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A Bitter Battle Over Guardianship. Who will be Emani’s Legal Guardian?

Nipsey Hussle was an American rapper, entrepreneur, community activist and father of two young kids. He was murdered in March 2019.  In the aftermath of his murder, his family and ex-girlfriend have been locked in a bitter battle for custody of one of his young children. And as this ugly drama plays out in the courtroom and tabloids, it highlights the single-most costly estate-planning mistake a parent can make.

Hussle, 34, whose given name was Ermias Ashgedom, was gunned down outside his South Los Angeles clothing store in March. His alleged killer, Eric Holder, was arrested and indicted for murder a few days later. The rapper’s death is particularly tragic, as his debut album, Victory Lap, was recently nominated for a Grammy Award.

Yet even more tragic is what’s happening to Hussle’s kids. Because Hussle never named legal guardians, the decision of who will raise his two children—daughter Emani, 10, and son Kross, 2—is now up to the court. And this mistake is already having terrible consequences.

In addition to not naming guardians for his kids, Hussle also failed to create a will, which makes their guardianship even more contentious. Hussle’s estate is estimated to be worth $2 million, and under California law, without a will, that money is to be split equally between his two kids.

Given that both children are minors, however, they’re ineligible to access their inheritance until they reach the age of majority. This means that whomever ultimately wins guardianship of the children will likely gain control over their money as well.

Caught in the middle

Guardianship of Hussle’s son Kross, while still undecided, is currently not a source of conflict. Kross’s mother is actress Lauren London, who was Hussle’s longtime girlfriend, and  Kross had been living with London at the time of his father’s death. She petitioned the court for her son’s guardianship, and there’s little doubt she’ll get it.

Who will be awarded guardianship of Hussle’s daughter Emani, however, is far less clear.

Since the day of the shooting, Hussle’s sister, Samantha Smith, has been caring for Emani, who was living with her father when he was killed. Following Hussle’s shooting, Smith petitioned the court to obtain Emani’s guardianship. But Emani’s mother, Tanisha Foster, an old girlfriend of Hussle’s, is also seeking guardianship.

Though Foster and Hussle shared custody of Emani, at the time of the rapper’s death, Hussle’s ex had reportedly not seen the child in months. Yet Foster claims that Emani was just visiting her dad on the day he was killed and that Smith and the rest of Hussle’s family are refusing to return her.

Smith and Hussle’s family contend that Foster is unfit to raise the child due to her criminal past. Foster has a criminal record dating back to 2006, and she currently has a warrant out for her arrest after skipping a court hearing for a DUI charge.

Yet Foster claims that her criminal history is irrelevant, and that as Emani’s mother, she’s the one who should be named as guardian. She’s also claiming that Smith unlawfully took custody of her daughter on the day of Hussle’s shooting.

For now, the court is siding with Smith, ruling in May that Hussle’s sister can retain temporary custody of Emani, pending a final decision on her guardianship. That decision will likely be made in a court hearing scheduled for October.

Don’t leave your child’s life in a judge’s hand

As Hussle’s case so dramatically demonstrates, your death can strike at any time, so if you’re the parent of minor children, it’s imperative that you select and legally document long-term guardians for your kids. In fact, naming guardians for your children should be your number-one planning priority.

The fact that Hussle didn’t create a will is obviously another terrible mistake. But when it comes to your children’s lives, all the money in the world is meaningless in comparison. For this reason, we’re going to focus solely on the consequences resulting from Hussle’s failure to name legal guardians, and how easily the whole ugly mess could have been avoided.

As we’re seeing with Hussle, leaving it up to the court to name guardians for your kids
can lead to conflict, as otherwise well-meaning family members fight one another over custody. This process is not only costly, but it can be terribly traumatizing for everyone involved, especially your kids.

Hussle’s case also shows how agonizingly slow this process often is. There have already been numerous court hearings related to Emani’s custody since her father’s death in March, and though the October hearing could finally decide her fate, it’s just as likely that the decision could be postponed again. Indeed, these custody battles often drag on for years, making the lawyers wealthy, while your kids are stuck in the middle.

But the most tragic consequence of Hussle’s failure to name legal guardians is that a judge will be the one who decides who’s best suited to care for his kids.

