Steve Chambers Bankruptcy

Late Night TV Lawyers

I'm sure you've seen them. The ads that come on TV trolling for someone, anyone, who has been harmed in any way by a drug or product. Right now I'm thinking about BadDrug. It's from a law firm or solicitor of some sort asking for clients who may have been harmed by Xarelto.

Now Xarelto is a blood thinning drug. It's used as a stroke-prevention treatment. A stroke is when a blood clot forms and moves to your brain. By keeping blood thinner it's less likely to coagulate and form a clot. Low dose aspirin is used but people who are at high risk for stroke need more. Warfarin, sold under the trade name Coumadin, has been used for years. Warfarin is the active ingredient in rat poison. The rats bleed out internally and die.

The problem with Warfarin is that it requires constant monitoring to make sure your blood is not too thick or too thin. That means frequent trips to the doctor to have blood drawn and analyzed. Xarelto does not require monitoring.

These hucksters are looking for people who may have experienced internal bleeding due to Xarelto. One of the main side effects of any blood thinner is that you bleed easier. Someone on a heavy-duty thinner like Xarelto could be in danger from a nose bleed or a cut finger because the blood doesn't clot. In other words, the drug is doing what it was intended to do.

That brings me to the point of this post. I'm all for holding people responsible if they cause harm but in this case I'm scratching my head. Let's see, you want to find the makers of Xarelto liable because the drug thinned your blood just like it was supposed to do? You took it voluntarily because your doctor suggested that taking it might lower the risk of having a stroke and either dying or being incapacitated for the rest of your life. Wake up. There are side effects to everything. You'll starve if you don't eat but if you do you might end up obese with a host of other troubles. Nothing comes free.

When I was in law school we studied inherently dangerous activities, like demolition and blasting. Our professor asked why knives don't carry a warning that they might cut you. The answer was, because that is what knives are supposed to do. We don't have to warn about a product doing what it was intended to do.  Nearly 40 years later it appears we do have to warn people about a product doing what it was meant to do.

Dershowitz v. Cassell?

Is a lawsuit brewing between Alan Dershowitz and Paul Cassell? Who, you ask? Who are these guys?

Alan Dershowitz is one of the United States' best known civil rights lawyers. A professor at Harvard Law School, Mr. Dershowitz may be best-known as the appellate attorney for O.J. Simpson; however he called that case not one of his most important. He also represented other celebrities, among them Patty Hearst and Harry Reams, who, in the 1970s, was accused of distribution of pornography for his movie Deep Throat. In 2006 Mr. Dershowitz began to represent Jeffrey Epstein, a billionaire who was accused of repeatedly soliciting sex from minors. The proceedings are tangled but the end result was a plea bargain by Epstein that resulted in his becoming a registered sex offender.

Paul Cassell is a former federal judge and professor of law at the University of Utah's S.J. Quinney College of Law. Mr. Cassell is a graduate of Stanford University and served as an assistant United States Attorney after clerking for U.S. Supreme Court Chief Justice Warren Burger. In 1992 he joined the faculty at the University of Utah. In 2002 he was appointed as a federal judge in Utah. He resigned in 2007 to return to the University of Utah where he became an advocate for victims' rights.

Beginning in 2008 several civil suits were filed against Jeffrey Epstein alleging that he forced underage girls to have sex with him. Many of these were settled by Epstein's paying various sums of money. In December, 2014, Mr. Cassell and another attorney, Bradley J. Evans, filed a motion to join two other women, identified as Jane Does 3 and 4, in a lawsuit pending against Epstein in Florida. In that filing, Mr. Cassell and Mr. Evans allege that Mr. Dershowitz himself, along with Prince Andrew, engaged in sex with the underage girls. More details can be found here.  Mr. Dershowitz responded by calling for Mr. Cassell's disbarment.

What we have is two heavyweights in the legal field squaring off against each other. This should be interesting. Stay tuned.

Collection Tactics

In the past week I've gotten two new clients and learned of a third person who are having issues with a company over collection of what the company calls past-due accounts. Without going into details about the nature of the business or the claims of the company I want to show some examples of the collection tactics used by this company.

In an email to one of my clients the company wrote "hope your [sic] ready for the storm that's coming. Smells like burnt toast to me."

Another email accused my client of having violated the Utah Medical Association's standards of ethics and conduct and threatened to file a complaint with the Department of Professional Licensing (DOPL) in Utah.

