What’s Going on with Larry King’s Estate?

April 24, 2023

Larry King’s widow Shawn has accused the firm Blouin & Company of helping Larry King Jr. as part of the fight over the late broadcaster’s estate.

Radar Online’s recent article entitled, “Larry King’s Widow Shawn SUES HER OWN SISTER Claiming He Spent Millions On Her While They Had Secret Affair,” says that Larry Sr. died in January 2021.

Larry King Jr. asked the court to be named special administrator of his father’s estate. He presented a handwritten will that Larry Sr. had reportedly signed before his death. The amended will left his fortune to his child and not Shawn. Shawn objected to the will claiming Larry Sr. was not in the right mind to sign the amendment to the will. A settlement was eventually reached between the two.

But a few months later, Shawn sued Blouin & Company, claiming it had led a “fraudulent and malicious conspiracy to steal money from their client, Mrs. King, and deprive Mrs. King of her rights and interests in the estate of her late husband.”

Shawn brought claims against Blouin & Company and her sister Shannon Engemann Grossman, a named defendant. She claims that Shannon “received a substantial number of improper and unauthorized transfers of” her community assets. Moreover, she alleges that her sister received “unauthorized goods and services worth millions of dollars (or more subject to further investigation), including airfare, clothing and accessories, furniture, limousine services, healthcare services, dental implants, luxury automobiles, luxury hotel accommodations and numerous other goods and services.”

During their marriage, Shawn and Larry were close to divorce multiple times after marrying in 1997. In 2010, they both filed their petitions in Los Angeles Superior Court. Shawn believed Larry and her sister were having an affair.

At the time, Shannon denied having an affair with Larry. She admitted Larry was generous with gifts but said he was like that with everyone. Shannon said, “I’m tired of taking the rap for things. I did not have an affair with Larry. He’s been like a father to me.”

Blouin & Company denied all allegations of wrongdoing in their response and noted that Larry had a secret bank account that they were unaware of that he used to fund his lavish lifestyle. The firm filed a countersuit against Shawn for unpaid invoices.

Reference: Radar Online (Jan. 9, 2023) “Larry King’s Widow Shawn SUES HER OWN SISTER Claiming He Spent Millions On Her While They Had Secret Affair”

Does Estate Tax Have an Impact on My Plans?

April 24, 2023

Yahoo Finance’s recent article entitled “This Is How Much Estate Taxes Will Cost You in Florida” explains that Florida abolished its estate tax in 2004. Before that, federal law allowed a credit for death taxes at the state level but on the federal tax return. When you filed your state taxes, the federal government changed the credit to a deduction. In Florida, the estate tax was based solely on the federal credit, so the state no longer needed the tax.

Thankfully, Missouri has no estate tax.

Estate taxes are imposed by the government on the estate of a recently deceased person.

These taxes only apply to estates worth a certain amount, which varies based on where the tax is levied. You may have heard the term “death tax.” However, it’s really an estate tax. This tax differs from the inheritance tax, which is levied on money after it has been passed on to the deceased’s heirs.

Florida has no inheritance tax. However, other states’ inheritance taxes may apply to you. In Pennsylvania, for example, the inheritance tax may apply to you, even if you live out of state and the deceased lived in the state.

Florida has a no gift tax. The federal gift tax exemption is $17,000 in 2023. Gifting more than that to one person in a year counts against your lifetime exemption of $12.92 million.

Even though Florida doesn’t have an estate tax, you might still owe the federal estate tax. This is triggered for estates worth more than $12.92 million in 2023. As a result, estates worth less than $12.92 million won’t pay any federal estate taxes at all. However, if your estate is more than that, any money above that mark will be taxed.

The federal estate tax exemption is “portable” for married couples. What does that mean? If a married couple plans appropriately, they can have an exemption of up to $25.84 million after both spouses have died. The highest tax rate is 40% if an estate exceeds that amount.

