Rosa Parks’ estate, allegedly looted by attorneys

“basically the system tends to rape and pillage the estates of deceased persons for their own selfish uses and the families and beneficiaries end up with a very small amount of what was intended for them. It happens all the time.

Detroit Attorney Steven Cohen

I wanted to pick up on a few themes that we’ve previously discussed in this blog. The first is the importance of choosing your Executor, and the second is the fees charged by legal professionals. To illustrate these points, we are referencing the estate of Rosa Parks. The attorney representing the beneficiaries is currently suing the court appointed trustees for the whittling away of assets in legal fees.

What makes it interesting is that the judge presiding over the handling of the estate is being sued in his own courtroom as well as the judge’s friends (““I’ve known both of these gentlemen for close to the 37 years, I would trust them with my personal matters,”) who were appointed the trustees. Why? because the estate has allegedly paid these two attorneys a total of $595,000 for their work to wind up the estate, and the costs are ongoing. Furthermore, it seems that the judge is allegedly signing off on all of the expenses without any scrutiny whatsoever. According to the Attorney who is suing the judge and trustees, the accused were

“double, triple and quadruple billing practices to falsely inflate the administrative and attorney fees.It was nothing more than a concerted plan to raid and bankrupt the estate of a revered civil rights icon for improper and selfish financial interests,”

As always, there are lessons to be learned in this fiasco. If the accusations turn out to be true, it makes me very angry as I have personally dealt with lawyers who outrageously overcharged to administer an estate. Remember, according to a recent study, 19% of lawyers write themselves into a Will as the Executor. They know that doing this can be extremely lucrative. Often times the job of an Executor is not particularly time consuming or difficult (sometimes it is, but often it is not), so taking 5% of the value of the estate in fees is approaching thievery. We gave some recommendations in a previous article for selecting an Executor, and in most cases, to protect the value of an estate, we would suggest that you consider keeping the appointment within the family unless you have very complicated financial affairs.

The most important lesson though is to write your Will and name your Executor. We wrote in a previous article about how Bernie Madoff’s son died and had named his father as Executor of the estate. His father however, was not able to perform his duties as he was serving time in jail. There are many reasons why your first choice Executor may not be able to perform their duties, and if you do not have an alternate, then the courts will appoint one for you.

The most important message is that you should make every effort to protect your assets so that they end up in the hands of your family and loves ones and not enriching the members of the legal profession. You can do this quickly and easily by using one of the services at LegalWills.ca, USLegalWills.com and LegalWills.co.uk. Write your Will yourself, name a family member as your Executor, and all of your assets will stay in your family. One thing is for certain, if Rosa Park’s estate can be looted by judges and lawyers, yours can too.

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Challenges to Wills…Sir Jimmy Saville’s estate frozen.

In a previous blog article we explained the different grounds for a successful challenge to a Will. We thought that this was an important article as it is often cited as a reason for not writing your own Will. Many times we have seen lawyers claim that if you write your own Will or use a service like the one at LegalWills, then your Will is more likely to be challenged. In our previous article we explained that there are five key grounds for a challenge (see the original article for a more detailed description);

  • Mental capacity: The person making the Will must understand that they are indeed writing and signing their Will
  • Undue influence: In order to contest a will on the ground of undue influence, it must be shown that the testator did something contrary to his or her true desires.
  • Improper execution of the Will: This varies by jurisdiction but in general the document must be signed in the presence of two or three witnesses who are not beneficiaries in the Will
  • Fraud: This can take many forms from the falsification of documents including forged signatures
  • No provision for dependents: This varies widely across jurisdictions but there are sometimes people who have to be included in a Will.

Last week, we saw an example of the “no provision for dependents” in the case of Sir Jimmy Saville. A three page Will, prepared by a solicitor in England, being challenged by a person claiming to be his illigitimate child. In this case though, the solicitor is blameless, as it is almost certain that Sir Jimmy did not divulge to the will-writer that he may have a child from a short intimate encounter in 1970!

But it is worth keeping in mind that according to English law a dependent can challenge based on the Provision For Family And Dependants Act where according to the article

The Act gives a child or other dependant the right to make a claim against their parent’s estate, for which they are required to successfully argue that ‘reasonable financial provision’ was not made for them.

They would also have to prove that whatever amount they sought was a ‘reasonable maintenance’, based on how well they already were able to support themselves’.

It is complicated, because as the solicitor in the article rightly explains

“a judge would pay close attention to what Mrs Ray needed to maintain herself financially. This is where adult children with jobs or earning capacity often fall down, as the vast majority tend to be financially independent and used to providing for their own standard of living, It would be open to the court to conclude that nothing at all was in fact reasonable financial provision, and it may well do that, if it considers that she is well provided for from her own resources.”

I always find the comments underneath the article to be the most interesting and it appears that sympathies lie with the daughter who grew up without a father. The three most approved comments are;

“I assume he didn’t pay for her upbringing so why shouldn’t she have a claim to it now? No amount of money can replace not being loved and raised by both your parents. She will forever be affected by this rejection.”

“She’s entitled to it. Shame on him for not acknowledging her”

“Saville had the opportunity to address this when he was alive and chose not to. He had a responsibility. God luck to her …”

So the lesson? firstly, make sure that you have written your Will, and then make sure that it is up to date. Using a service like the one at LegalWills.ca, USLegalWills.com and LegalWills.co.uk, you can update your Will in a few seconds to make sure that it always reflects the most recent changes to your financial and personal situation. Things can happen in your life, not just to you, but to people mentioned in your Will. It may not be an illegitimate child coming out of the woodwork!! but there are countless reasons why your Will would need to be updated; if the guardian for your children suddenly becomes unable to take on that responsibility, if your Executor no longer seems the most appropriate choice, or if somebody comes into your life who you may wish to acknowledge in your Will.

