Ed Said

Did the IRS REALLY "quietly change the rules" on how inherited property is taxed?

Tue, 19 Sep 2023 18:28:59 GMT

Revenue Ruling 2023-2 is old news.

Some of you may have come across a recent tax article with a bone-chilling headline: IRS Quietly Changed the Rules on Your Children’s Inheritance .

Fear not, my friends! Let me clarify the situation for you. The truth is that Revenue Ruling 2023-2, which has been making headlines, merely formalized what tax and trust attorneys have been aware of and practicing for years. If you have been working with anyone but the most aggressive tax professionals, there is likely no recent rule change that endanger your child’s precious inheritance, quiet or otherwise.

In a nutshell, Revenue Ruling 2023-2 states that assets which are not part of your estate when you die will not receive the coveted step-up in basis , wherein an inherited property's "purchase price" (basis) is stepped-up to the fair market value of the asset at the owner's death . Hardly a new change, this concept has been a fundamental principle of tax planning since time immemorial, harkening back to the days when early humans pondered the complexities of tax and asked themselves, "Should I give my cave to my children now, thereby excluding it from my estate for estate tax purposes (in increments below the annual gift tax exclusion of course), or should I consider its step-up in basis for capital gains tax purposes so my children receive less of a tax hit when they realize the gain?"

What’s the key takeaway here? You need to decide whether to prioritize (1) capital gains tax planning or (2) estate tax planning . For 2023, estate taxes only come into play if your estate exceeds $12.92 million, so most people will focus on capital gains tax benefits. But remember, individual circumstances vary, and it's crucial to engage in this kind of planning under the guidance of a knowledgeable trust and tax attorney.

The Estate of Darth Vader: Episode III – The Intestate Menace

Sat, 17 Dec 2022 06:06:24 GMT

How is the estate distributed if you don't have a will?

Train yourself to let go of everything you fear to lose. Sure, that’s great advice for a monastic peacekeeping order of sorcerers long ago in a galaxy far, far away, but most want to ensure their assets pass to whom they want. This includes Darth Vader, who decided, at the very last minute of his life, that he wanted his worldly possessions to pass to his twin children. Of course, he didn’t even know he had a second child until the day he died. We’ll assume that, if Darth Vader even did have a will, he revoked it by obliterating it (the statutory terminology) while being dragged by Luke to the hangar bay. How then will Darth Vader’s assets pass if he had no will or living trust?

Joint Tenancy

Joint tenancy is a form of asset ownership in which an asset is held equally by all owners and passes automatically at the death of one of the owners to the remaining owners. Some people chose this type of property ownership to help avoid the probate process at the first owner’s death, but it’s just kicking the can down the road to the next owner’s death and probate.

We’ll often hear people repeat the dubious advice to “just name your kids on the property as joint tenants with you, and it’ll avoid probate when it goes to them.” It’s a trap! Kids get sued? It’s their property. Kids decide they want the asset to be used differently? It’s their property! Worried about paying extra taxes? If you gift real estate to a child during your life by naming them a joint tenant, sure there’s a gift tax issue, but more importantly are the capital gains tax issues .

Suppose Luke and Leia inherit Fortress Vader, worth $500,000 at Darth Vader’s death. When he bought Fortress Vader it was worth $100,000. Since he died with it entirely in his name, Luke and Leia can sell the property for $500,000 and pay no capital gains tax, because the property received a step-up in basis at Darth Vader’s death. If, however, Darth Vader named Luke and Leia as joint tenants on the property during his life, there’d be no step-up in basis and capital gains would be determined based on the original $100,000 value: a $400,000 capital gain. This means a $60,000 tax for Luke and Leia if they're taxed at the 15% rate!

Darth Vader owned no assets jointly. He was a solitary man, and his property ownership reflected that. None of his assets will pass to surviving joint owners. Perhaps for the best, because Luke and Leia can now benefit from that wonderful step-up in basis.