The state sales tax is 6%. However, considering local sales taxes, the average is 7.01%. Property taxes in Florida are right in the middle of the pack nationwide, with an average effective rate of 0.80%.

There’s been no estate tax in the state of Florida since 2005. However, even if you live in Florida, your estate may still owe a federal estate tax when you pass away. No matter how much you have in your estate, it’s essential to make proper plans so your estate is taken care of and your descendants are now stuck with a large tax bill. Ask an experienced estate planning attorney for help.

Reference: Yahoo Finance (March 27, 2023) “This Is How Much Estate Taxes Will Cost You in Florida”

Can I Motivate My Heirs After I’m Gone?

April 19, 2023

When providing what should happen to your property upon your death, language in an estate plan should be clear, direct and unambiguous. Using unclear language can lead to confusion and disagreements between beneficiaries and a longer and more expensive probate process.

Kiplinger’s recent article entitled “I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge” says it would seem that using phrases such as “I wish,” “I hope” or “I desire” — known as precatory language — would never belong in a will or trust. However, there are three important cases where it can be helpful to include non-binding guidance for your loved ones and estate representatives.

You want to encourage your beneficiaries to work with a professional. Baby Boomers will pass on more than $70 trillion in wealth to younger generations. Working with an adviser can help preserve and protect assets and set beneficiaries up for a positive working relationship with a trusted professional. If you have a great relationship with your financial adviser and estate planning attorney and want to encourage your beneficiaries to consider working with them, your will could be a great way to communicate this message. Consider the following wording:

“I desire that my children consult with our family adviser, Sally Brown, or another competent professional adviser of their choosing to manage their inheritance.”

Putting language in your will that encourages your loved ones to take action and meet with an adviser to help manage their inheritance could be just the reminder they need to set an appointment after you pass.

You want to encourage your co-trustees to collaboratively make decisions, even if decision-making isn’t unanimous. For example, if you have named three or more co-trustees, you may have said they act by majority consent to streamline the decision-making process. You can express a desire to see your trustees work through decisions constructively and collaboratively — even if their final decisions aren’t made by unanimous agreement.
You want to encourage your trustee to consider certain parameters when making decisions about trust distributions. A typical trust arrangement gives an independent trustee the power to make distribution decisions to beneficiaries at their sole discretion. This gives the trustee the most flexibility to ensure that the beneficiaries’ needs are met to the appropriate extent. You can add factors for the trustee to consider in exercising their discretion, such as if the beneficiary has ample funds apart from the trust funds or if the particular need at stake would likely have been supported were you still alive. Giving your trustee some guidance (“I encourage my trustee in the exercise of their discretion to consider requests related to educational pursuits”) can help them make decisions, while simultaneously not tying their hands if they ultimately decide a different route is in the beneficiaries’ best interest.

Your estate planning documents should be clear about where your property should go on your death and who should manage it. When appropriately used, precatory language can help communicate essential guidance to your family.

Reference: Kiplinger (March 21, 2023) “I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge”

Will Proposed Tax Hikes Have an Impact on My Estate Planning?

April 19, 2023

President Biden’s tax proposals are at the center of what the White House estimates is a $3 trillion deficit-reduction plan. They will be immediately rejected by Congressional Republicans. However, the ideas set up Democrats’ approach to the debt-ceiling fight later this year, as Republicans are gearing up to ask for spending cuts.

A major change would almost double the rate of the capital-gains tax, and applying an additional surcharge to fund Medicare, which would mean taxes on investments could rise to almost 45%.

Bloomberg’s recent article entitled, “In Biden’s Tax-the-Rich Budget, Capital-Gains Rates Near 45%,” examines the details of the tax proposals in the budget request that the White House released recently.

