Revocable trusts provide two main estate planning advantages: They avoid the hassle of going through probate - helping privacy after you are gone; that's about it. Revocable trusts do not eliminate estate taxes.
Boston, MA (PRWEB) September 18, 2014
According to Forbes, she passed away at an age when most people have already abandoned the thought of working every single day. Joan Rivers was 81 years old when her daughter Melissa made the difficult decision of taking her off life support (1), but this may have been a decision that the legendary comedienne may have already made before she left us on September 4th, 2014.
Details surrounding River's demise are still unfolding. According to the Guardian Liberty Voice of Las Vegas, Rivers was undergoing endoscopic surgery at a clinic in New York when her respiratory system became compromised (2). She was rushed to the emergency room in Manhattan where she fell into a coma and was placed on life support. Less than a week later, her daughter Melissa authorized medical staff to discontinue life support. New York health officials are investigating the clinic where River's final surgical procedure took place.
“It is very likely that Melissa Rivers was following the wish of her mother when she took her off life support,” states Rocco Beatrice, Managing Director of estate planning and wealth management firm Estate Street Partners, LLC. “In New York, relatives cannot make end of life decisions automatically. An advance directive must be in place and proper procedure must be followed prior to execution. In this case, we can assume that Rivers had planned ahead and left what is known as a living will, advance medical directive or patient advocacy order to discontinue life support or resuscitation procedures.”
Estate Street Partners, LLC owns and operates UltraTrust.com, an online resource for individuals seeking advice on topics such as asset protection, wealth preservation and estate planning. Mr. Beatrice explains: “Most of our clients retain our services thinking almost exclusively about their finances. We often have to remind them about advance healthcare directives, which are very important to include when planning for your future. We learned from the Terri Schiavo case in Florida nearly ten years ago that it is always better to have control over our own medical condition. It seems as if Rivers had this covered.”
Rivers was outspoken about aging, death and estate taxation. She once told Time Magazine that show business had hardened her to the point that she was not afraid of dying (1). She used to joke about her advanced age and her penchant for cosmetic surgery. In a 2010 interview with the Washington Times, Rivers sarcastically explained that she was “thrilled” about estate taxation at the federal and state level, which she considered tantamount to double taxation.
On the issue of estate taxes, Mr. Beatrice has this to say: “We have reviewed a few media reports that give us an idea of the value of Rivers' estate and how she intended to bequeath it. There seems to be a trust, but we don't know too much about it. Based on her sentiment about estate taxes, we really hope it is an irrevocable trust. If it's not, her estate may end up having to pay those death taxes she dreaded.”
According to the Daily Finance, Rivers' net worth before she passed was estimated to have been about $150 million (3). She had excellent taste in real estate; she owned an apartment in Manhattan, a home in California and a property in Connecticut. The fact that Rivers established residence in three states certainly plays a part insofar as taxation. Depending on how her estate was set up, taxes may have to be paid in New York and Connecticut (4).
Rivers was somewhat candid about her estate planning. For example, we know that most of her estate was set up in a trust that mainly benefits her daughter, her grandson and her beloved dogs (3). Other details about Rivers' trust are unknown.
“What we know about Rivers' life and estate planning is based on information that she shared with the public,” explains Mr. Beatrice. “She was a forthright and plainspoken lady, but it seems that she wanted to keep some details about her estate and her family private. In this sense, trusts are always preferred over wills because they are not meant to be made public. We may never know if Rivers' trust is revocable or irrevocable, but there are several reasons why we think she should have chosen an irrevocable trust.”
Mr. Beatrice continues: “Revocable trusts provide two main estate planning advantages: They avoid the hassle of going through probate - helping privacy from a public probate; that's about it. Revocable trusts do not eliminate estate taxes. If Rivers left a revocable trust, her daughter Melissa and her grandson Cooper are not going to get all the money they could get from an irrevocable trust. There is a strong chance that estate taxes will be collected in New York and Connecticut unless Rivers' trust is irrevocable. It works like this: Assets held by an irrevocable trust are not subject to estate tax because they were not owned by the individual who passed away. Thus, if Rivers transferred her assets to an irrevocable trust, her estate would not be taxed because she was not the owner of those assets.”
About Estate Street Partners (UltraTrust.com):
For 30 years, Estate Street Partners has been helping clients protect assets from divorce and frivolous lawsuits while eliminating estate taxes and probate as well as ensuring superior Medicaid asset protection for both parents and children with their Premium UltraTrust® Irrevocable Trust. Call (888) 938-5872 to learn more.
1. forbes.com/sites/trialandheirs/2014/09/10/joan-rivers-can-help-with-difficult-end-of-life-conversations/ 9/10/14
2. guardianlv.com/2014/09/joan-rivers-leaves-150-million-fortune-to-family-and-pets/ 9/11/14
3. dailyfinance.com/2014/09/11/what-joan-rivers-just-taught-pet-lovers-about-estate-planning/ 9/11/14
4. forbes.com/sites/kellyphillipserb/2014/09/07/saying-goodbye-to-joan-rivers-the-bigger-the-funeral-the-bigger-the-deduction/ 9/11/14