Battle Over Campbell’s Estate More Complicated with Probate Frozen

The estate of one of America’s best loved country singers is facing a struggle…

The estate of one of America’s best loved country singers is facing a struggle, since the interim administrator of the estate is asking the court for the legal muscle he needs to hire accountants and other professionals.

Glen Campbell 2Stanley B. Schneider, Glen Campbell’s publicist, has filed a motion in Davidson Probate Court in Nashville for additional legal powers, so he can move forward with the singer’s estate. According to The Tennessean’s article, “Glen Campbell estate 'paralyzed' as will contest looms, lawyers say,”while the estate was filed nine months ago, the court set strict limitations on his ability to act and that has hampered the probate process.

The petition alleges that Schneider's duties are now curtailed to only collecting money paid to the estate and making mandatory non-discretionary payments.  It asks Probate Judge David "Randy" Kennedy to schedule a hearing later this summer to rule on the expanded duties request.

Glen Campbell died on August 8, 2017 at age 81, after a long battle with Alzheimer's disease.

Schneider, the court-appointed administrator for his estate, recently arrived at a partial preliminary estimate.  However, it is only a small fraction of the previous estimates of its value.

He claims that the estimated estate assets are roughly $410,000. Earlier estimates of Campbell's total estate value were near $50 million.

The estimate excludes future income rights from royalties, and notes that an appraisal is required.

Three of Campbell's children have served notice that they are contesting the will, which specifically excludes them from any estate assets. His will names his wife Kimberly as executor. She and his five other children are listed as beneficiaries.

Without the power to properly value the estate and its assets, which is done by qualified professionals who have to be retained and paid, coupled with a looming federal tax deadline, this estate may take a long time to unwind, even without the will contests that are waiting in the wings.

Reference: The Tennessean (July 2, 2018) “Glen Campbell estate 'paralyzed' as will contest looms, lawyers say”

Here’s Where NOT to Retire

You’ve read plenty of surveys about the best places to retire, but have you ever looked at the worst ones?

If taxes and cost of living are important factors for you, here’s a look at states where you should only retire with a good reason, like family ties.

MapYou’ve read plenty of surveys about the best places to retire, but have you ever looked at the worst ones? Think Advisortook a new twist on a new survey by Bankrate.com, in its article“12 Worst States for Retirement: 2018.”

The least desirable states for retirement typically had poor ratings in the categories for cost of living and taxes and were also weighed down by low scores in other categories. Bankrate.comcreated its rankings by looking at seven categories of interest to retirees and weighted those rankings based on the importance given to them by respondents to the firm’s 2017 survey. The categories were:

  • cost of living (20%);
  • taxes (20%);
  • health care quality (15%);
  • weather (15%);
  • crime (10%);
  • cultural vitality (10%); and
  • well-being (10%).

The last category, well-being, considered how people felt about their community, friends, health and general purpose. OneBankrate.comanalyst remarked that it’s important to have strong relationships with friends and your spouse and spend your money on leisure activities that bring you joy, citing recent research.

The seven factors were averaged, so some states that were down in the rankings had low crime, well-being, health care and cultural quality, even though they scored well on cost of living. Other states with high scores on cultural quality and crime may have done very poorly on cost of living and taxes.

Here's the list of the 12 worst states for retirement:

  1. Oregon
  2. Oklahoma
  3. South Carolina
  4. Nevada
  5. Washington
  6. Illinois
  7. California
  8. Arkansas
  9. Louisiana
  10. Maryland
  11. New Mexico
  12. New York

Of course, no one can make the decision about where to move for retirement based on a single set of facts.  However, the information above provides some compelling data. An estate planning attorney will be able to create a tax strategy for your retirement and your estate plan, that may overcome the tax portion of your desired state. If being close to children, grandchildren or friends is important to you, that may be more valuable than taxes.

