Worcester & Middlesex County Estate Planning & Elder Law

What’s the Latest with Aretha Franklin’s Estate?

What’s the Latest with Aretha Franklin’s Estate?

“Trouble is brewing around the estate of Aretha Franklin, where police are investigating possible theft of her assets and an ex-husband is angling for money.”

Aretha Franklin, known as “The Queen of Soul,” died of pancreatic cancer in August of 2018 in her Detroit riverfront apartment at age 76.

Franklin did not have a will or trust. Therefore, processing the estate, which could be worth tens of millions of dollars, has been slow.

The Detroit Free Press reported in a recent article, “Aretha Franklin's ex-husband wants a cut of her music royalties,” that recently filed pleadings in Oakland County Probate Court detail some of the fighting.

"There is a dispute between the estate and Ms. Franklin's ex-husband, the father to one of the heirs, regarding music royalties," David Bennett, a lawyer for the estate, wrote in a pleading.

Aretha Franklin was twice divorced, and the record doesn't name the man, beyond saying that he's the father of one of her four sons. It looks like it’s her first husband, Ted White, who served for a time as Franklin's manager. Franklin and White have a son, Ted White Jr. Her second marriage to actor Glynn Turman didn't occur until 1978—eight years after her youngest son was born.

The recent court pleading was filed in response to a request from Edward Franklin, Aretha’s son, for more financial disclosure from the estate, as it's being processed. Prior to Christmas, a lawyer for Edward Franklin requested that Probate Judge Jennifer Callaghan order the disclosure of monthly financial statements and other records.

Edward wants "copies of all invoices and supporting documents regarding payments to friends and relatives of the personal representative, if any, for services performed for the estate."

The lawyer for the estate, Bennett, asked Judge Callaghan to deny the request for monthly financial updates, because it "would be an exceptional expense to the estate, is time-consuming and would interfere with the administration of the estate."

The IRS filed a claim in December of last year alleging the Franklin estate owed about $6.3 million in back taxes and penalties. An attorney for the estate told the Associated Press that at least $3 million in back taxes had been paid back to the IRS, since Franklin's death.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: Detroit Free Press (January 11, 2019) “Aretha Franklin's ex-husband wants a cut of her music royalties”

 

Does TV Mogul Sumner Redstone Have the Mental Capacity to Change his Estate Plan?

“The ugly public legal battle over Sumner Redstone's estate plans has come to an end, as a Los Angeles judge on Wednesday, ruled the 95-year-old mogul had the mental capacity necessary to amend his trust in 2015 and 2016.”

The decision on TV mogul Sumner Redstone's estate plans follows the settlement of litigation with his former companion Manuela Herzer.

The Hollywood Reporter explains, in the article “Sumner Redstone Had Capacity to Change Estate Plan, Judge Rules,” that after Herzer was thrown out of Redstone's mansion and removed as the person in control of his health care directive in 2015, she sued and claimed he didn’t possess the mental capacity to make decisions for himself and his business.

The fight included allegations of elder abuse against Herzer and claims that his daughter Shari Redstone was manipulating her father, which have now been resolved. Herzer agreed to repay the $3.25 million she received in gifts and to state that she has no decision-making power concerning Redstone.

Los Angeles Superior Court Judge David Cowan formally concluded the fight over Redstone’s competence, by confirming the validity of Redstone's current estate plan.

"Mr. Redstone had sufficient capacity to execute the Fortieth Amendment to and Restatement of the Sumner M. Redstone 2003 Trust dated July 23, 2003, and the Forty-First Partial Amendment thereto on their respective dates of execution, October 16, 2015, and May 20, 2016," writes Cowan, adding the changes "were not the product of undue influence, fraud, duress or mistake."

Judge Cowan’s decision is no guarantee that there won't be further disputes over what happens to the billionaire's estate after he dies, but it does lend support to Redstone in weathering future challenges. This is particularly important, because a guardian ad litem was appointed by the court in December to ensure that the proceedings were in Redstone's best interest.

“After three years of litigation, Mr. Redstone is grateful for today’s court confirmation of his capacity to execute his estate plan, and of his free will in doing so," his lawyer Gabrielle Vidal said in a statement to The Hollywood Reporter.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: The Hollywood Reporter (January 23, 2019) “Sumner Redstone Had Capacity to Change Estate Plan, Judge Rules”

 

Why Did a Rock Star Sign a Will Days Before He Drowned?