A third email was full of vulgarities and accused my client of unethical conduct.

All of this is over debts that are disputed. One side says it is owed money, the other side disputes that, saying the first party breached its contract. Resolution of those types of disputes is what the court system is all about.

Where this crosses the line, in my view, is over the tactics this self-proclaimed ethical and professional company is using to collect. If these actions were undertaken by a third party (a debt collector) they would violate the Fair Debt Collection Practices Act. Unfortunately that act only applies to third parties, those who make collection of debt their primary business.

The fact that this conduct isn't illegal under that act (it might be actionable under other theories) doesn't make it any less reprehensible. If you're a business, conduct yourself professionally. Don't stoop to threats and even blackmail to collect on accounts.

How Internet Trading Began

Internet trading - how it all began...

In ancient Israel, it came to pass that a trader by the name of Abraham Com did take unto himself a young wife by the name of Dorothy. And Dot Com was a comely woman, broad of shoulder and long of leg. Indeed, she was often called Amazon Dot Com.

And she said unto Abraham, her husband, "Why dost thou travel so far from town to town with thy goods when thou...canst trade without ever leaving thy tent?"

And Abraham did look at her as though she were several saddle bags short of a camel load, but simply said, "How, dear?"

And Dot replied, "I will place drums in all the towns and drums in between to send messages saying what you have for sale, and they will reply telling you who hath the best price. The sale can be made on the drums and delivery made by Uriah's Pony Stable (UPS)."

Abraham thought long and decided he would let Dot have her way with the drums. And the drums rang out and were an immediate success. Abraham sold all the goods he had at the top price, without ever having to move from his tent.

To prevent neighbouring countries from overhearing what the drums were saying, Dot devised a system that only she and the drummers knew. It was known as Must Send Drum Over Sound (MSDOS), and she also developed a language to transmit ideas and pictures - Hebrew To The People (HTTP).

And the young men did take to Dot Com's trading as doth the greedy horsefly take to camel dung. They were called Nomadic Ecclesiastical Rich Dominican Sybarites, or NERDS.

And lo, the land was so feverish with joy at the new riches and the deafening sound of drums that no one noticed that the real riches were going to that enterprising drum dealer, Brother William of Gates, who bought off every drum maker in the land. Indeed he did insist on drums to be made that would work only with Brother Gates' drumheads and drumsticks.

And Dot did say, "Oh, Abraham, what we have started is being taken over by others." And Abraham looked out over the Bay of Ezekiel , or eBay as it came to be known.

He said, "We need a name that reflects what we are."

And Dot replied, "Young Ambitious Hebrew Owner Operators."

"YAHOO," said Abraham.

And because it was Dot's idea, they named it YAHOO Dot Com. Abraham's cousin,

Joshua, being the young Gregarious Energetic Educated Kid (GEEK) that he was, soon started using Dot's drums to locate things around the countryside.

It soon became known as God's Own Official Guide to Locating Everything (GOOGLE).

That is how it all began. And that's the truth. :-) 

Thanks to Chrissie Lightfoot of The Entrepreneur Lawyer for sharing this in her weekly email.

The Only Thing We Have to Fear

is fear itself.  Franklin Delano Roosevelt spoke those words during one of his fireside chats given in the midst of the Great Depression over 80 years ago.  It's as true now as it was then.  Knowledge is not only power, it is freedom from fear.  Fear of the unknown keeps a lot of people from taking action that could improve their lives.  I subscribe to a service where people post questions about various aspects of the law.  I get dozens of emails a week with copies of the questions asked.  As I read the questions it seems to me that many, if not most, could be answered by a competent attorney in about 30 minutes or less, the time most bankruptcy attorneys offer for a free consultation.  So why aren't people taking advantage of these free consultations?

The answer is fear.  They are afraid of calling a lawyer.  So they troll the Internet where they might or might not get competent advice.  They ask friends, co-workers, anyone but the people who really have the answers.  If you have a legal question, call a lawyer.  Even if they charge a nominal fee, like $30 or $50, for a consultation, isn't it worth it to get advice tailored to your specific situation?  Look at it this way: if you had a broken leg would you ask your friends or someone at work, or go to the Internet for advice on how to set it?