Reference: Think Advisor (July 17, 2018) “12 Worst States for Retirement: 2018”

New Estate Tax Law Enacted in Maryland Not Tied to Federal Tax Rate

The state legislature of Maryland has passed a law following the new tax reform that will limit the state’s estate tax exclusion amount.

The ability of the state to set laws regarding estate taxes has been exercised by Maryland, which has put its own estate law in place, separate and apart from the IRS.

TaxThe state legislature of Maryland has passed a law following the new tax reform that will limit the state’s estate tax exclusion amount to $5 million. Recently passed legislation permits portability between spouses of the deceased spouse’s unused exclusion amounts. This lets the personal representative or executor of the deceased spouse make an election on the decedent’s estate tax return to port the deceased spouse’s unused exclusion amount to the surviving spouse.

LegiScannotes in “MD HB308” that Maryland's estate tax exclusion amount has been "de-coupled" from the federal estate tax applicable exclusion amount (known as the "estate tax exemption") since 2004. However, a law enacted in 2014 provided for the eventual re-coupling of the Maryland Estate Tax Exclusion Amount to the Federal Applicable Exclusion Amount. This was phased in from 2014 through 2019. Full re-coupling was to be effective for decedents dying on or after January 1, 2019.

In effect, the 2014 Maryland law provided that for decedents dying on or after January 1, 2019, the Maryland estate tax exclusion amount would equal the amount that could be excluded under the federal estate tax. Prior to the passage of the Tax Cuts and Jobs Act in December 2017, the indexed federal exclusion amount was scheduled to be $5.7 million in January of 2019.

 However, with the new tax reform, the federal exclusion amount was upped to $10 million per person, indexed for inflation, for decedents dying on January 1, 2018 or later, through December 31, 2025. After indexing for inflation, the per person exclusion amount will be roughly $11.18 million in 2018.

Starting on January 1, 2026, the $10 million per person federal exclusion amount will sunset and return to the prior exclusion amount of $5 million per person, indexed for inflation.

The maximum Maryland estate tax rate of 16% is not altered with the new legislation .

In addition, the state’s inheritance tax is also unchanged. That rate is based on how closely related the decedent was to the people who inherit from him or her, rather than on the size of the estate. The inheritance tax doesn’t apply to surviving spouses and the children of a decedent.

The prior 2014 law still applies to decedents who passed in 2018, so the exclusion amount remains at $4 million for them. Note that the 2014 amount is not indexed for inflation and portability between spouses is not permitted.

Every state has its own estate tax laws, so it is best to meet with an estate planning attorney in your state to map out your family’s plan.

Reference: LegiScan (April 5, 2018) “MD HB308”

Pros and Cons of Joint Tenancy with Right of Survivorship

JTWROS gives owners an equal right to the asset, if one account holder dies.

Also known as JTWROS, this is used often by couples and business partners as a means of owning each other’s assets. There are some good reasons to do this, but there are also some drawbacks.

DeedUsed for bank accounts, real estate, personal property and even brokerage accounts, JTWROS gives owners an equal right to the asset, if one account holder dies. When that occurs, the other account owner, usually a business partner, spouse or a child, is immediately the owner of the money or property. There are advantages and disadvantages to this arrangement, as clarified in Investopedia’srecent article, “The Benefits And Pitfalls Of Joint Tenancy.”

ADVANTAGES

Avoiding Probate. When an individual dies, his or her will is reviewed by a probate court. The court decides if the will is valid and legally binding and determines what liabilities and assets the deceased may have left. Any remaining assets after all debts are settled, are then distributed to heirs. If the individual dies without a will, the laws of intestacy apply. The probate process can take weeks, months, or even years, to sort through the deceased's estate. It will take even longer for beneficiaries to receive their inheritance. However, with JTWROS, ownership automatically transfers to the other spouse or business partner upon the death of the first partner. There’s no probate.

