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George Steinbrenner's heirs avoid estate tax - or do they?

Baseball pioneer George Steinbrenner, owner of the famed New York Yankees' franchise, died from a heart attack on July 13, 2010, at age 80.  Checking in at number 341 on Forbes' list of richest Americans last year, the Steinbrenner fortune has been estimated at $1.1 billion.George Steinbrenner

Many publications, including the New York Post, have pointed out that, tax-wise, Steinbrenner chose a great year to die.  Due to a quirk in the federal estate tax law, there are no estate taxes for those who die in 2010. 

Those who died in 2009 paid a 45% tax for every dollar over $3.5 million ($7 million for married couples who did the proper estate tax planning).  There are no estate taxes this year, but next year, the estate tax comes roaring back with only a $1 million exemption and a 55% tax rate.

As the Post article and others have pointed out, this led to a huge tax savings for Steinbrenner's widow and four children of $500 million (based on 2009 levels) or $600 million (compared to the 2011 limit).  Not bad!

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Steve McNair Estate unsettled after one year

It's been just over a year since Steve McNair, the former NFL quarterback, was murdered on July 4, 2009, at the age of 36.  The Probate Lawyer Blog covered the initial drama surrounding the estate in a series of articles.  In the months that have passed since then, the estate has been relatively quiet.  It's been rather surprising given the early fireworks last summer.Steve McNair and son

McNair died with an estate worth more than $19 million but without even a basic will.  It looked like trouble initially when his wife named their two kids as estate beneficiaries in the probate paperwork, but failed to list his other two kids (from two other mothers).  The family was far from harmonious even before McNair was killed.

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Forbes: Celebrity Death and Divorce Train Wrecks

Forbes.com recently featured an article we wrote about our celebrity-based Trial & Heirs' Top Five Estate Planning Tips for Divorcees.  Here's a shortened version.  Go to Forbes.com for the full article: Forbes_home_logo

1. Update your will and/or trust. Life events like divorces are a critical time to update all estate planning documents with an experienced attorney.

Take the case of Gary Coleman.  Since his death, a variety of documents have surfaced purporting to be his will.  We know that Gary Coleman was divorced in 2008 from his wife, Shannon Price.  It was on an episode of Divorce Court after all!  The problem is that Price claims that she's entitled to inherit all of Coleman's assets based on a 2007 handwritten will and as his "common-law wife."  Now it looks like the estate will be tied up in a long and nasty fight.  If Gary Coleman had an estate planning attorney draft a clear will after his divorce, the impending legal battle may have been avoided.

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Steve McNair's widow facing estate tax nightmare

The Steve McNair Estate has been relatively quiet lately, after a fast start with plenty of fireworks.  You can read the Probate Lawyer Blog's prior articles about it here.  But despite the apparent calm, there are still lessons to be learned.  Steve-mcnair-photograph

The lawyers for McNair's widow, Mechelle McNair, recently had to file a petition with the Tennessee probate court asking for funds to be released from a frozen trust account to pay taxes.  Ho hum, right?  Not so fast.

How much did she have to withdraw?  A cool $3.72 million -- all for state and federal estate taxes that were due earlier this month.  And that's just the estimated taxes that she has to pay now.  When the final determination of how much she, as the surviving spouse, will receive is calculated, that price tag may increase.  Her attorneys anticipate filing an amended tax return which may include even more money due to the IRS.

Why should this matter to you?  If Steve McNair had done the proper estate planning, he could have avoided all of these estate taxes for his widow.  Through a properly-drafted revocable living trust, his widow would have have avoided the tax bill.  That's right, she would have owed nothing!  (But the kids may still have owed a tax bill after she died in the future, depending on the tax laws in place then).

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Early Book Reviews of Trial & Heirs: Famous Fortune Fights!

TrialAndHeirs_front My co-author, Danielle Mayoras, and I have been blown away by the early book reviews we've gotten so far.  Here are a couple highlights:

  • [Trial & Heirs] ignited a lively discussion with family and friends during a holiday gathering.  Everybody who has read or discussed it has pledged to get their financial affairs in order.  You can’t take it with you, so you want to organize your affairs so that they won’t cause a hassle among your loved ones when you go. 
    ~Avis Thomas-Lester
    The Washington Post (Read the full article.)
  • [The celebrities featured in the book] all flubbed their estate planning, costing intended heirs money and/or grief, according to a readable (really) estate planning how-to book, Trial & Heirs. The new book uses these celebrity cliffhanger cases to dish out real-life advice.
    ~Ashlea Ebling
    Forbes.com (Read the full article.)

  • If TMZ and Bankrate.com had a literary baby,
    it would be “Trial & Heirs.”

“Trial & Heirs” manages to accomplish a stunning trifecta of near impossibilities for a book about estate planning. Not only does it entertain, it deeply educates and also galvanizes readers into taking action to protect their families and their legacies.
~Tara-Nicholle Nelson
Inman News Service (Article syndicated at NJ.com, Philadelphia Weekly, Boston.com, and Inman.com)

  • It’s so well written and fun that even a person like me, who hates money talk can enjoy it.  And anyone reading it will learn a great deal.
    ~Carol Bradley Bursack
    Minding Our Elders

We're posting excerpts from all of our reviews at our Trial & Heirs website.

Posted by:  Author and probate attorney Andrew W. Mayoras, co-author of Trial & Heirs:  Famous Fortune Fights! and co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law.  You can email him at awmayoras @ brmmlaw.com.

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Bo Schembechler's son sues his stepmom over trust

Glenn E. "Bo" Schembechler, Jr., is one of the most respected names in the history of college football.  And, no, I'm not saying that just because I graduated from the University of Michigan (twice).  He built one of the most successful football programs around, and it excelled for decades.Bo_Schembechler

Coach Bo died of heart disease on November 17, 2006, at age 77.  He was survived by his second wife, Kathryn, his son, Glenn III, and two children of his beloved first wife, Millie, whom Bo had adopted (a third adopted son died before him).

From an estate planning perspective, Bo did everything right to avoid a family fight after he passed.  He created a living trust, which was quite detailed and left the income from his assets to his wife, Kathryn, passing from there to his son Glenn III (known as "Shemy"), and then onto his grandchildren and Kathryn's grandchildren. 

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