You may have heard by now that the Gift and Estate Tax exemption amount was increased by the Tax Cuts and Jobs Act of 2017, which became effective on January 1, 2018. This article is to highlight some of the key estate planning issues under the new tax law.

In 2019, the Gift and Estate Tax exemption as adjusted for inflation is $11.4 million, and in 2020, the exemption amount will be increased to $11,580,000. Historically, this is the highest the exemption has ever been. The exemption will continue to increase incrementally due to a built-in inflation adjustment until January 1, 2026, when, absent an act of Congress, the exemption will be decreased to about $6 million. The value of a decedent’s estate in excess of the available exemption upon death will be subject to a 40% estate tax.

This dramatic increase (and future expected decrease) in exemption poses a range of estate planning issues which affect all clients, regardless of the amount of your wealth. There are also some opportunities for tax savings.
Continue Reading With New Tax Law, Your Estate Planning May Need Some Revisions

Last Thursday, the United States Supreme Court ruled in Clark v. Rameker that funds held in inherited individual retirement accounts (IRAs) are not “retirement funds” for bankruptcy purposes.

In October 2010, the Clarks filed for bankruptcy and claimed that Heidi Clark’s $300,000 inherited IRA was exempt from their bankruptcy estate under Section 522 of the Bankruptcy Code (which provides that tax-exempt retirement funds are exempt from a bankruptcy estate). The bankruptcy trustee and creditors objected to this, taking the position that the funds were not “retirement funds” within the meaning of Section 522. The Bankruptcy Court agreed with the trustee and creditors.

The district court ruled that inherited IRAs are exempt because they retain their character as retirement funds, but the US Court of Appeals for the Seventh Circuit reversed that ruling. The Supreme Court agreed with the Seventh Circuit, holding that the funds in an inherited IRA are not set aside for the debtor’s retirement and, thus, are not “retirement funds” under the exemption in Section 522.


Continue Reading U.S. Supreme Court Ruling Regarding Inherited IRAs Highlights the Benefits of IRA Trusts

It was recently revealed that the late Paul Walker left his entire estate—valued at approximately $25 million—to his 15-year-old daughter, Meadow.

As reported, Paul Walker named his father as the executor of his will and his mother, Cheryl, as the guardian of Meadow’s person and now-$25 million estate. Prior to his death, Meadow lived

Over thirty-five years after Bing Crosby’s death, the California Court of Appeal put an end to the continuing battle over the Crooner’s right of publicity.

I Can’t Begin to Tell You

In 1930, Harry Lillis Crosby—nicknamed Bing for his love of a newspaper parody, “The Bingville Bugle”—married first wife, Wilma Wyatt (known professionally as Dixie Lee). The mother of his first four sons, Wilma died in 1952. In her Will, Wilma gave her community property to her two sons, which was held for their benefit in a trust known as the Wilma Wyatt Crosby Trust (the “Wilma Trust”).

Over the next several years, Bing was regularly the topic of gossip as he romanced several of Hollywood’s most beautiful women. In 1957, Bing married Kathryn Grant, a young actress and singer that Bing met on the Paramount lot. Together they had three children and remained married until Bing’s death on October 14, 1977 on a golf course in Madrid.

Bing left the residue of his estate to a trust for the benefit of his wife, Kathryn. Subsequent to Bing’s death, HLC Properties, Limited (“HLC”) was formed for the purpose of managing Bing’s interests, including his right of publicity.

Pennies from Heaven

Under the common law of California, there exists a “right of publicity” in a person’s name, likeness and identity. In 1971, the California Legislature established a statutory right of publicity in a person’s “name, voice, signature, photograph, or likeness.” After a controversial California Supreme Court decision in 2007, the California Legislature clarified that the right of publicity is freely transferable “by means of trust or testamentary documents.”


Continue Reading Celebrity Trusts & Estates: Another Battle in the Saga of Bing Crosby’s Right of Publicity Comes to an End

Family Drama

Casey Kasem’s three adult children from his first marriage have spent the last several months in L.A. County Superior Court fighting their stepmother, Jean, for control of their father’s personal affairs through a conservatorship proceeding.

Casey’s daughter Julie originally filed a petition seeking to be appointed conservator of her father based on claims that Jean had been isolating the beloved American Top 40 host since he became essentially bedridden this past summer due to advanced Parkinson’s Disease. The petition alleged that their stepmother (best known for playing the wife of Nick Tortelli on “Cheers”) has refused their visits despite their father’s requests. Since such accusations of isolation are considered a form of elder abuse in California, Jean naturally denied these claims, saying that unspecified “disturbing” conduct by the stepchildren would make visits in the family home an “intolerable and unpleasant experience for us all, including specifically [for] Casey.”

Despite the accusations of abuse, the children’s request for an emergency conservatorship was denied on November 19, 2013. At that hearing, the judge indicated that Casey was “receiving either good to excellent care” and found “no good cause for a temporary conservatorship.” However, the independent court investigator’s report confirmed that Casey wants to see his children. In light of this, the court instructed each side to set aside its “bad blood” and attempt to resolve their problems. Predictably, Jean’s initial offer to allow the children to see their father for one hour per month under heavy security was rejected by the children. Jean and Julie announced at the December 20, 2013 hearing that they have reached a settlement regarding visitation, though the details were not revealed. Casey’s other daughter, Kerri, has so far been unwilling to agree to the restrictions Jean wants to place on visitation and says she may file a petition to see her father without those restrictions.


Continue Reading Celebrity Trusts & Estates: Casey Kasem Conservatorship Battle Highlights the Need for Clarity Regarding Control over Visitation