Equal Responsibility. When a married couple or two business partners own an asset that is titled JTRWOS, both individuals are responsible for that asset. They both enjoy its benefits and share in the liabilities equally. It also means that neither party can incur a debt on the asset, without indebting themselves.

Continuity. When someone dies, his or her assets are often frozen until the probate court determines whether the assets are encumbered, or until a determination is made about how to distribute them to heirs. This can be a problem for a surviving spouse who has outstanding debt or expenses.  However, by owning an asset as a joint tenant, the surviving spouse or business partner may use the property in any way he or she sees fit. The law also states that immediately upon the death of one tenant, ownership is transferred to the survivor.

DISADVANTAGES

Deteriorating Relations. Two people who own the entire asset together can be a disadvantage in an unstable relationship. Neither party can sell or encumber the asset, without the other party's consent.

Frozen Bank Accounts. If the deceased is heavily in debt, and the probate court is concerned that the surviving spouse or business partner may liquidate the funds to avoid paying the obligations, the court could freeze the account. An account may also be frozen, if there is a question as to whether the surviving spouse or business partner actually contributed to the account, or if the ownership was merely for convenience. In some cases, the asset may still be frozen upon the death of either partner or spouse.

Partner Asset Control. When the surviving spouse or business partner assumes control over the joint asset upon the death of the co-tenant, he or she may then sell it, or bequeath it to someone else: the deceased loses control over the ultimate disposition of the asset entirely.

Alternatives. There are other ways to structure joint ownership. One is “tenancy in common,” which lets each party own one half, or a determined percentage or fraction of ownership. Each person has the right to sell their share without the other party’s approval or consent and the portion of ownership can be passed to heirs.

However, the ownership of the asset does not automatically transfer to the surviving account owner, when the first owner dies. It passes according to the deceased person’s will.

Assets can be accessed by other owners, if one person becomes disabled or dies. They can also sell a portion of the asset, without obtaining permission from a probate court.

Speak with an estate planning attorney before placing assets in JTWROS or tenancy in common to ensure that your assets work with your overall estate plan.

Reference: Investopedia(March 20, 2018) “The Benefits And Pitfalls Of Joint Tenancy”

Could Your Retirement Happen in a Pop Song?

Jimmy Buffett is among the developers creating two active-adult communities this year.

Things are real laid back at Latitude Margaritaville, even for those who aren’t “Parrotheads”—the Hawaiian-shirt-wearing, tropical-cocktail-drinking Jimmy Buffet superfans.

Latitude MargaritavilleSinger-songwriter Jimmy Buffett is more than the inspiration and driving force behind an empire that includes resort hotels, products and a Broadway show. He’s also among the developers creating two active-adult communities this year. If you ever wanted to live in a community where you can get a Cheeseburger in Paradise at the Latitude Bar & Chill restaurant and a margarita at the poolside Changes in Attitude bar, you’ll need to sign up—fast.

The Washington Post’s recent article, “Adopting a laid-back attitude at Latitude Margaritaville,”reports that singer-songwriter Jimmy Buffett is helping to create a retirement community with Key West-inspired houses linked to the lyrics of his 1977 hit “Margaritaville.”

The decision to expand the Margaritaville brand into active-adult communities seems like a natural fit,  since Buffett’s fans are mostly aging baby boomers, who have followed his career for many years.

More than 100,000 people have already expressed interest in buying a place at Latitude Margaritaville, asking for updates on the development or requesting information.

More than 225 of the homes at the Daytona Beach community sold within two months, after sales began and before models were open. When the project is completed in 10 years, the community will have approximately 7,000 homes.

The Margaritaville Corp.'s development partner for the development Margaritaville is Minto Communities USA, a Florida-based developer. Its first work outside of Florida is the Latitude Margaritaville Hilton Head, where a sales office recently opened.

Latitude Margaritaville is near Interstates 95 and 4, for easy access to Orlando and St. Augustine. It’s also three miles from two hospitals and a VA outpatient center. Homeowners will be able to use golf carts to get around the community. There is also a partnership with Halifax Health, which will have an onsite professional for health checkups and health education.