Capital Gains. The budget proposal would jump the capital-gains rate to 39.6% from 20% for those earning at least $1 million to equalize the taxation of investment and wage income. President Biden also wants to up the 3.8% Obamacare tax to 5% for those earning at least $400,000 to support the Medicare Trust Fund. As a result, the richest would pay a 44.6% federal rate on investment income and other earnings. The plan also calls for taxing assets when an owner dies. This would end a tax benefit that let the unrealized appreciation go untaxed when transferred to an heir.

Corporate Taxes. Trump’s 2017 corporate tax cut would get significantly rolled back, bringing the top rate to 28% from 21%. The proposal also calls for increasing the taxes US companies owe on their foreign earnings to 21%, doubling the 10.5% included in Trump’s tax law.

Carried Interest. The carried-interest tax break used by private equity fund managers to lower their tax bills would be struck under the Biden plan. Under current law, investment fund managers can pay the 20% capital-gains rate on a portion of their incomes that would otherwise be subjected to the 37% top individual-income rate.

Rich Retirement Accounts. The plan would close a loophole that allows the wealthy to accumulate savings in tax-favored retirement accounts intended for middle earners. In addition, Biden would limit the amount taxpayers with incomes over $400,000 can hold in Roth individual retirement accounts.

Estate, Gift Taxes. Bolstering the tax rules on estate and gift taxes would make the system harder for the wealthy and trusts to avoid taxes.

Reference: Bloomberg (March 9, 2023) “In Biden’s Tax-the-Rich Budget, Capital-Gains Rates Near 45%”

Transfer on Death Isn’t Always a Smart Estate Planning Strategy

April 17, 2023

Transfer on-Death (TOD) and Payable-on-Death (POD) designations on financial accounts appear to be a simple way to avoid probate. However, they can still derail an estate plan if not coordinated with the overall plan, says a recent article from mondaq, “Transfer-on-Death Designations: A Word of Warning.”

Using a TOD or POD benefits the beneficiary and the account administrator, since both avoid unnecessary delays and court oversight of probate. In addition, designating a beneficiary on a TOD/POD account is usually fairly straightforward. Many financial institutions ask account owners to name a beneficiary whenever a new account is opened. However, the potential for undoing an estate plan can happen in several ways.

TOD/POD designations remove assets from the probate estate. If family members or trusts are included in an estate plan, but the TOD/POD designations direct most of the decedent’s assets to beneficiaries, the provisions of the estate plan may not be implemented. However, when thoughtfully prepared in tandem with the rest of the estate plan with an estate planning attorney, TOD/POD can be used effectively.

TOD/POD designations impact tax planning. For example, when an estate plan includes sophisticated tax planning, such as credit shelter trusts, marital trusts, or generation-skipping transfer (GST) trusts, a TOD/POD designation could prevent the implementation of these strategies.

If an estate plan provides for the creation of a GST trust, but the decedent’s financial account has a TOD/POD naming individuals, the assets will not pass to the intended trust under the terms of the estate plan. In addition to contradicting the estate plan, such a mistake can lead to unused tax exemptions.

TOD/POD designations can create liquidity problems in an estate. For example, suppose all or substantially all of an individual’s financial accounts pass by TOD/POD, leaving only illiquid assets, such as real estate or closely held business interests in the estate. In that case, the estate may not have enough cash to pay estate expenses or federal or estate taxes. If this occurs, the executor may need to recover necessary funds from the beneficiaries of TOD/POD accounts.

TOD/POD designations can undermine changes made to an estate plan. During the course of life, people’s circumstances and relationships change. It is easy to forget to update TOD/POD designations, especially if one’s estate planning attorney is not informed of assets being titled this way. An inadvertent omission increases the risk that a person’s wishes will not be fulfilled upon death.

Whenever considering putting a TOD/POD on a financial account, you must consider the impact doing so will have on your overall estate plan. Therefore, be sure to coordinate any such move with your estate planning attorney to be sure you are not undoing all the excellent planning that has been done to achieve your wishes.

