Estate Planning

September 10, 2013

Tennessee’s Gift Tax Is No More

It seems like taxes are everywhere these days. You get taxed for your income, food, or anything else that you buy. You can even get taxed after you die. Most of these taxes are a way of the government to increase its dwindling revenue. However, there has been a push in Tennessee to remove some of these taxes in an attempt to lure new residents and businesses.

You may have heard about a gift tax. A gift tax is a tax excised on any gifts worth above a certain amount of money. Tennessee was one of only two states that still had a gift tax. However, the Tennessee General Assembly repealed the gift tax last year. Before the tax was repealed, any gift in the amount of $13,000 or under was exempted from the tax if the gift was made to a spouse, sibling, child, or other lineal descendent. The amount exempted to all other people was any gift valued at $3,000 or under. The tax rate ranged from 5.5% to 16% for any gift over the exempted amount.

It is important to note that any gift made before January 1, 2012 may still be subject to the Tennessee gift tax. However, any gift made after January 1, 2012 are free of any gift tax. Although Tennessee has repealed its gift tax, there is still a federal tax on any gifts over $14,000 given in a year. When completing your estate plan, you should recognize what taxes are required and what taxes may be avoided. If you have any questions about your estate plan in Tennessee, contact The Higgins Firm. Our Tennessee estate planning attorneys would be happy to answer any questions regarding your estate plan.

September 3, 2013

Tennessee Attempts to Entice Retirees by Repealing Inheritance Tax

by The Higgins Firm

While many states choose to levy taxes on its residents through a number of taxes after they die, many states are beginning to rethink this common practice. There are a number of states that are competing for wealthy retirees through incentives like certain estate tax breaks. Although a state can bring in large amounts of tax revenue through estate or inheritance taxes, states are beginning to recognize that more benefits can be had from cutting them rather than increasing them.

Last year, the Tennessee state legislature chose to cut taxes in an attempt to hold onto some of its wealthy retirees and in hopes of bringing in more from elsewhere. Lawmakers chose to phase out the state’s inheritance tax over a period of four years. Tennessee currently allows property inherited from the estate to be exempt from paying the tax if it is valued under a certain amount. If the value of the estate is over the exempted allowance, the tax rate ranges from 5.5% at the lower end to 9.5% at its highest end. The tax exemption increases incrementally each year until being completely eliminated in 2016. The tax exemption schedule is as follows:

2012 – $1,000,000

August 20, 2013

Estate Planning Lessons from Celebrities

by The Higgins Firm

Former “Sopranos” star James Gandolfini died suddenly in June of this year shocking many of the actor’s biggest fans. Many people may be equally as surprised to learn that as much as $70 million of Gandolfini’s estate will go to pay taxes that could have easily been avoided. Gandolfini could have avoided the huge tax burden by merely utilizing better estate planning. There are a number of lessons that can be learned from some other famous figures.

Choose appropriate guardians for any minor children

Before dying, Michael Jackson chose his aging mother to act as a guardian for his children. Jackson also chose legendary singer Diana Ross to act as a guardian in case his mother was unable to. Some wonder whether Jackson should have chosen another person to act as a guardian or backup guardian. While there is no doubt that Jackson’s mother loves her grandchildren, questions would arise if she was no longer able to serve as guardian in her aging condition before the children reached the age of majority. If this did occur, it is possible that the children would have to move across the country to where Diana Ross lives. There seems to be too much room for potential error.

August 7, 2013

Celebrity Will Mistakes- Avoiding Similar Potential Problems

by The Higgins Firm

Celebrities may feel that their lives are always being scrutinized by the public eye. That scrutiny can even carry over when a celebrity passes away. Despite having access to some of the best estate-planning advice, a few wealthy celebrities left behind huge legal fees and taxes, bitter court fights, and other issues. Below you can see how drafting a will and keeping it updated can avoid any potential problems that may arise for your loved ones.

Gary Coleman

Gary Coleman, former child actor and star of the television show Diff’rent Strokes, died unexpectedly in 2010 at the age of 42 after sustaining a fall.

July 24, 2013

Types of Wills in Tennessee

by The Higgins Firm

You probably know what a will is and what it does. However, what you may not know is that there are different kinds of wills. Under Tennessee law, there are three different types of wills. Each one has its own requirements and restrictions. It is important to know what are the positives and negatives of each type of will. If you need help or advice drafting your will, be sure to contact an experienced Tennessee wills attorney.