Estate Tax Portability

The American Taxpayer Relief Act of 2012 has an important provision that is now permanent after a two-year trial period.  It allows the $5.25 million estate tax exemption of one spouse to be carried forward to the surviving spouse.  In the past the exemption was personal and was lost upon death to the extent it hadn't already been used.  As a result, the Marital Deduction or A-B Trust came into play, whereby the decedent's estate was divided into two portions, one to take advantage of the marital deduction, the other to use the unlimited spousal exemption.

Now, with portability, if the first spouse has an estate under the cap, currently $5.25 million, he can pass that exemption to the surviving spouse, who can then add it to her own $5.25 million exemption for a total of $10.5 million that she can leave tax-free.  Any unused portion of the $5.25 million exemption can similarly be transferred to the surviving spouse.

As Deborah L. Jacobs of Forbes magazine explains in this article, even if no estate tax return is due from the first spouse, the executor must still file an estate tax return, Form 706, in order to preserve the portability.  Failure to do that results in the loss of the first exemption.

Bad News for Debtors?

The Utah Supreme Court gave debtors a lump of coal for Christmas in the form of its opinion in Gladwell v. Reinhart, 2012 UT 82 (December 4, 2012), a case certified to it by the Tenth Circuit Court of Appeals in Denver to answer a question of state law.  The issue arose in Dr. Reinhart's bankruptcy.  Dr. Reinhart claimed an exemption in 75% of the wages owed to him but unpaid as of the date of his bankruptcy petition.  This is common practice among bankruptcy attorneys in Utah and it had been universally recognized.  Occasionally a trustee would demand the other 25% that wasn't exempt under Utah's exemption statute, but most of the time the debtor kept 100% of any unpaid wages as of the filing date.

In the Reinhart case, the Chapter 7 trustee challenged the claim of exemption.  The bankruptcy court denied the trustee's objection, following the practice that had been in place for years.  The district court upheld the bankruptcy court.  On appeal to the Tenth Circuit, the Court of Appeals certified the case to the Utah Supreme Court.  "Certification" is a process by which a federal court, called upon to answer a previously unanswered question of state law, can ask the highest court of the state to determine the answer.

On certification the Utah Supreme Court held that the exemption statute in question, Utah Code section 70C-7-103, does not to allow a debtor in bankruptcy to claim an exemption for 75% of the wages owed to him but unpaid as of the date of filing.  In other words, 100% of what a debtor is expecting in his next paycheck after he files is subject to being taken by the bankruptcy trustee as "property of the estate."

In the past most debtors' attorneys have timed the filing of the bankruptcy petition to a date just before a payday so that what is in the debtor's checking account at the time of filing is almost nothing, relying on section 70C-7-103 to exempt what is owed to the debtor.  With the ruling in Reinhart debtors risk losing their entire next paycheck after they file.  And, if they wait and file the day after payday, so that what is owed but unpaid is a small amount, any money still in their account from that paycheck on the day they file is subject to being taken.  The Utah Supreme Court has effectively ruled that the debtor's last paycheck before filing is forfeited to his estate, meaning debtors will have to skip a payday in order to file.

Utah being the debtor-unfriendly state that it is, don't expect the Utah legislature to correct this problem any time soon.

Is Best Buy Headed to Bankruptcy?

In 2008 Circuit City filed bankruptcy, leaving Best Buy as the remaining entity under the business model both had used: Selling consumer electronics in large retail stores.  Best Buy has survived but it hasn't thrived.  Store sales have fallen in each of the last eight fiscal quarters.  Many observers feel it's only a matter of time before Best Buy faces the same fate as Circuit City.

The problem Best Buy faces is the same as that faced by most large retailers, that of competition from online retailers such as Amazon, eBay and even Walmart.

If you got a Best Buy gift card for Christmas you might want to use it soon.  If Best Buy files bankruptcy, holders of gift cards become unsecured creditors and the likelihood of getting anything back as an unsecured creditor is virtually nil.

Using Your Tax Refund Wisely

As 2012 draws to a close many of us are looking forward to getting a tax refund for the year.  Many have already decided how to spend it, some have already spent it five or six ways in their mind.  As you look forward to 2013, now is a good time to think hard and realistically about that refund.  Here are some things to bear in mind.

1.  If your refund is over $2,000, you are having too much withheld.  A refund is exactly what it says, a giving back to you some of your own money.  By getting a large refund you have made the IRS an interest free loan during 2012.  Look at it this way: a $6,000 refund means you had $500 per month too much withheld from your pay.  What would that extra $500 a month have done for you?  Now is a good time to use one of the calculators you can find on the IRS website (www.irs.gov) to see how much you should have withheld.