Reference: mondaq (March 15, 2023) “Transfer-on-Death Designations: A Word of Warning”

Steps for an Effective Pet Protection

April 10, 2023

Pet trusts and other options are now available to owners to provide for their animals when they can’t—and they’re not just for wealthy people. How to plan for your pet in the event of your incapacity or death is detailed in a recent article, “6 estate planning tips for pet owners” from Puget Sound Business Journal.

First, address your desired level of care and the annual cost of your pet. Depending on the type of pet, breed, health and diet, costs can vary dramatically. If you have multiple pets, consider which one is most likely to outlive you. What do you spend on food, pet insurance, vet care, medications and supplements? Will your pet require additional care as they age?

Create a list of your preferred veterinarians, groomers, daycare, pet walkers, food, sleeping preferences, treats, toys and any particular information you’d want someone to know if you are unable to tell them.

Name an appropriate trustee and caretaker and be sure they are willing to serve in these roles. Pets are considered property and legally may not own property of their own. If you leave an inheritance to them or name them as beneficiaries, state laws will determine who owns the assets. It won’t be the pet.

To ensure your pet is cared for, people typically designate a caregiver and a trustee. The trustee oversees the finances and is charged with ensuring that funds are used to care for the pet. The caretaker is similar to a custodial parent, and your pet will ideally live with them. Compensation for these roles is common, so factor this into your cost analysis.

Next, put it in writing. If you know your caregiver well and trust they will follow your wishes, you may put your request in your will. Your will disposes of all your property, including your pets, and leaves them to a beneficiary, who is your caretaker. It is important to understand that there is no guarantee or legal enforcement if you go this route. Informal agreements for pet care aren’t much better. If you give your pet to someone when you pass away, they can leave it at a shelter or give it to someone else.

Have your estate planning attorney create a pet trust. This is increasingly common, and not just for eccentric billionaires. Pet trusts were approved in 2000 under Section 408 of the Uniform Trust Code. The trust is a legal entity to plan for the care of your pet.

Make sure that your documents are reviewed every few years to be sure they reflect your wishes. This is especially true if you relocate or if caregivers pass away.

Fund your pet trust. This is the process of transferring assets into the trust, so the trustee can distribute them to the caregiver. Once the trust is created, it should be funded, even if you don’t expect to die tomorrow. Your estate planning attorney can discuss ways of funding the trust upon your death if you wish.

Provide directions for any remaining funds after your pet dies. If your beloved Woof passes shortly after you, what would you want to happen to the remaining funds? Beneficiaries could be an individual, a group, or an organization. It’s generally not recommended to leave the remaining funds to the caregiver or trustee—you don’t want to give them a reason to artificially shorten the pet’s life or provide bad care.

Estate planning for pets can easily be overlooked. However, if you are a pet parent, you’ll feel better knowing you’ve taken care to protect your pet so they’ll enjoy a long and happy life, even in your absence.

Reference: Puget Sound Business Journal (March 2, 2023) “6 estate planning tips for pet owners”

What’s the Latest on Bruce Willis’ Dementia Diagnosis?

April 7, 2023

Last year, actor Bruce Willis announced his retirement due to being diagnosed with ‘aphasia.’ However, that diagnosis was recently updated, reports Microsoft’s recent article entitled, “Bruce Willis’ wife Emma Hemming forced to dementia specialist after actor’s new diagnosis.”

Willis and Heming first met in 2007 at their mutual trainer’s gym. Heming is a British-American model and actress raised in north London and California.

“When we first met, I was surprised at how charming and how funny he was – and extremely handsome,” Heming told People. “That was my first thought of you.”

“I was already in love with her,” Willis, then 52, said. The two dated for a year before they got married in March 2009.

Willis’ diagnosis affects his communication and memory. Dr. Allison Reiss, an Alzheimer’s Foundation of America’s Medical, Scientific and Memory Screening Advisory Board Member told the media what the diagnosis means. She said the causes is a “hodgepodge of different things that have been put together” leads to “a lot of devastating consequences,” such as “difficulty saying words, understanding the meaning of words, and remembering and naming familiar objects.”