Beneficiary Designations

Many accounts allow owners to name a beneficiary. These are sometimes called payable on death (POD) or transfer on death (TOD) accounts. These designations automatically transfer the account when the owner dies. The institution or bank transfers ownership as part of its internal process without going through probate. Vehicles registered in Connecticut may also have a beneficiary designated. On the reverse side of the registration certificate, or on a separate Beneficiary 1 certificate, you may name a beneficiary to receive the vehicle after your death.

What if the will or the trust says something different from the account’s beneficiary designations? The account would still be transferred to the account’s beneficiaries, not the will’s or trust’s beneficiaries.

Did Darth Vader designate beneficiaries for his various accounts? Perhaps. What if he named his master, Darth Sidious, as the beneficiary? Darth Sidious is famously dead (or so we think), and the bank or institution will look to see if a contingent beneficiary was named should the primary beneficiary predecease the owner.

Intestacy

Assets in the estate which aren’t passed through joint tenancy or beneficiary designations will instead pass through the probate process. If the deceased had a will, the probate court would dispose of the estate according to the terms of the will. If there isn’t a will, the court will instead refer to the state’s intestacy laws to determine who gets what. An estate is “ intestate ” when there isn’t a will guiding the disposition of the estate. Who gets what under intestacy depends on whether the deceased had (1) a living spouse, (2) living descendants, and (3) living siblings.

In Connecticut, if the deceased was married and had children only by their surviving spouse, the spouse inherits the first $100,000 in the intestate estate and the remainder is split half to the spouse, and the other half to the deceased’s children. If one of the children was not the surviving spouse’s, it’s an even split between spouse and children. If there were no descendants and no parents, the spouse gets everything. If there was no spouse, the children get everything.

What if there were no living spouse, descendants, or siblings? The siblings’ descendants would be next. What if they had no descendants? Now we’re in “next of kin” territory where very remote relatives could inherit. No next of kin? The deceased’s stepchildren now enter the picture as inheritors. No stepchildren? The estate finally “ escheats ” and is transferred to the state.

Darth Vader had no living spouse and was survived by two children. The probate court will therefore distribute the intestate estate to Luke and Leia equally. It was fortunate that the intestacy laws matched what Darth Vader wanted. The circle is now complete, at least it will be once the probate process is concluded. Mind what you have learned. Save you it can.

What if Darth Vader had actually created a meaningful estate plan? What if his predeceased wife, Padmé Amidala, created a trust for the benefit of her children, Luke and Leia? Find out more in our next installment: The Estate of Darth Vader: Episode IV – The Inheritance of Luke and Leia.

Be sure to check out:

The Estate of Darth Vader: Episode I - The Estate of the Sith Lord

The Estate of Darth Vader: Episode II - The Order of Payment

Estate Planning School - Lifetime Trusts

Mon, 12 Dec 2022 17:23:59 GMT

Can you protect a beneficiary's inheritance from divorce or creditors?

Trying to protect a beneficiary from themselves? Asset protection is frequently a part of an estate plan, and that can even include protecting assets after they’ve passed from you to your beneficiaries. If you’re concerned about protecting your estate from your beneficiary’s missteps, you need to act while you’re alive to prevent creditors from going after their inheritance.

Picture this: your estate plan leaves your estate directly to your darling son. You love the idea of the money going to ASAP, but now that inheritance is all his, just like any of his other assets. This means your son’s creditor’s, divorcing spouses, and other claimants can seek to stake a claim on that inheritance you’ve left him. Wouldn’t it be nice if you could get the inheritance to your son, but also with some protection?

Clever estate planners will accomplish this with lifetime trusts . Rather than leaving the money directly to your son, you instead leave the inheritance to a trust you create for his benefit: his lifetime trust . You can even allow your son to serve as the trustee of his lifetime trust. Your son can use the inheritance held in that lifetime trust for his benefit, but because the trust was

created by you, not him,
funded only with your assets after you die, never your son’s assets, and
made irrevocable at your death,

your beneficiary’s creditor’s, divorcing spouses, and other claimants cannot seek to claim the inheritance from him.

