It may seem too early for the November roundup of elder law news items. But December is less than a week away, so it’s time. This month, in our survey of the elder law landscape, we stumbled upon a real-life circumstance that illustrates the conundrum that divorce sometimes creates for divorcing couples. Plus: tax updates, IRA tips, and holiday help.
Updated Ocasek Estate Plan Could Unravel
Divorcing couples often put off updating their estate plan until the process is final. The case of Ric Ocasek illustrates why that’s not a good idea. And why updating the plan might not always work. Ocasek and his wife, model Paulina Porizkova, married 30 years, were seeking a divorce when the Cars singer died a few weeks after surgery. Just prior to the procedure, Ocasek did what most estate planning attorneys would recommend. He executed a Will that expressed his wish to disinherit his soon-to-be former spouse. It looks like Porizkova is going to fight for a larger share. The new Will was still a good idea. If it didn’t exist, Porizkova would inherit under their existing plan. The divorce in progress wouldn’t matter. Most married people leave everything to their spouse, so she may have gotten everything.
Ocasek died in New York, and under New York law, to completely disinherit his spouse, he had to claim she abandoned him. But the couple still lived under the same roof and she discovered his body when she was bringing him coffee that morning. Sources say she has a good chance of defeating that assertion. If she manages to invalidate the entire Will, she would inherit under the prior plan (likely everything). If she wins on abandonment, she could take home as much as $1.7 million – one third of Ocasek’s probate estate.
Ocasek’s new plan would have fared better in Arizona. In New York, spouses can “elect” to take a third of the probate estate as an “elective share.” Not so in Arizona. Here, spouses receive a “statutory share,” specific amounts that add up to no more than $37,000. Note also, though, that if Ocasek and Porizkova had lived in Arizona, much of his $5.1 million probate estate probably would have been Porizkova’s as community property.
Interested in disinheriting someone? Here are some general tips and considerations.
In other November roundup items:
Estate, Gift Limits Adjusted for Inflation
The IRS released new numbers for estate and gift tax limits. For 2020, it’s $11.58 million for lifetime transfers, $15,000 per person excluded annually. The IRS also finalized the regulations that confirm gifts made during this temporary window of high exclusion will not be clawed back later.
AARP Study Calculates Value of Caregiving
We all know family members put a lot of heart, soul, time, and money into caring for loved ones. A new AARP report puts a number to it: 34 billion hours of unpaid care, with an economic value of $470 billion.
IRAs: Still Complicated
IRAs, we’ve noted many times, have complicated rules, especially when inherited. Here are seven of the rules you should know, and an illustration of why inheriting an IRA is generally better than inheriting a 401(k).
If a Holiday Visit Becomes Alarming
If you are visiting an aging loved one over the holidays, and you notice he or she might need some extra help, here’s some general guidance and more specific to-dos dealing with dementia. For those already caring for someone with dementia, a new website aims to guide households to safety.
That’s the November roundup. If you see an item of interest, please let us know. Happy Thanksgiving!
