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Why Is Daughter of Comic Book Legend Stan Lee Looking for More from Estate?

On Nov. 12, 2018, the legendary comic book creator Stan Lee died of heart and respiratory failure in his sleep at age 95. Lee had amassed a fortune estimated at between $50 and $70 million through the iconic characters he co-created, including Spider-Man, Black Panther, and the X-Men. In his final days, he’d allegedly suffered elder abuse and been financially abused by several people in his inner circle.

Microsoft’s recent article, “Here’s Who Inherited Stan Lee’s Estate After He Died,” explains that Lee’s daughter has continued pursuing various legal actions to get everything.

“I want my museum, I want to do a restaurant — Stan Lee’s Super Subs — I want to do a big Spider-Man Stan monument to put my family’s ashes somewhere,” she told AARP. However, one of those lawsuits against Pow! Entertainment regarding her father’s intellectual property was thrown out of court for being “meritless,” and Lee was sanctioned $1 million in 2020.

Stan Lee married Joan Boocock in 1947, and their daughter J.C. was born in 1950. Until she died in 2017, Joan kept a steady hand on the rudder of the family’s assets, according to AARP The Magazine. But J.C. wasn’t very good with money, according to her dad.

He and Joan created a trust to prevent her from burning through her inheritance before her parents died. The control of Stan Lee’s fortune allegedly led to J.C. shouting and physically abusing her elderly father.

In February 2018, Lee filed a notarized declaration with his attorney in which he said his daughter would often ring up credit card charges of $40,000 a month and that when the two disagreed about money, she “typically yells and screams at me and cries hysterically if I do not capitulate.” He worried that “after my death, she will become homeless and destitute” if he changed the trust stipulations.

The declaration blamed Jerardo “Jerry” Olivarez, Keya Morgan, and J.C.’s attorney, Kirk Schenck, for unduly influencing Stan Lee’s daughter to “gain control over my assets, property, and money.”

Days later, Lee repudiated the declaration, and he, or someone close to him, fired his attorney. He sued Olivarez and his former attorney right before his death, alleging both men had taken advantage of the 95-year-old for their monetary benefit.

In July 2022, Stan Lee’s estate settled the case against Olivarez out of court, and in November 2022, a judge dismissed a criminal case against Morgan after a mistrial. He’d been facing charges related to the alleged theft of about $200,000 from Lee.

Reference: Microsoft (June 15, 2023) “Here’s Who Inherited Stan Lee’s Estate After He Died”

How Much Money to Give Away with Upcoming Tax Changes?

With inflation, the current federal estate tax exemption amount, which you can have when you die without paying federal estate tax, increased to $12.92 million for individuals for 2023. That’s up from $12.06 million in 2022. It will jump to $25.84 million for couples in 2025, up from $24.12 million in 2024. However, those rates sunset at the end of 2025. Without action from Congress, the exemptions will revert to the levels in place before the 2018 Tax Cuts and Jobs Act increased them. That’s about half the amount the exemption has grown to by then due to inflation, says Microsoft’s recent article entitled, “If I have $10 million, how much should I give away while I’m alive?”

Few families have faced federal estate taxes in the last few years, as the IRS has seen about 1200 taxable-estate returns in 2020. However, more families would have to look at the effect of estate taxes if the exemption went back down to $6.5 million per individual. A total of 17 states and the District of Columbia also have their own estate tax and inheritance thresholds. While a number like $6.5 million sounds big, it’s really now just a healthy 401(k) and a nice house in a big city

If you have something like $10 million, and you decide that giving away $3.5 M is the best tax scenario for your estate, you probably aren’t going to write a check. You’ll be looking into trusts and other advanced estate planning techniques that require the help of an experienced estate planning attorney. Those take time, and there’s no way to push them to a December 31, 2025 deadline.

One reason you’d want to give money away while you’re alive is to lower the size of your estate when you die, which would minimize taxes. If you have assets above the exemption limit set by the IRS, the federal tax will likely be 40% on the amount over that limit. There are a number of ways to give away a significant amount of money to lower the value of your estate. People hesitate because most of those options are irrevocable, so you can’t change your mind later.

An issue is using up your exemption by giving away money. If you have $10 million and pass away after the exemption goes down, you’d owe federal estate tax on the $3.5 million difference. If you had given away that $3.5 million before the end of 2025, you’d have a $3 million exemption remaining, and you could have made a wise tax move — at least as long as you stayed under the new threshold. If you gave away more than $6.5 million between 2018 and 2025 — up to the limit during that time — the IRS says you won’t be penalized.