There’s no golf course, but the LPGA International Golf Course is across the street from the development, and 18 others are nearby.

There’s no requirement for residents to be Jimmy Buffett fans.  However, it’s likely that they will all share a passion for a lifestyle focused on fun. Expect this to be one happy community!

Reference: Washington Post (March 8, 2018)“Adopting a laid-back attitude at Latitude Margaritaville”

Feeling Squeezed? You Might be in the “Sandwich” Generation

The term “sandwich generation” was added to Meriam Webster’s dictionary in 2006.

If you’re feeling pressure on two generational sides—caring for aging parents and taking care of children—you’re a member of the Sandwich Generation.

Bigstock-Extended-Family-Outside-Modern-13915094The term “sandwich generation” was added to Meriam Webster’s dictionary in 2006. However, twelve years later, the number of people it describes seems to be on the rise. Sandwich Generation members are raising their children and are responsible for their parents or taking responsibility for their grandchildren and grandparents. Whichever sandwich you’re in, it’s not an easy place to be. Even if your parents or grandparents are financially fine, your time for yourself, your career and your kids is squeezed.

ThePress-Enterprise’s article, “3 tips for anyone in the sandwich generation,”offers the following tips tomake the “sandwiching” easier on you and your family:

  1. Talk About Money Issues. Discuss finances with your children and parents. Perhaps you could go with them to meet with their estate planning attorney. He or she can make sure your parents have all the proper estate planning documents, such as a will, trust, living wills and powers of attorney.

This legal professional will create a plan to lessen or avoid estate taxes and work to ensure that your life's savings and assets are protected from your beneficiaries' creditors after your death, and that your legacy is assured.

Estate planning attorneys are accustomed to working with families and navigating the issues between adult children and their aging parents. There is little chance that yours is a unique situation.  It does not mean it is easy, but a skilled attorney will be able to help you and your family deal with whatever situation you face, with dignity and compassion.

  1. Get (More) Help. You may get support or assistance to help your parents, your kids, or even yourself. Odds are good that your parents will be reluctant to accept help, so start the process yourself. This could involve hiring a housekeeper for yourself to free up some of your time for things that are more important.

 This will give you more time, and your parents won’t feel you are using your finances to assist them. If you have friends and relatives that offer help, take them up on it. Don’t try to do everything yourself.

If your children are old enough, you can also get them involved. Children are surprisingly capable, and sometimes grandparents are more comfortable having grandchildren help with minor chores around the house, where their children’s own actions may seem intrusive.

3.Get Rid of the Guilt. Even a dedicated husband and wife team can’t cover everything. Do the best you can and remember that you do have to set some time and energy aside for yourself.

Reference: (Riverside CA) Press-Enterprise(June 28, 2018)“3 tips for anyone in the sandwich generation”

Will There Be an Estate Battle Over Anthony Bourdain’s Will?

Part of Anthony Bourdain’s charm was his unflinching honesty, but he may not have liked just how public all of his financial information has become.

If she decides to go that path, Bourdain’s estranged wife could exercise her right to her share of his estate.

BourdainPart of Anthony Bourdain’s charm was his unflinching honesty, but he may not have liked just how public all of his financial information has become. Among the details—he wasn’t as wealthy as some might have thought. Since he never finalized his divorce from Ottavia Busia-Bourdain, his estate plan might also be challenged, as reported in a recent article from Investment News, “Will of Anthony Bourdain could be open to legal dispute.”

Documents filed with the Manhattan Surrogate's Court say that Bourdain's estate was worth $1.21 million, theNew York Daily News reported. This includes $425,000 in savings and cash, $35,000 in brokerage money, $250,000 in personal property and $500,000 in "intangible property, including royalties and residuals."

Bourdain was estimated to be worth as much as $16 million.

