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.
Scott's personal assets were possibly protected from business creditors through a limited liability business structure that protects the personal assets of an owner from company debts, unless she personally guaranteed the debt. The federal estate tax exemption is $5.34 million, and the New York estate tax exemption is $1 million. The taxes due on the estate would come to approximately $2 million, assuming no liability for company obligations. If her estate is liable for her company's debts, her estate could be decreased to about $3 million, and estate taxes due would be about $182,000.
Incorporation may help protect personal assets from exposure to company debt. Experience in drafting wills, asset valuation, trusts, and estate law may help preserve wealth from unnecessary taxation as well. In this way, carefully accumulated wealth can be protected from ending up with unintended parties.
Source: New York Daily News, "EXCLUSIVE: L'Wren Scott's ashes split between family, beau as her will reveals $9M estate goes to Mick Jagger," Nancy Dillon, Barbara Ross and Dareh Gregorian, March 27, 2014
Source: CBS News, "If L'Wren Scott's company was broke, why did she have millions?", Aimee Picchi, March 28, 2014