What Is in Senator Dianne Feinstein’s Estate?

The properties demonstrate Feinstein and her husband’s expansive wealth and success in their respective fields, according to BNN’s recent article, “Feinstein’s Billionaire Legacy: Children to Inherit Prominent Properties Amid Disputes.”

Feinstein, who was raised with money, has been one of the wealthiest members of Congress for years. She was independently wealthy when she married Richard Blum in 1980. After her election to the Senate, she placed her securities into a blind trust valued between $5 million and $25 million.

The couple’s combined fortunes have thrived, surpassing even the senator’s previous standard of living. Her primary residence is a 9,500-square-foot mansion in the posh Pacific Heights neighborhood of San Francisco. Until recently, their vacation homes included the 36-acre Bear Paw Ranch in Aspen, Colorado, and a seven-bedroom Lake Tahoe compound. Current holdings include a property on the Hawaii island of Kauai and a home in Washington, D.C.

However, the battle over Blum’s estate raises questions about the extent of his wealth and the out-of-pocket cost of home health care that Senator Feinstein has received since her bout with shingles earlier this year. During his lifetime, Blum, a private equity magnate, was often publicly referred to as a billionaire. However, the pandemic reportedly significantly impacted his investments, particularly his extensive hotel holdings.

An ugly dispute has arisen among the couple’s children, casting a new light on their fortune, and hinting at a potential court battle over the estate. Feinstein’s daughter, Katherine, and Blum’s three daughters, Annette Blum, Heidi Blum Riley, and Eileen Blum Bourgarde, will split the estate equally. However, a dispute has come up concerning a waterfront house in Marin County, California, valued at $7.5 million, which was at the center of a dispute between Katherine and Blum’s daughters this year.

The couple’s wealth is largely attributed to his success as an investor. Feinstein’s daughter and three stepdaughters are set to inherit the late senator’s $102 million property portfolio and her $62 million private jet.

The distribution of the portfolio, estimated to be worth over $160 million, is now a big issue among the couple’s children.

Reference: BNN (Oct. 3, 2023) “Feinstein’s Billionaire Legacy: Children to Inherit Prominent Properties Amid Disputes”

Why You Need to Include Digital Assets in Your Estate Plan

A new form of wealth, with different ownership, storage, and transferability terms, has created a new challenge for estate planning from traditional forms of wealth. These are digital assets, electronic records in which an individual has a right or interest, as explained in a recent article, “Planning for Digital Assets 101,” from Wealth Management.

Digital assets can be divided into two groups: sentimental digital assets and investment digital assets.

Sentimental digital assets are those with an emotional tie, like photos, videos, social media accounts, etc. For these assets, the goal is to provide access to loved ones after a person’s death. Some platforms allow settings to name a legacy contact. A list of accounts, usernames and passwords will be helpful for family members.

The IRS defines investment digital assets as “any digital representation of value which is recorded on a cryptographically secured distributed ledger, like a blockchain, or any similar technology as specified by the Secretary.” This type of asset includes cryptocurrency, stablecoins and non-fungible tokens.

The challenge of digital investment assets in estate planning centers on how they are owned and stored.

Digital assets are stored in digital wallets, web-based or hardware-based. “Hot wallets” are web-based and run on smartphones or computers. Many investors use them for small amounts of cryptocurrency and frequent trading. “Cold wallets” are hardware-based wallets stored on devices not connected to the internet, reducing the risk of unauthorized access. A cold wallet can only communicate with an internet-connected device when plugged in. An investor will have a seed phrase or backup code to access the cold wallet, which the owner must store in a secure place.

Understanding the storage system is essential for estate planning for two main reasons:

Beneficiary Access. The recipient of a gift or bequest of the digital asset must have access to the relevant storage device to access the actual investment. Sharing this information comes with an element of risk, as access is inherently tied to value.

Fiduciary Access. If only the owner has access, heirs will have no way to gain access to the digital assets when the owner dies. Digital exchanges don’t allow users to name a contact to access the investment information upon death. Most exchanges don’t have centralized entities to record information. If access is denied to the heir, the investment could be lost.

