Klitzman Law Group, PLLC

Delayed Property Tax and Inheritances

A state law in Massachusetts lets seniors defer paying property tax, until after they pass away. That can leave heirs with an unexpected tax bill.

It is not unusual for retired people on fixed incomes to have difficulty paying their property taxes. When property values rise quickly, seniors' incomes do not, and they struggle to pay the increased amount. For some this can even trigger the need to sell their homes, so they can move someplace less expensive.

To avoid this problem, Massachusetts created a program that lets seniors defer any property taxes, until after they pass away. The taxes are then owed by the estate. It has not been a particularly popular program. Only about 1,000 people are currently enrolled. The reason for that might be the program’s unintended consequences as the Wills, Trusts & Estates Prof Blog discusses in "An Inheritance Damaged by Delayed Property Taxes."

In 1989, a woman named Frances Arntz applied for the program. She continued to do so, until she moved in with her daughter in 2008. At that time, her son moved into Arntz's old home and began paying the property tax regularly.

Even though Arntz passed away in 2018, the town had been charging interest on the deferred property tax, which it is allowed to do. The son inherited the property and received an unexpected bill for $120,000 for the back-property taxes, plus interest.

These types of programs are designed to help the elderly make ends meet.  However, it is important to visit with an elder law attorney to make sure the program is adequately understood.

Reference: Wills, Trusts & Estates Prof Blog (June 21, 2018) "An Inheritance Damaged by Delayed Property Taxes."

Suggested Key Words: Elder Law, Elder Issues

Lisa Marie Presley Sues Money Manager

Elvis Presley's daughter has filed a lawsuit claiming that her former money manager wasted all the assets in her trust fund without telling her.

It is likely that Elvis Presley still makes a lot of money for someone. His intellectual property and likeness are still hot properties. After he passed away, those valuable assets were left in trust for the benefit of his daughter, Lisa Marie Presley. However, if someone is making money off Elvis, then it may not be Lisa Marie. She is claiming in a lawsuit that the trust fund is depleted and she blames her former money manager, as the Daily Mail reports in "Lisa Marie Presley claims her ex-money manager lost $100 million trust fund left to her by Elvis with 'reckless and negligent' investments while paying himself a salary of $700,000."

According to the lawsuit, the money manager decided to sell 85% of the stock of Elvis Presley Enterprises in 2005, in exchange for $40 million in cash and $25 million in holding company stock that owned American Idol. When the trust did not generate enough money to fund her normal lifestyle, Presley claims the money manager did not tell her.

In 2014, the American Idol Company declared bankruptcy in 2014 and the stock became worthless as well. Presley now claims the trust fund has only $14,000 and that she has debts totaling $16 million. On top of that, she is currently undergoing a divorce from her fourth husband and he is asking for $263,000 in annual alimony.

The money manager denies the accusations and is countersuing for money he claims he is owed.

Reference: Daily Mail (June 19, 2018) "Lisa Marie Presley claims her ex-money manager lost $100 million trust fund left to her by Elvis with 'reckless and negligent' investments while paying himself a salary of $700,000."

Suggested Key Words: Trust Litigation, Trust Administration

 

What to Do Now with Digital Assets

What happens to digital accounts after someone passes away is still sort of a gray area in the law. There are a few simple steps that you can take now, to make it easier for your heirs to manage things.

Access to digital accounts after the account holder passes away is one of the most discussed and controversial areas in estate law. The digital world is still new enough that the law just has not had enough time to develop standard rules people can rely on.

Everything varies greatly between different states and between different websites on which people have accounts. Some states have almost no laws that apply to digital accounts. Other states have some laws that apply in some circumstances.

However, there are a few things everyone can do now to make it easier for others to handle their digital accounts, after they pass away, as Komando discusses in "One Essential thing you must do with your digital life before it's too late," including:

• Make a list of all your accounts and passwords. Store it in a safe place, where a trusted person can find it after you pass away.
• Create a Facebook legacy account. This will let a person of your choosing access your account to leave a farewell message but not allow access to your private messages.
• Set up a trusted contact with Google. If your account ever goes inactive, then a person of your choosing will be contacted and he or she can manage your account. This feature is customizable, and you can choose what to allow access to, as well as how long you have to be inactive before the trusted person is contacted.

