Tag Archives: Probate

50% of Prince’s estate value goes to pay estate taxes

PrinceYesterday, Prince’s estate had to file an estate tax payment plan.  Since his estate was valued at about $200 million, the taxes are expected to be about half of that – 40% to the federal government and 16% to the state of Minnesota.  Allowable deductions and exclusions will reduce that amount to 50%.

If Prince had an estate plan with trusts to benefit relatives and charities he chose, the amount of taxes due would have been very low.  Instead, only about 50% will go to his six siblings and the government will take the rest.

Prince’s estate didn’t have to actually have to pay the entire $100 million yesterday; it can make payments over time.  That’s a good thing since Prince’s estate isn’t very liquid.  There are many entertainment assets which are still being valued and it can take a long time since their actual worth will be determined.

It’s not clear whether the IRS and Prince’s estate will agree on the value of his music catalog; it’s difficult to put a dollar value on this kind of asset.  The estate can learn from the experience of Michael Jackson’s estate.  He died in 2009 and yet his estate is still not settled.  The tax case will go on trial in Los Angeles next month where there will be a dispute about more than $700 million in taxes, interest and penalties.

You probably aren’t worth this kind of money but even if your estate is only worth a few hundred thousand dollars, you should still have an estate plan.  It will make it much easier for your heirs and will enable them, rather than the government, to share in the total value of your estate.

For more information about estate planning, go to our website http://www.diesmart.com.

Do you have a will?

cynyjagxuaa5ewcIt’s never too soon to write a will.

Reginald “Jake” Gutierrez, a Washington state police officer, was fatally shot while responding to a domestic violence call in early December.  He had been with the Tacoma police department since 1999 and was highly respected and experienced.

Although he had a career in a dangerous field, he had not taken the steps necessary to protect his family if he was killed.  He lived with his fiancé, Rebecca Humphrey, and had talked about writing a will before they were married… but had not done it before his death.

Gutierrez was the breadwinner in their family, supporting Rebecca as she started a small business.  Now he is gone and Rebecca cannot access any of his money.  His estate will have to go through the probate process before she will possibly have access to any money.

Meanwhile, bills are piling up.  The Tacoma Police Department gave her $2,000 to cover her immediate needs and also set up a fund for the family.  But she will burn thru the $2,000 very quickly and doesn’t know how or when the fund will be distributed.

Rebecca is hopeful that everything will be worked out.  She says that Jake’s family hasn’t been fighting over money.  However, she wants others to hear her story and prepare for the worst.  She says “If you love your kids or fiancé or spouse, please think about that now for them so they don’t have to when they are grieving.”

If Gutierrez had written a will before his death, a lot of anguish and difficulty could have been avoided.

Even though you may not have a career in a dangerous field, you cannot plan when you will die.  You should prepare now and make decisions on how to take care of your family when you’re gone.  See an estate planning attorney or, if you have a simple estate, find a form on the internet.  But, whatever, you do, write your will today.

For more information about wills and estate planning, check out our website http://www.diesmart.com.

What’s a big problem in China?  No wills!

chinese-will-centerIt’s only been in the last 30 years that China has allowed people to accumulate wealth.  Prior to that, it really didn’t matter.  There was no private property to pass along to a descendant so a will was not needed.

Now, some of the first generation to benefit from the ability to accumulate wealth are dying and it’s causing a huge problem with inheritance disputes that are taking up the time of the courts and causing rifts between family members.

We came across a story in USA Today that illustrated the problem and explained what the Chinese government is trying to do to fix it.

“When people die without a will their children scramble for their property, damaging family ties and having a negative effect on society,” the state-run Xinhua News Agency has warned.

“Only 1% of China’s 220 million seniors have drawn up inheritance plans, according to best estimates.  The reason is cultural: talking about death is taboo and writing a will is akin to putting a curse on yourself.”

“Consider the publicized case of Yan Jiying, a coal baron from the northern province of Shanxi.  He died in 2015 at the age of 71, leaving his estranged wife, long-term mistress and six children to fight over his assets.”

“The government is calling on local authorities around the country to establish free legal centers for those over 60. One charity doing that since 2013 is the China Will Registration Center, founded by Chen Kai, a young lawyer with a passion to protect seniors. “

“ The waiting list for appointments at his first Beijing center now stretches into September, proof that people will write a will if they can find support they trust, Chen said. “We want to teach old people that they are the masters of their fortune, that they have the right to decide what happens to their hard-earned money, ” he said.”