We will be watching this case with interest to see whether the courts overturn Sir Jimmy’s Will.

Why do lawyers charge so much?

We get this question a lot at LegalWills. How is it that our service is available at a tiny fraction of the price of a lawyer or a solicitor? And the answer is not as straightforward as it may seem.

This article isn’t concerned with why lawyers make so much money in general. We know that lawyers make up nearly 10 percent of that top one percent club that incurred the wrath of the 99 percent in the last year or so. They sit just behind bankers in the list of most lucrative professions. We also know that some lawyers gladly bill themselves out at around $1250 an hour. But these are very qualified individuals who have skills and experience that most other lawyers do not have. No, this article is specifically concerning how a lawyer can charge so much for such a relatively simple task as preparing a Will.

The clear difference between a service like ours and a lawyers office is that we do not provide legal advice. If your situation is complicated and you need legal advice, then you should see a lawyer who can draw upon their years of experience and potentially craft some custom clauses in your Will to cover your unique situation. But the question is a more difficult one to answer for a more conventional family.

If for example you are married, you would want your spouse to be the main beneficiary and your children to share equally as alternate beneficiaries, then how can a lawyer charge so much? After all, they are going to use an automated software application to punch in a few details and it will generate your Will for you – in exactly the same way as our service. The end result will look exactly the same whether prepared by a lawyer, or prepared by yourself at LegalWills. In fact, many lawyers will charge ten times our prices for a “simple Will” with anything out of the ordinary incurring additional costs.

I did a little research online to answer the question; why does a lawyer charge so much to create a document that is so simple, that an office assistance is probably given the task of creating it. It’s a question that many people have asked, and Google pulled up millions of responses. The answers from the lawyers are quite revealing;

Our first answer from a lawyer in our internet search explains that “attorneys charge a lot because …They do not get to keep all that money and they are not constantly billing $400 every hour they are at work. They pay for secretaries, copiers, rent, suits, advertising” ahhh, so you are paying for the custom suits that a lawyer wants to wear. That goes some way to explaining how we are able to undercut them so dramatically. But more seriously, every business has overheads including copiers and advertising, so it still doesn’t explain why an hourly rate is so high.

The next common answer is that law school costs so much, that when you pay for your Will, you have to contribute to paying off some of that tuition. That seems to be an odd argument to us. I can understand that they may have incurred debts, but the cost of a Will should be in line with the value provided, not paying of a historical debt.

The question though is specific to the drawing up of Wills. In an interesting paper from Columbia law school, the author notes that

“The personal segment (of law practice) is populated by lawyers who graduate from lower-tier schools, charge lower fees and often flat fees set in apparently competitive fashion providing largely routine, non-contested legal services such as house closings, uncontested divorces and wills. Their work is perceived, by them and the rest of the profession, as low prestige.”

The work to prepare a Will for somebody is mundane, easy and only takes a few minutes for a simple situation.

The natural conclusion is that lawyers charge several hundred pounds or dollars to prepare a Will because…they can, and some people are prepared to pay. But increasingly people are starting to understand that this does not necessarily represent value for money and the fees are going to pay of tuition debt, pay for nice offices, and of course, those fancy suits. That is why people are turning to services like those at LegalWills.ca, LegalWills.co.uk and USLegalWills.com. The same end product can be created without paying for those overheads resulting in a dramatic cost saving.

I’ll leave the final word to the Chief Justice of Canada The Right Honourable Beverley McLachlin who said

“Our justice system has, I believe, failed many middle class families. It has failed thousands of Canadians who don’t have a legal will, simply because they do not have the money to hire a lawyer to draft one or are so afraid that what it will cost will bankrupt them,”

New lessons from the famous – how to make a mess of a Will

We have seen many examples of famous people making a mess of their estate planning. In this blog we have described the situation of Stieg Larsson who failed to keep his Will up-to-date and also underestimated how much his estate would be worth. We also talked about  Anna Nicole Smith who didn’t update her Will after her child was born. Today we are going to highlight a very frequent mistake with the help of Gary Coleman who died over two years ago. Why now? because just last week a judgement was made on his estate which goes some way to illustrate the toll that a badly drawn up estate plan can have on loved ones. The family have been embroiled in a legal battle for nearly two years and a significant part of the estate has been lost to legal fees.

So what made Gary Coleman’s estate so troublesome?  Firstly, he had a Will written in 2005 naming his manager as the Executor and main beneficiary of his Will. But his ex-wife had a handwritten note from 2007 stating that she was the main beneficiary and Executor. Different jurisdictions have different laws regarding the status of a common-law spouse and the effect of marriage and divorce on the status of a Will, so there is no need to go into details of the judgement but there is a clear lesson here.

I actually feel sorry for Gary Coleman as many people find themselves in this situation. They have taken the time to prepare their Will (in this case in 2005), but in the space of a few years he married, divorced, then lived as common-law. Any lawyer would have advised him to update his Will on at least four or five occasions during those two years. But as we have discovered when dealing with customers at LegalWills many people are being charged as much to update a Will as it cost to create one in the first place. One person called our support line explaining that she had been quoted $100 “per change” to her Will. This puts people in a difficult situation where they try to handwrite changes on their Will, or even handwrite a “codicil” which is effectively what Gary Coleman did. Generally handwritten updates to Wills result in legal uncertainty, litigation, lawyer’s fees and acrimony between remaining loved ones.

This is why services such as those provided by LegalWills.ca, LegalWills.co.uk and USLegalWills.com are becoming increasingly popular. It is precisely because Gary Coleman used the services of a lawyer, that there became a barrier to updating his Will. If he had used an online interactive service, he simply could have logged into his account, made the change and printed off a brand new, up-to date document.