The doctor also said that everything “just gets more difficult” as “the problem spreads and gets worse”, until “you pretty much lose everything.”

However, she encouraged families to keep up hope through the challenges that come with the diagnosis. This is exactly what the Willis family seems to be doing. Heming has hired Teepa Snow, a professional who provides awareness, knowledge and hands-on skills for dementia care. Heming took to Instagram to appreciate Snow, she wrote, “I’m grateful I had the opportunity to work with @teepasnows_pac who has helped me add to my dementia care toolbox.”

“She’s a loving, compassionate and skilled leader in this space who navigates herself with pure empathy,” Heming continued. “She’s a gift.”

Snow admired Heming and appreciated how she’s been caring for her husband following his diagnosis. She said that she’s done an absolutely remarkable job of providing the right support for Bruce as his abilities have changed and created a place space and life that continues to provide him with what he needs to live well.

She added that “frontal temporal dementia is never easy but with the right programming and support, it truly is possible to continue living life. Congrats to Emma and their entire family for their very, very hard work and dedication. It is truly remarkable!”

Reference: Microsoft (March 1, 2023) “Bruce Willis’ wife Emma Hemming forced to dementia specialist after actor’s new diagnosis”

Does Divorce Have an Impact on Estate Planning?

April 5, 2023

Even the most amicable divorce requires a review and update of your estate plan, as explained in a recent article from yahoo! finance, “I’m Divorcing. Will That Impact My Estate Planning?” This includes your will, power of attorney and other documents. Not getting this part of divorce right can have long-term repercussions, even after your death.

Last will and testament. If you don’t have a will, you should get this started. Why? If anything unexpected occurs, like dying while your divorce is in process, the people you want to receive your worldly goods will actually receive them, and the people you don’t want to receive your property won’t. If you do have a will and an estate plan and if your will leaves all of your property to your soon-to-be ex-spouse, then you may want to change it. Just a suggestion.

State laws handle assets in a will differently. Therefore, talk with your estate planning attorney and be sure your will is updated to reflect your new status, even before your divorce is finalized.

Trusts. The first change is to remove your someday-to-be ex-spouse as a trustee, if this is how you set up the trust. If you don’t have a trust and have children or others you would want to inherit assets, now might be the time to create a trust.

Review insurance policies. You’ll want to remove your spouse from insurance policies, especially life insurance. If you have young children with your spouse and you are sharing custody, you may want to keep your ex as a beneficiary, especially if that was ordered by the court. If you received your health insurance through your spouse’s plan, you’ll need to look into getting your own coverage after the divorce.

Power of Attorney. If your spouse is listed as your financial power of attorney and your healthcare power of attorney, there are steps you’ll need to take to make this change. First, you have to notify the person in writing to tell them a change is being made. This is especially urgent if you are reducing or eliminating their authority over your financial and legal affairs. You may only change or revoke a power of attorney in writing. Most states have specific language required to do this, and a local estate planning attorney can help do this properly.

You also have to notify all interested parties. This includes anyone who might regularly work with your power of attorney, or who should know this change is being made.

Divide Retirement Accounts. How these assets are divided depends on what kind of accounts they are and when the earnings were received. The court must issue a Qualified Domestic Relations Order (QDRO) before defined contribution plans can be split. The judge must sign this document, which allows plan administrators to enforce it. This applies to 401(k) plans, 403(b) plans and any plans governed under ERISA (Employment Retirement Income Security Act of 1974).

Divorce is stressful enough, and it may feel overwhelming to add estate planning into the mix. However, doing so will prevent many future problems and unwanted surprises.

Reference: yahoo! finance (Feb. 3, 2023) “I’m Divorcing. Will That Impact My Estate Planning?”