“Connecticut State Police investigating the suspicious death of All That Remains guitarist Oli Herbert have examined a will signed by the Longmeadow native a week before his death.”

All That Remains guitarist Oli Herbert signed a will at a Hartford, Connecticut car dealership on October 9, 2018. The will was notarized by an individual who was a friend of Herbert and his wife Elizabeth, according to The Hartford Courant.

Mass Live recently reported in the article “Police probe will signed by All That Remains guitarist Oli Herbert days before suspicious death” that there isn’t an attorney signature on the will. Herbert’s will was filed in probate court in late December 2018. There also is no indication the will was reviewed by any legal representatives.

The will designates Elizabeth Herbert as Executrix and sole benefactor, adding that under no circumstances should Oli Herbert's sister, Cynthia Herbert, become Executor or receive anything from his estate.

Manchester attorney Anthony Spinella is representing Elizabeth Herbert. He told The Hartford Courant that his client initially cooperated with the state police and allowed them to search the couple's Stafford Springs home and answered questions. However, the attorney has now told police that any further requests should come through him.

Herbert's body was found on October 17 by a pond behind his house. The state medical examiner determined that Herbert drowned. However, they haven’t stated a manner of death.

Some of his fans have brought up various theories surrounding the metal guitarist's death. The Facebook page Justice for Oli Herbert has more than 11,000 followers.

Herbert began playing guitar at 14. His first paid gig was a Battle of the Bands on his final day of his senior year at Longmeadow High School.

Herbert started playing professionally in Massachusetts clubs with Netherworld, a thrash metal band he formed in 1991.

Herbert co-founded All That Remains with Phil Labonte in 1998.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: Mass Live (January 14, 2019) “Police probe will signed by All That Remains guitarist Oli Herbert days before suspicious death”

 

Why Did a Rock Star Sign a Will Days Before He Drowned?

“Connecticut State Police investigating the suspicious death of All That Remains guitarist Oli Herbert have examined a will signed by the Longmeadow native a week before his death.”

All That Remains guitarist Oli Herbert signed a will at a Hartford, Connecticut car dealership on October 9, 2018. The will was notarized by an individual who was a friend of Herbert and his wife Elizabeth, according to The Hartford Courant.

Mass Live recently reported in the article “Police probe will signed by All That Remains guitarist Oli Herbert days before suspicious death” that there isn’t an attorney signature on the will. Herbert’s will was filed in probate court in late December 2018. There also is no indication the will was reviewed by any legal representatives.

The will designates Elizabeth Herbert as Executrix and sole benefactor, adding that under no circumstances should Oli Herbert's sister, Cynthia Herbert, become Executor or receive anything from his estate.

Manchester attorney Anthony Spinella is representing Elizabeth Herbert. He told The Hartford Courant that his client initially cooperated with the state police and allowed them to search the couple's Stafford Springs home and answered questions. However, the attorney has now told police that any further requests should come through him.

Herbert's body was found on October 17 by a pond behind his house. The state medical examiner determined that Herbert drowned. However, they haven’t stated a manner of death.

Some of his fans have brought up various theories surrounding the metal guitarist's death. The Facebook page Justice for Oli Herbert has more than 11,000 followers.

Herbert began playing guitar at 14. His first paid gig was a Battle of the Bands on his final day of his senior year at Longmeadow High School.

Herbert started playing professionally in Massachusetts clubs with Netherworld, a thrash metal band he formed in 1991.

Herbert co-founded All That Remains with Phil Labonte in 1998.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: Mass Live (January 14, 2019) “Police probe will signed by All That Remains guitarist Oli Herbert days before suspicious death”

 

How Can I Use Special Needs Planning with the New Tax Laws?

“The financial costs of caring for a loved one with special needs can be staggering.”

Of course, the precise expenses for an individual with special needs will vary, based upon the type of condition and level of care. A condition, such as autism, can require lifetime support costing upwards of $2.3 million, according to the advocacy and support organization Autism Speaks.

If you have a family member affected by a disability, what is your plan to pay for this care? This was the issue explored in a recent Financial Planning article, “A new special needs planning approach under the tax overhaul.”