Reference: Komando (June 8, 2018) "One Essential thing you must do with your digital life before it's too late."

Suggested Key Words: Estate Planning, Digital Assets

Stupid Estate Planning Mistakes

There are some estate planning mistakes that are extremely basic errors that no one should ever make. Yet, they are made routinely.

One of the strange things about people with money, is that they are often very smart in how they handle that money. However, they are not so smart when they decide how that money should be distributed in their estate plans. People who should know better make stupid, for lack of a better word, estate planning mistakes that could be avoided.

A comprehensive list of these mistakes probably is not possible but recently the Wills, Trusts & Estates Prof Blog discussed a few of them in "10 Surprising (or Surprisingly Common) Estate Planning Mistakes," including:

• People do not name contingent beneficiaries on life insurance policies or retirement accounts. If the beneficiary predeceases the account holder, the money reverts to the estate and requires probate.
• People like to sell property to a family member for $1 or some other far below the market value amount. This can cause problems with the IRS for the family member, if the sale happens shortly before the seller passes away.
• Some people name specific investments in their wills. If they no longer hold that asset when they pass away, and if it should happen to be worth a lot of money, then that can force the estate to purchase that investment.
• Giving gifts without regards for how they might have an impact on the lives of the recipient.
• Leaving money for minors, without creating a guardianship for it.

Reference: Wills, Trusts & Estates Prof Blog (June 5, 2018) "10 Surprising (or Surprisingly Common) Estate Planning Mistakes."

Suggested Key Words: Estate Planning

What to Do When You Cannot Find a Will

If one of your parents passes away and you do not think that they have a will or cannot find it, then you should know what to do.

Many Americans pass away, without ever having created a will. Many others have created wills, but they do not tell their families about them.  As a result, the families cannot find those wills, when they are needed. These are very common occurrences that often give children, whose parents have passed away, a lot of headaches.

Fortunately, things do not have to be too difficult. There are a few steps people need to take if they find themselves in this situation, as Forbes discusses in "Your Parent Didn't Have a Will: What Should You Do Now?"

Those steps include:

• First check to see if your parent had a safety deposit box. Your parent might have created a will and put it in their safety deposit box. It is very common for people to leave their wills there. It can be difficult to gain access to these boxes, but it is possible.
• Search around the house for a will. Check any place your parent put any important financial or legal information. You might find a will stuffed away in some old file folder at the back of a drawer.
• While you are doing this, gather all of the information that you can find about your parent's finances. This information will help you later, so you might as well get it while you are searching for the will.
• Hire an estate attorney to help you. The attorney can assist with the probate process and make things much easier on you.

Reference: Forbes (June 4, 2018) "Your Parent Didn't Have a Will: What Should You Do Now?"

Suggested Key Words: Wills, Estates

The Benefits of Working Longer

It is possible that choosing to work past the age of retirement, can actually help some people live longer.

When we normally think of people who are working past their retirement age, we often take some pity on them. That is often appropriate since some people have to keep working because they do not have the money to stop. However, that is not always the case. Some people like to keep busy and they want to continue working.

It is possible that they are making a very wise decision to do so. Working longer could help people to live longer, as Harvard Health Publisher discusses in "Working later in life can pay off in more than just income."

Staying active helps keep some chronic illnesses at bay. For example, the social and cognitive abilities necessary for some jobs helps stave off dementia. This does not mean people should avoid retiring or that they need to continue to work 40 hours a week, until the day they die. What it does mean is that it is important to stay active, both mentally and physically, as long as people can do so. Part of that mental activity can include some work.

Continuing work is not for everyone. It is typically not a good idea for people whose jobs have a physical labor component. Consult with a doctor to make sure that you can still work, if you are considering doing so past your retirement age.

If you are concerned that you do not have enough money to retire on so that you have to work, then talk to an elder law attorney about your other options.

Reference: Harvard Health Publishing (June, 2018) "Working later in life can pay off in more than just income."

Suggested Key Words: Elder Law, Elder Issues