Funerals for the rich

A crypt beneath New York’s Basilica of St. Patrick’s Old Cathedral is available for $7 million. This isn’t just any crypt, It’s one of the last full-body burial spots in Manhattan and can hold nine caskets and 10 cremated remains. And at least three prominent NYC families have already inquired about it.

Today, funerals are becoming the way for the rich to flaunt their wealth. Along with lavish weddings and over-the-top birthday parties,  funerals have become a way for the rich to flaunt their wealth one last time.

William Villanova, general manager of Frank E. Campbell Funeral Chapel, New York’s “undertaker to the stars.” told “Accounting Today, “Whatever we can do that is legal, lawful and in keeping with the integrity of our profession, we will do.”

CEO Nigel Lymn Rose of the U.K.-based A.W. Lymn funeral home said, custom-made Rolls-Royce Phantom VII hearses and a fleet of 25 matching Rolls-Royce sedans are sought-after internationally.

He also told Accounting Today, “I get inquiries from people who have always driven Rolls-Royce’s and want their final journey to be in a Rolls-Royce.  They “want to make a statement: Ride it in life, ride it in death.”

Accounting Today also told of  the recent funeral of a fashion designer they did not name, where they assembled 120 gospel singers who performed as the casket was carried from the hall. A marching band performed at one service, and Lincoln Center’s Alice Tully Hall was covered in blue hydrangeas to mirror the deceased’s Hamptons home.

Businessmen and billionaires are often aggressively competitive in life “and that doesn’t end when they think they’re going to die,” said Ted Klontz, a Nashville, Tennessee-based financial psychologist.

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Avoid estate planning mistakes like Aretha

Aretha Franklin may have been the Queen of Soul, but she made gigantic estate planning mistakes that you should avoid. Franklin, who was divorced, died without a will or a trust despite having four grown children, one of whom has special needs.

If you follow in her footsteps could mean your loved ones won’t receive the inheritance you intended; disbursements could be long-delayed; ugly family squabbles may ensue; and your estate might owe additional taxes and your financial life will become a public record. If you have a special needs child, he or she may wind up losing some government benefits.

Many Americans don’t have a will or a living trust. A 2017 survey by Caring.com found that only 4 in 10 adults do. The study noted 64 percent of Gen Xers and 42 percent of boomers don’t have a will. The top reason for not taking these easy estate-planning steps, according to survey respondents: they “hadn’t gotten around to it.”

Chances are you don’t have anywhere near Franklin’s reported $80 million. But the actual dollar value isn’t the point. It’s about making sure your loved ones receive what you want the way you want them to.

If you don’t have a will, your estate will wind up in probate court, which means it will become public for anyone to see.

In Franklin’s case, the feds will take a big bite, too. There’s a 40 percent estate tax on an estate’s assets over $11.18 million (the exception to this: money or assets left to charity). If Franklin’s estate truly is worth $80 million, the Internal Revenue Service will snag $27.5 million of that.

Get a will for Pete’s sake. You can do it online but your better off having a real attorney to make sure it is totally legal. If you don’t have a will, your estate will wind up in probate court, which means it will become public for anyone to see and create hassles for your loved ones.

 

 

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Federal estate tax and New York

Last December, Trump signed into law  the Tax Cuts and Jobs Act that took effect this past January. The main feature of the law is that prior to the law being enacted, the federal estate and gift tax exemption was $5.49 million. However, the Act increases the federal estate and gift tax exemption to $11.18 million or $22.36 million for married couples starting in 2018. It also increases the per person “generation-skipping transfer tax” exemption to approximately $11.18 million. Under the Act, the increased exemptions will remain in effect through 2025, after which they will return to the 2017 federal estate tax exemption.

What about New York? In 2017, New York State increased the tax exemption to $5,250,000 which will be in effect until the end of 2018. In 2019 the exemption will increase to over $5.6 million and will increase each year.

A common estate planning trick for married couples is to fund a trust with the maximum amount that can pass free of federal estate tax with the rest of the estate being sheltered by the unlimited marital deduction, resulting in no estate tax due on the death of a spouse. However, New York has decoupled its exemption from the federal exemption, and that forces couples to make a decision. If at death, the he or she wants to put the total amount they are able to pass free of federal estate tax into a trust they will incur a New York estate tax. Or, they can fund the trust with only the amount that can pass free of both New York and federal estate tax in order to not incur any estate tax on the first death. Although decoupling is not new to New York residents, the new laws significantly impact the way  New Yorkers decides to structure their estate plan.

With the passage of the new tax law and increased federal estate tax exemption, the cost of decoupling is bigger than ever.  An estate plan which directs the full amount that can pass free of federal estate tax into a trust will incur $1,258,800 in New York estate taxes in 2018.

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Social Security, Medicare and Retirement

If you’re an older worker and decide to file for Social Security before you reach full retirement age, you need to account for the impact that income will have on your benefits. That’s because your benefits would be reduced temporarily and up to 85% of your benefits would be taxed if your combined income exceeds a certain threshold.

More income can also push you into a higher tax bracket and that can trigger Medicare surcharges.

For more details read this article at Kipplinger.

And what about longevity? Non-smoking 65-year-old women have a 50% chance of reaching the age of 88, while their male counterparts have the same chance of living for 20 more years, says Kipplinger.com

So you should get long-term health care coverage, plan for incapacity and avoid probate and estate plan to lessen your tax burden. Kipplinger suggests,  “Estate planning techniques such as credit shelter trusts, giving assets away during your life, or even changing the state in which you live, can help minimize the impact of these taxes.” 

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Biological dad not entitled to money in son’s death

A Milwaukee County, Michigan judge has denied a biological father a share of the wrongful death proceeds awarded in a suit brought by the mother of a 25 year-old man who died in a mental health facility back in 2012.

 Alicia Johnson, 48, argued that the biological father, 53 year-old Marcus Crumble, her first cousin, didn’t deserve a cent because he raped her when she was 15 and never helped financially with the son who was born as a result of that rape.

Circuit Judge David Borowski agreed with her, writing,

“The Court has seen far too many absent fathers in this community. Out of wedlock births, where a ‘father’ both literally and figuratively abandons a child are a scourge.

“Under the tragic facts and circumstances of this case, including the fact that Mr. Crumble committed both statutory rape and incest, this Court will not allow a six-figure windfall to be awarded to Mr. Crumble.”

However, Crumble was awarded the amount he chipped in for the funeral. Crumble rekindled somewhat of a relationship with his son, Brandon Johnson, after he graduated  college.

 Borowski wrote, that anyone 18 years old could create a will and direct their estate not go to an abandoning parent. But noted that very few unmarried people without children under 30 actually create a will.

He wrote the equitable powers of the probate court allow him to find that allowing Crumble half of the settlement would amount to unjust enrichment.

Borowski ordered the estate’s special administrator to pay Crumble only the amount he spent for Brandon’s funeral, give half of the remaining $837,000 to Alicia Johnson, and keep the balance for 90 days, or longer if Crumble appeals.

 

 

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