Families usually want to plan for disabled relatives, but can be wary of losing access to savings, fearing that they may need the money themselves. A caretaker must also weigh the individual’s needs against the family’s other financial goals and obligations.

Planning for people with special needs, often involved irrevocable trust strategies in the past. Trusts can benefit the person with special needs, but other family members had limited access to the investments. The lifetime estate tax exemption is doubled under the tax overhaul, so most Americans do not face a federal estate tax. The change in the tax law and higher exemptions have made it possible for people to plan for the loved one’s care, while ensuring protection for the family.

1. Estimate the cost of caring for a family member with special needs. A good plan should preserve eligibility for government benefits, such as Medicaid and SSI. However, it is important to note that many expenses are not covered. This plan must also state who will care for the disabled person, if the primary caregiver dies or is incapacitated.
2. Decide how to fund the plan. Families frequently use a permanent life insurance policy to help cover any gaps left by limited government aid. The death benefit, which is generally income tax-free, provides money to help replace caregiver services, add to benefits provided under government programs and provide a liquidity source to help equalize the inheritance for other family members.

When the federal estate tax exemption was lower, a parent or caregiver usually would create an irrevocable third-party special needs trust during their lifetime. The trust assets would be used to purchase a life insurance policy, with the trust made owner and beneficiary. At the insured’s death, the death benefit received by the trust would be excluded from the grantor’s estate for estate taxes. The policy distributions would provide ongoing care for the relative, while allowing for access to government benefits.

However, the new higher exemptions have made it possible to plan for a loved one with special needs and also protect the entire family. This can be done by a caretaker personally owning a life insurance policy on his/her life, that names a special needs trust as the beneficiary.

1. Work with an estate planning attorney. Use an attorney who has experience with special needs planning, to determine the appropriate ownership structure, based on your personal situation.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: Financial Planning (January 15, 2019) “A new special needs planning approach under the tax overhaul”

 

Do I Pay Estate Tax on Property in Canada?

“New Jersey can't impose the inheritance tax on any property it wants.”

If a loved one dies in Canada, and you reside in New Jersey, how do the estate and inheritance taxes work?

nj.com’s recent article asks what happens if “My sister died in Canada. Will I owe inheritances taxes to New Jersey?” The answer: unless the relative owned property in New Jersey, any inheritance would be free of state inheritance taxes.

This is due to the fact that New Jersey has an inheritance tax on the estate of a nonresident for the transfer of real property and tangible personal property located in New Jersey, belonging to the decedent or transferred within three years of death in contemplation of death.

In addition, the transfer of intangible personal property, like bank accounts, stocks, bonds, and annuities, that belong to a nonresident decedent, isn’t subject to New Jersey inheritance tax.

It doesn’t matter where the beneficiary resides, experts say.

Therefore, if the relative had no real or tangible personal property located in New Jersey, there will be no New Jersey inheritance tax owed to New Jersey. If he or she had property located in the Garden State, then the tax will be calculated, based upon the relationship of the beneficiary to the decedent—no matter where the beneficiary lives.

If the relative did own property in New Jersey, waivers must be obtained from the New Jersey Division of Taxation to release the lien for any New Jersey inheritance tax on the decedent's impacted New Jersey property.

If a New Jersey resident is inheriting the property from a sister, he or she is considered a Class C beneficiary and generally subject to tax at a rate of 11-16% on inheritances of greater than $25,000. However, for tax calculation purposes, a ratio of the New Jersey property, compared to the entire estate can be utilized.

In New Jersey, a Form IT-NR would need to be filed (and any tax paid) within eight months of death for a decedent with beneficiaries who are other than Class A, which includes the spouse, civil union or domestic partner, parents, grandparents, descendants or stepchildren of the decedent or charities.

There are no inheritance taxes in Canada. However, the estate could be subject to estate taxes. It’s smart to speak with an attorney there to be certain.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: nj.com (January 15, 2019) “My sister died in Canada. Will I owe inheritances taxes to New Jersey?”

 

Why Do I Need Estate Planning If I’m Not Rich?

“Estate planning isn't only for the rich. Without a plan in place, there could be a long-lasting impact on your loved ones, even if you don’t have a pricey home, large IRA or valuable art to pass on.”

Many people spend more time planning a vacation than they do thinking about who will inherit their assets after they pass away. Although estate planning isn’t an enjoyable activity, without it, you don’t get to direct who gets everything for which you’ve worked so hard.

