While my practice is in California, and I am most familiar with probate litigation in the California court system, there all probate disputes throughout the world.  Obviously the ones that get written about generally concern the wealth and generally make for an interesting story.  From time-to-time, I like to write about one that I have come across.

The London Daily Mail carried the story earlier this summer of a mistress who accused her lover’s son of forging his father’s will to deprive her of any money from his estate.  Ms. Pat Powell, currently 59 years old,  testified that during their 15 years together, Jimmy Swantson always assured her that she would be provided for upon his death.  Mr. Swantson was 35 years older than Ms. Powell when he died in 2003.

When she discovered that she was not mentioned in his will, she retained solicitors (English attorneys) who discovered that witness signatures were fakes. One of the “witnesses” names was misspelled and his address was incorrect. That “witness”, Peter Coletti, testified that he did not sign the Will.

A second witness testified that he was asked to sign by the decedent’s son even though Mr. Swantson was not present.

While it was alleged by the mistress that the estate was worth 26 million British pounds (approximately $47,500,000), the co-executor of the estate testified that the amount was closer to 2.5 million British pounds (approximately $4,600,000).

In California, even if the Will were found to be a forgery, the mistress would not inherit unless she had proof that he had prepared another Will or Trust because of the laws of intestacy.  In other words, if someone dies without having memorialized their intentions by a Will or Trust, his/her estate is going to be distributed according to the laws of intestate succession.  In California those laws do not provide that a mistress is to receive anything.

We all know that eventually someone is going to have to deal with the issues concerning our funeral and/or memorial service; burial or cremation.  As with other parts of estate planning, we have the ability to make things much easier on our  loved ones by doing a little planning ahead of time.

When our office prepares an estate plan for a client, we provide them with a section in their estate planning binder to make their wishes known to their family.  This includes notifying specific family members, friends, and organizations of the individual’s passing.  We also provide forms for our clients to set forth their personal information; sections for handling of remains and marker selection; casket or urn selection; information concerning a remembrance/funeral service; and information regarding costs and expenses.

We encourage our older clients to be proactive and if they wish to be buried to think about purchasing their burial plot and their casket.  For those that want cremation, we ask them to think about making the arrangements and to detail that information in the estate planning binder that we provide.

For those that do not wish to pre-pay the expenses, we encourage them to make sure their estate has the liquid assets available to make payment.  This can be done in a variety of ways including earmarking an account for the purpose or even purchasing insurance.

Under federal law, each of is allowed to have $2,000,000 at our death without their being any federal estate tax liability. This is a huge increase from the $675,000 amount that was the federal estate tax exemption amount as recently as in 2001.  (Understand, that many states have an inheritance tax and some have a pick up tax.  California, however, is tied to the federal state death tax credit which means that there is not an additional tax).

On January 1, 2009, the federal estate tax exclusion increases to $3,500,000.  Thus a married couple with properly drafted estate planning documents could leave $7,000,000 without their estate owing any tax.  This is without any fancy or complicated estate planning. 

The estate tax rate of 45% will remain the same, but obviously an heir stands to receive a lot more money if someone dies at 12:01 a.m. on January 1, 2009 rather than 11:59 p.m.  on December 31, 2008.  As many have speculated, certain heirs will not be telling doctors to pull the plug in December!

President Bush had originally campaigned on eliminating the estate tax.  He did not accomplish that goal.  Moreover, regardless of who wins the 2008 presidential election, it is unlikely that the estate tax will be eliminated.  In fact, the only thing that is relatively certain is that Congress will act in 2009.  The reason that is true is that in 2010 the estate tax is set to be eliminated, if only for one year.  In 2011, the law currently provides that it returns to a $1,000,000 exclusion amount.

Both Obama and McCain have indicated that they will not eliminate the estate tax.  Obama basically would continue the $3,500,000 exclusion amount with a tax rate of 45% on amounts over $3,500,000. 

McCain, on the other hand, proposes a $5,000,000 applicable exclusion amount with a top tax rate of 15%.   The reason for the 15% number is that it is the same as the current capital gains tax rate.

Very wealthy Americans care less about the applicable exclusion amount than they do about the top tax rate.  For example, the difference between a 15% and 45% estate tax rate on a $53,500,000 estate, with a $3,500,000 applicable exclusion amount is $15,000,000.  That is more than twenty times more tax savings than the increase of the applicable exclusion amount from $2,000,000 to $3,500,000.

However, for the vast majority of Americans, $3,500,000 indexed for inflation will mean that there estates will not be subject to federal estate tax.  There is no telling what the individual states will do.

Remember, estate taxes and probate are two of the major issues that we as estate planning attorneys deal with on a daily basis.  It is possible to have estate taxes and not have a probate and it is possible to have a probate and not have estate taxes.