COVID-19 UPDATE: What We Are Doing to Protect Our Clients

Articles Posted in Estate Planning

Recent reports indicate that musical mega-star Prince may have passed away without a will or other estate planning in place. If that is true – a very big IF – his inaction will likely cost his estate millions of dollars in federal and state tax bills. In addition, contentious lawsuits seem certain to erupt over who are his rightful heirs, how to value his estate, and how to distribute and manage his complex assets.

Prince fought mightily to retain control over publishing rights and sound recordings. But now, if he is indeed without a will, he will have no say over how those interests will be preserved. The laws of the state of Minnesota will make those decisions for him.

Prince also closely guarded his privacy during his life. But now, assuming he did not protect his assets through effective estate planning, the nature and extent of his assets and their distribution among his heirs will play out very much in public.

Do you store pictures online? Have a Facebook account? Keep documents in the Cloud? Or use online accounts to maintain certain aspects of your life? If so, you should be aware that earlier this month Tennessee Governor Bill Haslam signed into law a bill that could impact what happens to those digital assets after your death.

The Uniform Fiduciary Access to Digital Assets Act (UFADAA) is designed to make sure you control what happens to your digital property after you pass away. The law addresses concerns that online accounts containing assets of personal significance or even monetary value may be simply deleted upon a person’s death, or that loved ones will be refused access to digital property.

Oregon’s Karen Williams faced this dilemma while grieving the loss of her 22-year-old son, Loren in 2007. She revisted memories of his life by accessing his Facebook account, where he kept pictures and stories. When Facebook learned of his death, however, the company changed the password, denying her access, and sparking a lawsuit over control of his property. Ultimately, she won a court order, but as Associated Press reported, “she never received the full access she sought.” The account was subsequently deleted.

Country music legend Glen Campbell is engaged in a very public struggle with Alzheimer’s disease, a common form of dementia. Campbell announced his diagnosis in 2011 before embarking on a farewell tour with his family, which was documented in the feature film, “Glen Campbell: I’ll Be Me.” The film depicts in sometimes painful detail the impact of Alzheimer’s, not only on the person afflicted with the disease, but also on the loved ones faced with finding the right care and making decisions for someone no longer able to make decisions for himself.

The “Rhinestone Cowboy” is now in a long-term care facility with round-the-clock care.  After facing numerous health care issues and a legal challenge from two of his children from a previous marriage, his wife Kim is speaking out to help families dealing with the cruel disease, which affects about 6% of the over-65 population. “Estate planning is very important,” she said, according to a Lexington Herald-Leader report. “Advance health care directives are also very important.”

Kim Campbell is right. Planning ahead for health care crises can alleviate much of the anxiety for both the patient and his or her loved ones, and should be a standard step in every person’s estate planning process.

This is a common question from estate planning clients. Once a year, you should make a point of thinking through your family and life circumstances with an eye toward your estate planning goals and priorities. Major life changes involving you or your family often create the need to revisit your Will and other estate planning documents to make sure they effectively reflect your current intentions.

Here is a list of common life events that often indicate it is time to update your Will:

  • Your marital status changes –if you were single when you prepared your Will and then subsequently got married, you should update it to adequately provide for your spouse after your death. If you and your new spouse both brought children to the marriage, special attention is required to address how your plan can best provide for your blended family. A divorce also likely means your Will no longer reflects your goals and should be updated.

If you are a resident of Tennessee, the amount of state tax your estate will owe, as of January 1, 2016 is: zero. Tennessee’s inheritance tax (known in most states as an “estate tax”) phased out permanently at the start of 2016, which means for anyone who passed away on or after January 1, 2016, no estate tax will be due to the state of Tennessee.

This change is the result of a law passed by the Tennessee legislature in 2012 that gradually increased the inheritance tax exemption (the maximum amount of a taxable estate subject to the tax) until the 2016 repeal of the tax altogether, leaving only 14 states and the District of Columbia with estate taxes still on the books.

What a difference 4 years makes! In 2012, a $2 million Tennessee estate could expect to pay more than $80,000 in state taxes (between 5.5% and 9.5% of the taxable estate above a $1 million state exemption). In 2016, that same estate owes no state taxes in Tennessee.

No one wants to think about leaving their loved ones behind when they pass away. However, making sure that you have a will that details all your wishes about how you want things handled after you are gone will help you make sure that your loved one are cared for even when you cannot be there. It will help protect the things and people you care about and help them to have the future that you want for them. Here are some important factors to consider when it comes to the writing of your will. If you have questions or concerns about your will and need help having one drafted, then you should speak to one of our estate planning lawyers with the Higgins Firm. We will help answer any questions you may have and help you create a plan that is right for you.