Investopedia asks you to consider these four reasons why you should have an estate plan to avoid potentially devastating results for your heirs in its article “4 Reasons Estate Planning Is So Important.”

Wealth Won’t Go to Unintended Beneficiaries. Estate planning may have been once considered something only rich people needed, but that's changed. Everyone now needs to plan for when something happens to a family's breadwinner(s). The primary part of estate planning is naming heirs for your assets. Without an estate plan, the courts will decide who will receive your property.

Protection for Families With Young Children. If you are the parent of small children, you need to have a will to ensure that your children are taken care of. You can designate their guardians, if both parents die before the children turn 18. Without a will and guardianship clause, a judge will decide this important issue.

Avoid Taxes. Estate planning is also about protecting your loved ones from the IRS. Estate planning is transferring assets to your family, with an attempt to create the smallest tax burden for them as possible. A little estate planning can reduce much or even all of their federal and state estate taxes or state inheritance taxes. There are also ways to reduce the income tax beneficiaries might have to pay. However, without an estate plan, the amount your heirs will owe the government could be substantial.

No Family Fighting (or Very Little). One sibling may believe she deserves more than another. This type of fighting can turn ugly and end up in court, pitting family members against each other. However, an estate plan enables you to choose who controls your finances and assets, if you become mentally incapacitated or after you die. It also will go a long way towards settling any family conflict and ensuring that your assets are handled in the way you wanted.

To protect your assets and your loved ones when you no longer can do it, you’ll need an estate plan. Without one, your family could see large tax burdens and the courts could say how your assets are divided, or even who will care for your children.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: Investopedia (May 25, 2018) “4 Reasons Estate Planning Is So Important”

 

Which Stars are Leaving Their Kids No Inheritance?

“Whether they shocked the world following their death by leaving their children with no inheritance, or they’re already thinking ahead while they’re still alive and writing their children out of their will, many stars have revealed their reasons for passing on little or none of their fortune to younger generations.”

Stars like Gordon Ramsay and Nigella Lawson have announced that they don’t want to leave their millions to their children after they die, says Starts at 60 in the article “Famous snubs: The stars who have cut their kids out of their will.”

Let’s look at some of the big names leaving their kids with little or nothing.

Known for his harsh words and incredible comebacks in the kitchen, Gordon Ramsay has built up a nice fortune for his family. However, he’s said that most of the millions won’t be going to his children, Matilda, Jack Scott, Holly Anna, and Megan Jane. Ramsey has said has no intention of leaving his entire fortune to them, when he’s gone.

“It’s definitely not going to them, and that’s not in a mean way; it’s to not spoil them,” he said. “The only thing I’ve agreed with Tana is they get a 25 per cent deposit on a flat, but not the whole flat.”

Elton John may have been hurt when his own mother snubbed him in her will when she passed away. But he’s said that he doesn’t intend to pass over his entire fortune to his two boys, when he passes away. The 71-year-old singer, who has sons Elijah and Zachary with husband David Furnish, told the Mirror: “Of course I want to leave my boys in a very sound financial state. But it’s terrible to give kids a silver spoon. It ruins their life.”

Bill Gates has famously stated that he will leave much of his estate to charity. Gates remarked, “I definitely think leaving kids massive amounts of money is not a favor to them. Warren Buffett was part of an article in Fortune talking about this in 1986, before I met him and it made me think about it and decide he was right.”

He added that it’s not a favor to kids to leave them have huge sums of wealth. “It distorts anything they might do, creating their own path.”

Simon Cowell may be completely dedicated to his son Eric now, but before becoming a father, the music mogul said he didn’t believe in passing down millions to kids.

“I’m going to leave my money to somebody. A charity, probably–kids and dogs. I don’t believe in passing on from one generation to another,” he said in an interview with Esquire.

Facebook founder Mark Zuckerberg and his wife Priscilla Chan don’t intend to pass on their wealth to their children. In an open letter, Zuckerberg said he wanted to leave the vast majority of their fortune to the limited liability company Chan Zuckerberg Initiative.

“We will give 99% of our Facebook shares–currently about $45 billion–during our lives to advance this mission. We know this is a small contribution compared to all the resources and talents of those already working on these issues. But we want to do what we can, working alongside many others,” he wrote.

