GENE HACKMAN’S ESTATE PLANNING

There are plenty of LESSONS FROM GENE HACKMAN'S ESTATE PLANNING. https://youtu.be/HZI4oiP0ZtM It's a cautionary tale about managing changing circumstances. Proper implementation and monitoring has to be in place. Periodic reviews of the documents, asset titling, and staffing of the fiduciary roles are a must. Finally, understanding the family dynamics and desire for confidentiality are vital in putting the estate plan in place. The disposition of $80 million was at stake here. LAWRENCE D MANDELKER, Partner at the NEW YORK OFFICE OF VENABLE, and I discussed the fact pattern, what could have been avoided, and points to take away in one's own affairs. https://open.spotify.com/episode/1ndlYCQRiAokJ4FyATL9Te Transcription Frazer Rice (00:02)Welcome aboard, Larry. VENABLE ARTICLE ON GENE HACKMAN'S ESTATE Lawrence D. Mandelker (00:04)Thanks for having me, Frazer. Frazer Rice (00:05)This is, I wouldn't say it's fun talking about someone's estate, but this one's particularly interesting. We all remember Gene Hackman from Hoosiers and Superman and Mississippi Burning and all sorts of great movies. Unfortunately, his end was sad and as it turns out, Gene Hackman's Estate was complicated and public. From a planning perspective, we can learn a lot. ⁓ Take us through a little bit about where where Gene's estate kind of went from and ended up as far as a fact pattern. Fact Pattern in Gene Hackman's Estate Planning Lawrence D. Mandelker (00:37)Sure. So, you know, the news sort of surprised all of us when we heard that he had died. And then over the next couple of days and weeks and even months, more more detail came out. And as you said, it was pretty disturbing. But it seems as though Gene Hackman was a very successful ⁓ actor and he engaged in estate planning. Gene worked with attorneys, which is always a good thing to do it to work with people who are experts in the field And he had a you know a normal estate plan. He lived with his wife It seems like he had a little bit of a fractured family. It was not his first marriage. We learned after he signed his estate planning documents sort of things over the next 20 years sort of changed for him he He had some health issues. He was suffering from advanced dementia at the time he died and as we know his wife died from a virus apparently a week before. Then as the details came out we learned that he had the advanced dementia. There was a fractured family the the wife and his kids did not get along so well. It's unclear what the situation was with how much contact he did have with his children. But he had a will, he had signed it 20 years before he died. The facts changed. It looks like he hadn't reviewed it in a while. His attorney died so we have a sad situation here. Frazer Rice (02:12)Many lessons to get from that. Let's start with the first one. He definitely had ⁓ sort of dementia situations, cognitive dysfunction that eroded over the course of time. Maybe take us through a little bit about the scope of that issue. mean, it affects lots of people and a growing number every year and some things that should be in place because of that. Lawrence D. Mandelker (02:38)Yeah, you know, we all think we've got a lot of time and for someone who gets a diagnosis of dementia It's sort of a warning sign as soon as that happens that, you know, we never know when our time is going to come, but the dementia is sort of the warning. You know, maybe you're entering the second half of the game or the fourth quarter of the game. So maybe you should start getting your affairs in order while you still can. So it's a good ⁓ impetus to do that. You know, when we're looking at estate planning, there's, you you can do different types of estate planning, but really think about it as, you know, you can do it for yourself. You can do it- your loved ones and then you know for depending on the nature of your assets you can do it for tax purposes but you know getting the the warning that you have dementia doesn't mean that you can't sign a will doesn't mean you can't do any estate planning it just means that you know you're probably heading towards a situation where you are going to face you know a number of years during your life where you can't make the same decisions on a daily basis for your own benefit that you can today. And going back to that idea of the first level of estate planning is for yourself. So you want to make sure that you've put in place a plan of who's going to make decisions for you when you can't make those decisions, rather than having those people fighting amongst themselves to decide who's going to do it. You're empowered to do it yourself. Standard Documents Frazer Rice (04:08)Well, and it goes to goes so far as to reiterate the notion that you should review these things periodically. The idea of making decisions around health care, making decisions around financial ⁓ situations. We're dealing