Lifetime trusts offer asset protection to inheritances.

Lifetime trusts can also be used as a tool to manage distributions to a beneficiary throughout their lifetime. Rather than naming the beneficiary as trustee, you can name a third-party trustee to make periodic distributions to your beneficiary over a period of time instead of giving them access all at once. Worried about the inheritance going somewhere you don’t want it to when your beneficiary dies (like your beneficiary’s spouse)? You set the terms of the lifetime trust, including who benefits from it after your beneficiary has died.

Lifetime trusts can be a powerful estate planning and asset protection tool, so long as you create them as part of your estate plan while you’re alive. To find out more about lifetime trusts, call and inquire or attend one of our popular estate planning seminars .

Gods of Estate Planning: Hermes will make your HEART FLUTTER!

Sat, 10 Dec 2022 22:03:54 GMT

Which Mythological God of Estate Planning Embodies Your Goals?

The sacrifice is prepared; an offering of gold and silver. Do I speak of a sacrifice to the incorporeal estate planning gods, or to the entities here on Earth that tax and deplete your estate when you depart this plane of existence? Many mortals seek to safeguard the wealth of their estate by avoiding taxes, fees, and other expenses after they’ve passed to the next world. Those who wish to preserve the wealth of their estate must be fleet of foot, and should therefore consider retaining Attorney Hermes as their ethereal estate planning attorney in Part 2 of our Gods of Estate Planning series !

Hermes, god of estate planning

Hermes is the Ancient Greek god of messengers, commerce, shepherds, speed, wit, speech, and magic. All good estate planning gods, as well as modern flesh and blood estate planning attorneys, embody these virtues, but Hermes also filled the role of psychopomp for the Ancient Greeks. Since we all already know what a pyschopomp is, it goes without saying that as a psychopomp Hermes was responsible for leading the souls of the recently departed to the underworld.

Hermes was so good at being a psychopomp that he became the god of those travelling along our terrestrial roads as well, along with the merchants who would travel those roads plying their trade. His role as god of commerce resonates today, with the words merchant, mercantile, and merchandise all being born from his Roman name: Mercury (thieving Romans, Romanes eunt domus !)

As a god of commerce, Hermes was interested in ensuring wealth was properly and honestly earned. In the " Tale of the Honest Woodcutter ," a poor woodcutter accidentally dropped his only axe and means of livelihood into a river. Hermes dove into the river and returned not with the woodcutter’s plain axe , but a glorious golden axe . “Is this what you lost?” Hermes asked the woodcutter, but the woodcutter truthfully said it was not. Hermes dove again into the river, this time returning with a magnificent silver axe . “Is this what you lost?” Hermes asked the woodcutter, but the woodcutter, again, said it was not. Hermes dove into the river a third time, and this time returned with the plain, old axe the woodcutter had lost, which the woodcutter gladly accepted. Impressed by how honest the woodcutter had been, Hermes gifted to him the golden axe and silver axe as a reward for his virtue. When a jealous neighbor heard what transpired, he misinterpreted the reason for the gift and threw his axe into the river as well. When Hermes asked if the golden axe was his and the jealous neighbor claimed it was, Hermes punished him by refusing both the golden axe and the return of his own axe.

For these reasons, Ed Lowe Law , with its full right and authority, grants the title "god of estate planning" to Hermes . As an estate planning god, Hermes embodies the estate planning goals of preserving the wealth of your estate with honesty and wit, in order to be a good shepherd for the flock you leave behind .

Estate Planning Goal: Safeguarding the Estate

When I talk to clients, almost all of them are interested in making sure as much money as possible is left in their estate for the people they leave behind. They’re not looking to take anything that they didn’t earn; they’re only looking to make sure their estate passes without paying excessive taxes and exorbitant fees. Certainly not an unfair request; all we want is for our axe to be returned to us. Through a clever and honest estate plan, we may be able to have what was ours, plus a little more for the next generation. Hermes would be pleased to see this goal accomplished in an ethically planned estate plan.