Transferring digital assets requires providing access to beneficiaries and/or fiduciaries. There are several ways to structure such a transfer while minimizing the risk of theft or loss.

Digital assets can be transferred to a Limited Liability Company, and subject to certain limitations, retain control of the digital assets’ management by serving as LLC manager. Transferred LLC interests can also provide a mechanism to discount the value of the transferred interest. In addition, LLCs can provide asset protection since, in most states, LLCs protect a member’s personal assets from an LLC’s liabilities.

A directed trust is another way to transfer digital assets, while maintaining control and decision-making with the owner. In some states, a directed trust can have an “investment trustee” or “investment trust director” to exclusively handle investment responsibilities, including managing and storing digital assets.

Even using these two methods, someone other than the original owner must be granted access to the digital assets. One way to do this is by naming a “digital fiduciary”—someone tasked with managing the digital assets.

Estate plans involving digital assets must clearly outline heirs for the digital investment and its tangible storage devices. The assets can pass with the residuary, and complexities can arise if the residuary beneficiaries differ from tangible property beneficiaries who will receive the storage device. Speak with an experienced estate planning attorney to be sure that your digital assets are included in your estate plan.

Reference: Wealth Management (Sep. 19, 2023) “Planning for Digital Assets 101”

Have Estate Plan Checkup before Heading to Warmer Winter

“Snowbirds” spend their winters somewhere warm, which usually means they own assets in more than one state. For them, special attention is needed to certain decisions in their estate planning documents, including Wills, Trusts, Power of Attorney, and Advanced Medical Directives, according to a recent article from Coeur d’Alene/Post Falls Press, “Headed South for the winter? Your estate plan may need some attention.”

If you live in multiple states at different times of the year or own assets like real estate in more than one state, your estate planning documents and overall estate planning strategy need to take this into account. Many people aren’t aware of the need for planning to avoid having their estate go through probate in every state where they own property.

Even if you don’t mind the idea of your estate being administered through probate, a formal court-controlled process, you probably don’t want your loved ones to go through this process in multiple states, which takes time and can be costly.

Another issue for Snowbirds concerns the Power of Attorney documents. Which state these are prepared in and which state’s laws govern the use of these POA documents is more complex than most people expect. There’s no one-size-fits-all answer, so having this discussion with your estate planning attorney before you travel for the season is critical. Don’t assume you have it all set up and can efficiently deal with it once you arrive at your winter home. The law is a little more complicated than that.

Any time you leave your home state for an extended period, you should bring copies of important legal documents. For most people, this includes your Financial Power of Attorney, Health Care Power of Attorney, Last Will and Testament, Living Trust, or any other Trusts you may have, Living Will, and a Physician’s Orders for Scope of Treatment Form. This last document is known by different names in different jurisdictions, which is another reason to review these documents with your estate planning attorney.

Will copies of these documents be accepted? This is another question to ask your estate planning attorney. In some cases, a copy will be sufficient for any purpose, while in others, the originals will be needed, regardless of how far away you are from them.

Estate planning documents should be in a safe and secure location, like a fireproof safe or your estate planning attorney’s office. If you are traveling, a set of copies should always travel with you.

Before you head to the airport or pack up for your winter sojourn, call your estate planning attorney to be sure your estate planning documents are all in order. Hopefully, you won’t need any of them, but if you do, you’ll be glad to be prepared.

Reference: Coeur d’Alene/Post Falls Press (Sep. 13, 2023) “Headed South for the winter? Your estate plan may need some attention”

Where Should I Store My Will?

When you fail to plan for your demise, your heirs may end up fighting. With Aretha Franklin, three of her sons were battling in court over handwritten wills. The Queen of Soul, who died in 2018, had a few wills: one was dated and signed in 2010, which was found in a locked cabinet. Another, signed in 2014, was discovered in a spiral notebook under the cushions of a couch in her suburban Detroit home.

The Herald-Ledger’s recent article, “Aretha Franklin’s will was in her couch. Here’s where to keep yours,” says that a jury recently decided the couch-kept will is valid. However, Aretha didn’t clarify her final wishes. Her handwritten wills had notations that were hard to decipher, and she didn’t properly store the will she may have wanted to be executed upon her death.

