Building Legacies that Last Estate Planning and Elder Law

Under Pressure: David Bowie’s Estate Plan

Download-1“Under Pressure.” These two words were said by the iconic David Bowie along with Queen singer, Freddie Mercury. Sadly, Bowie died back on January 20, 2016 from liver cancer at the age of 69 in Manhattan, New York City. Many celebrities, including Kanye West and Madonna, reacted with deep sorrow because they had lost the “Chameleon of Rock.” Bowie’s legacy still lives on through his children, Lexi and Duncan, along with his wife and now widow, Iman.

Bowie, initially, left the rest of his residuary estate and the remainder of Iman’s trust to Duncan and Lexi. Lexi was also subjected to her own separate trust until the age of 25. After the age of 25, she would be able to possess all the trusts assets. In the case of Iman’s trust, it did qualify for a full marital deduction, which created Bowie’s estate taxes that were to be managed by the children’s shares of the residuary estate.

Even though Bowie was iconic, his estate plan did suffer some consequences. With the $100 million value of his estate, Bowie did not create lifetime trusts that would have benefited his children. If he had created that trust, his children would have been protected from creditors for either his or her lifetime. It would have also given Bowie the power to use his full GST exemption. Since he did not achieve this step, both Lexi and Duncan did not have a special power of appointment over the trust.

One other mistake that David Bowie made in his estate plan was that he did not institute the decanting procedure, which an authorized trustee, not the grantor, transfers assets from one trust into another trust which contains the necessary changes that will achieve the intended purpose. Since he did not use this process, Iman’s trust could not be transferred from one to another.

When creating an estate plan, make sure to use the decanting process. The decanting process can be a powerful tool for post- mortem estate planning and should always be considered whenever testamentary trusts are created. Don’t be under pressure! Create your estate plan today!

Michelle Profit is an estate planning attorney serving Maryland and the District of Columbia. A Harvard Law School graduate, she has worked in the financial services industry for over 20 years. A dedicated advocate for all of her clients, Michelle Q. Profit personally handles each client case from start to finish to meet the client’s needs and objectives. Michelle listens in the consultation sessions and works with any other client accountants or financial planners to create a comprehensive estate plan.

Sonny Bono’s Estate Plan

“I’ve got you babe.” Those were the words that the beloved Sonny Bono said to Cher in 1965, 33 years before his tragic death in 1998 from a ski accident. Salvatore “Sonny” Bono was a comedian, a father, a singer, and also a congressman who appealed to to the younger generations as a figure of American singer- songwriters. His fame skyrocketed after he married his second wife, Cher in 1964 and produced a show, “The Sonny and Cher Show,” which featured even their own daughter Chaz(Formerly: Chastity) Bono, who is now a man.

Along with his career, his death also sparked some difficulty. Since he died without a will, his estate was even up for grabs, even for his second wife Cher. Cher sued Sonny’s fourth wife, Mary Bono, and the estate for $1.6 million dollars that was in unpaid alimony. That money consisted of: $25,000 per month for six months, $1,500 per month for child support, and $41,000 in attorney fees. Whether or not Cher collected this money is up for debate even to this day.

By not creating his will, Sonny’s legacy suffered drastically. It was all filled with legal fees and like before it is now up for grabs. Don’t make the same mistake that Sonny did. Create an estate plan.

Michelle Profit is an estate planning attorney serving Maryland and the District of Columbia. A Harvard Law School graduate, she has worked in the financial services industry for over 20 years. A dedicated advocate for all of her clients, Michelle Q. Profit personally handles each client case from start to finish to meet the client’s needs and objectives. Michelle listens in the consultation sessions and works with any other client accountants or financial planners to create a comprehensive estate plan.

 

John Lennon’s Estate Plan

John Lennon, a beloved songwriter and singer from the band The Beatles’, was murdered tragically at the age of 40 in 1980. John Lennon always had the motivation to change the world and to imagine a life without destruction. With the backup support from his wife, Yoko Ono, Lennon became a voice for the people of the world. Instead of naturally giving his son Julian full control over his estate like he did at first, Yoko Ono got full control over Lennon’s original song rights and his image. Unfortunately, Lennon’s estate plan became sad just like a ballad due to his son Julian’s fury over his estate. Sixteen years after Lennon had passed away, Julian sued Ono for a larger part of his father’s estate. Eventually, it was settled completely in 1996 and Julian received 20 million in English pounds after the long and limitless legal battle versus Yoko Ono. Some of the lessons that can be learned from Lennon’s estate plan include: Don’t leave your children out of will, Create Steps in order to make sure each one of your heirs receives their part, and Create an Additional Trust just in case your child gets left out. By using this advice, you can avoid family feuds and will be able to make sure your estate plan is executed smoothly.

Michelle Profit is an estate planning attorney serving Maryland and the District of Columbia. A Harvard Law School graduate, she has worked in the financial services industry for over 20 years. A dedicated advocate for all of her clients,Michelle Q. Profit personally handles each client case from start to finish to meet the client’s needs and objectives. Michelle listens in the consultation sessions and works with any other client accountants or financial planners to create a comprehensive estate plan.

Estate Planning Documents You Need

Bigstock-Attractive-Mixed-Race-Couple-P-9992345[1]Everyone needs an estate plan, and every estate plan will contain a mix of different documents depending on the complexity of the estate assets and individual preferences. However, there are a few documents that everyone needs.

Estate plans come in all shapes and sizes. Some are extraordinarily complex and contain thousands of pages of legal documents. Other estate plans contain only a few basic documents. One of the interesting things about estate plans is the documents that make up the simplest estate plans are also part of the most advanced plans. These documents are the basic framework of estate plans. The Chicago Tribune recently discussed what these basic documents are in “Documents you need before you die or become incapacitated.” They include:

  • Will – At its core a will is simply a legal document that declares how a deceased person’s property that is not disposed of by any other legal means should be handled.
  • General Durable Power of Attorney – A standard document that allows a person to determine who should handle his or her finances in case of incapacity.
  • Health Care Power of Attorney – Similar to the other power of attorney, but it allows for someone else to make medical decisions for an incapacitated person.
  • Living Will – Gives prior instructions to medical personnel about what means should be used to prolong a person’s life in the event that the person is terminally ill with no chance of recovery and unable to give instructions at the time.

Meet with an estate planning attorney at Profit Law Firm, PLLC to determine what additional documents you may need.

Reference: Chicago Tribune (July 25, 2016) “Documents you need before you die or become incapacitated