There’s nothing at all like the death of a celebrity to bring home the reality that there is an end to life for us all. This is especially so when the death is abrupt and completely unexpected. It could be a favorite actor, an athlete, or even a much adored singer such as Prince. When such a death happens, one must stop and think about the other issues that inevitably follow, especially when it comes to decided what will happen to the estate of the individual who passes away.
Imagine the shock of finding that your loved one left no will in place to help determine how the estate is to be divided. The attorney and court fees alone could take their toll on what has been left. Before they get their portion though rest assured that the IRS will get its share. The amount that the IRS can draw from an estate can be as high as 40%. Of course, this can happen just as easily with a poorly managed will, but it is still better to have one in place than not.
In the case of Prince, his lack of a will means that according to Minnesota law each of his half-siblings have a claim to a portion of his estate. While he may or may not have had anything to do with these siblings in life, they will certainly have a say in what happens with his estate in death, and then the IRS takes their share.
There are other will-related gaffes that can have a huge impact on the estate left behind. The actor Seymour Hoffman and his partner Marianne O’Donnell never married, but had three children together. His last updated will only named one of the three children. This means that the other two children through no fault of their own are excluded from the estate. Because Hoffman and O’Donnell were unwed, it also means that the IRS was able to claim much more than the amount to which they would have been entitled. Whether it is given during life or after death, the amount given a spouse is considered tax-free. The federal estate tax would not come due until after the death of the spouse.
There are times that choosing to pay those taxes is a personal one. In the case of James Gandolfini, he chose to leave a large sum to his sister. While it was a move that was considered negative by many estate planners, he simply wanted to ensure that his sister was cared for upon his passing. In cases such as this, choosing to pay the taxes is one that only the individual leaving the estate behind can make.
Where There’s A Will There’s A Way
Making choices that have to do with what happens once a person passes away is not easy. Creating a will can be hard on the psyche when deciding who should receive a portion of the estate, how much, and other such issues. Having an attorney who is experienced in estate planning and will creation is a must. Such an attorney will help to decide the best path for the beneficiaries to receive their portion of the estate while helping to avoid any unnecessarily exorbitant tax burdens.
In the case of Prince and his estate, even a simple will would have made a world of difference. Don’t let loved ones get caught in the same sort of situation. Be sure to establish a proper will and keep it updated throughout life so that sort of situation can be avoided.