However, if the exemption stays the same after 2026, at nearly $13 million, if you gave away $3.5 million, you’d have essentially $9.5 million left in lifetime exemption. However, be careful not to use up your entire exemption. If you give everything away while living, you won’t have any exemption left. The annual gift-giving limit without losing any of your lifetime exemptions is $17,000 per recipient in 2023.

Reference: Microsoft (Aug. 7, 2023) “If I have $10 million, how much should I give away while I’m alive?”

How to Pass on Family Heirlooms with Fewer Estate Battles

Family feuds are more likely over Aunt Josephine’s jewelry than the family home. Putting sticky notes on personal items before you die or expecting heirs to figure things out after you’ve passed often leads to ugly and expensive disputes, says a recent article from The Wall Street Journal, “Pass On Your Heirlooms, Not Family Drama.”

Boomers handling parents’ estates and assessing their personal property are having more conversations around inheritance and heirlooms. However, there are better ways to plan and distribute property to avoid family fights over cars, jewelry, furniture and household items.

The person you name to handle your estate, the executor, typically distributes personal property. Therefore, pick that person with care and clarify how much power they will have. An example of this comes from a police officer in Illinois who has been settling his father’s estate for nearly two years. His father owned more than twelve vehicles, a water-well drill rig and two semitrailers of car parts and guns dating back to the Civil War. He also listed 19 heirs, including stepchildren and friends. He told his son he knew he could handle everyone and the stress of people who “aren’t going to be happy.”

If you want a particular item to go to a specific person, make it clear in your will or trust. Describe the item in great detail and include the name of the person who should get it. A sticky note is easily removed, and just telling someone verbally that you want them to have something isn’t legally binding.

Without clear directions, one family with five siblings used a deck of cards and played high card wins for items more than one sibling wanted. Only some families have the temperament for this method.

In one estate, two sisters wanted the same ring. However, there were no directions from their late parents. An estate settlement officer at their bank had a creative solution: a duplicate ring was made, mixed up with materials from the original ring, and each daughter got one ring.

Ask your estate planning attorney how to address personal heirlooms best. In some states, you can draft a memo listing what you want to give and to whom. It is legally binding, if the memo is incorporated into a will or trust. If not, the personal representative can consider your wishes. Make sure to sign and date any documents you create.

Get heirlooms appraised to decide how to divide items equitably, which to sell and what to donate. If heirs don’t want personal property, they can donate it and use the appraisal to substantiate a tax deduction. Appraisals will also be needed for estate tax and capital gains tax purposes.

Reference: The Wall Street Journal (July 30, 2023) “Pass On Your Heirlooms, Not Family Drama”

Transferring Property to Heirs? Skip Top Five Mistakes

It is not difficult to ensure the smooth transfer of ownership of your property to a spouse, children, or other heirs, as long as you have an estate plan created by an experienced estate planning attorney and know what pitfalls to avoid. Most importantly, says the article “I’m a Financial Planner: Here Are 5 Mistakes You Must Avoid When Transferring Property to Heirs” from GoBankingRates, if you die without a will, your state’s intestate succession or next-of-kin laws will determine who inherits your house if yours was the only name on the deed.

Next-of-kin succession varies by state, but for the most part, the priority order is first the surviving spouse, biological and adopted children, parents, and siblings, followed by grandparents, aunts, uncles, nieces, nephews, cousins and extended family members.

You’ll want to know how your state treats intestate property to avoid unwanted surprises for your family. For instance, in some states, full siblings are prioritized over half-siblings, while in other states, they are treated equally.

The biggest mistake is dying without a will and an updated deed. In some states, the property will need to go through probate if the surviving heir is not in co-ownership of the house, regardless of what’s stated in the will.

The solution is simple. Add an adult child or the person you intend to be your executor to the property’s deed via a warranty or quit claim deed. This prevents the family home from going through probate and seamlessly transfers to the individual you want to handle your estate after you’ve passed. In particular, this should be done once one spouse in a joint-owning couple dies.

There are four general types of property ownership. The legal system treats them all differently. They are property with the right of survivorship, property held in a trust, property subject to a will and property for which the spouse does not have a will.