2.  Pay down high interest debt, especially any payday loans you might have.  High interest debt hurts in several ways.  First there is the actual monetary cost of the debt.  Then there is the emotional cost of worrying about making payments.  Finally there is potential risk to your credit score or even the chance of defaulting.

3.  Build up your emergency fund.  Ideally you should have enough money set aside for three to six months' worth of normal living expenses (including your house payment).

4.  Beef up your IRA or 401(k).  Check with your plan administrator about the maximum contributions and if you haven't reached those, consider using some of your refund to add to your retirement account.

5.  Save for something you have wanted.  Maybe it's a new house or a new car or some renovations to your home such as new carpet.  Your refund can jump start your ability to reach that goal.

Defamation Lawsuits to Rise?

The growing number of websites such as Yelp and Angie's List, where consumers can post reviews of local businesses, may have the effect of increasing the number of defamation lawsuits that are filed.  Defamation includes the similar torts of libel and slander.  Historically, libel was defamation in written form while slander was oral defamation.  Both involve publishing (whether by word or mouth) false or misleading statements about another.

Defamation lawsuits in the United States are fairly uncommon due to the First Amendment, which guarantees freedom of speech.  In Great Britain, libel and slander suits are much more common.  But the growing use of the Internet, the prospective reach of the Internet and the relative anonymity of the Internet are all pointing to signs in a rise of such suits.  Here's how it works:  A consumer gets what she feels is shoddy service from a local business.  Instead of complaining directly to the business (or perhaps after doing so without getting satisfaction) she posts a scathing review on one of the websites devoted to that or to her Facebook page.  The fact that she can do so from her own home without immediately being subjected to any contrary feedback might prompt her to embellish the "facts" a bit.  The shoddy workmanship might become an intentional attempt to rip her off.  The business might be described as crooked.  All of a sudden her rant gets spread to hundreds or thousands of readers.

Businesses, who rely on word of mouth and reputation, are becoming pro-active in attempting to squelch negative images.  For example, a Chicago plastic surgeon sued when a former patient accused him of giving her "Frankenstein breasts."  The woman might suddenly find herself a defendant in a defamation suit.  While it's true that truth is an absolute defense, that vindication might come only after the expenditure of thousands of dollars in legal fees.  And there are cases of consumers losing.  A California technology company was awarded $1.5 million against a blogger who accused the firm of cheating associates.  A Florida woman won an $11.3 million verdict over claims she was a "crook" and a "con artist."

Before you hit the "publish" button, stop and think what the effect of your rant might be.

Beware the Purchase Money Security Interest

When filing bankruptcy, or any time you're buying on credit, beware of the Purchase Money Security Interest (PMSI).  A PMSI gives the seller of the goods a security interest in whatever you purchase.  This is especially sneaky when you use an in-store credit card, such as one issued by Best Buy, Sears or, in the Salt Lake City area, R.C. Willey.  When you applied for credit with these companies the credit application you signed says that you grant a PMSI in whatever you buy using the card.  This extends to EVERYTHING you buy, even if you bought it five years ago and think you long ago paid that purchase off.  If you still owe money on the card, those items are probably collateral for the debt.

Suppose that last Christmas you used your Best Buy card and purchased a laptop and an iPod.  You kept the laptop but you gave the iPod as a gift.  Now you find you have to file bankruptcy and you list Best Buy as a creditor.  Everything seems fine until a representative of Best Buy calls and asks if you intend to reaffirm their debt.  It's a credit card, you say.  I'm not reaffirming with VISA or Master Card, why would I reaffirm with them?

The simple answer is the PMSI.  As a secured creditor Best Buy is entitled either to be paid the value of what you want to keep or have the merchandise returned.  You probably don't want to go to whomever you gave the iPod to and ask for it back so you have no choice but to pay for it.  Reaffirmation is a negotiated agreement between debtor and creditor and a creditor doesn't have to reaffirm, so if Best Buy demands that you reaffirm the entire debt if you want to keep the iPod you might have to pay the entire debt, even though you'd be happy to give back the laptop.

The reason you don't have to reaffirm with VISA or Master Card is that they are unsecured creditors.  They did not get a PMSI in whatever you bought using the card so they have no right to demand anything back.

