Have an extra few billion lying around? You may soon be able to purchase the Denver Broncos...
Have an extra few billion lying around? You may soon be able to purchase the Denver Broncos...
In the November 2019 Wade Ash Newsletter, Herbert E. Tucker submitted an article regarding the pros and cons of pre-death will contests. In that article, he pointed out only a handful of states will entertain a pre-death will contest. A majority of states, however, will not entertain a motion for determination of the validity of a will during the testator’s lifetime because a will is deemed ambulatory and, therefore, only takes effect upon the testator’s death. Simply stated, most Courts will not render advisory opinions where there is no actual controversy before the Court.
In 2011, Colorado passed legislation permitting chemical methods to decompose a decedent’s remains. Holistic funeral homes are cropping up in Colorado. These funeral parlors offer an environmentally friendly process called alkaline hydrolysis.
The gift, estate and generation-skipping exemptions are $11.4 million per taxpayer in 2019. Keep in mind that if a Credit Shelter Trust was earlier created at the death of a family member, that trust ordinarily will not be included in the estate of the beneficiary. With the larger estate tax exemption, the family may not care about estate tax inclusion, but they may want a “stepped up basis” for the assets in the trust at the death of the current beneficiary to minimize capital gains taxes. If this applies to your situation, you probably need to take some actions now in order to obtain the stepped-up basis for the trust assets on the death of the current beneficiary.
In May, three hand-written wills were found hidden in Aretha Franklin’s Detroit area home. Her family and lawyers previously thought she had died intestate. Two hand-written wills dated 2010 were found in a locked cabinet and third hand-written will dated 2014 was found under a couch in Ms. Franklin’s living room. The wills are difficult to follow. (Click here for example.) All three documents have been offered for probate as valid holographic wills. There is some question whether they are valid under Michigan law.
Many of our probate statutes are designed to carry out a decedent’s intention as expressed in his or her will. Certain rules of construction (survivorship, substitution of assets) apply to wills and revocable trusts as will substitutes. The statutes also provide for recognition and ordering of third party (non-beneficiary) interests in probate and revocable trust assets. These would include taxes, creditor claims, and family protection entitlement during the period of administration.
In 2001, when the estate tax exemption was $675,000 and George W. Bush was President, Congress “repealed” the estate tax. But the repeal was phased in over ten years and was then scheduled to last for only one year. Instead of actual repeal, what we got, under President Obama, was a reinstated estate tax with a much higher exemption of $5 million, indexed for inflation. The Republican party now controls both houses of Congress as well as the White House, and we are again hearing calls for repeal of the estate tax.
The law allows a person to sign binding contracts including Wills at age 18, the age when young adults should begin to plan to avoid financial and medical complications in the event of debilitating illness, injury or death. Wills, Medical and Financial Powers of Attorney, and Advanced Directives are the basic documents that every person should have in place.
When Michael Jackson died, his estate valued his image and “right of publicity” at zero on his U.S. Estate Tax Return, as well as the value of his music interests due to the large debts encumbering those interests. The IRS disagreed, and argued that the success of the documentary and Cirque du Soleil show released after his death were foreseeable and should affect the value of his estate. The disagreement resulted in a $526 million estate tax deficiency and penalties of $205 million imposed by the IRS. The trial began in Tax Court on February 6, 2017.
This election season was full of interesting contests and a few surprises. If you were following the issues in Colorado, you saw an array of familiar ballot initiatives dealing with legalized marijuana, funding for the Scientific and Cultural Facilities District, and of course, heated contests between diametrically opposed candidates. But you also saw the passage of a ballot initiative that will only directly affect a limited portion of the population, but is intended to provide that small group with an alternative to suffering through a painful terminal illness.
Prince, the artist formerly known as Prince Rogers Nelson, died on April 21, 2016 at the age of 57. While people all over the world are mourning the loss of this music icon, his surviving family and the lawyers for his estate may soon be mourning his lack of legal planning for his death.