If two spouses purchase and jointly own a property, the right of survivorship dictates that the surviving spouse automatically receives the decedent’s half and becomes the sole owner. This is the simplest and easiest outcome, since it avoids probate and the need to alter the deed. However, it’s not always the case.

A surviving spouse might need to change their deed if a partner dies and the deed didn’t automatically transfer property after death. If only one spouse was on the deed, they may have to go through probate (if there was a will) to transfer the home into the surviving spouse’s name. The spouse may need to file a survivorship affidavit and a copy of the death certificate to ensure that the title is properly in their name.

Should you transfer property while you’re still living? It may solve some problems but create others. If a primary residence is transferred to an adult child and they sell it not as their primary residence, it could lead to a large capital gains tax bill. However, if the child inherits the property after your death, the heir will enjoy a stepped-up tax basis and avoids capital gains taxation.

Before taking any steps to arrange for the transfer of the home after passing, talk with the person or people to make sure they want it and the responsibilities associated with owning a home. This is especially true if there’s more than one heir with different opinions.

If children don’t get along or are in different financial positions, leaving one property for all of them to manage together could lead to family fights. Talk with them before putting your wishes into your estate plan to avoid unnecessary resentment and, in the worst case, litigation.

Reference: GoBankingRates (July 26, 2023) “I’m a Financial Planner: Here Are 5 Mistakes You Must Avoid When Transferring Property to Heirs”

What’s the Latest on Multiple Wills of Queen of Soul?

A Michigan jury recently determined that a handwritten document by Soul Superstar Aretha Franklin found on her couch after her 2018 death was a valid will. It was a critical turn in a dispute that had turned her sons against each other.

CBS News’ recent article, “Expensive court fight over Aretha Franklin’s will provides cautionary tale,” warns that the fight could have been avoided if Franklin had had a formal will drafted by an experienced attorney.

An experienced estate planning attorney could have made certain that it specified what should become of her money, property and other possessions — and that it would hold up in court.

This lesson also applies to other families. You should prepare your estate plan, so the children won’t fight after you die. Estate attorneys may recommend that you establish a revocable trust. This can keep the estate out of probate court.

After the singer died, her family thought she had no will. Under Michigan law, her assets would have been divided equally among her four sons. The sons unanimously selected a cousin as the estate’s personal representative, a position similar to that of an executor. However, months later, in May 2019, two handwritten documents were found at Franklin’s home in suburban Detroit — one in a locked cabinet, the other in a spiral notebook in the couch — which immediately divided the singer’s children. Neither document was prepared by a lawyer, and neither lists witnesses, though the first one was notarized. Both had detailed lists of assets.

Aretha put her family through five years of expensive litigation that could have been avoided.

She was working with an attorney about a formal will from 2016-18, but nothing was finalized at her death.

“There were a lot of open questions and we never resolved those open questions,” lawyer Henry Grix testified during the long-running litigation. “She was quite ill and perhaps unable, really, to reach final intentions.”

Do-it-yourself software is inexpensive. However, these programs can’t customize a will to a family’s unique circumstances and foresee all the potential pitfalls like a good attorney could. Don’t be pennywise and pound foolish. Work with an experienced estate planning attorney.

Reference: CBS News (July 12, 2023) “Expensive court fight over Aretha Franklin’s will provides cautionary tale”

What Happens to Digital Assets on Death?

You’ve probably thought about who will inherit your home, your great-grandmother’s jewelry collection and your collection of superhero comics. However,what about your digital assets, asks a recent article from Coast Reporter, “Make sure your estate plan considers your digital assets.”

Digital assets may have significant value. Digital assets include cryptocurrency, non-fungible tokens (NFTs), domain names, digital photos, digital rights to literary content, musical compositions, blog content, online video channels where your content is generating revenue, online gaming, digital online betting accounts, PayPal accounts or even prepaid subscriptions to online content or goods and services.

If your estate plan hasn’t adequately accounted for these assets, your heirs may be unable to access them. Do you and your executor even know what digital assets you own?

Having a list of your digital assets is a start. However, this doesn’t mean your executor can access the assets after your death. Photos and videos stored online may be inaccessible, social media accounts may stay online forever and heirs might not receive money or other assets you intended them to have.