The Herald-Ledger’s article gives some options for storing your will. First, don’t store your will in the couch.

You should keep your will where it is secure but easily located. Here are some options:

Safe-deposit box: The downside is that the box might be initially inaccessible when you die. If your will is in the box, that’s an issue. The executor may need a copy of the will to access the box. If so, and a court order is required, it could take some time before the executor can get the will from the safe deposit box. If you do this, include your executor or the person designated to handle your estate on the safe deposit box contract.
At home: Keep a copy of your will in a fireproof and waterproof safe, but make sure there’s a duplicate key, or you give the combination code to your executor or some other trusted person.
With an attorney: You could have a spare set of original documents and leave one with your attorney. But be sure your family knows the attorney’s name with the will.
Local court: Check with the local probate court about storing your will and tell someone that you’ve placed your will in the care of the court. For instance, in Maryland, you can keep your original last will and testament with an office called the Register of Wills. The will can then be released only to you or to a person you authorize in writing to retrieve it.
Electronic storage: You could store it online to keep your will safe. However, most states don’t yet recognize electronic wills. As a result, you’ll need to have the originally signed copy of your will even if you store a digital copy.

All options to store your will have pros and cons. Whatever you do, tell the person designated to handle your estate where to find your will.

Reference: The Herald-Ledger (July 19, 2023) “Aretha Franklin’s will was in her couch. Here’s where to keep yours.”

Now Is the Time for Estate Planning

Individuals in their twenties are usually focused on their careers, acquiring assets and enjoying life—death is one of the last things on their minds, according to a recent article from The National Law Review, “Don’t Wait until Time Is Up.” However, unexpected things happen, even to healthy young people.

Estate planning documents, including Power of Attorney, Healthcare Proxy and Living Will, should be prepared because they go into effect as soon as they are executed, allowing others to carry out legal, financial and health wishes in case of incapacity.

Thirty-somethings may have reached various milestones, such as marriage, having children, owning property, starting a business, or working in the family business. This is also a time when life-changing events occur, such as divorce, death in the family, inheritance, moving to another state and more. Estate planning documents should be in place now, including a will and ancillary documents. This may also be the time to establish trusts to accomplish estate planning goals.

If you are getting married, already married, divorced, or remarried, it’s time to call your estate planning attorney. Estate planning is often negotiated as part of prenuptial, postnuptial and separation agreements. Upon getting married or remarried, your estate plan must be updated to include your new spouse and/or remove your ex-spouse. A new spouse may have elective rights to a portion of their spouse’s estate if they remain married at death and the deceased spouse has failed to provide for their surviving spouse.

One of the most important provisions of a will is the designation of a guardian of minor children. The guardian will take legal custody and responsibility for minor children if both natural parents die while the child is under legal age. Any new parent must execute a will or update their will to designate a guardian. Within the will, you may also request guidelines for guardians to file while raising minor children. The court must find and appoint a guardian if there is no will or the will does not designate a guardian.

If you die without a will, the state laws of intestacy control, which means your spouse and nearest heirs will inherit your estate. If this is not your intention and you want to leave assets to friends, charities, or other relatives, then you need a will.

An estate plan is also needed to streamline the probate and administrative process of the estate. An estate plan can be designed to effectively minimize the expense, delay, and loss of privacy of the probate process. This is typically done by establishing a Living Revocable Trust in addition to the will. The trust can be funded during your lifetime and controlled by you before death. Assets don’t pass through the will, avoiding the need for probate.

One of the first steps of probate is filing the will with the appropriate court when the will becomes part of the public record, and anyone can access it. Probate varies from state to state, and courts experiencing back-ups can delay admitting the will and appointing an executor to manage and distribute the assets. This process can take up to a year in some New York Surrogate courts.

Having an estate plan in place and updating it regularly can help protect assets and beneficiaries. If you haven’t already implemented it, now is the best time to begin.

Reference: The National Law Review (Sep. 12, 2023) “Don’t Wait until Time Is Up”

How to Include Digital Assets in Your Estate Plan

While owning digital assets hasn’t changed the principles of estate planning, it has made the estate pre-planning process more complicated, according to the article “Estate planning and cryptocurrency: 5 tips for leaving your digital assets” from Bankrate. The hurdle is the information needed to retrieve digital assets, including passwords, keys and digital asset locations. There’s no one to call, and the stories of millions in digital assets lost forever are already legendary.

