It is always difficult to plan for your death… but you should think about it before it is too late!
The famous and beloved Aretha Franklin was 76 years old and passed away without having a will or trust for her $80 million estate (as filed in Michigan’s Oakland County court last week). Aretha was not married at the time of her death and survived by her four adult sons. One of her sons has special needs and is legally represented by a legal guardian. This means that Aretha’s estate will have to go through the Michigan Probate process to close her estate and distribute her assets to her four children. This will be an expense and public legal process.
There are new federal lifetime gift tax exemption for 2018 (including distribution upon death) is $11.18 million per person. So this means Aretha’s estate will have a big federal tax bill when all is settled in the courts. After the first $11.18 million, federal tax rates max out at 40%! This will mean a large part of Aretha’s estate will not be going to her children.
Lesson to learn from this sad death and estate issue… if you are in California and have more than $40,000 in real estate (HA!… almost anywhere in California, if you own a house it is worth more than $40,000!) or $150,000 or more in liquid assets (without assigned beneficiaries), you need to talk to an estate planning or elder law attorney to understand how to protect this asset from Probate and possibly protecting the house from California Medi-CAL Estate Recovery. If you have a large estate worth more than $11 million dollars you should call an asset protection attorney than can look at setting up a Charitable Remainder Trust or other ways to protect your hard earned money by reducing taxes on your estate.
The best advice is to find out what will happen to your assets if you die tomorrow. If this is not want you want to happen… go see an experienced Estate Planning Attorney or Elder Law Attorney (if you have been on or plan to need Medi-CAL).
LA LAW Center in Burbank CA offers free consultations and we pride ourselves on helping families get their affairs in order. Call 818.241.4238
www.la-lawcenter.com