Though we can’t be sure exactly who Hussle would have wanted to raise Emani, it’s almost certain he wouldn’t have wanted a total stranger to make that decision for him. Yet, because he didn’t take the time to document legal guardians, that’s exactly what’s going to happen.

Kids Protection Plan®

We help parents choose and legally document long-term guardians for children. The founder of the Personal Family Lawyer® program, Alexis Katz, wrote a best-selling book on the subject titled Wear Clean Underwear!: A Fast, Fun, Friendly and Essential Guide to Legal Planning for Busy Parents.

As a mother and one of the country’s leading estate-planning experts for families, Alexis was shocked to discover that the plan she created for her own daughter under the traditional planning model would have left her child at risk of being taken into the care of strangers, if anything happened to her and her husband. To address this gap in her plan, Alexis created a unique system known as the Kids Protection Plan®.

The system is a comprehensive methodology to guide you step-by step through the process of  legally documenting guardians for your kids, for the short-term, long-term, and so much more. Attorney Myrna Serrano Setty has trained to support you to put in place the Kids Protection Plan® for your minor children and/or children with special needs.

Get started immediately

Our law firm implements the Kids Protection Plan® to provide a broad array of protective measures and materials designed to provide for the well-being, care, and love of your kids no matter what happens. Meet with us to ensure that your children and family never fall victim to the same tragic circumstances as Hussle’s.

 

This article is a service of the law firm of Myrna Serrano Setty, Esq. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer an estate Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call us today to schedule a Planning Session and mention this article to learn how to get this valuable session at no charge.

Call us at (813) 514-2946

Tools for Parents of Children With Special Needs

Parents want their children to be taken care of after they die. But children with disabilities have increased financial and care needs, so ensuring their long-term welfare can be tricky. Proper planning by parents is necessary to benefit the child with a disability, including an adult child, as well as assist any siblings who may be left with the caretaking responsibility.

Special Needs Trusts

The most comprehensive option to protect a loved one is to set up a special needs trust (also called a supplemental needs trust). These trusts allow beneficiaries to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose their eligibility for certain government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiaries in determining their eligibility for public benefits.

There are three main types of special needs trusts:

  • A first-party trust is designed to hold a beneficiary’s own assets. While the beneficiary is living, the funds in the trust are used for the beneficiary’s benefit, and when the beneficiary dies, any assets remaining in the trust are used to reimburse the government for the cost of medical care. These trusts are especially useful for beneficiaries who are receiving Medicaid, SSI or other needs-based benefits and come into large amounts of money, because the trust allows the beneficiaries to retain their benefits while still being able to use their own funds when necessary.
  • The third-party special needs trust is most often used by parents and other family members to assist a person with special needs. These trusts can hold any kind of asset imaginable belonging to the family member or other individual, including a house, stocks and bonds, and other types of investments. The third-party trust functions like a first-party special needs trust in that the assets held in the trust do not affect a beneficiary’s access to benefits and the funds can be used to pay for the beneficiary’s supplemental needs beyond those covered by government benefits. But a third-party special needs trust does not contain the “payback” provision found in first-party trusts. This means that when the beneficiary with special needs dies, any funds remaining in the trust can pass to other family members, or to charity, without having to be used to reimburse the government.
  • A pooled trust is an alternative to the first-party special needs trust.  Essentially, a charity sets up these trusts that allow beneficiaries to pool their resources with those of other trust beneficiaries for investment purposes, while still maintaining separate accounts for each beneficiary’s needs. When the beneficiary dies, the funds remaining in the account reimburse the government for care, but a portion also goes towards the non-profit organization responsible for managing the trust.

Life Insurance

Not everyone has a large chunk of money that can be left to a special needs trust, so life insurance can be an essential tool. If you’ve established a special needs trust, a life insurance policy can pay directly into it, and it does not have to go through probate or be subject to estate tax. Be sure to review the beneficiary designation to make sure it names the trust, not the child. You should make sure you have enough insurance to pay for your child’s care long after you are gone. Without proper funding, the burden of care may fall on siblings or other family members. Using a life insurance policy will also guarantee future funding for the trust while keeping the parents’ estate intact for other family members. When looking for life insurance, consider a second-to-die policy. This type of policy only pays out after the second parent dies, and it has the benefit of lower premiums than regular life insurance policies.

