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Massachusetts Estate Planning Blog

L'Wren Scott's estate lessons

  • 10
  • April
    2014

Massachusetts residents may learn from the recent death of New York fashion designer L'Wren Scott. Scott was found dead from an apparent suicide in her Manhattan apartment in March. Although no note was found, foul play was not suspected. L'Wren Scott was the longtime girlfriend of Mick Jagger, lead singer and frontman for the Rolling Stones.

Scott's personal estate is reportedly worth $9 million, as reported by the New York Daily News. Her Manhattan apartment comprised $8 million of her $9 million in assets. Scott's clothing company was reported to be in in financial difficulty, and it was reported that Scott was planning on closing her business. Other sources reported that the business was $6 million in debt and that an anonymous person had paid her 2013 business taxes online. Scott's tangible personal assets were left to boyfriend Mick Jagger in her will.

What is an estate plan and why do you need one?

  • 03
  • April
    2014

Massachusetts residents may be interested in an article discussing some of the basics of estate planning and why a person would need to implement such a plan. Relatives of a person who dies without an estate plan in place could be at a disadvantage.

The purpose of estate planning is to ensure that the distribution of assets and other matters at the end of one's life are carried out according to their wishes. Failure to have the proper documents prepared can lead to the decedent's property being distributed in accordance with state laws of intestacy, which may be different than what had been desired. Often, those with little to leave to their relatives neglect to prepare even a simple will, thinking that it would be a waste of time. However, a will can also direct guardianship of children and other matters that apply to more people than merely wealthy individuals.

Tax changes create estate planning challenges

  • 25
  • March
    2014

Massachusetts taxpayers know that the federal government raised tax rates for personal and investment incomes for wealthy individuals effective for 2013 tax returns. The tax changes were in part implemented to fund the President's health care plan. While this hike in income tax rates will only affect individuals making more than $400,000, the new marginal rate will affect trusts making more than $11,950 a year. This change in tax law may create challenges for estate planners.

Estate planning professionals are taking a close look at how this change affects trustees and beneficiaries of trusts, and most of them are focused on finding strategies to reduce taxes. A trust allows assets to be transferred to someone's heirs without paying estate taxes, and they often allow for a trustee to manage the assets for the beneficiary. This can be very useful in the case of passing on wealth to children. As different trusts have different purposes, a trust should be carefully set up for maximum benefit.

ATRA may change how estate trusts are used

  • 21
  • March
    2014

In an action that affects Massachusetts residents and citizens all across the country, Congress passed the American Tax Relief Act of 2012. Included in that law are provisions for transfer taxes or taxes on an estate.

Under the new tax law, credit shelter trusts will still be a part of many estate plans, but they will be used differently. Prior to ATRA, the transfer tax laws included an exclusion amount that was not subject to estate tax. That amount was fixed at $5,000,000 in 2011 and adjusted each year for inflation. Frequently, a trust was set up so that when a person passes away, the estate passed into a trust and sheltered the amount from taxes for both the original owner and the heirs. The beneficiaries of the trust were usually the spouse and children.

Neglecting to make a will can be disastrous

  • 10
  • March
    2014

People in Massachusetts and throughout the nation who neglect to create a last will and testament may instead be creating potential relational and financial disasters. Some people believe that a handwritten note will direct the proper distribution of assets, but this is not necessarily true. Without a valid will, a deceased person's property will be distributed under the laws of intestacy of the state having jurisdiction over the estate, and this may very well not be in accord with the decedent's wishes.

In addition to property distribution, another important provision in a will is a designation of who will be responsible for minor children if both parents pass away. Sometimes couples avoid making a will because choosing a potential guardian is so controversial. However, in the absence of a provision, families may begin squabbling over something that is both very personal and extremely important. To make sure children are not impacted by these controversies, couples must have the conversation and take action.

Philip Seymour Hoffman estate not in good shape

  • 05
  • March
    2014

Massachusetts readers, along with the rest of the country, may be following the news of the recent death of star Philip Seymour Hoffman. It turns out that the Oscar-winning actor left his estate paperwork in miserable shape. Experts guess that between almost $12- $15 million of his estimated $35 million estate could end up going to pay taxes.

Hoffman's will was 10 years old when he passed away. It does have a provision for a trust for the child that he and his partner had at the time the will was written. It is not clear if the couple's other two children are mentioned in his estate paperwork. It appears that the majority of his estate has been left to his long-term partner.

Common problems with do-it-yourself wills

  • 28
  • February
    2014

For many Massachusetts residents, designing an estate plan is a difficult but necessary action that must be taken. In most cases, this plan will help their loved ones be able to carry out the person's wishes. However, there are mistakes that are often made in the preparation of wills that could result in emotional and expensive arguments that ultimately have results that differ from what the person desired.

One common mistake that many make is to use unclear wording. This problem mostly arises in wills that are prepared without legal guidance. For example, simply stating that certain possessions should go to the "family" could mean that eligible beneficiaries could include a child, their mother, father, siblings or anyone else considered part of the family. If there is no clear intention on who the assets should go to, arguments may ensue.

Balancing heart and head in inheritance decisions

  • 18
  • February
    2014

Striking the right balance between emotion and logic is often a tricky challenge when making decisions.

We often conceptualize this very-human challenge as heart versus head. It's a challenge that often comes up in estate-planning contexts regarding what to do with a family inheritance.

In this post, we will discuss some of the ways that the interplay between sentiment and strategy is affecting many baby boomers, both in Massachusetts and across the nation.

Untimely death puts focus on estate-administration issues

  • 10
  • February
    2014

An untimely death can raise estate issues in very pointed ways.

When death comes suddenly, to someone who is still in the prime of life, the emotional elements of the sudden loss tend to make resolving the issues even more challenging.

In this post, we will discuss some of the estate administration issues that have followed the sudden death in a car accident of Paul Walker, the star of the "Fast and Furious" movies.

Blended families and asset transfer: the role of trusts

  • 03
  • February
    2014

Divorce can greatly reshape a person's estate-planning priorities.

This is true regardless of whether someone gets remarried or not. After a divorce, the arrangements regarding leaving property to a spouse are naturally in need of revision.

This is particularly true when remarriage occurs and a new spouse enters the picture. And sometimes, upon remarriage, blended families are created in which both spouses have children from a previous marriage.

In this post, we will discuss some estate-planning basics for these families to keep in mind.

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