Often such a plan will begin with a Funded Living Trust to avoid the probate process in Connecticut and each other state where assets are owned. Avoiding the probate process can save the estate a lot of time, publicity, and money, but keep in mind that the Connecticut probate court must always receive and review the estate tax return of the deceased. This makes a Funded Living Trust planning an excellent first step in an estate plan, accomplishing many of the usual estate planning goals people have, and it also serves as a flexible base for clients who require more advanced planning. Whether or not it is the right estate planning tool for you depends on much and can be determined in a consultation with an attorney. To earn a free consultation with Ed Lowe Law, inquire and attend one of our complimentary seminars.

Check Out the Estate Planning Gods of Other Mythological Pantheons

Thoth, Greek God of Estate Planning - Here

Bragi, Norse God of Estate Planning - Coming Soon

Nabu, Mesopotamian God of Estate Planning - Coming Soon

Ogma, Celtic God of Estate Planning - Coming Soon

The Estate of Darth Vader: Episode II - The Order of Payment

Fri, 02 Dec 2022 18:52:25 GMT

What expenses will your estate pay? What can Luke and Leia expect in dad's estate?

Patience you have learned, young Padawan. We continue our quest to settle Darth Vader’s estate by exploring the expenses Darth Vader's estate must pay before it is distributed to his beloved beneficiaries: Luke and Leia. As a resident of the Connecticut system (just 12 parsecs from the Hoth system), Darth Vader’s estate must pay the claims, expenses, and taxes owed before the estate can be distributed amongst his beneficiaries. There is an order of preference to determine which expenses get paid first, as some creditors are more important than others (take a gander at the statute here , or do not, there is no try).

Woe to the poor creditors at the bottom of this list if the estate is insolvent , meaning the expenses owed are larger than the size of the estate. Will Darth Vader's estate be insolvent ? Let’s take a look at the Sith Lord's estate and the expenses it pays from the most preferred to the least preferred.

1. Funeral Expenses

At the very top of the list, as the most important expense to be paid, we have payment for the deceased’s funeral. "Why?" , you ask. Funerals are usually planned in a very short period of time, often before the family even looks at the deceased’s estate plan. The family almost always ends up paying for the funeral out of their pockets, not from the estate. Homo sapiens as a species have a strong innate interest in ensuring that the departed are handled promptly, with dignity, and without causing financial hardship for the family. As such, the very first expenses given the highest priority are the funeral expenses for the deceased.

Darth Vader’s estate is unlikely to be burdened by a large funeral expense. His funeral consisted of a simple cremation on the Forest Moon of Endor. There’s music and refreshments, but those are likely not an expense Luke or Leia paid out of pocket since they were piggybacking off the Rebel Alliance’s victory party. As hosts to the ceremony, the Ewoks may have charged a facility fee or cremation fee, but I’m hesitant to say that Ewok society even uses currency. In a pinch, C-3P0 can use his status as their god to negotiate a lower fee with Ewok Chief Chirpa.

2. Expenses of Settling the Estate

Once the funeral expenses are paid, the estate’s assets are available to pay for the expenses associated with settling the estate. These expenses encompass a potpourri of fees including (1) court fees, (2) appraisal fees, (3) accounting fees, (4) bonds, (5) attorney fees, (6) publication fees, (7) fees associated with getting real estate ready for sale…the list goes on and on as it encompasses any and all fees that are related to the resolution of the estate.

Darth Vader’s estate is going to be hit hard by these expenses, unless he did some clever estate planning, such as a Living Trust plan, to help avoid some of the probate process. With several assets in several systems, each system having its own local probate code, there are going to be a litany of fees. With an attorney guiding the estate through each of those probate courts, the expenses are likely to range anywhere from 3% to 6% of the gross assets of the estate .