ABLE Account

An Achieving a Better Life Experience (ABLE) account allows people with disabilities who became disabled before they turned 26 to set aside up to $15,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. This money can come from the individual with the disability or anyone else who may wish to give him money.

Created by Congress in 2014 and modeled on 529 savings plans for higher education, these accounts can be used to pay for qualifying expenses of the account beneficiary, such as the costs of treating the disability or for education, housing and health care, among other things. ABLE account programs have been rolling out on a state-by-state basis, but even if your state does not yet have its own program, many state programs allow out-of-state beneficiaries to open accounts.

Although it may be easy to set up an ABLE account, there are many hidden pitfalls associated with spending the funds in the accounts, both for the beneficiary and for her family members. In addition, ABLE accounts cannot hold more than $100,000 without jeopardizing government benefits like Medicaid and SSI. If there are funds remaining in an ABLE account upon the death of the account beneficiary, they must be first used to reimburse the government for Medicaid benefits received by the beneficiary, and then the remaining funds will have to pass through probate in order to be transferred to the beneficiary’s heirs.

Get Help With Your Plan

However you decide to provide for a child with special needs, proper planning is essential. We can help!

This article is a service of Myrna Serrano Setty, Esq. Myrna doesn’t just draft documents. We help you ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a  Planning Session and mention this article to find out how to get this $500 session at no charge.

 

Seniors, should you sell your life insurance policy?

Seniors with a life insurance policy that they no longer need have the option to sell the policy to investors. These transactions, called “life settlements,” can bring in needed cash, but are they a good idea?

If your children are grown and your mortgage paid off, you may decide that there is no longer a reason to be paying premiums every month for a life insurance policy, or you may reach a time when you can no longer afford to keep up with the premiums. If this happens, you may be tempted to let the policy lapse and get nothing from it or to surrender the policy for its cash value, which usually is a fraction of its death benefit. Another option is a life settlement. This allows you to sell your policy to an investor for an amount that is greater than the cash value, but less than the death benefit. The buyer pays all future premiums and receives the death benefit when you die.

Life settlements offer seniors a way to get cash to supplement retirement income and help pay for living expenses, health care, or other needed items. They can be a good alternative to surrendering a policy or letting it lapse. But as with any financial transaction, you need to exercise caution.

The amount you receive from a life settlement depends on your age, your health, and the terms and conditions of the policy. It is hard to determine if you are getting a fair price for the policy because there are no standard guidelines for life settlements. Before selling you should shop around to several life settlement companies. You should also note that the amount you receive will be reduced by transaction fees, which can eat up a good chunk of the proceeds of the sale. In addition, you may have to pay taxes on the lump sum you receive. Finally, the beneficiaries of your policy may not be pleased with the sale, which is why some life settlement companies require beneficiaries to sign off on the transaction.

Before choosing a life settlement, you should consider other options.

If you need cash right away, you can borrow against your policy. If the premiums are too much, you may be able to stop premiums and receive a smaller death benefit. In some cases of terminal illness, you can receive an accelerated death benefit (this allows you to receive a portion of your death benefit while you are still alive). If you don’t need the cash but no longer want the policy, another possibility is to donate the policy to charity and get a tax write-off.

To find out the right solution for you, talk to your elder law attorney or a financial advisor.

For more information from the Financial Industry Regulatory Authority on the pros and cons of life settlements and questions to ask to protect yourself in a sale, click here.

This article is a service of attorney Myrna Serrano Setty, Personal Family Lawyer®. Myrna doesn’t just draft documents, she ensures you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why she offers a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love.

Call us at (813) 514-2946 to schedule a Planning Session. Mention this article and ask how to get this $500 session at no charge.

Later in Life Parents: Estate Planning and Retirement Considerations

Older parents are becoming more common, driven in part by divorce and remarriages and fertility treatments. Comedian and author Steve Martin had his first child at age 67. Singer Billy Joel just welcomed his third daughter. Janet Jackson had a child at age 50. Later-in-life parents have some special estate planning and retirement considerations.

Update Your Plan

Make sure you have an estate plan and that the estate plan is up to date. One of the most important functions of an estate plan is to name a guardian for your children in your will. This is especially important for parents having children later in life. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal.

