Sacramento Estate Planning Law Blog

A well-worn maxim tells us that death and taxes are the only two things of which we can be certain. Under particular circumstances, we can also be certain that the occurrence of the former will trigger the latter. Everyone should be aware of the estate tax, but especially those whose estates stand to be diminished because they exceed a specified dollar threshold. Proper estate planning can help avoid unnecessary taxation.

A potentially wider range of people may have to address the estate tax next year, however. At the present, federal law provides for a $5,120,000 exemption from taxation. If an estate exceeds that limit, the rest is taxed at 35 percent. That exemption expires at the end of the year, and unless Congress passes legislation to extend or modify it, the estate tax exemption in 2013 will drop to $1 million. By contrast, the tax rate on the excess will rise to 55 percent.

There are many ways a person can pass wealth on to descendants. One of these is the trust, which comes in a wide variety of forms to suit a person's needs. Trusts can be particularly useful if a person has minor children or other young descendants who could benefit from receiving their inheritance once they become older and more financially mature.

Some trusts can be established during a person's lifetime, while another type is created after a person's death. That latter type of trust is called a testamentary trust because it is named in the testator's will. One of the chief benefits of a trust is that it obviates the need for a guardian to manage assets left to minor children. Instead, a named trustee takes over that responsibility. Additionally, although a testamentary trust is created through the public process of probate, the management of trust assets remains private.

Many California residents have prized personal possessions. These can include pieces from a hobby collection, such as antique china, coins or cars. Other items may have been handed down through family generations, such as a grandfather clock, a jewelry set or artwork. While some of these objects may have substantial monetary value, they likely also have a great deal of value for reasons personal to the owner.

The question becomes: How should one provide for the distribution of personal property in a will? Furniture and paintings cannot be as neatly divided as stocks or money, and separating items in a collection can often decrease their value. There are steps a person can take before drafting a will to give specific gifts of property to friends and family members.

Marilyn Monroe's life on and off the screen captivated people in California and across the country. Her enduring fame is proved by the recent movie, My Week with Marilyn, which earned lead actress Michelle Williams an Academy Award nomination for Best Actress. But other examples of Monroe's continued popularity abound.

For example, a number of unreleased photographs of the actress will be sold at auction later this month. The photos come from the estate of her longtime personal makeup artist and friend. Also included in the auction sale will be some of the man's personal effects related to Monroe, such as a gold money clip that she bought him at Tiffany's. Sales from a deceased person's estate are not unusual, but can raise questions about whether they were part of the overall estate plan.