Last month the pop music icon Prince died a sudden and untimely death at the age of 57. During the course of his career, Prince amassed a massive estate that includes the rights to his music catalog and unreleased music reportedly worth more well over $300 million. Prince did not make a will prior to his death. A comprehensive estate plan could have significantly reduced his estate's tax liability and controlled the release of his unpublished music after his death. In addition, and arguably more importantly, Prince's estate is facing costly and time-consuming litigation that likely would have been avoided if he had made a will.
According to the Daily Record, Tom Clancy's widow, Alexandra Llewellyn Clancy, is attempting to remove J.W. Thompson Webb, Clancy's estate attorney, as personal representative of Clancy's estate. Clancy's estate is valued at a $83 million, a majority of which is Clancy's 12-percent-stake in the Baltimore Orioles. Mrs. Clancy claims that Webb made mistakes in preparing Clancy's will and estate plan which have cost the estate approximately $6 million in taxes. However, under Maryland law, a beneficiary of an estate cannot sue the attorney who drafted the will. The suit must be brought by the personal representative of the estate. Since Webb is both the drafter of the will at issue and the personal representative, Mrs. Clancy must first have Webb removed as personal representative in order to sue him on behalf of her late husband's estate.
According to an Investment News' report, Philip Seymour Hoffman may have left his longtime companion and the mother of his three children, Marianne O'Donnell, with a large tax bill and outdated will. Under Hoffman's will, which was filed with New York City Surrogate's Court earlier this week, Hoffman left everything in his estate to O'Donnell. The couple was not married at the time of Hoffman's death and the estate will not be able to take advantage of the estate tax breaks reserved for spouses. Hoffman's will gives O'Donnell the option of disclaiming all or part of her inheritance which would allow the property to pass into a trust for the benefit of their oldest son. Unfortunately, Hoffman's two daughters were not born at the time the will was executed and were not named beneficiaries of the trust.
According to an Investment News' report, the heirs of James Gandolfini's estate could be faced with a $30 million tax bill. Gandolfini's estate is estimated to be worth approximately $70 million most of which was left to his two sisters. Gandolfini's will reportedly left 30% to each of two sisters, 20% to his infant daughter, Liliana, and 20% to his wife, Deborah Lin, and his clothing and jewelry to his 13 year old son. If this report is accurate, approximately $51 million of his estate is subject to both New York and Federal estate taxes which could result in a $30 million tax bill.
Yesterday, the Supreme Court struck down the 1996 Defense of Marriage Act (DOMA) in US. v. Windsor. Edie Windsor and Thea Spyer were legally married in Canada and although the state of New York recognized their marriage, the federal government did not under DOMA. When Spyer died, Windsor had to pay $353,053 in Federal estate taxes as a result of the IRS' disallowance of the marital deduction. Supreme Court affirmed the Second Circuit's ruling that Section 3 of the DOMA violates the Fifth Amendment's guarantee of equal protection of the laws as applied to persons of the same sex who are legally married under the laws of their State.