March 2009 Planning for DisabilityAn ailing tycoon's after-death wishes are bungled by poor estate planningWhen he was of sound mind, real estate developer Max Farash was a generous man, and his charitable foundation has given away millions to worthy causes over the last ten years. Long before dementia ravaged the 95-year-old's once-sharp business mind, Farash drew up plans to transfer, upon his death, most of his wealth – valued at $200 to $500 million – to his charitable foundation. The Rochester, New York, multimillionaire also had left instructions that several residential properties in New York and Florida should to go to his daughter, Lynn, upon his death. For Lynn, these "heirloom assets" hold cherished memories of time with her family. But Farash's plans didn't take into account that a third party would intervene and force the millionaire's charitable wishes to deprive his only child of an inheritance he wanted her to have. This case is a great example of failing to plan for disability. A well-structured living trust with disability provisions could have accomplished Farash's goal, kept his disability private and saved his family hundreds of thousands of dollars. Guardian Collects Millions in Fees. After Farash was declared legally incapacitated two years ago, the court appointed an attorney, instead of Farash's daughter, as the ailing man's guardian. In his first year as guardian, the attorney claimed $1.5 million in fees from Farash's estate and is asking a probate judge to allow him to sell off Farash's valuable real estate to benefit the foundation, despite Farash's clearly written wishes in his will that the homes should be left to his daughter. The attorney claims that keeping the properties is a burden on the estate, and that the $140,000 spent annually to maintain these homes should be set aside to benefit the foundation. The attorney has offered to pay Lynn Farash the sales proceeds when her father dies, but she'd rather have the homes for their sentimental value. A Simple, Two-Step Solution. This case underscores the dilemma of court-appointed guardianships, as they can cause people to lose control and incur needless costs. Farash could have avoided the legal nightmare for his daughter if he had done two things: hired an attorney to draft a proper revocable living trust, and hand-picked a successor trustee to manage his estate in the manner he wanted.
Such simple steps are not reserved for the very rich; they can avoid court involvement in your affairs as well, and your children or other heirs can be assured of receiving the family's treasured assets as you intend.
Adapted from the Daily Plan-It newsletter Hoopes, Adams & Alexander, PLC, is a Chandler, Arizona, law firm offering services to Phoenix-area clients in the areas of estate planning, entity formation, commercial and real estate transactions, and civil litigation. | 
