I'm guessing only planners may think like this but I have always been fascinated after a celebrity passing, what type of planning they may have done to protect their estate and pass their successes on to the next generation. Recently we lost Debbie Reynolds and her daughter Carrie Fisher in the same week and I couldn't help but take a peak at what their various estates looked like and what level of planning may have been accomplished.
I must admit, I have always been fond of Debbie Reynolds and her daughter. Perhaps because there are so few of the old guard left, true Hollywood royalty, or maybe because of how they have both overcame challenges in their life. Bottom line, I just felt they were two of the good people walking this Earth.
Overall, I think both of their estates would have been rather simple to plan. There weren’t many heirs so likely the issues would be simple. For Carrie, her one daughter Billie Lourd would likely get the house and whatever money there may be. Did Carrie have a will? Was it updated? Same questions all of us need to answer but in her case the absence of one would likely not change much with only one daughter. Debbie on the other hand had a trust. Since this is obviously a more private way of distributing assets, we may never know the details unless it's released by her son Todd, where all the assets went. I would surmise however since this family was very close, Todd would be the largest benefactor, likely a smaller portion to Billie Lourd and if I were a betting man, Debbie listed several charities that would also share in the wealth. For both ladies, how much wealth are we talking about?
For Debbie, it was reported at $60 million. I doubt that very much. She may have made that in her career but some of her business endeavors did not fare very well including a casino that she filed for chapter 11 on in 1997 and a personal bankruptcy the same year. She was a fighter and survivor however and as many know, a huge collector of Hollywood memorabilia. Although some of it was used to pay off debt, the remaining sales along with her performing well into her eighties probably allowed her to rebuild a portion of her earlier wealth. She lived in a very modest $1,000.000 home in Beverly Hills so much of her work later in life was more so out of pleasure and to maintain her lifestyle.
As for Carrie, her estate was probably similar to her mom's. Perhaps in the $20-25 million range with much of that in her $14 million Beverly Hills home next door to Mom. No one certainly needs to feel sorry for her or Billie but it was dissappointing to me that she did not own the Princess Leia image or any piece of the merchandising which I guess was simply not done back in the day. I will be curious to see if the lawyers decide to go after Disney and essentially blackmail them to force additional payouts in a time of tragedy. Disney from my perspective owes her nothing. I'm sure they were insured against losing a star in their film, but that money belongs to them. Like all of us, it is our responsibility to plan and prepare for this eventuality.
In the end, Billie Lourd will be well taken care of and even get to carry the torch as she has a role in the next Star Wars film. Even though her Mom and grandmother were not ultra wealthy, they fought for what they accumulated and have started this young lady off very well. Hopefully their fight, persistence and goodness will also transfer to Billie which in reality are the most important things to pass along to the next generation.
By Roy Larsen, CFP®, AAMS®
What if’s are very rarely top of mind for most of us but with a little knowledge, time and most importantly execution, peace of mind for a possible incapacitation can be quickly addressed. In this article I hope to address the basic differences in Power of Attorneys’ and when this simple document simply isn’t enough. Lastly, what powers do you have if something happens to your adult children and grandchildren?
Did that last one get you thinking? Let’s start there:
Our adult children- Your child or grandchild comes to you saying, “Mom, Dad, now that I’m 18, I need to prepare a power of attorney so you can still act on my behalf in the event of an emergency”. Happens all the time right? OK…my unscientific research tells me this conversation has never happened in earth’s history! Quite likely, it isn’t something as parents we are likely thinking about either. The fact remains that if our children are legally an adult and they are in an accident or have another health event, you as a parent may just have to go to court to make decisions on their behalf! Don’t let it happen. As they probably don’t have finances to worry about yet, at least make sure they create a Healthcare Power of Attorney giving you the ability to act on their behalf.