Miley Cyrus Hopes to Avoid Achy-Breaky Heart

Miley Cyrus and fiance Liam Hemsworth are reportedly working on a pre-nuptial agreement in case their planned marriage should fall apart.  Cyrus is reportedly worth $130 million, while Hunger Games' Hemsworth is only worth a paltry $20 million.  But there's more.  Cyrus is said to be equally concerned about the possible fate of the couple's six dogs in the event of dissolution of the marriage.

It isn't clear where the couple is getting married.  Hemsworth is from Australia; some reports indicate a wedding in England.  If so, a pre-nup might not be binding.  In England a pre-nuptial agreement does not carry the same force it does in the United States.  Rather than being considered as a binding contract it is merely one of several factors that a court can consider.

Avoid this Year-End IRA Trap

Because the Individual Retirement Account (IRA) was created as part of the Internal Revenue Code, there is  nothing simple about the way it works.  There are a number of traps that can end up hurting you if you're not careful.

One of this is failing to take a Required Minimum Distribution (RMD) every year after you turn 70-1/2.  The RMD is first due by April 1 of the year after the year in which you turn 70-1/2.  Once RMDs begin they must be taken every year by December 31.  If an RMD isn't made, or is made in an amount less than the RMD required, the IRS imposes a 50% penalty on the shortage.  The amount of the RMD is determined by dividing the IRA balance as of December 31 of the prior year (after that year's RMD) by one of three life expectancy factors.  Be sure you use the right one!

Here's how it would work for an 85-year old whose IRA balance is $900,000 as of December 31, 2011:  Using the life expectancy factor of 14.8, the RMD for 2012 would be $60,811 ($900,000/14.8).  If this person failed to take any RMD the IRS would impose a penalty of 50% of $60,811, or $30,405.50.  If the person took a distribution of $50,000, the penalty would be 50% of $10,811 (the shortage), or $5,405.50.  Of course, you can take more than the RMD without penalty; you just have to take the minimum each year.

If you have more than one IRA the RMD is calculated on the total of all IRAs and can be taken from any or all of them.  So if the person in the above example had two IRAs, one of $500,000 and one of $400,000, he could take the distribution equally from both, all from one or the other, proportionally from each or however he wants.  One thing he should do is re-balance the account from which the distribution is made after he takes it.

With the year end approaching watch out for tax traps.

Your Own Fiscal Cliff

We're hearing a lot lately about the fiscal cliff that the country is about to plunge over if Congress doesn't act before December 31.  Many people might be facing their own fiscal cliffs with the coming holiday season.  This is a time for giving but don't get carried away by all the marketing hype.  If your finances are precarious, this is not the time to throw caution to the winds and spend recklessly.

Some may have the idea that they can run up a large credit card bill, have a great holiday season and then declare bankruptcy.  That would be possibly the worst thing you could do from a financial standpoint.  Creditors look closely at expenditures just before a person files bankruptcy with an eye to objecting to the discharge on the grounds that the debt was fraudulently incurred.  A debt is fraudulently incurred if, among other things, the debtor knew or should have known that she couldn't pay the debt at the time it is incurred.  Filing right after running up a big credit card debt, especially for non-necessities such as gifts, movies, dining or luxury items is an indication that the person knew she wouldn't be able to pay those debts.

Even worse, the United States Trustee might look into the case and decide to challenge the entire bankruptcy as opposed to a single debt.  Or, in the worst case scenario, the Trustee refers the case to the Department of Justice for possible prosecution as bankruptcy fraud.  That's a federal crime punishable by imprisonment.

Remember that bankruptcy is intended for the honest debtor who simply can't make ends meet.  It isn't meant as a way of letting someone have their cake and eat it too.  This holiday season make sure to use your common sense before you use your credit cards.

Post Election Uncertainty

The great election of 2012 is now history and President Obama will serve another four years.  In response to  his re-election the NYSE dropped to its lowest point in a year.  That's probably the best indication that business doesn't favor what the future might hold under a second Obama administration.

One issue that has been waiting for resolution until after the election is the estate and gift tax.  The Bush era tax cuts are set to expire at the end of the year, reverting the estate and gift tax exemption to $1,000,000 from its current $5+ million.  If that should happen (and that's a big IF), a lot of families could get caught with an unexpected estate tax.  Five million is a lot of money in an estate, but one million, even with today's depressed real estate values, is not that uncommon.