“On a recent morning around a dozen seniors were squeezed around a communal table at the center, diligently transcribing the final copy of their will. They begin by dictating their wishes to a lawyer, who types up a draft. The clients are then evaluated by a visiting psychiatrist to establish clarity of mind, they record video testimony of their wishes in the presence of two independent witnesses, and finally copy the final document by hand.”

“For many, the last step is the hardest. Most are over 70 and have shaky hands or poor eyesight. Transcribing a page of formal Chinese characters mistake-free is no easy task. But Chen is adamant that they do it this way, saying he has seen too many badly written wills challenged. He wants his clients to be sure their wishes will be respected even if some family members do not like them.”

Although the percentage of people in the United States having wills is much higher than 1%,  it’s still below 50%.  If you don’t have a will, you should consider preparing one so that your family won’t have to deal with issues related to your estate once you’re gone.  To find out more about preparing a will and other estate planning steps, check out our website http://www.diesmart.com.

A unique way to preserve your loved one…

holding_heart-300x214 img_1179-768x1024I came  across a company in Seattle, Washington called Artful Ashes.  They have come up with a unique way to hold the memory of a loved one – a piece of glass art.  All you have to do is send them about a tablespoon full of ashes and they will turn it into art.  Their designs are in the shape of hearts or spheres, measure approximately 3 ½ by 3 ½ inches and weigh about 14 ounces.  The ashes you provide are swirled through the design and can be seen in the finished piece.  If you like, you can include a short inscription on the memorial.

Some people I mentioned this idea to thought it was creepy; others liked it.  Regardless, it’s a beautiful piece of art and something to be considered.  There are many unique ways to preserve the ashes of a loved one.  This is just one more new one.

For more information about cremation and funeral planning, check out our website diesmart.com.

You don’t think you’ve been treated fairly by a deceased relative?

judge-cartoonIf someone in your family has died and you don’t think you’ve been treated fairly, what’s the first thought that comes into your head?  Challenge the will.  But you might want to think a second time before doing this.  A will contest is very hard to win.  It’s difficult to prove that someone was incompetent after they’ve died and it’s equally as tough to prove that undue influence was exerted on the deceased.    Finally, some wills have a clause that will cause you to forfeit your inheritance if you challenge that will.  So it might be best to just accept whatever has been left to you and then to get on with your life.

We found a blog that gave a great example of what might happen if you challenge someone’s will.

Sam and Erica were married. It was Erica’s first marriage and Sam’s second, his first marriage ending in divorce. Sam had one child, Jason, from his first marriage. Erica did not have any children. They each had identical wills, leaving their entire estate to the other, and on the death of the survivor everything goes to Jason.

Their wills also contained a provision, requiring the surviving spouse to live at least six months after the first spouse’s death. If the survivor did not live that long, he or she would be treated as having predeceased the first spouse.

In March of 2015, Sam died. Erica filed a probate proceeding in May and submitted Sam’s will to the court. Because she filed just two months after Sam’s death, Jason objected. He argued that she had no authority to take over Sam’s estate because she had failed to survive him by six months.

Erica apparently became angry, and revoked her own will to make sure that Jason did not receive any share of her estate. Erica signed a new will a few months later (well after she had reached the six-month survivorship requirement). She left her entire estate to her sister and nothing to Jason. She died five months later.

Jason contested her new will, arguing that she had been subjected to undue influence by her sister in preparing her new will. The probate court dismissed his complaint and upheld Erica’s will. Not satisfied, Jason appealed.

The higher court affirmed the probate court finding and stated that it was clear that no one influenced her in her decision to revoke the earlier will or to do her new will. Once she revoked the earlier will, she was intestate — that is, she had no will at all — and since Jason was not her child, he would have no right to any share of her estate if she had died without a will.

Why would that make a difference? Because if she had no will prior to signing the new will, Jason had no standing to even challenge that will. According to the appellate court, there was no question that Erica had revoked her earlier will a few months prior to her executing a new will and thus Jason’s objections were dismissed.

What might Jason have done differently? Hindsight is always 20/20. Perhaps Jason should not have objected to his father’s estate when he did. If Erica had actually died in the four months after he raised his objection, he could probably have still made his legal point. In the meantime, he clearly offended her to the point that she changed her estate plan.”

Moral of the story: Think about what might happen if you challenge someone’s will.  It might be better to accept what’s been left to you than taking a chance that you might end up with nothing.

For more information about estate planning, check out www.diesmart.com
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