After a death occurs, the will must be probated. This means that the executor of the estate must go to court, and the will must be validated. The estate must be valued, creditors paid off and taxes paid. The remaining value of the estate must be distributed according to the terms of the will.
The process of probate should be relatively simple, but unfortunately things can quickly become complicated. A probate attorney knows that probate disputes can arise over many different issues, from the value of the estate to how taxes should be paid.
Probate Disputes Can Become Complicated
A recent article in the Wall Street Journal illustrated how complicated the probate process can be. The article focused on the estate of writer Tom Clancy. Clancy was an author who wrote techno-thrillers. He passed away less than a year ago at age 66. Although Clancy had a will, there are questions about who should pay taxes on the $83 million estate he left behind.
Mr. Clancy left a portion of the estate to his four grown children, who he had with his first wife. He left 2/3 of his estate to his sole or main beneficiary, his widow. His widow, however, is now taking legal steps aimed at shifting state and federal estate taxes to the children. She claims that the lawyer who was serving as the executor of the state incorrectly determined that $6 million of the tax burden should be paid out of a family trust that names her as the primary beneficiary. Her argument is that the author did not intend for this to happen, and that he intended for her to pay $0 in estate taxes. The argument is based on a modification to the will that occurred in July of 2013 that specified the family trust fell under the marital deduction.
If this is the case, the children would have to pay the full amount of taxes out of their portion of the estate. This could be as much as $16 million, and could thus significantly reduce the value of the estate left to the children if the widow is successful at his efforts.
Other issues in Mr. Clancy’s estate could involve valuing rare assets such as a World War II Tank.
While most estates do not necessarily owe this much in taxes, valuation issues can arise in any estate and beneficiaries could be left arguing a host of other legal matters. The best way to avoid problems is to consult with a lawyer during the estate planning process and for the executor and heirs to be represented by an attorney as soon as possible after a death occurs.
An attorney can help you understand the tax implications of inheritance. Experts can also be consulted to value businesses or other non-monetary items that are a part of the decedent’s estate.
Contact Bertolino LLP at 512-717-5432 to schedule a consultation with an Austin, TX probate lawyer today. Serving Austin and surrounding suburbs including Round Rock, Cedar Park, Georgetown and San Marcos.
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