WHY MORE MONEY MAY EQUAL MORE ESTATE PROBLEMS: ESTATE OF TOM CLANCY

WHY MORE MONEY MAY EQUAL MORE ESTATE PROBLEMS: ESTATE OF TOM CLANCY

As an experienced Queens estate lawyer practicing in Forest Hills, New York I am always intrigued by the estate planning practices of the wealthy. For the vast majority of Americans, the onerous Federal and State Estate Taxes which used to exceed 65% of any and all estate assets are all but forgotten. In 2010 the Federal Estate Tax Exemption, the amount you can leave in your estate without incurring Federal Estate Tax was progressively raised to $5,340,000.00 per individual and $10,680,000.00 per married couple. In 2014 the NYS Estate Tax Exemption was also lifted to match the Federal amount by 2019.

While these changes alleviated the New York estate planning needs for most clients, there still remains a select few who still require more elaborate estate strategies. One such estate was that of the acclaimed author Tom Clancy who wrote a plethora of books based on the CIA, which were made into blockbuster movies such as The Hunt for Red October and Patriot Games. Tom Clancypassed away on October 1, 2013 in Maryland. His estate is estimated to be in excess of $100 million dollars and includes a $65 million dollar interest in the Baltimore Orioles baseball organization, numerous luxury homes, a collection of handguns and expensive watches and onearmored tank valued at $250,000.00.

Admittedly, most of my Queens estate planning clients do not have tanks in their estate. In fact under the current Federal Estate Tax structure, fewer than one tenth of one (.01 %) percent of all estates nationally will be subjected to the dreaded Federal Estate Tax. However estates such as Tom Clancy’s do require arrays of elaborate trust formations to minimize the Federal and Estate Tax burdens.

As a Queens Estate Lawyer, practicing in Forest Hills, I can tell you that a one-hundred million ($100,000,000.00) dollar estate can easily generate a sixty-five million ($65,000,000.00) dollar Federal and State estate tax bill for heirs. I do not care how much money you are worth, nobody wants to see that kind of money lost in estate taxes because someone failed to have a NY estate planning lawyer plan their estate.

Tom Clancy did not fail to plan his estate. To the contrary he had his estate lawyer, J.W. Webb create several trusts to provide for each of his children from a prior marriage, current spouse as well as various charitable organizations. Clancy further designated the same estate attorney to be executor of his will ensuring there would be no squabbling among his heirs. Additionally, Clancy added an amendment onto his will instructing that his surviving spouse not receive any amount from his estate that would subject her to estate tax liability.

Unfortunately something went wrong. Despite the measures taken by the estate lawyers for Tom Clancy his estate still generated a sixteen million ($16,000,000.00) dollar estate tax bill. While the sixteen million ($16,000,000.00) dollar tax bill is not as bad at the sixty-five million ($65,000,000.00) dollar bill the Clancy Estate would have generated had there not been estate planning it is still not the intended result.

To make matters worse, Tom Clancy’s estate lawyer and executor, J.W. Webb, suggested Tom Clancy’s surviving spouse pay the sixteen million ($16,000,000.00) dollar tax bill. You do not have to be a Queens estate lawyer to appreciate the irony here. Tom Clancy went to great lengths in having his estate lawyers specifically draft a will to prevent his surviving spouse from incurring any estate tax liability. In light of the above the fact that his executor and attorney draftsman now expect Clancy’s wife to pay the estate tax is unconscionable. As such Alexandra Clancy, Tom Clancy’s surviving spouse is now suing her late husband’s estate attorney.

This presents various issues. The first issue being whether Alexandra Clancy, an intended beneficiary of her husband’s estate, can even sue J.W. Webb? The answer is maybe not. J.W. Webb represented Tom not Alexandra and therefore owed no legal obligation to anyone other than his client, who in this case was Tom. Tom passed away and can no longer sue Webb as his attorney. Therefore, it is unclear if Alexandra even has standing to sue Webb.

Contending with the estate tax can be a difficult proposition. Luckily for most of us, the legislature has systematically been raising the amounts of inheritance that can pass from each generation to the next without generating any substantial estate tax liability. As you can see above, with more money comes more problems. No area of law better exemplifies this idiom than the New York estate law. However under the current estate tax structure most NY estate lawyers do not have to contend with trust formation and estate tax avoidance any longer.

As a New York Estate Lawyer, I cannot stress the value of having an attorney drafted will enough. If you or a loved one are thinking about drafting a new will or challenging an existing one please call one of our New York Estate Lawyers at the Law Offices of Jason W. Stern & Associates at (718) 261-2444 for a free consultation. Our Queens estate lawyers have nearly 45 years of combined NY estate law experience drafting and probating the wills for families like yours in the counties of Queens, New York, Kings, Bronx, Westchester, Rockland, Nassau, Orange, Dutchess as well as in the State of New Jersey.