Tag Archives: inheritance

Why is Michael Jackson’s estate back in the news?

michael jacksonWhen Michael Jackson died in 2009 at age 50, he left a will that specified what should be done with his assets.

He may not have taken into consideration what those assets would be worth in subsequent years…but the IRS has now done so.  There is now a huge dispute between the Internal Revenue Service and Michael Jackson’s estate over what should be paid in estate taxes.

According to Michael Jackson’s representatives, the value of the estate is currently $2,105; according to the IRS, it’s more like $434 million.    “With interest and penalties, lawyers estimate the case – set for trial at a Los Angeles tax tribunal in 2017 – could be worth more than $1 billion.”  The outcome of this trial could impact celebrity estate planning.

Howard Weitzman, the estate’s lead attorney, that the Michael Jackson name has “experienced a commercial rebirth thanks to the savvy executors who have managed the estate’s assets.”  He estimates that Jackson earned no more than $50 million for the licensing of his name and image when he was alive and doesn’t think that what’s been done since Jackson’s death should impact what the estate pays.

It is important to note that this is the first time ever that the IRS is pursuing estate taxes for name and likeness earnings after a celebrity’s death.

If the estate loses the case, Michael Jackson’s heirs will be hit with a huge tax bill.  If the IRS wins, this will probably be the first of many celebrity estate cases that it will pursue.

You are probably not worth $434 million and your heirs won’t be faced with this kind of issue when you die.

However, knowing what your estate is worth and putting into place the correct type of plan to protect these assets for your loved one is critically important.  If you don’t have a will, you should consult an estate attorney and get one written today.  Otherwise, the government will decide what will happen to your assets and your family will have no say in the matter.

For information about estate planning, go to www.diesmart.com.

 

 

What’s your most important password?

passwordsYou may guess it’s the password to your online bank account, to Facebook or to a shopping site.  Those are all important but there’s one that it’s critical you share with a loved one.  It’s the password to your email account.

Why is this so important?  When you die, your loved one or executor will try to access all of your online accounts so that they can close them down or, if necessary, continue their use.  For example, they may want to shut down your account on Amazon since you won’t be doing any more shopping.  Or, if you pay your utility bills online, they may want to continue to pay them until they sell your home.

You may use the same login information and password for all of your accounts but chances are that you have several different ones.  However, most of the accounts have a system that will enable a user to recover a forgotten login or password.  The user just needs to know how to access the email account linked to that other site so he or she can recover the information when it is sent out.

Although it is not strictly legal for you to share your password and login information, it is the easiest way to ensure that when you’re gone, your executor will be able to easily access your information and settle your estate.

For more information about digital estates and the steps you should take to be sure you have included them in your planning process, check out our book “Access Denied ” or go to our site www.diesmart.com.

Who makes decisions if your divorce is not finalized?

lamar

I came across a blog the other day that made a very important point.  If you are in the process of divorcing and have a medical emergency, who will make decisions on your behalf?

When Lamar Odom was recently found unconscious in a Nevada brothel and was rushed to the hospital, who did the officials call?  They called Khloe Kardashian.  Although they are in the process of finalizing their divorce, in the eyes of the law, they are still married and unless an advance directive for healthcare states otherwise, is the person who can make medical decisions on his behalf.

Unless you just don’t care, when you are getting a divorce, it’s critical that you update your advance directive to name someone other than your soon to be spouse to decide what the doctors should and shouldn’t do if you have an accident or a sudden health emergency.

To find out more about advance care directives and planning for the end of your life, go to www.diesmart.com.

Don’t bury your head in the sand!

So you donbury head in the sand’t think you need a will?

Don’t bury your head in the sand like more than half of all Americans.  That’s the percentage of people who don’t have a will…and probably don’t think they need one.

Maybe you think you don’t have enough assets to make it worthwhile.  Perhaps you think your spouse will automatically get everything.  Or you know your children will do what’s right so you don’t have to worry about it.

Do you know who actually decides who gets what when you die if you don’t have a will?  It’s the government!  Yes, every state has laws that determine who will inherit your things if you die intestate (without a will).  Your spouse and children will have no choice and will not be part of the process.  In some states, it’s simple.  Your spouse gets everything.  In others, your spouse splits the estate with your children.  If you aren’t married or don’t have children, your parents or siblings may be the ones who get it all.  You may not want your siblings to get anything or, perhaps, you don’t want your parents to inherit.  Maybe you’d prefer that the bulk of your estate goes to charity.  Whatever your wishes, without a will, they won’t be carried out.

It’s very easy to draw up a simple will.  There are many templates on the web or forms you can fill out for less than $100.  If you have a complex estate and need to sit down with an attorney, it will cost more.  However, for less than $100, you have no excuse.

Get a will drawn up today.  Don’t let the government make the decision for you.  You decide who inherits what when you die.

For more information about wills, go to diesmart.com.

3 tips when making estate planning decisions

I came across this blog that was written by Julie Ann Garber, J.D. last year.  It had such good information that I decided to re-post and share it with you.

Many people struggle with all of the decisions that they have to make when putting together their estate plan: Who should get what? When should they get it? Who shouldn’t get anything? Who should be the executor? Who should be the trustee?

All of these decisions can be overwhelming, even for someone who has what is considered a “normal” family, but they don’t have to be.  In the wise words of Jerry Cantrell of Alice in Chains, it’s your decision.

If you’re stressed out about how to plan your estate, then don’t despair.  Here are three tips for making your estate plan your way:

Tip #1 – Don’t be afraid to disinherit someone.  It’s your money, so you can choose to leave it, or not leave it, to whomever you want. But beware – being bullied into making your estate plan a certain way by a certain individual and not the way you really want it (for instance, leaving everything to one child to the exclusion of others at the insistence of that one child) will result in family discord.  If you really want to disinherit someone, then that’s your prerogative, but if someone bullies you into disinheriting someone else, then in extreme cases this could amount to “undue influence” and lead to an ugly will or trust contest. If you truly want to disinherit someone, then work closely with your estate planning attorney to insure that not only will your final wishes be carried out, but your plan will be bullet proof from challenges.

Tip #2 – Choose your executor and trustee wisely.  Here are the traits you should look for in your executor and trustee:  loyal, fair, practical, trustworthy, organized and tough.  If you choose a person who has most of these traits, then your final wishes will be fulfilled, but if you choose a person who has only one or two of these traits, then your final wishes will take a back seat to their own agenda.  Better yet, choose a corporate trustee, such as a bank or trust company, to put these important jobs in the hands of professionals.  Otherwise it may be way too easy for Uncle Bob to skim some off of the top or for your loved ones to convince Uncle Bob to disregard your wishes.

Tip #3 – Listen to your estate planning attorney.  While a good estate planning attorney will listen intently so that he or she can learn about your greatest concerns and challenges when it comes to planning your estate, you should also listen to your estate planning attorney because he or she can offer some good advice and solutions to ease those concerns and overcome the challenges. And while sometimes what your estate planning attorney says may not be what you want to hear, your attorney’s advice, which comes from years of experience in similar situations, may very well head off a family feud or a will or trust contest.

For more information about estate planning, go to www.diesmart.com.