Reference: Starts at 60 (January 19, 2019) “Famous snubs: The stars who have cut their kids out of their will”

 

Credit Union Association Supports Fights Against Elder Fraud

“CUNA strongly supports efforts to help protect seniors from financial exploitation and to empower seniors to make responsible financial decisions, it wrote to the Senate Special Committee on Aging.”

CUNA delivered a letter for the record of the committee’s hearing on combating elder fraud.

“Many credit unions provide a full range of financial services such as financial management, retirement planning, and credit counseling to their members,” wrote CUNA President/CEO Jim Nussle. “The cooperative relationship between a credit union and its members often puts credit union employees in a vital position to detect suspicious financial activity related to seniors’ accounts, because employees tend to know their members well and are likely to recognize when something is amiss.”

CUNA also noted in the article “CUNA: CUs positioned to combat elder financial abuse” that it thanked committee leadership, Senators Susan Collins (R-Maine) and Bob Casey (D-Pa.), for their leadership in sponsoring the Senior$afe Act in that last Congress.

The bill protects the reporting of suspected elder financial abuse. It was signed into law as part of the Economic Growth, Regulatory Reform and Consumer Protection Act (S. 2155).

“Senior$afe represents an important step toward improving the ability of credit unions to protect seniors from unscrupulous activity, by providing limited immunity for properly trained financial employees who disclose concerns about financial exploitation of senior citizens to the appropriate authorities,” CUNA President/CEO Nussle wrote.

“This safe harbor, which applies only when reporting suspicions of exploitation to a class of covered agencies, such as financial regulators or law enforcement, is a vital component of the legislation and will give greater leeway to those individuals who have the most power to detect and prevent the financial abuse of those most vulnerable to it.”

Senator Collins, who sponsored the Senior$afe Act in several Congresses, has partnered with the Maine Credit Union League on several occasions on the topic of senior abuse.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: CUNA (January 16, 2019) “CUNA: CUs positioned to combat elder financial abuse”

 

How Can I Leverage Life Insurance in Estate Planning?

“According to a recent study commissioned by Bankers Life Center for a Secure Retirement, middle-income boomers have lowered their overall expectation for financial independence in retirement, since the onset of the financial crisis in 2007. Ten years later, fewer boomers expect they will retire debt free (34 percent today, down from 45 percent before the crisis) and fewer have paid off their mortgages (19 percent, down from 25 percent).”

If someone you care about is one of our country’s estimated 75 million baby boomers, there are a few things you should know. Insurance News Net’s article, “How To Use Life Insurance In Better Estate Planning” says that middle-income boomers are carrying more debt into retirement than ever before. That said, life insurance can help provide your surviving family with an income after you die and also be used to pay off debts. The proceeds from life insurance policies can be used to pay down your mortgage and debts. It can also be used to help pay for funerals and other final expenses.

If you have sufficient assets to pay your debt when you pass away, your creditors will receive their payments from your estate. However, be aware that it matters if your home is your primary asset and if your spouse or another family member is a co-applicant or co-signer on an account, because your mortgage and other debts, such as credit card bills or car loans, could become their responsibility.

Carrying debt in retirement is very common today. Life insurance can help provide peace of mind knowing that provision has been made for the comfort and security of your family. Boomers should conduct an inventory of their finances and debt, weigh their options and find a life insurance policy that will help with any potential financial burdens upon death. Let’s look at some tips to help you decide, if purchasing life insurance is right for you:

1. What’s your need? Do people depend on you financially? Do you have sufficient funds to cover your final expenses? Consider life insurance to help protect your family's future. Your policy’s beneficiary can use the money for living expenses or to pay off debts.
2. Educate yourself on the different types of life insurance. There are three major types of life insurance coverage—term life, whole life and universal life. All three pay a death benefit, but each can differ in terms of coverage length, premium flexibility, cash value accumulation and distribution.
3. Determine the amount of life insurance you need. What amount of coverage would your family need, if something happened to you? What expenses would have to be covered or debts paid off? What amount is earmarked for savings? The answers will help you determine the type and amount of life insurance you'll need.

Give us a call at (978) 342-1914 or visit us at www.dellamonaca.com.

Reference: Insurance News Net (January 7, 2019) “How To Use Life Insurance In Better Estate Planning”

Suggested Key Terms: Estate Planning, Joint Tenancy, Life Insurance