Consider a Trust

In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for them when they get older. If the child is the product of a second marriage, a trust may be particularly important. A trust can give your spouse rights, but allow someone else — the trustee — the power to manage the property and protect it for the next generation. If you have older children, a trust could provide for a younger child’s college education and then divide the remaining amount among all the children.

Retirement Savings

Another consideration is retirement savings. Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement. One advantage of being an older parent is that you may be more financially stable, making it easier to save for both. Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years.

Social Security

When to take Social Security is another consideration. Children can receive benefits on a parent’s work record if the parent is receiving benefits too. To be eligible, the child must be under age 18, under age 19 but still in elementary school or high school, or over age 18 but have become mentally or physically disabled prior to age 22. Children generally receive an amount equal to one-half of the parent’s primary insurance amount (PIA), up to a “family maximum” benefit. You will need to calculate whether the child’s benefit makes it worth it to collect benefits early rather than wait to collect at your full retirement age or at age 70.

This article is a service of Myrna Serrano Setty, P.A. Myrna doesn’t just draft documents, she guides her clients and educates them about how to protect what matters most.  And that’s why Myrna offers a Planning Session, to help you get more financially organized than ever before and to make the best decisions for the people they love. Call our office at (813) 514-2946 to schedule a meeting with Myrna.

When Something Is NOT Better Than Nothing- Part 2

In part one of this series, we discussed the hidden dangers of do-it-yourself estate planning. In part two, we cover one of the greatest risks posed by DIY documents.

Maybe you think that you can save time and money with DIY documents you find online.  You’re probably anxious to check estate planning off your life’s to-do list. These forms may tempt you because they seem quick and easy. And you’re busy, so why not? Unfortunately, this is one case in which SOMETHING is not better than nothing.

But DIY wills lead to the false sense of security that you have things covered. But the reality is that those generic forms could end up costing your loved ones more money and heartache than if you’d never gotten around to doing anything at all.

In this way, DIY wills and other legal documents are among the most dangerous choices you can make for the people you love. These generic documents can leave the people you love most of all—your children—at risk.

Children at risk

First, it’s probably distressing to think that by using a DIY will you could force your loved ones into court or conflict if you become incapacitated or die.

Second, if you’re like most parents, it’s probably downright unimaginable to think about your children’s care falling into the wrong hands. But that’s exactly what could happen if you rely on free or fill-in-the-blank wills found online, or even if you hire a lawyer who isn’t equipped or trained to plan for the needs of parents with minor children.

Naming and legally documenting guardians involves a number of complexities that most people aren’t aware of. Even lawyers with decades of experience frequently make at least one of six common mistakes when naming long-term legal guardians.

If wills drafted with professional help are likely to leave your children at risk, the chances that you’ll get things right on your own are pretty much zero.

What could go wrong?

If your DIY will names legal guardians for your kids in the event of your death, that’s great. DIY documents are too risky!  Consider these factors.

  1. Does it include back-ups?
  2. If you named a couple to serve, how is that handled? Do you still want one of them if the other is unavailable due to illness, injury, death, or divorce?
  3. What happens if you become disabled and are unable to care for your children? You might assume the guardians named in the DIY will would automatically get custody, but your will isn’t activated if you become disabled.
  4. What if the guardians you named in the will live far away? It would take them a few days to get there. If you haven’t made legally-binding arrangements for the immediate care of your children, it’s highly likely that they will be placed with child protective services until those guardians arrive.
  5. Even if you name family who live nearby as guardians, your kids are still at risk because it’s possible they might not be immediately available if and when needed.
  6. And who even knows where your will is or how to access it?

The Kids Protection Plan®

To help ensure your children are never raised by someone you don’t trust or taken into the custody of strangers (even temporarily), consider creating  a comprehensive Kids Protection Plan®, which our firm is trained in.

Get the right “something”

Protecting your family and assets if you die or become incapacitated is too important to do on your own. No matter how busy you are or how little wealth you own, the potential disasters of DIY documents are simply too great.

Plus, proper estate planning doesn’t have to be super expensive, stressful, or time consuming. We offer options for all budgets and asset values.