with a sizable estate and to have that in a confused state, you know, someone's health starts to decline. That's a dangerous place to be. Lawrence D. Mandelker (04:31)Yeah, absolutely. mean, you're at the very basic documents. You want a healthcare proxy and a power of attorney. The healthcare proxy is going to name a healthcare agent to act for you to make your decisions when you can't make them. And the power of attorney is going to name someone who can do anything that you can do by signing your name. So they can sell your house, they can buy a house, they can take out a mortgage, they can buy stock, they can sign your tax return, they can pay your electricity bill. The people that you trust to do those important jobs may change over time. So when your kids are young and if you've got a teenage child, maybe you don't trust them. But as they are in their 20s and 30s, and at that point when your kids are young, maybe you're naming your siblings as these agents, or good friends, or trusted advisors, whether it's your accountant or your attorney, people that you've known for a while whose judgment you trust. But then when your children get older, that changes a little bit. Maybe now you start trusting your kids to do that. Your advisor is no longer working or you've moved on a different advisor. Maybe your siblings have their own health problems so they're not able to do it. So it always changes and it's always something that you don't need to look at the documents every day. And I sort of tell my clients, know, keep the documents someplace where they will be found but not where you see them every day. ⁓ Frazer Rice (05:57)Well, the backup to that is don't leave it in a safety deposit box at a bank where necessarily the bank may have trouble getting to it if you don't have those documents in place or they are in the vault. Lawrence D. Mandelker (06:12)Yeah, you know, that's the thing that's one of the first things you learn out of law school as a trust and estates attorney that you you need a court order to open in New York, at least you need a court order to open up a safe deposit box after someone died. So if the will is in there, you you've increased your complexity, you've increased your costs, you've increased your time just to get the will. Implementation Frazer Rice (06:32)So let's get back to the important notion of implementation and then the close cousin to that monitoring the estate plan as it goes forward. A lot of what's going on in the Gene Hackman estate is going to be related to titling of assets and making sure that they are in the different entities that were set up, making sure the designations are in place, and then understanding that that is where that it follows the intent of Gene going forward. What do we learn on that from what we had here. Lawrence D. Mandelker (07:04)Sure, know, a lot of our clients come in, they sign the documents, and they think, wait a minute, I'm done, right? And, you know, sort of there's a next step. You want to make sure that you've implemented your plan. So that means you know if you have a revocable trust because you want to avoid probate Well, the assets have to be in the revocable trust You actually have to retitle your assets if you want to update your beneficiary Designations on your retirement accounts or on life insurance policies. It's not enough to just say you want to do it. You have to actually fill out the forms. You have to send them in. Practice pointer: you should follow up with the insurance company and get written confirmation that you've done it correctly. If you name three children and they only put down two, then they're only going to pay it to two kids. You want to always check and recheck to confirm that everything that you've done. Frazer Rice (07:58)This was a case where sort of the way of going about it, where they "set it and forget it." It really hurt things going forward. Lawrence D. Mandelker (08:06)Yeah, he signed his will and he didn't review it, it seems like, for quite some time. So he named as a fiduciary, he names his attorney. And meanwhile, his attorney ⁓ predeceased him. We don't know if that was because maybe he lacked capacity to change those documents at the time the attorney predeceased or he just didn't look at it. But in any event, if the attorney's getting older or something's happening, you you should know, you should constantly monitor. If these are the people that you're counting on to take care of you, then you want to make sure that they're in a good position to do that. Frazer Rice (08:42)I tell people that it's a good idea to have the people who staff the different roles in your estate plan be, as a rule of thumb, 10 years younger than you are. Maybe more, just so that you don't have these types of issues. Lawrence D. Mandelker (08:57)Yeah, no, that's a good rule of thumb. You usually don't want someone older in the event that you really have nobody else....