Here are five tips for cryptocurrency owners:

Know where the crypto is held. Cryptocurrency held with a traditional broker or crypto exchange can be handled like other investment accounts, if a beneficiary is named on the accounts or otherwise specified in a will or trust documents. An owner might try to hide the account. However, it generally can be found if the executor knows where the crypto is located.

If crypto assets are self-custodied in an off-chain wallet, and no one knows where the wallet is or its existence, crypto can be hidden and may not be retrievable. A title or probate search will not reveal them; it may be gone forever without the password, private key, or seed phrases.

Understand crypto can easily be lost permanently. Anyone holding crypto on an encrypted hard drive could lose the asset forever, if no one but the owner knows where it is or how to access it. If a hard drive is lost, destroyed, or stolen, or if the key is lost, the crypto is gone.

Provide access to crypto accounts. Whether it’s traditional brokerage accounts or crypto on a hard drive, you’ll need to provide the means and info for your executor or heirs to access these assets upon your passing. The challenge is balancing access with the security of the accounts. There are ways to set up a centralized location to secure all known seed phrases, keys and passphrases and then locate them in the most secure place available. For example, a hard copy list may be stored with other important documents in a fire and waterproof safe.

Another problem is that if your executor is unfamiliar with digital assets, they may not know anything about how digital assets work, making accessing the accounts challenging. You may need to bring them into the digital world as part of your estate planning process.

Protect access to accounts with best practices. If crypto is sent to another person, it’s basically unrecoverable. Don’t include this information in your will, as it becomes a public document upon going through probate. It may be better to secure digital vaults or use reliable, reputable third-party services to store access information. Be careful about providing access to family members who may take advantage of their digital fluency before the estate plan is settled.

Don’t forget cryptocurrency is taxable. Any realized capital gain is taxable, and so are purchases using crypto when the value of the goods is worth more than the purchase price of the crypto. If the estate is over the federal or state exemption level, it can owe estate taxes, even when the crypto is hidden. Tax implications, including tracking the cost basis and gain and loss metrics, are especially important during the asset transition phase. Executors dealing with crypto must be careful to declare the estate’s taxable gains and losses. The estate must meet all tax obligations, crypto and traditional assets included.

Speak with an experienced estate planning attorney about how your state’s laws govern cryptocurrency and digital assets as part of a comprehensive estate plan.

Reference: Bankrate (September 5, 2023) “Estate planning and cryptocurrency: 5 tips for leaving your digital assets”

Three More Reasons to Have an Estate Plan

Even after COVID, most Americans still don’t have an estate plan. A 2023 survey reported in Kiplinger’s recent article, “Three Overlooked Benefits of Estate Planning,” found that 75% of respondents didn’t have an estate plan. Worse, 72% of all respondents over age 75 didn’t have an estate plan.

It’s an easy task to postpone. No one likes to think about death, their own or their spouse’s. However, not having an estate plan condemns your loved ones to deal with an expensive, time-consuming, stressful mess that can be easily avoided.

Estate planning involves the creation and execution of the documents needed to address healthcare, financial, and legal affairs in case of incapacity or death. This is done with a series of documents created by an estate planning attorney. The names of the documents vary by state, but their function is roughly the same:

Guardianship—if there are minor children, the will names who will receive custody of your children if you and your spouse both die.
Will—A legal document used to express your wishes to distribute your property, name a guardian and an executor.
Trust—A fiduciary agreement used to shield your estate from probate and allow further customization of your estate plan.
Durable Power of Attorney—A legal document naming a spouse, partner, or other third party to manage finances if you can’t manage your own decisions.
Advanced Care Directive—A document outlining the medical care you want or don’t want if you can’t make or communicate these decisions on your own.
Medical Power of Attorney—A document naming a third party to make medical decisions if you are incapacitated.
HIPAA Authorization—A document giving another person the right to view medical and insurance records and communicate with healthcare providers.