3. Claims Due for the Last Sickness of the Decedent

The last sickness a decedent had is often what kills them, and it often kills them before they get the chance to pay their medical bills. Such fees are paid after the expenses of the estate settlement are paid, and often hospitals will need to argue about what exactly constitutes an “expense of settling the estate” taking precedence over them, because there may be very few assets left to collect once the settlement expenses are paid. Can the executor add an addition to a property owned by the estate as part of the settling of the estate? Such work can certainly be costly, and may exhaust cash assets, so such repairs must be limited only to repairs which are (1) necessary to conserve the overall value of the estate or (2) ordinary and necessary to preserve the property in question.

Darth Vader had a lot of medical issues, mental health issues too. Being a private person, and one who abhorred the idea of anyone seeing him in a weakened state, Darth Vader self-insured and treated his ailments with his own medical equipment, his personal medical droids programmed- exclusively by him, and his strong connection to the Force. He would be unlikely to have any outstanding medical costs to be paid from the estate.

4. All lawful taxes and all claims due the state of Connecticut and the United States

The government finally gets their due as the fourth priority expense. Taxes owed to the state, taxes owed to the federal government, and claims against the estate by any of those governmental entities need to be paid before the beneficiaries get their slice of the estate.

In Darth Vader’s estate , I envision the estate being completely wiped out at this point. Normally the estate would pay any back taxes owed, estate taxes, income taxes, and every other tax or claim before moving on to the next expenses in the list, but there has been a significant regime change! The Rebel Alliance has formed the New Republic after defeating the Galactic Empire, and priority number one for the New Republic is the seizure of the defeated Galactic Empire’s assets and the assets of its most prominent officials. Since Darth Vader was a war criminal, Luke and Leia should expect the estate to be depleted at this point as the New Republic takes possession of all of Darth Vader’s remaining assets to help rebuild the galaxy, right the wrongs he committed in life, and provide whatever restitution can be had for his victims. Darth Vader’s estate would therefore become INSOLVENT if he had any other expenses to paid, and there are still a few more left in this list!

5. All claims due any laborer or mechanic for personal wages for labor performed by such laborer or mechanic for the decedent within three months immediately before the decease of such person.

Fifth on the list of priorities are the laborers who worked for the deceased within three months prior to death. Got the house painted a month before you died? That painter gets paid at this point. Got the car fixed four months ago? Sorry car mechanic, you’ll have to wait until we’re a little further down the list.

Unfortunately for Darth Vader’s workers , there are no assets left in the estate to pay them for their hard work. The debt he owed them in life goes away because there’s simply no money left to pay for it in the estate following the New Republic’s claim against the estate. Sorry folks. Next time you enter into a contract with a Sith Lord, demand payment up front!

6. Other preferred claims

A seemingly subjective term, “other preferred claims” refers to claims from creditors which are considered more important than others. It depends on the circumstances of each case and can include expenses such as (1) mortgage loans, (2) unpaid child support, (3) benefit recovery, (4) promissory notes, and (5) good ol’ fashioned credit card debt, so long as the court agrees such claims are “preferred.”

Sorry Darth Vader’s preferred creditors. You may as well be a regular, lowly, non-preferred creditor at this point because there is nothing left to claim from the estate.

7. All other claims allowed in proportion to their respective amounts

At the end of this list, we have all the other claims against the estate. Non-preferred creditors now get their slice of the pie. If there isn’t enough left in the estate to pay everyone in this non-preferred group what they are fully owed, the remainder is divided pro rata amongst the creditors, meaning the higher the amount owed to you, the higher percentage you get of whatever’s left.

Darth Vader’s estate couldn’t even pay preferred creditors. You think you stinking non-preferred creditors have a chance? Go chase yourself around the galaxy you non-preferred scum.

