Dealing with a friend's passing

Posted on March, 15 2017, 16:11

Sometimes the rigmarole around the passing of a friend is more immediate than the possible incidence of the Death Tax.  I'm reminded of Winston Churchill's comment that arranging his own funeral was more difficult than defeating the Axis powers. 

When dealing with federal tax policy as I do, it can be too easy to forget that the Death Tax is also, in fact, a very personal burden -- an added load thrust upon men and women at a most emotionally charged time in their lives.

The following is a composite of stories that have come to my attention.  The main character is a man who got one of those verdicts from his doctor that all of use fear:  that his prostate cancer will probably claim him within six months, "give or take."  He must put his affairs in order.  He'd known about the his cancer diagnosis for some time and he has been undergoing treatment as prescribed, but he has also been told by his doctor that they have been in the mode of "managing" the disease.  He's over the age of 75 after which the majority of all cancer deaths for men is caused by prostate cancer. 

He's been conscious of his responsibilities as overseer of his family's businesses and he now has to confront issues such as terminating more than one family trust and do much more to arrange things.  He tells us that his successors as Trustees will have to deal with the fact that assets in the trust have considerable capital gains, and thus potential capital gains tax liability.

And he has to adjust his investments -- how best should he change his businesses to help his successors and to help them perpetuate the wealth-creating machine he built.

But he also has to be concerned with many more mundane matters.  As a man who has accumulated wealth, he finds that some relatives -- and some not-no-near relatives -- look to him for favors, or perhaps for a piece of inheritance.  Some are complex:  He has always had affection for his cousin, Alice, and planned to leave a bequest to her of $50,000.  He has told Alice of this and evidently Alice told her twin daughters Felicity and Travisty who are pursuing doctorates in Public Art at the University of New Mexico at Taos.  They have pleaded through their mother to be given joint grants of $25,000 each for public art to adorn four overpasses on I-25.

At his wife's behest, he has also modified his will to include money for refurbishment of the organ at the First Presbyterian Church.  Numerous other charities are listed in his will.

His lawyer asked him if he wanted to include bequests in his will to those already in his will for transportation and lodging if it is necessary to attend his funeral.  He thought he should instruct his attorney to make attendance at his funeral necessary for anyone receiving an inheritance, but his attorney talked him out of it. 

But he laid down the law, anyone getting an inheritance of more than $10,000 will not get any travel subsidies.  Travel subsidies will be provided to people of modest means who, nevertheless have won the affection of the old man and the family.  A total of $15,000 will be set aside for their transportation, lodging and rental cars, if needed.  The executor will handle it within that budget and any residual will go to the Salvation Army.

He said to me that he was also concerned that either his wife or his sister-in-law would contrive to spend a majority of the remainder of his estate on the funeral reception.  He said that it was his thought to compromise between their desires for something at the Four Seasons and a polish-sausage-and-beer reception at the local Moose Lodge.  That might be his biggest fight and it was one that I would never want to get involved in.

He was certainly also concerned about the other wishes he had for his estate that might curtailed because of the Death Tax.  He spoke about the potential damage to his business if there are needed sell-offs.  Regarding his personal estate, his reply was, "I suppose you could say that I'm lucky and fortunate to be forced to make this kind of decision over what will be the remainder of my estate.  But, still, I damn-well feel it is unfair and rotten for the feds to lay claim on about 40% of my estate and not let me decide on how my money would go to my church, my charities or my heirs or even if it is for painting  overpasses on I-25!"