Anthony:            Here’s the reason why I kind of pause on that. Client references are great, but here’s the funny thing. You have no idea if your situation or your needs are similar to your friends situation or needs. So he can say, oh yeah, I worked with Joe lawyer and he did a great job on my mom’s estate. You should use him.

Anthony:            But his mom’s estate was this huge contested litigation that required a lot of … a courtroom brawler, right. But your situation, Stan Lee or whatever, is a lot more nuanced and requires a lot more savvy in terms of dealing with the banks and getting things done. So those are two completely different skillsets.

Anthony:            So your friends recommendation of Joe Lawyer, it was sincere and was authentic, but it might not be the right fit for you. And most people don’t know the different, the clients, because you just don’t know. That’s why they hire lawyers.

Anthony:            So I guess, you get those references for professionalism and people who …

Janice:             That’s a great …

Anthony:            People who are good to work with who get along with. That they can definitely vouch for. But in terms of if they’re the right kind of lawyer for you, that’s really hard to say.

Janice:             Okay. So maybe going off of asking the attorney himself what he would specialize in and what he’s … well like you said, what you’re good at, what you do all the time. And then using the references for personal information. If someone says, did they contact you back and how were they in the overall process of whatever they were doing.

Links

https://www.marketwatch.com/story/stan-lees-tangled-web-of-estate-planning-and-how-to-avoid-this-mess-2018-11-14

Original post by Alessandra Malito (@malito_ali)

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