New York Estate Planning & Elder Law Blog

The first part of this article listed some of this year’s most notable celebrity deaths and the estate planning issues that arose as a result. This next part of the article is a continuation of lessons that can be learned by the estate planning problems of celebrities who passed away this year.

Paul Walker

Mr. Walker tragically died at the young age of forty this year in a car accident. He did take the steps to plan for his estate at a young age, but at the time of his death he had not updated his documents in over twelve years. His estate had a will, trust, and over $25 million in assets when he died.

Factoring in retirement to an estate plan can be confusing, tiresome, and complex. In fact, this aspect is arguably the most difficult part of estate planning because you can never be positive about exactly how much money you will need in retirement. With the influx of new estate planning tools this year also came some changes in the way retirement planning should be approached. Here are five changes that could affect the way that you plan for retirement next year.

Decreased Creditor Protection in Inherited IRAs

This year, the United States Supreme Court ruled that creditors can gain access to the funds in an inherited IRA. As discussed in a previous post, the justices in Clark v. Rameker found that inherited IRAs are not considered retirement funds for the heir, and therefore they do not get the same protections as the original IRA holder under federal law.

James Brown’s life was full of life, music, and manic energy. It was also full of broken marriages, estranged children, tax liens, and legal problems related to drugs, guns, and domestic violence. However, James Brown’s estate was meant to be a mea culpa for his transgressions in life and to help others after his death. Yet, almost eight years after his passing the charity that was supposed to receive a significant portion of James Brown’s estate has not seen a dime, his family is entangled in lawsuits, and even the state has attempted to intervene.

Estate Problems

James Brown signed his most recent will in 2000, and he explained on audio tape that he wanted a portion of his estate set aside for the use of a scholarship fund to benefit black and white children in his home state of Georgia as well as South Carolina. In addition, the will provided $2 million in scholarships for his seven grandchildren and divided his other personal property worth another $2 million between the six children that he recognized. Any heir who challenged the estate would be disinherited.

Recently, Apple and Facebook made the headlines when both companies announced that it is paying the expenses for its female employees to freeze their eggs. Most people do not assume that an announcement like this will affect their estate plan, but if you have a daughter or granddaughter you may want to reconsider that opinion. If either decides to use assisted reproductive techniques and freeze their eggs, you must consider whether you would like to include these potential descendants in your estate plan.

Defining Descendants and Heirs

For estate planning purposes, descendants and heirs are people who are genetically, biologically, or legally related to you. However, with the advent of egg freezing there is a chance that you will have a descendant that is not biologically or genetically related to you, and you must decide whether to include them in your estate.

This year saw a number of tragic celebrity deaths, and some were complicated further with estate planning issues. Using these stories can be a good way to transition into discussing issues of estate planning with your own family. A look back on the celebrity deaths and estate battles of the rich and famous shows just how many things can go wrong when an estate is not properly planned.

Patrick Swayze

Although Patrick Swayze died over five years ago, reports are coming out now that members of his family believe that his will was forged only a couple of months before his death while Mr. Swayze was hospitalized. His entire estate was left to his widow, and nothing was left to his mother or siblings. Because of the length of time that the estate has been closed, chances are that the estate documents will remain valid despite allegations of forgery.

Divorce is almost always an emotionally and financially draining experience, and high asset divorces come with an increased level of tension and drama. It is because of that emotion that some spouses in high asset divorce settlements make irrational decisions or financial errors that can cost them thousands or millions of dollars in the end. However, there are some areas in a high asset divorce that can be analyzed to ensure that you are getting the most out of the settlement proceedings.

Hiring a Valuation Expert

One way to minimize potential mistakes in a high asset divorce is to hire a valuation expert. This person is an objective professional who is hired to make accurate valuations of all assets for the couple based on specific metrics and methodologies. Many valuation experts are associated with accounting firms and carry special designations for their profession. However, more help may be necessary for the expert if highly specialized assets like a privately held company, holdings in a family business, or other technical investment interests are at stake.