The will establishes a trust and designates Bourdain's 11-year-old daughter, Ariane Busia-Bourdain, as the primary beneficiary. The trust will distribute assets when she is 25 and 30, and she will receive access to the balance when she turns 35, according to a report in the USA Today. A guardian will be selected by the court to protect her inheritance, since Ariane is still a minor.

These types of trusts that pay out over time, are frequently created for young beneficiaries to make certain they aren’t overwhelmed by getting a big inheritance all at once. A trust with periodic disbursements allows her a better chance of being strategic with her money.

Bourdain named his estranged wife, Ottavia Busia-Bourdain, as his executor and left her "personal and household effects" including cars, furniture, books, and frequent flier miles. Reports say that he never finalized his divorce from Ottavia. As a result, she may be eligible for elective share of the assets, even if she was left out of the will. She could receive as much as a third of Mr. Bourdain's estate, if she elects.

French authorities ruled that Bourdain had committed suicide in a hotel room in France in early June. He was in France to film segments for “Parts Unknown,” his popular CNN show.

Reference: Investment News (July 9, 2018) “Will of Anthony Bourdain could be open to legal dispute”

Blueprint for Senior Singles

Not having a built-in support system of a spouse, children, in-laws, etc., can lead to challenges for singles as they age.

Singles need to be more proactive about planning for long-term care and estate planning to protect themselves against some of the inevitable issues of aging.

MP900438735Not having a built-in support system of a spouse, children, in-laws, etc., can lead to challenges for singles as they age. About 35.4 million Americans lived alone in 2016, making up almost a third of all households, according to the U.S. Census Bureau, and about 20 million of them are 65 or older. For these aging singles, planning is key to being prepared for financial security and health issues, as reported by CNBCin “For aging singles, here's how to plan for your golden years,”

Saving as much as possible in a 401(k) plan or IRA while you can are important. You should also make certain that you have emergency savings, if you're still working. If you’re still employed, find out if your company offers group insurance for long-term disability. Those policies provide a portion of your income, in case you end up unable to work due to an accident or other medical condition.

There are other ways for singles to protect themselves, as they age.

In addition to an estate plan with a will, select someone to handle your finances, if you reach a point where you can’t. When you give someone durable power of attorney for your finances, he or she will be  responsible for paying your bills with your money.  It is, therefore, important to choose someone you trust.  You should also grant someone durable power of attorney for health care. That lets the individual make important health-care decisions, if you can’t. That is different from a living will. That document states your wishes, if you’re on life support or suffer from a terminal condition. This helps instruct your proxy’s decision-making. If you have no one named, your healthcare providers must follow your wishes in that document.

If you’re single and don’t have family close by who can assist, if you need help with daily living activities, you'll need to plan for how to pay for it. A person turning age 65 today has nearly a 70% chance of needing such long-term care in their remaining years, according to the Department of Health and Human Services. On average, women need care longer (3.7 years) than men (2.2 years).

You also need to understand that Medicare (which you generally sign up for when you’re 65) doesn’t pay for long-term care. It can be expensive. If you have no family to rely on, and you don’t want to spend down your assets, but you’re above the income threshold to qualify for Medicaid, long-term care insurance can be an option. LTC insurance will pay a daily amount, up to a predetermined dollar limit and length of time, for services. Policies can be expensive, costing up to $2,000 a year for younger applicants (in their 50s) and double that for those over age 65. As with all age and health related insurance, the younger you are when you look into it, the better.

Here's a critical point: if you have a medical emergency and you live alone, you could be at risk. There are many different ways to solve this problem, among them, a medical alert system or a tag team of peers who check on each other daily.

Reference: CNBC (July 2, 2018) “For aging singles, here's how to plan for your golden years”

Britain’s Favorite Entertainer’s Estate Plan Leaves His Kids Out of his Will

Will Bruce Forsyth still be as beloved, now that the public knows he did not leave any of his millions of dollars to his children?