  • Having a will does not mean all your assets are covered:   Any assets where a beneficiary is designated such as IRA 401k plans and life insurance will go directly to the beneficiaries. Also, any assets that you have in joint tenancy with survivorship will go directly to the people who have the survivorship rights after you die. Any accounts that are pay on death or transfer to death will also go to any beneficiaries when you die. If you have a trust with any assets these will be handled without probate. It is important to review your beneficiaries when you make any changes to your will so that you make sure your assets are divided exactly how you want them to be.
  • It is important to make sure the executor of your will is someone you trust:  The executor should be someone you trust because they will be responsible for handling everything after you die as well as making sure the wishes in your will are honored in the way that you want them to be. They will be responsible for paying bills and taxes that deal with your estate. They also have to appear at legal proceedings and maintain any property until the estate is settled. It is best to appoint someone whom you not only trust but who also has business knowledge.

No one wants to think about leaving their loved ones behind when they pass away. However, making sure that you have a will that details all your wishes about how you want things handled after you are gone will help you make sure that your loved one are cared for even when you cannot be there. It will help protect the things and people you care about and help them to have the future that you want for them. Here are some important factors to consider when it comes to the writing of your will. If you have questions or concerns about your will and need help having one drafted, then you should speak to one of our estate planning lawyers with the Higgins Firm. We will help answer any questions you may have and help you create a plan that is right for you.

• Having a will does not mean all your assets are covered

Any assets where a beneficiary is designated such as IRA 401k plans and life insurance will go directly to the beneficiaries. Also, any assets that you have in joint tenancy with survivorship will go directly to the people who have the survivorship rights after you die. Any accounts that are pay on death or transfer to death will also go to any beneficiaries when you die. If you have a trust with any assets these will be handled without probate. It is important to review your beneficiaries when you make any changes to your will so that you make sure your assets are divided exactly how you want them to be.

Estate planning can be a difficult and confusing process. This process can be made even more complicated when you have a business or foundation that your family members may be involved in. This appears to be the case with Paul Newman’s family. The Newman’s Own company and foundation started in 1980 when actor Paul Newman and author A.E. Hotchner began making homemade salad dressing and giving it to neighbors as Christmas presents who came by as they were caroling. Newman’s Own made a profit of almost one million dollars two years later and donated most of it to charity. Then in 1993, Newman’s daughter Nell began Newman’s Own Organics, a division of the company. Newman’s Own now makes pasta sauce, popcorn, salsa, frozen pizza and other products, and the company has stated that it has given away more than $400 million to charities such as summer camps for seriously ill children.

Newman had his attorney draft a letter in 1999, that stated his intention to give his children the major voice in distributing funds for charity. He stated these intentions again in meetings in 2006 with family members, lawyers, and accountants and it was also on a 2007 video interview.

After Newman went into the hospital changes were made to his estate plan and on April 11, 2008 he rewrote his will and appointed two associates to controlling positions in the Newman’s Own Foundation on July 29, two months before his death. When his will was read, his family members learned that Newman’s daughters would not be on the board of the Newman’s Own Foundation and that millions of dollars for their personal foundations would go instead to Newman’s wife’s marital trust. Newman’s family now claims that Newman’s Own, and its foundation are being  mismanaged by the man who’s served as chief executive for several years. The dispute has to do with concerns about the changes Paul Newman made to his estate plan in his final years.

Many people may believe that they do not have to be worried about federal estate tax if they do not make a large amount of money, but if you have a substantial amount of life insurance, own a home or have a good retirement account or plan, there are some things you need to think about and consider when it comes to estate tax. If you have questions or concerns about how estate tax may affect you and your family, you should talk to a estate planning lawyer at the Higgins Firm. We will help you to determine the best plan for you and answer any concerns you may have.

So, you may be asking what exactly is included in estate tax? Federal estate tax includes assets such as proceeds from any life insurance you may have, any house or property you own including vacation and rental properties. It also includes retirement plan accounts, vehicles, furniture, any valuable collectibles you may have and any other property and items you own. Finally, if you have shares in a family business or corporation those are also included.

If you are single, any life insurance coverage you may have is subject to federal estate tax. If you are married, it is not that big of an issue because the life insurance benefits would go to the surviving spouse tax free because of a marital deduction. However, this only applies if your spouse is a citizen of the United States.

This is a difficult question to answer for many people. Often, it is because people do not know the difference between the two or what is involved in each. It is important to choose the one that is best for your needs so that your loved ones and family members will be protected and taken care of after you pass away. Here are some things we consider with our clients when helping them decide between a living trust or a last will. If you have any more questions about a living trust or a will, you should speak to one of our lawyers with the Higgins Firm. We will go through each option with you and help you with the planning of your estate.

First, it is important to know what a will and living trust mean. A will is a written document that is signed and witnessed that describes how you wish for your property to be divided after you die. It is revocable and can be amended or changed at any point during your lifetime. Finally, it allows you to appoint guardians for your young children. A living trust can provide life-time and after death management of your property. It is a legal written document that places your assets into a trust for your lifetime and then is transferred to a certain beneficiary or beneficiaries when you die. This person is known as a “successor trustee.”

Contact Information