General Power of Attorney versus a Durable Power of Attorney- First an ordinary or general POA can have various ranges of authority from very general to only a very specific purpose. The general POA is often used for those that can still legally act for themselves and that principle can revoke the POA at any time he or she is still capable to do so. Once that person is incapacitated, a general power of attorney is automatically revoked. The durable POA on the other hand continues to be valid even after incapacitation and very often is triggered by the incapacitation itself. A durable POA often requires specific language based on the state they are used in. Often Powers of Attorneys are used in conjunction with a living trust which can provide further instruction on asset management, income and distribution.
Does every entity recognize a General or Durable Power of Attorney? - No! It is not all encompassing. For instance, many banks and brokerage firms although they will request submission of your POA, will want documentation of their own. There have been far too many fraud cases involving the appointed representative so financial institutions now require additional hoops to jump through. This helps to protect their client as well as avoid being sued. It is best to update these documents frequently and keep them current as well as checking with financial institutions in advance to discover their requirements.
A second institution which will not recognize your POA is Social Security. You will need to use their specific forms in order to transact business on behalf of someone incapacitated. The form number is 2848 and they call the person acting on behalf of a beneficiaries funds, a “representative payee”.
Living Wills- Lastly a complement to any Health Care Power of Attorney is typically a living will. (Which is different from a Living Trust) While the Healthcare POA will cover major medical decisions when you are incapacitated, the Living Will addresses “End of Life” preferences in terms of pain relief and to what measures you would want to be kept alive depending on the condition it would potentially leave you in. Caringinfo.org is a great site with additional resources and up to date living will forms for the State you reside in.
Still have questions? Reach out to your financial advisor or feel free to contact our office on the steps necessary to create a comprehensive Estate Plan.
As the surviving spouse, you have several filing choices that may be appropriate. You may be able to choose married filing jointly, married filing separately, qualifying widow(er), or head of household.
Married filing jointly: You can usually file a joint return for the year your spouse died. Generally, you'll have to file in cooperation with the executor or administrator of your spouse's estate. If you remarry before year-end, you cannot file a joint return with your deceased spouse for that year.
Married filing separately: To determine the most advantageous approach, you should figure taxes according to both the married filing jointly status and the married filing separately status.
Qualifying widow(er): If you meet certain requirements (e.g., you support a dependent child for whom you can claim a tax exemption, and you have not remarried), you can file as a qualifying widow(er) in each of the two years following the year of your spouse's death. This status allows you to use the married filing jointly tax rates.
Head of household: If you are ineligible to file jointly or as a qualifying widow(er), the head of household filing status may be possible. To qualify, you must provide support for a relative and meet several conditions.
Regardless of whether you file a joint return or a separate return for your spouse, you must write "DECEASED" across the top of the return, along with your spouse's name and date of death.
If you file a joint return and no personal representative has been appointed, write your (and your spouse's) name, address, and Social Security number in the regular name/address space at the top of the return. To sign the return, write "Filing as Surviving Spouse" in the space for your spouse's signature, then sign in the space for your own signature. If you are not filing a joint return, write your spouse's name at the top of the return and the personal representative's name and address in the remaining space. If a personal representative has been appointed, he or she must sign the return. Again, you must also sign if it is a joint return.
For additional details, consult a tax professional.
Roy Larsen, CFP®, AAMS® is a CERTIFIED FINANCIAL PLANNER™ practitioner, financial advisor and wealth manager. Roy is President and CCO of Larsen Wealth Management, LLC, a Fee-Only Registered Investment Advisory firm in Cumming, Georgia. Roy is an expert in successful retirement living and specializes in holistically managing the multiple planning and investing issues surrounding the receipt of a large lump sum. Roy Larsen, CFP®, AAMS® is available in all 50 States. He can be reached for comment at 678-456-8138,firstname.lastname@example.org or www.investinretirement.net
Roy Larsen is a Certified Financial Planner™ practitioner and Fee Only Wealth Manager who resides outside of Atlanta, Georgia.
Roy's Financial Blog contains articles on multiple financial life events as well as his favorite questions from he receives from around the country as a an expert panel member for Investopedia's Advisor Insights.