New York residents unhappy with their tax burden may wish to spare a thought for some of their neighbors. Connecticut has raised several state taxes and fees to bridge large budget gaps, and the increases have been implemented retroactively to Jan. 1, 2015. Among the most contentious tax and fee hikes are changes to the probate fee structure that have led to tenfold increases in fees for many estates. While many wealthy Connecticut residents are now said to be thinking about moving out of the state, observers feel that growing financial pressures will prompt other states to impose similar measures.
Connecticut’s revised probate fees were implemented in June after funds for the state’s probate courts were eliminated as legislators struggled to balance the budget. While Connecticut’s estate tax of 12 percent is not excessive compared to other states, a new 0.5 percent probate fee on estates valued at more than $4.754 million and the elimination of a $12,500 probate fee cap have led to estates receiving six-figure probate fee bills.
The probate fees for a Connecticut woman who died in the spring of 2015 would have been capped at $12,500 under the old fee structure, but they will now shoot up to almost $250,000 even after a 50 percent surviving spouse discount has been applied. Some families may think that they can avoid such fees by setting up trusts to avoid probate, but this strategy would be unsuccessful as Connecticut bases the fees on the amount of assets listed on estate tax returns regardless of whether the probate process is employed.
The tax and fee increases in Connecticut are a powerful reminder of how important it is to review estate plans on a regular basis. Attorneys may suggest strategies that could limit fees and taxes even when trusts are unable to accomplish this goal. Such measures could include gifting part or all of an estate or establishing joint property ownership arrangements.
Digital document archives are becoming popular among people in New York who are planning their estates. Sites like Everplans, Principled Heart and AfterSteps provide a platform where people can easily store digital versions of estate planning documents like wills, trusts, powers of attorney and health care directives. Digital archives can also house important financial information and personal assets like photos.
Many people are attracted to digital document archives because they offer a simple solution for organizing vital documents and keeping them all in one easy-to-find place. After a person dies, family members often struggle to carry out the person’s last wishes because key financial information and documents simply can’t be found. With a digital document archive, family members have one go-to place to find everything that is needed to execute a will.
The risks of using digital document archives for estate planning are important to note. Because digital archives are new in the world of estate planning, none of the companies that offer these services have a long and established track record. Estate planning is about long-term planning, and there is always a possibility that a startup company won’t be around in the long-term. If a digital document archive platform is not secure, users risk losing their digitized documents in a computer hack.
Another risk is that an archived will may not satisfy the will execution rules of a particular state. As such, it is important to obtain the advice of an attorney who has experience in probate and estate administration before choosing to use these types of services for estate planning purposes.
New York residents have likely heard about the ongoing legal battle between the wife of the late actor Robin Williams and Williams’ three adult children from previous marriages. After Williams committed suicide in 2014, his widow claimed that items from the home she shared with him had been taken without her permission. In December, she filed a petition asking the court to exclude the items in the home from the children’s inheritance.
Williams’ children and widow have reportedly reached an out-of-court settlement in the estate battle . The exact terms of the settlement were not revealed publicly, but an attorney for Williams’ widow said that she would be allowed to keep living in the home she shared with Williams. Expenses for maintaining the home would be paid out of a trust for the rest of her life.
The attorney also stated that Williams’ widow was granted ownership of all of the couple’s wedding gifts, a bike that was bought on their honeymoon and a watch that Williams wore quite often. Some of the items that Williams’ family had previously fought over included a tuxedo that he was married in, watches, memorabilia and photographs from his 60th birthday.
After a person dies, it is common for family members to argue over sentimental objects that may have little or no monetary value. Family disputes could be prevented if people include provisions about personal property in their will. Testators may choose to write specific provisions about who gets what, or they could instruct their heirs to take turns choosing items from their home.
Source: ABC News, ” Attorneys: Robin Williams’ Widow, Kids Settle Estate Fight ,” Janie Har, Oct. 2, 2015
Naming an executor is one of the most important estate planning decisions that New York residents have to make. When someone is asked to serve as an executor of a testator’s will, it is important for the person to understand the responsibilities that they might be taking on. If those who are asked feel that they are too disorganized or ignorant about financial matters, they might want to say no to being an executor.
The executor must locate the deceased person’s will and all of their financial assets and then disburse those assets to beneficiaries in the manner that the will states. If these duties are not performed adequately, the executor could be sued by the testator’s surviving family members for fraud or negligence.
Executors can mitigate the legal risks of their job by communicating with the testators while they are still alive. If possible, an executor should ask to see the will during the testator’s lifetime so that any ambiguous wording in it can be clarified or, if necessary, changed. In some cases, testators will not want to disclose the details of their will to the executor while they are alive. However, the executor can still make sure that they are told where the find the will and any other key estate planning documents.
As long as executors take their time, use sound judgment and communicate with beneficiaries, the chances of being sued while serving in that capacity are slim. By working with an estate administration attorney during the process, executors may be able to ensure that their experience goes smoothly.
Many New York residents have heard about the ongoing dispute over the estates of Whitney Houston and her daughter Bobbi Kristina. Both the Houston and Brown families are reportedly fighting over what happens to Houston’s estate. According to a report, members of Whitney Houston’s family are named as the legal inheritors of Bobbi Kristina’s wealth; however, reports also note that Bobby Brown’s family wants to inherit the money.
The inheritance left to Bobbi Kristina included $20 million and royalties from the famed singer’s career. This essentially means that the estate will continue to grow as the royalties keep coming in. When Bobbi Kristina died, she did not leave behind a will. Because Bobby Brown is Bobbi Kristina’s father and potentially a sole beneficiary, he could receive the portion of future proceeds that his daughter had been entitled to under her mother’s will.
However, Whitney Houston’s will stated that if her child did not survive, her mother Emily Cissy Houston was to be given her jewelry. The rest of the estate was to be divided between Houston’s mother, father, two brothers and Bobby Brown, who was still her husband at the time the will was drafted.
Most young individuals wait to draft a will until they have their first child or make a major investment. However, it can be very difficult for families to determine what happens with a person’s estate should they die before a will is drafted. If there is no will, the state law of intestacy will govern the distribution unless family members are otherwise able to agree.
Source: Realty Today, ” Who Will Get Bobbi Kristina’s $20 Million Inheritance From Whitney Houston? “, Sept. 20, 2015