Also, many of our clients actually find the process highly rewarding. Our systems provide the type of peace of mind that comes from knowing that you’ve not only checked estate planning off your to-do list, but you’ve done it using the most forethought, experience, and knowledge available.

Act now

If  you haven’t done any planning yet, contact us to schedule a Planning Session. This evaluation will allow us to determine if a simple will or some other strategy, such as a living trust, is your best option.

If you’ve already created a plan—whether it’s a DIY job or one created with another lawyer’s help—contact us to schedule an Estate Plan Review and Check-Up.

No matter what you do, make sure  have a “something” that’s actually better than nothing. Contact us and we’ll provide you with that level of confidence—and so much more.

This article is a service of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love.

That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make the best choices for the people you love. Call our office today to schedule a Planning Session and mention this article to find out how to get this $500 session for free.

Estate Planning Mistakes Seniors (Including You or Your Parents) Can’t Afford to Make

couple, elderly, man

It’s no secret that many of us put off estate planning. But once you or your parents reach senior status, you really can’t afford to put it off any longer. Unfortunately, without proper planning, seniors can lose everything, even if they have family to look after them. Having a will isn’t enough.

More and more, the media is highlighting stories of seniors being taken advantage of, and even being targeted by unscrupulous professional guardians. The New Yorker  recently published an article about many seniors in Nevada that were targeted by professional guardians, had their rights and property stripped away, and were isolated from their own families.

While planning for your incapacity and death can be scary, it’s even scarier to think of all the horrible things that can happen to your family if don’t have the right planning in place.

Here are a some of the most common mistakes that seniors make:

Mistake #1: Not creating advance medical directives

In your senior years, health care matters become much more relevant and urgent. At this age, you can no longer afford to put off important decisions related to your medical needs. How do you want your medical care handled if you become incapacitated and can’t communicate your wishes? And at the end of life, how do you want your medical care handled? You can address both of these situations with a Designation of Health Care Surrogate and a Living Will.

With the Designation of Health Care Surrogate, you appoint a health care decisionmaker that can step in for you when you can’t make your own health care decisions. With the Living Will, you provide guidelines for what medical care you want or don’t want at the end of your life. You can even include other instructions, such as who can visit you.

Mistake #2: Relying only on a will

Many people mistakenly believe that a will is the only estate planning tool they need. While wills are definitely one key aspect of estate planning, they come with some serious limitations:

● Wills require your family to go through probate, which is open to the public, can be time consuming and expensive.
● Wills don’t offer you any protection if you become incapacitated and unable to make legal and financial decisions.
● Wills don’t cover jointly owned assets or those with beneficiary designations, such as life insurance policies.
● Wills don’t shield assets from your creditors or those of your heirs.
● Wills don’t provide protections or guidance for when and how your heirs take control of their inheritance.

Mistake #3: Not keeping your plan current

Far too often people prepare a will or trust when they’re young, put it into a drawer, and forget about it. But your estate plan is worthless if you don’t regularly update it when your assets, family situation, and/or the laws change.

We recommend you review your plan at least every three years to make sure it’s up to date and immediately amend it following events like divorce, deaths, births, and inheritances. And if you have a trust in place, you need to make sure that you’re using it properly. Many people who have trusts aren’t using them effectively, leaving their property vulnerable to probate or mismanagement.

Mistake #4: Not pre-planning funeral arrangements

Although most people don’t want to think about their own funerals, pre-planning these services is a key facet of estate planning, especially for seniors. By taking care of your funeral arrangements ahead of time, you not only eliminate the burden and expense for your family, you’re able to make your memorial ceremony more meaningful, as well.

In addition to basic wishes, such as whether you prefer to be buried or cremated, you can choose what kind of memorial service you want—simple, elaborate, or maybe none at all. Are there songs you want played? Prayers or poems recited? Do you have a specific burial plot or a spot where you want your ashes scattered?

Pre-planning these things can help relieve significant stress and sadness for your family, while also ensuring your memory is honored exactly how you want. It’s important that you take care of your estate planning immediately and avoid these common mistakes. Our firm can walk you step-by-step through the process, ensuring that you have everything in place to protect yourself, your assets, and your family.

This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents, she helps her clients make informed and empowered decisions about life and death, for themselves and the people they love. Contact Myrna today at (813) 514-2946.