And there you have it! These expenses must be paid by the estate before the beneficiaries can get their share. Unfortunately for Luke and Leia, Darth Vader’s estate was insolvent because of his terrible misdeeds and the installation of the New Republic as the authority controlling the galaxy. Knowing Luke and Leia though, they are alright with that and prefer to see justice done.

For future articles exploring Darth Vader’s estate, we’ll assume he had a little something left to divide amongst his children. Let’s see how Luke and Leia deal with an inheritance in The Estate of Darth Vader: Episode III – The Intestate Menace.

Be sure to check out:

The Estate of Darth Vader: Episode I - The Estate of the Sith Lord

The Estate of Darth Vader: Episode III – The Intestate Menace

Gods of Estate Planning: Thoth will leave you LIGHTHEADED

Thu, 24 Nov 2022 03:59:01 GMT

Which Mythological God of Estate Planning Embodies Your Goals?

First things first, there are no "gods of estate planning." There were mythological gods of the sea, gods of war, and gods of agriculture across almost all ancient cultures because those aspects of reality were important to them. Well, those cultures clearly didn't value estate planning and that's why they're dead . You and I though? We're alive, and we have the opportunity to get our estate planning in place.

The perfect estate plan for you depends on what you're trying to accomplish. Some estate planning goals are universal, and some are very particular to you. Wouldn't it be neat if we explored those estate planning goals as embodied by those mythological gods most closely linked to lawyering. For part one, meet Attorney Thoth!

Thoth, god of estate planning

Thoth is the Ancient Egyptian god of magic, writing, science, wisdom, and art, the same virtues modern estate planning attorneys embody. This makes him the most lawyerly of the Ancient Egyptian pantheon, and a good candidate for god of estate planning as well.

Ancient Egyptians believed strongly in the immortality of the soul. After death, assuming the deceased's remains were not desecrated, the Ancient Egyptians believed that the soul would travel through the underworld of Duat and face a series of trials. At the end of those trials was the " Weighing of the Heart ," a ritual in which the departed's heart was weighed against the feather of Maat, the embodiment of truth and justice.

Sins committed in life made the heart heavy. If the heart was lighter than the feather, the soul was worthy of joining the god Osiris in the afterlife. If the heart was heavier than the feather, the soul was devoured by the crocodile god Ammit, and thus annihilated for eternity. What an end!

Thoth worked with the god Anubis in the Weighing of the Heart. Thoth took on a lawyerly role for this ritual. Anubis was the handler of the heart, conducted the weighing, and served as lucky souls' guide to the afterlife. Thoth was responsible for making sure the scale was perfectly balanced and recording the results of each weighing.

For all of these reasons, Ed Lowe Law, with its full right and authority, grants the title "god of estate planning" to Thoth . As an estate planning god, Thoth embodies the estate planning goals of giving yourself peace of mind during life and lightening your soul for your passing .

Estate Planning Goal: Peace of Mind

When I meet with people, I'm curious about what their initial goals are. Almost everyone says, " I know I need to do something ," or " I just keep thinking about it ." People are looking to rid themselves of that nagging thought that claws at them day after day. Getting the right estate plan in place bestows upon you that precious peace of mind in knowing your affairs are in order. It lightens your soul in giving an amazing gift of time and money saved to your survivors. Thoth would be pleased to see such goals accomplished in a plan.

Many people are anxious in general about getting estate planning done. Some prefer to never even speak of it, lest talking about death invite it. If there's one thing we can be certain of in life, it's death. For the anxious estate planner, it may help to meet with an easy-going attorney. Perhaps someone at Ed Lowe Law can help?

Check Out the Estate Planning Gods of Other Mythological Pantheons

Hermes, Greek God of Estate Planning - Here

Bragi, Norse God of Estate Planning - Coming Soon

Nabu, Mesopotamian God of Estate Planning - Coming Soon

Ogma, Celtic God of Estate Planning - Coming Soon

The Estate of Darth Vader: Episode I - The Estate of the Sith Lord

Sun, 13 Nov 2022 03:22:49 GMT

We've all thought about it. When we’re watching the greatest cultural accomplishment of the last 200,000 years, one persistent thought gnaws at us all: what are the particulars of Darth Vader’s estate plan?

