Whether people remember him as the voice of American Top 40 or the voice of Shaggy from the Scooby-Doo cartoons, Casey Kasem became an American icon over the course of his career. While Casey Kasem gained an incredible level of fame during his lengthy career, he may be remembered more for the short period of time surrounding his death. The circumstances surrounding Casey Kasem’s passing raise important issues to consider involving mental health planning and children of blended marriages. In tribute to the man whose voice became synonymous with American Top 40, here is a “Top 10” list of issues highlighted by the tribulations of Casey Kasem.
1. Medical Directives – For many people, the quality of life is more important than quantity of life. To avoid the risk of medical intervention which would result in either prolonged suffering from a terminal illness or a vegetative state, affirmative action by drafting a medical directive can be taken to remove the burden from loved ones whose natural instinct will be to approve any life-extending measures.
2. Power of Attorney – A way to mediate complications from incapacity or mental illness later in life is to appoint someone to make decisions for you and act on your behalf by executing a power of attorney. Appointing someone as your agent places a tremendous amount of trust and power in the hands of another individual, so in a scenario where there is mistrust or dissension between family members, a neutral third party may be advisable to reduce potential disputes.
3. Updating Critical Documents – Having specific directives and documents in place is important, but since these documents are often created at different times, they can lose their effectiveness if they conflict with subsequent documents. For example, a medical directive created early in life could create legal conflict if a later document (such as a power of attorney) is given to a person at odds with parties seeking to enforce the medical directive.
4. The Incompetency Trap – Requiring a ruling of incompetency before a power of attorney takes effect can lead to tragic consequences when the primary caregiver is at odds with the appointed agent. If an agent is powerless to act in the assistance of their loved one absent a medical declaration of incompetency, the primary caregiver could contend that the loved one was still competent to make their own decisions and block attempts for a medical determination.
5. Avoid Conservatorship or Guardianship – A conservatorship (or in some states guardianship) is a court proceeding which requests that a court appoint an individual to make decisions on behalf of someone who is mentally or physically infirm. This type of after the fact planning is typically more expensive and time consuming than addressing the issue before incapacity.
6. Second Marriages – Family tension is a common consequence of parents divorcing, getting remarried, and in many cases, having additional children with the new spouse (often referred to as “blended families”). Children of a previous marriage may have feelings of entitlement, especially when the inheritance passes to a non-parent or children of that non-parent.
7. Estates Involving Spouses with Blended Families – For blended families, special care may be needed to ensure the surviving spouse is not by default the executor and successor trustee of all trusts. If the surviving spouse is a step-parent to potential beneficiaries of the estate or of trusts, naming an independent trustee may be needed to ensure all beneficiaries are treated fairly.
8. Protecting New and Old through a QTIP – A popular planning device for individuals who are divorced with children from a previous marriage is a “qualified terminable interest property” (or “QTIP”) trust. The donor transfers property gift tax free into the QTIP trust, which will pay income to the new spouse for their life, and pass the remainder of the trust assets to the children of the previous marriage. The property is removed from the estate of the spouse making the gift, but includable in the estate of the donee spouse.
9. Removing Uncertainty with an ILIT – While a QTIP is a very effective tool in protecting children of a previous marriage, the children may see distributions to the surviving spouse as taking money away from their inheritance. A way to avoid this issue and make sure children from a prior marriage receive a fixed amount is through an “irrevocable life insurance trust” (or “ILIT”). The trust is the owner of the policy, and the life insurance proceeds distributed to the children are not included in the estate of the parent or the surviving spouse.
10. Having the Difficult Conversation – While it may be uncomfortable to bring everyone together at the table for a discussion regarding wealth and death, not dealing with the issue head on just creates bigger issues later on. Including your trusted advisors such as your accountant, attorney, and financial planner into your family succession planning can be an effective way to get younger generations to discuss topics they would not be comfortable discussing directly with their parents.