Key Components of an Estate Plan to Tackle First

April 4, 2023

Despite the importance of estate planning, not everyone takes the time to make an appointment with an estate planning attorney and get it done, according to a recent article from Think Advisor, “6 Trust and Will Considerations That Can’t Wait.” Having an estate plan, including a power of attorney for yourself or an older family member is necessary to avoid a more contentious and expensive alternative: guardianship.

If an elderly family member is showing signs of dementia, the power of attorney needs to be done as soon as possible. Capacity doesn’t get better over time, only worse, and once someone is fully incapacitated, the only option is guardianship.

Wills aren’t just for wealthy people. Anyone with even a moderate estate needs a will. Young people often claim they don’t need a will because of their age. However, young and old people die unexpectedly.

Putting a will in place is particularly important for people who want to leave assets to their “chosen” family, those who may be outside the traditional nuclear family but who are for all intents and purposes, their family. Without the benefit of marriage or kinship, chosen family members do not have any legal right to inherit and will not be considered in any property distribution.

Having a will saves heirs from pain and confusion. If you don’t have a will, the court will make decisions for property distribution and guardianship for any minor children according to the laws of the state, which may not be what you had in mind.

Planning for incapacity is part of an estate plan. Designating a Medical Power of Attorney, Financial Power of Authority and HIPAA Authorization giving a trusted person access to medical records and treatment decisions are best done before there’s an emergency.

Guardianship is not something most people want to deal with, and planning can avoid it. Guardianship at its essence is a legal process effectively stripping a person of the right to act on their behalf and must be approved by a court.

It is often required when the loved one is unable to act responsibly or is undermining their family’s ability to act in their best interest under the power of attorney. However, there are many legal landmines in guardianship. The legal process can become contentious, especially if family dynamics are toxic.

Advance planning saves time, money and heartache. The Power of Attorney gives the person named as agent the right to take care of legal and financial matters in the event they can no longer do so for themselves. An estate planning attorney can create a power of attorney to meet your specific needs, either as broad or as narrow as desired.

Reference: Think Advisor (March 2, 2023) “6 Trust and Will Considerations That Can’t Wait”

Do I Need an Estate Planning Attorney?

March 27, 2023

Sound estate planning can help minimize taxes and expenses associated with transferring your assets and property after your death, says Urban Asia’s recent article entitled “Why Is It Important To Hire An Estate Planning Attorney.”

An experienced estate planning attorney can help you with your estate planning goals efficiently, avoiding legal processes that can be time-consuming and costly. Estate planning through an attorney can help you, and your loved ones avoid legal complications or unwanted delays.

What are the benefits of hiring an experienced estate planning attorney?

Legal expertise: They have specialized knowledge of the laws and regulations governing probate and estates. They can advise you on the best plan to suit the utilization of your assets and needs, and make sure that your estate planning complies with all applicable laws.
Tax implications: Estates can have tax implications. An experienced estate planning attorney can advise you on how to structure your estate plan to minimize taxes and maximize the benefits for your beneficiaries.
Customization: They can help customize your estate plan to suit your individual needs and goals.
Protection of beneficiaries: Estate planning attorneys can help protect your heirs’ interests by ensuring that your will and trust are administered correctly. They can help assure that all your assets are protected from creditors and other legal claims.
Charitable giving: An estate planning attorney can advise you on how to make philanthropic gifts, either during your lifetime or at death, through charitable trusts or other charitable giving vehicles.
Incapacity planning: They can help you plan for incapacity by creating a power of attorney or living will to let you specify how your assets and property should be managed, if you are unable to decide for yourself.

Finding the right attorney for estate planning can be a challenging task. Estate planning can be complex, and selecting an attorney with experience and expertise in this discipline is essential. Therefore, look for an attorney with plenty of experience in estate planning.

Reference: Urban Asia (Jan. 22, 2023) “Why Is It Important To Hire An Estate Planning Attorney”

Estate Planning Blog

Serving Clients Throughout North Central Missouri

What’s Going on with Larry King’s Estate?