The first hurdle is knowing the passwords for your accounts. Some can be accessed by cybersecurity professionals, like breaking into your phone or a laptop. However, others, like cryptocurrency keys, could be lost forever. Unless you’ve given explicit authorization to someone to access your accounts, they could violate data privacy laws, a criminal offense in most states.

Here’s a game plan for your digital assets and estate plan:

Document digital assets. Know what you own and understand that there’s a difference between owning a digital asset and owning a non-transferable license to use the asset.

Back up your digital assets. Ensure that all online documents, data and assets are backed up to the cloud and store them on a local computer or external hard drive, so your family can access them with fewer obstacles.

Leave digital assets to your spouse. This will avoid the assets being taxed and give the surviving spouse time to plan for the tax liabilities upon their death with an experienced estate planning attorney.

Provide authorization in your will. Update your will so your executor can bypass, reset or recover passwords. If your digital assets are significant enough, talk with your estate planning attorney about having a separate will to deal with digital assets and name an executor knowledgeable about digital assets for the second will.

Check-in regularly. Digital assets are still new for most people, so speak with your estate planning attorney to be sure your wills and powers of attorney reflect any changes in the law or your digital assets.

Reference: Coast Reporter (June 21, 2023) “Make sure your estate plan considers your digital assets”

Ever Wonder How the Very, Very Rich Pass Wealth to Their Children?

When making plans to pass assets on to family members, it’s important to consider how estate planning can help manage the taxes associated with inheritances, says a recent article, “Here’s How the Ultra Rich Pass Wealth Tax Free to Their Heirs” from yahoo! finance. The very rich have used many strategies to pass on wealth with limited or no taxes owed, and some of these strategies can be used by regular people too.

The annual gift tax exclusion. Transferring wealth during your lifetime, rather than after your death, allows you to gift any number of people up to $17,000 each in a single year without incurring a taxable gift and having no impact on your estate and gift tax exemption. Married couples may give up to $34,000. People often use this annual exclusion for cash gifts and deposits into 529 education savings plans. These plans permit “frontloading” of up to five years’ worth of gifts into one year, which results in longer and more significant compounded growth.

Paying directly for medical care or tuition. If you wish to help a loved one pay for healthcare needs or education costs, the way to do this is to pay the institution directly. You may make unlimited payments to medical providers or educational institutions on behalf of others for qualified expenses without incurring a taxable gift or impacting your $17,000 individual gift exclusion. In addition, qualified medical expenses would be considered deductible for income tax purposes. Educational expenses are tuition, not living expenses or dorm fees. However, educational expenses aren’t limited to college and could be for a private school at the primary or high school level. Even certain daycare and afterschool activities might qualify.

Using the lifetime gift and estate tax exemption. One of the best estate planning tax strategies is to gift assets you expect to have significant appreciation in the future. For example, you have a $100,000 investment in a tech start-up you believe will appreciate ten times over the next five years. Of course, gifting the $100,000 investment today makes you eat slightly into your gift and estate tax exemption. All the future appreciation of the investment is still out of your taxable estate and into the hands of your heirs—estate and gift-tax free.

Converting IRAs to Roth IRAs. The SECURE Act’s 10-year rule eliminated the ability to ‘stretch’ inherited IRAs over most beneficiary’s lifetimes. A way to preclude the tax burden on your heirs from an inherited IRA is to convert it to a Roth IRA. You’ll pay the taxes at the time of conversion, but they won’t have to pay taxes upon inheriting the IRA or any future appreciation in the account.

Implementing discount strategies. This is a complex strategy used for transferring family businesses or real estate. Discount strategies reduce the value of an interest before its transfer to its value for gift tax purposes is reduced. You maintain some control or benefit from the asset after the transfer. Examples are FLPs (Family Limited Partnerships), Limited Liability Companies (LLPs) and Qualified Personal Residence Trusts (QPRTs).

Reference: yahoo! Finance (May 25, 2023) “Here’s How the Ultra Rich Pass Wealth Tax Free to Their Heirs”

Protecting Assets with a Trust vs. Limited Liability Company

While trusts and Limited Liability Companies (LLCs) are very different legal vehicles, they are both used by business owners to protect assets. Understanding their differences, strengths and weaknesses will help determine which is best for your situation, as explained by the article “Trust Vs. LLC 2023: What Is The Difference?” from Business Report.

A trust is a fiduciary agreement placing assets under the control of a third-party trustee to manage assets, so they may be managed and passed to beneficiaries. Trusts are commonly used when transferring family assets to avoid probate.