Will Bruce Forsyth still be as beloved, now that the public knows he did not leave any of his millions of dollars to his children? Or do they recognize a tax strategy that’s well known in the United Kingdom?

Bruce ForsythThe widow of one of England’s legendary entertainers, Bruce Forsyth, has inherited his entire fortune—a whopping $15.4 million. Starts at 60’srecent article, “Millionaire performer Sir Bruce Forsyth leaves kids nothing in will,”says that his children didn’t inherit a single dime of his estate.

According to The Daily Mail report, it was Forsyth’s strategy to avoid estate tax. In the United Kingdom, money that’s passed from a husband to a widow isn’t subject to inheritance tax. However, an inheritance from a parent to a child is taxed.

In addition to the money left for his wife, the entertainer left about $130,000 in a trust fund to split between his nine grandchildren when they turn 21 and roughly $26,000 to the two executors of his estate.

Nothing was left to daughters Debbie, Laura, and Julie, who Forsyth fathered in his first marriage to Penny Calvert. His daughters Louisa and Charlotte from his second marriage to Anthea Redfern also weren’t included in the will. Likewise, his son Jonathan from his third marriage won’t inherit anything.

Forsyth died last year with his six children by his side at age 89. The star had been sick for an extended period of time and had been admitted to hospital earlier in the year with a severe chest infection.

Bruce Forsyth had a record-breaking 78-year career in British film and television. He made his first TV appearance at the age of 11, taking up tap dancing after being inspired by a Fred Astaire film.

Forsyth received a knighthood in 2011. His last appearance on TV was at Christmas 2015, when he sent a festive message to fans.

Social media was flooded with tributes to Forsyth upon his death last year. The London Palladium promised to dim its lights, celebrities shared their memories of working with the entertainer and fans wrote of their experiences they had had with him.

Whether tax strategy or not, Forsyth is now one of many wealthy celebrities who have made the decision not to leave their children with their fortunes. Bill Gates, Simon Cowell, Elton John and Gordon Ramsay are among the bold-face names who have other plans for their millions.

Reference: Starts at 60(June 19, 2018) “Millionaire performer Sir Bruce Forsyth leaves kids nothing in will”

No Succession Plan Often Means Businesses Live and Die with Owners

To make it past the first generation, family owned businesses need a lot of communication and planning for succession.

To make it past the first generation, family owned businesses need a lot of communication and planning for succession.

Business_meetingThe challenge is clear: less than a third of all family owned businesses will survive to the second generation. By the third generation, prospects for survival are even worse—only one in 10 will make it. With approximately 80-90% of American businesses being owned by families, the potential for business longevity is not great.  However, it can be addressed.

KRCU’srecent article, “Business Succession Planning is Very Important,”reminds us that business succession planning is a process in which business owners research and consider a strategy to move forward in the event of death, illness, or simply transition.

Business succession planning implements several estate planning strategies. There is no “one size fits all” plan. A business owner should carefully consider his or her options. Without a plan in place, there’s a good chance for failure.

There are several factors to be examined. There are questions like estate taxes, liquidity, ownership percentages, family disagreements and the management capabilities of those relevant individuals.

The uncertainty of a transition can impact the business internally among staff and externally with customers. As a result, it’s vitally important to create a business succession plan and communicate that plan to your team and family.

There are many succession planning vehicles and succession planning concerns. Seek the advice of an expert on these matters and do it sooner rather than later. Work with an experienced estate planning attorney, who can walk you through the issues that must be addressed.

Many experts think that business succession planning is at least as important (and maybe more important) than individual estate planning.

Improving the chances that a family owned business will continue past the first generation, takes as much work as building it did in the first place. A seamless transition to the next generation is a worthwhile task, benefiting customers, employees and the community, as well as family members.

Reference: KRCU(June 17, 2018)“Business Succession Planning is Very Important”

Scroll to Top