The first type of will that we will discuss is known as a nuncupative will. This is the least common type of will because of the restrictions under the law. Nuncupative wills are entirely oral and are given when the person making the will is in imminent peril and dies of that peril. In other words, for this type of will to be valid, the person must speak his or her wishes from the deathbed and must die shortly thereafter. Imminent peril can include sickness or trauma. In addition, the deathbed declaration must be heard (or witnessed) by two disinterested people, must be documented within 30 days after the declaration, and be submitted to probate within six months after the death. The value of the property cannot exceed $1,000 for a civilian and $10,000 for an active duty military member.

Obviously, there are a number of restrictions with this type of will. It would only apply in a limited set of circumstances. However, it can be an easy alternative for those without any other means in a time of dire circumstances.

July 18, 2013

When Should I Update my Will?

by The Higgins Firm

Life is full of change. Whether you move to a new state, have a baby, or get married, situations are always changing. Some of life’s biggest changes can have a lasting impact on other areas that you would not realize. Although you learn how to adapt or compensate for any changes, there will always be an impact in your life from any major change. Changes should also be reflected in your Will. Although many people have a Will, it is important to update it whenever you have any life changes.

So we have provided a list of major life changes that should prompt you to update your Will accordingly:

Changes in your family

July 16, 2013

Avoiding Commonly Made Mistakes in Estate Planning

by The Higgins Firm

Preparation is the main ingredient in the recipe for success in life. Whether it is packing for a vacation, planning a schedule, or even studying notes before a big presentation, preparation is critical in so many areas. Similarly, it is important to be prepared in estate planning. There are a number of issues that can arise with estate planning. It is critical to avoid some of the common pitfalls that many people may not even think about. Contact a Tennessee estate planning attorney with any questions that you have.

Get Your Estate Planning Documents in Line

One of the more obvious pitfalls to avoid is to actually have estate planning documents in line. Although you may have intentions of putting together an estate plan, it is important to begin now. It is always better to have an estate plan in place years early rather than being one day too late. It is also important to coordinate all of the legal documents including: wills; any asset ownership forms; trusts; and medical directives. This can keep things organized in order to eliminate any potential headaches for family members in the future.

July 15, 2013

The Benefits of Using a Tennessee Wills Attorney Over Online Legal Services

by The Higgins Firm

With the hustle and bustle of life these days, we all have so many things going on. The 80’s classic movie Ferris Bueller’s Day Off has a great quote talking about the speed of life: “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” Whether it is keeping up with our families, jobs, or other interests, we are all looking for ways to spend more time doing what we love. As a result, many people are looking for an easy way to save both time and effort. However, there are some things in life that really do require specialized attention.

Online services have made so many things much easier. Many people use certain websites in an attempt to preliminarily diagnose an illness or even do their taxes, but we understand the limitations that those services offer. Those online services simply do not offer the same amount of attention to detail or a complete understanding of a situation that an actual doctor or accountant can provide. Similarly, a Tennessee wills lawyer can provide a number of benefits that online legal services are unable to match.

Services like LegalZoom are best suited for drafting basic and general legal documents. They are not law firms and are consequently unable to provide the state specific advice that an actual attorney could. Services like LegalZoom are unable to review your answers for legal sufficiency, draw any legal conclusions about the information you provided, or apply the law to your particular situation. Because each state’s laws are different, it is important to know specifically what your state laws are before drafting documents like a will, power of attorney, or other important legal documents. Using a Tennessee wills attorney gives you the peace of mind that you are receiving legal advice specific to Tennessee’s laws based on actual experience.

July 10, 2013

Baby Steps: Basic Considerations in Estate Planning for your Child’s Future

by The Higgins Firm

Every parent seems to have the “perfect” advice when it comes to rearing children: “We don’t let Abby watch TV because it leads to A.D.D.;” “Oh, we don’t let John eat anything but organic foods;” “Let him cry it out;” “Don’t let him cry it out.” Child-raising techniques vary with each child and parent. Some seem odd; some seem too traditional. The “dos” and “don’ts” of child-rearing are generally relative.

However, I think it’s safe to say that the following piece of parental advice is universal: you need to put together a plan for your children in the event that you are not around to raise them.

Estate planning is so much more than deciding how to divide and distribute assets. Individuals who have minor children or are the guardian of an adult child should plan for the care of their children regardless of the size of their estate. The absence of such a plan could result in a court appointing someone to control your child’s life and estate—someone who you otherwise might not have chosen. We suggest that you begin the process of planning for the future of your child’s care and estate before or just after the birth of a child.