It's extremely important to keep your 'mind on your money and your money on your mind.' With Marcella's monthly advice in Copa Style Magazine you should be able to handle your financial world.

Love Death and Taxes

by Marcella Mollon-Williams

When you don’t take time to prepare for your future, you can leave behind a tarnished legacy, or worse, the ones you love can be left in financial turmoil. If you can’t understand what this means or how it can apply to your life, think of Phillip Seymour Hoffman.  Phillip Seymour Hoffman, considered one of the most versatile actors of his generations, tragically died at the age of 46. His untimely death meant that his partner, costume designer Mimi O’Donnell, whom he never legally married, but shared three young children with, will be left to figure out how to financially provide for their family although Hoffman had an estate roughly worth $35 million.  Since O’Donnell was not his wife, she is not legally entitled to any assets of his multi-million dollar estate, despite being mentioned in his will. In fact, she could be subject to as much as $15 million in estate taxes. The lack of nuptials means she is ineligible for spousal exemption, which would’ve meant that all of Hoffman’s assets would’ve been hers- free and clear.  How does this apply to you? If you and your partner are not legally married, consider how this will affect their life when you die and what will happen to your estate. If an asset is left to a spouse or a federally recognized charity, the estate tax usually does not apply. Additionally, if your partner is not included in your will or has no legal authority over your assets, they may be left without anything after you die. Clearly understand your assets and their disbursements after your death. It can save a substantial amount of money and time for your grieving partner and the organizations you support. Start now by creating proper asset protection strategies.  Secondly, Hoffman’s will was signed in 2004, when he and O’Donnell only had one child. Additionally, the will was signed before Hoffman won the Best Actor Oscar for his role in Capote, and probably before he had earned the bulk of his estate. Two more children were born after the will was signed, which means they were not included in the designation of his assets. It would’ve been possible for O’Donnell to create trusts for all three of the children – passing assets to them outside of the estate, and mitigating the estate tax. However, since two of the children weren’t included in the will, it will be much trickier to pass any of Hoffman’s assets to them.  How does this apply to you? Keep your documents updated. Life is constantly changing. Whether it’s a new marriage or divorce, the birth of a child, or a new job - our lifestyles shift on a regular basis and our financial and estate planning documents should reflect those changes accordingly. Meet with your wealth coach/financial planner on an annual basis, at a minimum, and make sure to update them whenever there is a life-changing event.For more information about Marcella: www.LBGFinancialcom
Marcella Mollon-Williams is a licensed insurance professional, financial educator and part owner of LBG Financial Services. As a Wealth Strategist and Coach, Marcella spends her time building her clients’ financial acumen by developing smart and meaningful plans to create wealth and build legacies.

~Copa