As an update, coronavirus concerns have lead to an updated IRS deadline of filing and paying individual and C-Corp returns by July 15th
As I blogged last Friday and then posted on our Facebook page, the coronavirus affected IRS deadlines by extending payment due dates for individual and C-Corp taxes, but not filing deadlines. The tax preparing community immediately responded, indicating that taking extensions for so many clients wasn’t feasible. In light of that concern, Secretary of the Treasury Steven Mnuchin tweeted on Friday that the deadline for filing would be extended as well.
There has been some confusion about the tax filing / tax payment deadline extensions, but ultimately it has been confirmed that both the filing and the payment deadlines have been extended from April 15 to July 15 giving all taxpayers and businesses additional time to file and make payments without interest or penalties. In short, the coronavirus affected IRS deadlines for both payment and filing of individual and C-Corp taxes.
If you are expecting a refund, however, the Treasury Department encourages you go ahead and file as soon as possible – the sooner you file, the sooner you will get your refund. The blog from last week may be found here. https://galligan-law.com/coronavirus-and-irs-deadlines/
Many estate planning mistakes by famous people illustrate on a grand scale what applies to all of us; the need for an up-to-date, quality estate plan.
The instructions for the disposition and management of one’s estate at death through the use of wills, trusts, and other devices can cover almost about any topic you can think of. While the majority of instructions in estate planning concern finances, wills and trusts frequently guide decisions regarding health care, guardianships, business, education and even which heir gets the entire Barry Manilow record collection.
Born2Invest’s recent article entitled “The biggest estate planning blunders of all time” looks at a few colossal estate planning mistakes by the rich and famous. Estate planning mistakes by famous people show you what can go wrong in the worst of ways.
Estate planning usually conjures up thoughts of drafting a will by an attorney. Although the cost of drafting an estate plan varies significantly based on location and complexity, it can range from a few hundred dollars to several thousand. Regardless of the cost, hiring an experienced estate planning attorney will save your family time, money and anguish after your death.
With that said, let’s take a look at some estate planning mistakes by famous people who simply didn’t get around to this very important task.
Ted Williams (Baseball Legend). When Ted died in 2002, he had one will that said his body should be cremated, and another that instructed he should be cryogenically frozen. As you can imagine, there was a fight among his children. This resulted in Ted’s decapitation (postmortem). Therefore, the Splendid Splinter, the greatest baseball hitter of all time, had his body and head frozen in Arizona at Alcor Life Extension Foundation.
Sonny Bono (Singer and Congressman). Sonny didn’t create a will. As a result, he passed away intestate. A lawsuit was initiated by ex-wife and singing star, Cher, to collect $1.6 million in unpaid alimony, along with a fraudulent claim by an illegitimate child (disproven by DNA testing), and Sonny’s widow, Mary.
Heath Ledger (Actor). Heath failed to revise his will after the birth of his daughter. At his death in 2003, his entire estate was split between his parents and sisters, but they agreed to give all the money to his daughter.
Philip Seymour Hoffman (Actor). The Oscar-winning actor also never updated his will after the birth of his two daughters. Since he wasn’t married to his then girlfriend, there was an approximate $12 million estate tax that was owed.
Joe Robbie (the owner of the NFL Miami Dolphins). Robbie had a substandard estate plan that contained a pour-over will and revocable inter vivos trust. This was designed to defer estate taxes until after the death of his wife. However, it didn’t work as planned. She demanded her “elective share” as spouse, 30% of the husband’s illiquid estate, which created a $47 million tax bill that could only be settled by selling off his football team. His 11 children also went to court to fight over his estate.
James Brown (Singer). The “Godfather of Soul” wasn’t around to witness the 12-year epic legal battle among several blended families over his estate.
Barry White (Singer). White died in 2003 in the middle of divorce proceedings. Legally speaking, he was still only separated from his wife. As a result, she got it all, instead of his current girlfriend and mother of nine kids.
There are many more famous people who posthumously became members of this dubious club. Their eligibility for membership was poor estate planning that resulted in unintended—and in some cases, tragic—consequences. Although many Americans can’t really identify with these mega-wealthy or public icons, they do have assets and families and friends, and everyone should expect to need an estate plan. See here for ideas on how to do it properly https://galligan-law.com/a-will-is-the-way-to-have-your-wishes-followed/
The club of estate planning mistakes by famous people shows the rest of us the need for proactive professional planning. Be certain that you work with a qualified estate planning attorney, so that your estate plan doesn’t end up like the ones above.
The IRS has established a special section focused on steps to help taxpayers, businesses and others affected by the coronavirus. This page will be updated as new information is available. https://www.irs.gov/coronavirus
As of this writing, the IRS has extended several IRS deadlines due to the coronavirus. The April 15th, 2020 filing deadline for 2019 tax returns is still in effect. However, payment deadlines are extended to July 15, 2020 for up to $1,000,000 due. The deadline is also extended for first quarter 2020 estimated payments. Type C Corporations also may pay their tax liabilities by July 15, 2020, up to $10,000,000 worth of tax due. The IRS also included a reminder that you may request a filing extension, and that the best solution is to file as soon as possible so you can receive your refund if you are entitled to one.
Keep in mind this does not extend non-income tax deadlines nor affect state income taxes.
In addition to the IRS’ coronavirus response, there are several other government links worth keeping in mind.
For health information about the COVID-19 virus, visit the Centers for Disease Control and Prevention (CDC) https://www.coronavirus.gov
The Department of Treasury also has information available at Coronavirus: Resources, Updates, and What You Should Knowhttps://home.treasury.gov/coronavirus