Why should you go through the trouble of having all these documents created? If focusing on the benefits of having an estate plan is the motivation you need to get going, here are several good reasons to have an estate plan.

Securing management of health care and finances if you’re incapacitated. No one likes to think they’ll ever be too sick to care for themselves or make their own decisions. However, this happens routinely to older Americans. Diseases like Alzheimer’s and other illnesses strike older adults with increasing frequency as they age. If you have an estate plan in place, family members can step in to take care of you if necessary. They’ll be able to pay bills to keep your household running smoothly, speak with your doctors and avoid going to court to obtain guardianship or conservatorship.

Fulfilling your wishes. Lacking a will, the laws of your state will determine how your property is distributed, with most states following a next-of-kin lineage. If you want your spouse to inherit everything and the state law divides your estate so 50% goes to a spouse and 50% is divided among the children, the state law will rule.

Another set of problems comes from outdated wills. If you named someone to be your executor thirty years ago and haven’t updated your will, they may no longer be in your life, or you may not want them administering your estate. Another problem is that if you’ve divorced a spouse and never updated your will, life insurance policies, or retirement accounts, your next call should be to your estate planning attorney and insurance agent.

Avoiding probate. Probate is a process where your will is filed with the court, reviewed by a judge,and approved—or not—to be administered. Depending on the jurisdiction, all documents, including your will, are available to anyone by searching the public records. An estate planning attorney can help you decide what assets you are willing to have to go through probate and what might be removed from your estate using trusts. Trusts provide more control over asset distribution and, depending upon the trust used, can provide protection from creditors and nuisance lawsuits. Trusts are also used in tax planning, which should go hand-in-hand with estate planning.

Estate plans have many benefits. Consider having an estate plan as part of your legacy to protect yourself during your lifetime and help your family.

Reference: Kiplinger (September 6, 2023) “Three Overlooked Benefits of Estate Planning”

Should I Add My Pet to Estate Plan?

The first rule is that you can’t leave money to your pet. Unfortunately, the law says that animals are property, and one piece of property can’t own another. Yahoo’s recent article, “3 Ways to Ensure Your Pet Is Cared For After You Die,” explains that a pet trust is a trust that provides money and care for your pets when you can no longer do so. People usually create a pet trust as part of their estate planning. However, in some cases, it can be helpful if you’re incapacitated or unable to care for your pet.

Like all trusts, a pet trust is a legal entity that owns property, money and other assets. You fund the trust by contributing assets to it during your lifetime and leaving assets to the trust in your will. Your pet is the beneficiary of this trust. Once the trust is activated, a trustee will use its funds to pay for your pet’s food, housing and other care. In most cases, this means someone has taken possession of your pet, and the trust reimburses their costs.

If you want to ensure that your pet is well cared for after you die, most experienced estate planning attorneys consider a pet trust better than a will. Pet trusts are more specific than leaving your pet and some money to an heir. A trustee must be sure this money really is spent on your pet’s well-being. They can also find a new home for your pet, if your heir changes their mind and chooses not to inherit the animal.

A pet trust does two main things. First, it provides the resources to care for your pets and other animals once you no longer can. Second, it provides the instructions to make sure those pets are cared for the right way.

Funding a pet trust can be an issue for some, and if you leave too little money in the trust, it will run out during your pet’s lifetime. If that happens, the trust will wind up, and state law will govern what happens to your pet. If you leave too much money, your family may challenge the trust. While that’s pretty rare, courts will reduce excessive funds left to a pet trust.

Don’t just assume that someone will assume the role of trustee. And don’t assume that someone will want to take possession of your pet. Ask the people you intend to name for those positions. If someone you trust wants to take your pet after you die, you can name them as both caretaker and trustee. Otherwise, you may want to name a professional trustee, such as a lawyer or banker, to oversee the trust. If you do name a professional trustee, make sure to contribute enough money to cover their costs, as they will bill the trust for their time.

If your pet has any specific needs, detail these in the trust. However, be careful not to get too specific, or people may disregard your instructions, creating issues.

Reference: Yahoo (Aug. 21, 2022) “3 Ways to Ensure Your Pet Is Cared For After You Die”

What Is the Latest on Picasso’s Estate?

