Articles Posted in Asset Protection

The passing of a loved one is not easy. The closer you were to the deceased the bigger a toll that it takes on you mentally and emotionally. You may experience anger, frustration, and numbness as you seek to process the passing. As you begin to contemplate what you must do next, you experience a feeling of being overwhelmed with facing the unexpected. All of these feelings are a part of the normal process of grieving and it is typical for a person responsible for handling the deceased’s estate to feel overwhelmed. Thinking ahead of time and knowing what to expect can reduce these feelings and help make the overall process go more smoothly.

Beyond the Funeral Arrangements

Many people are already familiar with arranging a person’s funeral, burial or cremation. After you have made arrangements for a funeral service, a viewing, the burial, cremation or spreading of the ashes, there are still a number of actions that must be completed to wrap up the deceased’s affairs. It is of the utmost importance that you contact all relevant people and organizations that need to know of the deceased’s death.

Probate is the legal process that takes place after a person passes away.  It typically involves submitting a valid will to the surrogacy court in New York state, taking inventory of the deceased’s estate’s assets, paying off the estate’s liabilities and distributing the estate assets to the beneficiaries designated in the will. What assets go through probate though are not always what the deceased or the future beneficiaries expect. Only certain assets are considered probate assets and pass ownership through New York probate proceedings.

Probate Assets

Probate assets are those who are owned individually by the decedent or person who has passed away. These assets are a part of the decedent’s estate because they have not been disposed of through other testamentary instruments like a trust or been passed on through a survivorship right or named beneficiary designation. Typical examples of a probate asset is all the property left in a person’s residence, the residence itself, bank accounts and cars.

The Inheritance Left To University of New Hampshire By A Long Time Library Employee Was Spent In A Way That Raised A Few Eyebrows

Longtime University of New Hampshire library cataloguer died last year at the age 77. As his final wish to the world he left the entirety of his estate to the university where he graduated from and worked for most of his life. What shocked many though is the size of the humble librarian’s estate: four million dollars accumulated over a lifetime working for the university and living frugally.

But while many at the University of New Hampshire are thankful for the gift, the way the administration has decided to spend it has many asking if the university is honoring the librarian’s memory. One million dollars is being used to install a new video scoreboard at a new University of New Hampshire football stadium. Many students, alumni and community members wonder if this is the best way to use the funds considering the librarian’s occupation and passion for literature.  

New Department of the Treasury and Internal Revenue Service Final Regulations Now Reflect Supreme Court’s Obergefell v. Hodges and Windsor v. United States Rulings

On September 2nd, the final regulations that reflect the holdings of the Supreme Court rulings that upheld same-sex marriage laws around the country as well as Revenue Ruling 2013-173 were released to the public. The new terms in the regulations reflect the new descriptions of marital status of taxpayers for federal tax purposes.

A Brief History Lesson

One of the more unique present day aspects of estate planning comes from the very mobile and connected nature that many people who need estate planning have. Many people will not just move across countries for their jobs but across borders. Globalization has brought the world closer together but added another layer of complexity for when it comes to protecting and planning for assets. A citizen of the United States needs to know what law governs taxation and their estate for their income, assets and holdings both in the United States and abroad.

Taxation Is Everywhere

Despite what many may believe, U.S. citizens and resident aliens are subject to U.S. income and estate tax on their worldwide assets. It does not matter what country those assets might be in, the income and assets must be reported. In fact, U.S. Citizens working overseas and foreign citizens considered residents of the United States must file reports with the IRS if the total value of their foreign financial accounts exceeds $10,000 at any time during the year. U.S. citizens who are officers or directors in a foreign corporation who own more than 10 percent of the foreign corporation must also report ownership.

2016 will undoubtedly go down as an infamous year of celebrity deaths and the unfortunate passing of celebrities continue. The world lost one of its funniest men this past August: Gene Wilder, star of Blazing Saddles, Willy Wonka and the Chocolate Factory, Young Frankenstein and The Producers. He continued to be active later in his life, penning short stories and novellas while contributing to his charity work. Mr. Wilder passed at age 83 from complications due to Alzheimer’s disease.

Past Spouses Must Be Accounted For

While details of Mr. Wilder’s estate remain sparse at the moment, there are no rumblings or rumors of will contests or estate disputes despite the estimated value of Mr. Wilder’s $20,000,000 estate. This is impressive, especially considering that Mr. Wilder was married four times during his lifetime. Having previous divorces can bring numerous complications to estate planning as we have covered before. Considerations for past divorce decrees as well as keeping up to date estate planning documents must be made to prevent a legal mess after a person’s passing.

More and more Americans are getting married multiple times. As multiple marriages become more common, proper estate planning becomes more important. Tools such as prenuptial agreements can create an additional level of protection for you and your loved ones.

Protecting Family Heirlooms: Dave & Mary

Prenuptial agreements can be especially helpful if you or your spouse have children from prior marriages. Many people who remarry would like all or part of their estate to go to their children. Heirlooms or even family homes are often passed on the children. However, without proper estate planning these wishes could be ignored.

The first presidential debate of 2016 was the most watched debate in United States’ history. The two candidates hold very different positions from each other and no more so than on the topic of the federal estate tax. The federal estate tax has a very checkered history in American politics, often serving as a talking point between the two biggest parties in Congress to emphasize how different each party is from the other and what purpose the federal estate tax should serve. No matter which candidate wins the office of the president, the federal estate tax is likely to change in the future.

Up and Down and Sometimes Not At All

Of course if any changes are made to the federal estate tax, it will be in line with its history. The only constant of the federal estate tax is that it is constantly changing. The federal estate tax was an early part of our nation’s history, but was repealed and implemented again over the decades. It was not until 1916 that the modern federal estate tax takes root and has been with us ever since.

Prince’s lack of estate planning in life has made quite a mess for his potential heirs as we have covered in the past. The slow moving probate proceedings are also preventing his estate from fully monetizing his image and collecting potential revenue. This week though the Minnesota probate judge gave the go ahead for the administrator of Prince’s estate to sell six of the late artist’s properties. This order does nothing to touch the much more valuable part of Prince’s estate such as his likeness, music catalogue, personal home or recording studio.

Your Life Out In The Open

But how exactly do we know the extensive real estate listings and assets held by Prince? That is because court proceedings are public knowledge and any court filings in a probate court are public records. That means that when you pass, if you have to go through probate chances are any assets you have at the time of your death will be catalogued and listed. Probate records include wills, estate inventories, letters of administration and other documents relating to the administration and settlement of deceased persons’ estates. These records also contain information on the property of decedents, the identity and relationships of heirs, and legal actions taken to prove wills and settle estates.

A charitable remainder annuity trust or CRAT as is it more commonly known is a type of irrevocable trust that is used to pass on property to a charity while still receiving an income from the assets in the trust. The way it operates is that a fixed amount of income or principal is paid from the CRAT to designated noncharitable beneficiaries, usually the grantor or creator of the trust. After a set term the remainder of the trust is payable to charity.

Multiple Tax Benefits

The CRAT comes with many tax benefits due to its charitable nature. The CRAT pays no income tax on its income. The CRAT is not taxed on any gain it realizes upon selling appreciated property either at the time of donation or any appreciation occurring after the donation. Furthermore the grantor of the trust created during his or her lifetime is entitled to an immediate income and gift tax deduction equal to the amount of the present value of the remainder interest passing to charity.

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