There's no clear-cut answer.  President Obama has said he's in favor of allowing the tax cuts to expire. Does that mean he would veto an extension if passed by Congress?  Give that the House is under Republican control while the Senate is under the Democrats, will Congress even work together to pass a bill in time to present to the president?  Most advisers are saying to use your exemption while it exists if you would have an estate tax issue under a reduced, $1,000,000, exemption.  If you fall in that category, or even think you might, talk to a qualified estate planning attorney.

Does Your Pet Need a Trust?

An article in today's online Wall Street Journal addresses the question whether you should set up a trust for your pet.  At first glance that may seem like a preposterous idea.  But think about it.  Many pets are practically family members.  A pet is property, and will be treated as such in the eyes of the law, meaning if there is no one to care for it, it could be treated as abandoned property.  That could result in the pet being sent to the pound or even euthanized.

Since a pet isn't a human, it can't receive an outright bequest of money.  If you want to leave money to your pet you will need to establish a trust and appoint a trustee.  The trust should give direction to the trustee how to care for the pet and specify how much money is being left to the trust for the benefit of the pet.  You might also want to make a "no contest" clause in your will.  That clause deletes an heir's share if that heir challenges the will.  Such a clause could discourage one of the human heirs from challenging grandma's bequest of her estate to her cat.

"Conscious Presence" in Witnessing a Will

In law school we learned that when someone witnesses another person execute a will, the witness has to be in the "conscious presence" of the signer.  We read cases about whether being in another room counts if the witness can see the signer as he or she signs the will.  Of course way back then no one could possibly imagine video conferencing.

Now that millions of people have Skype sessions routinely the question is bound to come up: if the witnesses are in a room thousands of miles from the signer of the will, but they are connected by video conference technology and can see and hear each other in real time, does that qualify as being in the conscious presence of each other so as to make the will signing legitimate?  The Court of Appeals in Ohio recently had this question before it in Whitacre v. Crowe  ( http://www.sconet.state.oh.us/rod/docs/pdf/9/2012/2012-ohio-2981.pdf).  The court concluded that under the Ohio definition of "conscious presence" video conferencing while signing a will was not permitted and invalidated the will.

The result was that the will, which had excluded three of the decedent's five children and named one of the remaining two as executor and the other as sole beneficiary, was revoked from probate, meaning the decedent died without a will.  In that case, the general laws of intestacy would go into effect.  Presumably the result would be that the five children will share equally in the estate, which is probably the reason for the lawsuit in the first place.

401(k) Contributions in Chapter 13

One question many people ask is, "can I continue to contribute to a 401(k) plan in Chapter 13."  The answer depends on where you live.  Depending on which federal judicial circuit you live in, contributions to a 401(k) might be allowed or they might not.  Utah is in the Tenth Judicial Circuit.  In the Tenth Circuit ongoing contributions to retirement accounts are not considered necessary living expenses and are therefore not allowed in Chapter 13.  In other words, the amount ordinarily contributed to a 401(k) plan must be diverted to the trustee for the benefit of creditors while one is in Chapter 13.

Separate from ongoing contributions is the question of whether loans from a 401(k) can continue to be repaid in Chapter 13.  In this case, courts are fairly unanimous in holding that repayment of existing loans as opposed to contributions is permissible in Chapter 13.

Disinheriting Someone

Occasionally it happens that a parent wishes to cut off a child from any inheritance.  Rarely one spouse wants to exclude the other.  The question arises, can that be done?

The answer is "yes" if the heir is a child or anyone besides a spouse.  In Utah a spouse is entitled to what he or she would receive if the decedent died intestate (without a will) even if the will says the spouse is to receive nothing.  This is called the spouse's elective share.  When it comes to anyone besides a surviving spouse a person is entitled to include or exclude whomever she sees fit.

Before deciding to exclude someone from a will, it's important to think through the reasons for wanting to do this.  Usually the person disappointed the decedent in some way, such as by dropping out of school, marrying the "wrong" person, becoming involved in drugs, crime or some other illegal or immoral activity.  Then think about the legacy you as the maker of the will that excludes this person will leave.  How will you be remembered by this person and any others who learn of the decision to exclude that person?  Is that a legacy you want to leave?

Distributing one's estate shouldn't be about rewarding or punishing anyone.  It's about giving away what you can't take with you.  You have no use for anything after you're dead; why should you care particularly who receives it or what they do with it?