A family home could be placed in a trust to avoid estate taxes on the owner’s death, if the goal is to pass the home on to the children. The trustee manages the home as an asset until the transfer takes place.

There are several different types of trusts:

A revocable trust is controlled by the grantor, the person setting up the trust, as long as they are mentally competent. This flexibility allows the grantor to hold ownership interest, including real estate, in a separate vehicle without committing to the trust permanently.

The grantor cannot change an irrevocable trust, nor can the grantor be a trustee. Once the assets are placed in the irrevocable trust, the terms of the trust may not be changed, with extremely limited exceptions.

A testamentary trust is created after probate under the provisions of a last will and testament to protect business assets, rental property and other personal and business assets. Nevertheless, it only becomes active when the trust’s creator dies.

There are several roles in trusts. The grantor or settlor is the person who creates the trust. The trustee is the person who manages the assets in the trust and is in charge of any distribution. A successor trustee is a backup to the original trustee who manages assets, if the original trustee dies or becomes incapacitated. Finally, the beneficiaries are the people who receive assets when the terms of the trust are satisfied.

An LLC is a business entity commonly used for personal asset protection and business purposes. A multi-or single-member LLC could be created to own your home or business, to separate your personal property and business property, reduce potential legal liability and achieve a simplified management structure with liability protection.

The most significant advantage of a trust is avoiding the time-consuming process of probate, so beneficiaries may receive their inheritance faster. Assets in a trust may also prevent or reduce estate taxes. Trusts also keep your assets and filing documents private. Unlike a will, which becomes part of the public record and is available for anyone who asks, trust documents remain private.

LLCs and trusts are created on the state level. While LLCs are business entities designed for actively run businesses, trusts are essentially pass-through entities for inheritances and to pass dividends directly to beneficiaries while retaining control.

Your estate planning attorney will be able to judge whether you need a trust or an LLC. If you own a small business, it may already be an LLC. However, there are likely other asset protection vehicles your estate planning attorney can discuss with you.

Reference: Business Report (April 14, 2023) “Trust Vs. LLC 2023: What Is The Difference?”

What’s Going on with Larry King’s Estate?

Larry King’s widow Shawn has accused the firm Blouin & Company of helping Larry King Jr. as part of the fight over the late broadcaster’s estate.

Radar Online’s recent article entitled, “Larry King’s Widow Shawn SUES HER OWN SISTER Claiming He Spent Millions On Her While They Had Secret Affair,” says that Larry Sr. died in January 2021.

Larry King Jr. asked the court to be named special administrator of his father’s estate. He presented a handwritten will that Larry Sr. had reportedly signed before his death. The amended will left his fortune to his child and not Shawn. Shawn objected to the will claiming Larry Sr. was not in the right mind to sign the amendment to the will. A settlement was eventually reached between the two.

But a few months later, Shawn sued Blouin & Company, claiming it had led a “fraudulent and malicious conspiracy to steal money from their client, Mrs. King, and deprive Mrs. King of her rights and interests in the estate of her late husband.”

Shawn brought claims against Blouin & Company and her sister Shannon Engemann Grossman, a named defendant. She claims that Shannon “received a substantial number of improper and unauthorized transfers of” her community assets. Moreover, she alleges that her sister received “unauthorized goods and services worth millions of dollars (or more subject to further investigation), including airfare, clothing and accessories, furniture, limousine services, healthcare services, dental implants, luxury automobiles, luxury hotel accommodations and numerous other goods and services.”

During their marriage, Shawn and Larry were close to divorce multiple times after marrying in 1997. In 2010, they both filed their petitions in Los Angeles Superior Court. Shawn believed Larry and her sister were having an affair.

At the time, Shannon denied having an affair with Larry. She admitted Larry was generous with gifts but said he was like that with everyone. Shannon said, “I’m tired of taking the rap for things. I did not have an affair with Larry. He’s been like a father to me.”

Blouin & Company denied all allegations of wrongdoing in their response and noted that Larry had a secret bank account that they were unaware of that he used to fund his lavish lifestyle. The firm filed a countersuit against Shawn for unpaid invoices.

Reference: Radar Online (Jan. 9, 2023) “Larry King’s Widow Shawn SUES HER OWN SISTER Claiming He Spent Millions On Her While They Had Secret Affair”

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