Sacramento's young professionals may not think they are old enough or rich enough for estate planning, but that mistake could lead to years of heartache and strain for their relatives should an accident happen. For those young people who have taken the initiative to speak with an estate planning lawyer, however, it is most likely they have only created a will. Instead of just making a will, there are other options, including trusts, that may make more sense.
The death of Michael Jackson may have been a huge loss to the music world, but not even death could stop him, or his estate, from making money. Through clever estate administration, Jackson and his lawyers were able to secure a solid financial future for Jackson's mother and children. Now, approximately 18 months after his death, the King of Pop is continuing to provide for his family.
Proper estate planning is very important for California families, as even when a trust is set up while an individual is still alive, legal matters can still arise. The heirs to a California winery are learning this after winding up in court over matters related to trust administration of the family winery. The family has settled the legal dispute, but there may be emotional scars left on the family for some time.The matter involves the Foppiano wine family from Healdsburg. The winery was family-founded and has been in operation since 1896. The 101-year-old father passed control of the winery to his son in 2005, and named both children as co-trustees in 2009.
Most people go through the estate planning process to ensure that when they die, as much of their estate as possible escapes the clutches of Uncle Sam. However, in a case that California readers may find interesting, one Florida man chose to do the exact opposite. That is, he intentionally left his historic house, along with $1 million, to the federal government through his will.The man, who died in December 2010 at the age of 87, had lived in his Coral Gables home for almost his entire life. The home was reportedly worth more than $1 million, and it sold for $1.175 million in a recent auction. A news report states the contents of the home will also be auctioned off by the government in January.
One of the concerns that California residents have when they do estate planning is the effects of federal taxes on their estate. At the moment, estate taxes have an exemption amount of $5 million with a top marginal rate of 35 percent, but that exemption is set to expire in 2013. If no action is taken by Congress, then the exemption will fall to $1 million and the top marginal rate will rise to 55 percent. So readers of this blog may be particularly interested in a piece of legislation by Rep. Jim McDermott, D-Washington.The bill, called the Sensible Estate Tax Act of 2011, was recently introduced a week before Thanksgiving. If passed, the bill would allow the top marginal tax rate to rise to 55 percent, as it would under current law. However, the bill also proposes that the current exemption amount be allowed to expire, and that the $1 million exemption be indexed for inflation starting in 2000. That would mean the exemption amount would fall from the current $5 million for individuals and $10 million for couples to $1.31 million for individuals and $2.61 million for couples.
When a person has a substantial estate to transfer upon their death, he or she will often utilize wills and trusts to handle many of the issues that they may face. Wills and trusts are often an excellent way to avoid probate court and to see that the deceased person's wishes are followed when it comes to asset protection. One Filipino woman who owns property in California and elsewhere understands the importance of estate planning as she is expected to inherit some $33 million from a wealthy recluse she had nursed for years.The massive inheritance that Hadassah Peri is expected to receive comes from Huguette Clark. Ms. Clark died at the age of 104 and is the daughter of a wealthy copper baron. She is perhaps best known for her reclusive behavior, having not been seen in public circles for an estimated 70 years. Mrs. Peri has been Clark's private nurse (and reportedly close personal friend) for over 20 years. She came to the United States in 1972 from the Philippines.
One aspect of estate planning may be that an individual or couple is "house rich" but strapped for cash. In some California communities, real property taxes have risen to the point that seniors are in danger of losing their homes solely for not being able to come up with the money for the property tax. Asset protection planning is often necessary to both save the home for the duration of the owner's remaining years and to preserve it as part of the estate to pass on to heirs. A law to help seniors with just that problem is being proposed again, having been initially axed when California faced its budget crisis.
In a case that illustrates the kind of problems California attorneys who provide estate planning services deal with regularly, a judge ruled that their mother's adoption severed three siblings' legal connection to their aunt, which caused them to be denied any part of the aunt's estate. The Virginia probate decision frustrated the siblings, who were already in the process of dividing up their aunt's belongings. However, the adoption eliminated the siblings' legal rights, even though it happened when their mother was already 53.
A recent California case highlights the problems that may result when a person decides to draft a will unassisted. A mother with two children and many friends decided she could do just fine writing her own will, documenting her wishes for distributing her assets and personal property on her death. So, she used her home computer to do just that. Once completed, she printed it out and decided a notary public would trump having mere witnesses acknowledge her signature on the will.