Claude Ruiz Picasso, Pablo Picasso’s youngest son, has died at the age of 76.

The Art Newspaper’s recent article, “Claude Ruiz Picasso, the artist’s son and manager of the Picasso estate, has died,” reports that as the long-term manager of his father’s estate, Claude was the holder of the Picasso copyright. He was also instrumental in organizing Picasso Celebration 1973-2023, a compendium of 50 exhibitions of Picasso’s work, shown in cultural institutions across Europe and the US over the course of 2023 to mark 50 years since Pablo Picasso’s death.

Claude transferred management of the estate in July of this year to Paloma Ruiz Picasso, his younger sister. He was originally appointed by a court as the administrator of the Picasso estate in 1989. The Picasso estate remains one of the most valuable collections in the art world, numbering around 45,000 pieces. At the time of Pablo Picasso’s death in 1973, the estate was estimated to be worth $817m.

In the commercial art world, art is frequently subject to forgery, fake usage, and criminal trading. In the copyright and trademark sectors, the Picasso estate has often set legal precedents regarding its willingness to pursue legal action against counterfeit, illegal reproduction, and forgery cases to protect the artist’s legacy.

Claude was the son of Pablo and the French painter Françoise Gilot, who also died in June of this year at the age of 101. Gilot is often known as the only woman who left him. Pablo tried to legally stop her, 40 years his junior, from publishing a memoir of her life that detailed her experience of being in a relationship with him, including testimonies of abuse, including an occasion when he held a lit cigarette against her cheek. The book was eventually published in 1964.

Pablo severed contact with both Claude and Paloma after the book’s publication and never contacted them again.

Before he was appointed the manager of the Picasso estate, Claude was an artist in his own right. Living in New York, he worked briefly as an assistant to the photographer Richard Avedon before seeing his own photographs published in fashion magazines, including Vogue and Time Life.

Reference: The Art Newspaper (Aug. 25, 2023) “Claude Ruiz Picasso, the artist’s son and manager of the Picasso estate, has died”

How can You Make Changes to Estate Plan?

It’s rare for a person to put their estate plan together once and never change it. A recent article from Coeur d’Alene/Post Falls Press asks a good question: “Can you amend your estate plan by writing the changes on your existing documents?”

Effectively and legally changing your will or trust so the changes are enforced per your wishes is best done with an experienced estate planning attorney. People often hand-write edits and changes to the original documents, thinking this is the simple way to amend their wishes. Most attorneys have tales of family members coming into their offices with a handwritten addendum added to the front or back of a will or trust document, which has been written and attached after the document has been signed and executed.

These approaches are problematic, as they are never done in a way that meets the requirements for a legally valid amendment to a will or trust.

A legally enforceable change to a will is accomplished in one of two ways. One is to replace the entire document with a new will document, which should include explicit language stating all prior wills are revoked and replaced, or by adding a new document called a codicil to the old will document. The codicil must make clear exactly what part of the old document is being changed, and typically, it reaffirms the unchanged terms of the old will.

Changes to a trust are accomplished in most states in one of two ways. The first is by replacing the prior trust document with an entirely new trust document, although the name and creation date of the trust must remain the same, and it is explicitly not a revocation of the trust. This is called a trust restatement. The second way to change a trust is using a trust amendment, similar to adding a codicil of a will. A Trust Amendment is a new document added to the existing trust document. It states which part or parts of the original trust document are being changed.

Every state has specific technical requirements for a will codicil or trust amendment/restatement, which must be followed to enforce the changes legally. Just writing on the documents will never meet those requirements and will almost always lead to major disputes among family members and other interested parties.

Handwritten or holographic wills are legal in some states. However, those states have very specific requirements, and wills still need to go through probate. There are many ways to create major problems trying to use this method and only a few ways to do it right.

The good news is an experienced estate planning attorney can help with any modifications, large or small, to make your estate planning documents accurately reflect your wishes.

Reference: Coeur d’Alene/Post Falls Press (Aug. 16, 2023) “Can you amend your estate plan by writing the changes on your existing documents?”

Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

What Is in Senator Dianne Feinstein’s Estate?

Why You Need to Include Digital Assets in Your Estate Plan