For those of you unfamiliar with the character, Darth Vader is the wealthy father of two precocious twins. Unfortunately, he’s been away from his children for most of their lives because of a religious calling. We spend precious little time on Darth Vader’s estate planning goals, and after becoming one with the Force it is unclear what happens to his assets or if he even had an estate plan (can you imagine?)

Estate planning fans, we must opine on several aspects of Darth Vader’s assets, family, and religious order to determine the intricacies of his estate plan. Really this ought to be presented in a miniseries, but Disney has not responded to any of the scripts I’ve sent featuring a rugged Bounty Hunter / Attorney administering Darth Vader’s estate.

Instead, Ed Lowe Law will bring us on a written journey of discovery in a series of blog posts, wherein we will learn much about a topic that touches us all, from the mightiest Sith Lord to the lowliest Nutmegger: estate planning .

What is an Estate?

Before anyone starts on their estate planning journey, they must first ask themselves:

"What is my estate?"

An estate is everything you own! Real estate, vehicles, bank accounts, insurance policies, jewelry, retirement accounts, the list goes on and on. If you own it, it's part of your estate and your estate continues on after you die.

"What do I own?"

Ownership is the legal right to (1) possess, (2) use, and (3) give away that property. Th is means the assets you rent or lease from someone else are not owned by you, because you don’t have the right to give that asset away away. Once you know what you own, you know what your estate looks like. Any asset you own is part of your estate.

If an asset is part of your estate, you get the benefit of deciding who gets it. Unfortunately, the larger your gross estate, the larger your taxes and administrative fees. Administrative fees can take anywhere from 3% to 6% of the gross assets of the estate before taxes are even levied , as we discovered in The Estate of Darth Vader: Episode II - The Order of Payment.

Estate taxes at least have the benefit of exempting a large chunk of the estate from taxation. As of 2023, for both Connecticut and Federal estate tax, the first $12.92 million in the estate is exempted from estate tax. Any amount over $12.92 million is taxed between 12% to 52% .

What is Darth Vader's Estate?

Darth Vader certainly uses and possesses many impressive assets. Does he have the right to give them away though? If he does, those assets are includable as part of his estate.

Darth Vader wanted for nothing as both a Sith Lord and the Galactic Empire’s Supreme Commander of the Imperial Forces. The most advanced star fighters, the most luxurious lava castles, and the best bacta tanks money can buy are all his. He is perhaps one of the richest individuals in the galaxy, but his circumstances are very unique. Are these assets truly owned by Darth Vader, or are they owned by the Galactic Empire or the Sith religious order? His balmy residence at Fortress Vader alone is worth billions, but it is also an important site for his Sith religion. Darth Vader may use and possess Fortress Vader, but can he dispose of it unilaterally? Could he give Fortress Vader to the Jedi, or do laws of the Sith determine where it ends up? The right to determine where things end up is called a " power of appointment ," and it is an important estate planning tool for virtually every planner.

Darth Vader has a potentially massive estate. Darth Vader may not want it to appear that he has a large gross estate, especially if it would gross more the $12.92 million. Wouldn’t it be convenient from a tax perspective if it was determined Darth Vader did not own certain assets, but rather his tax-exempt religious order? Would Darth Vader's estate have benefited by gifting assets to his beneficiaries while he was alive to reduce his total estate size, and thus save on estate taxes in the long run? As of 2023, he could gift up to $17,000 per year, per beneficiary without filing any gift tax returns with Connecticut or the Federal government , but it's too late for that type of planning now because Darth Vader is dead. Anakin Skywalker killed him when he chose his love for his son over his fear of his evil master, Darth Sidious.

You, dear reader, are alive unlike Darth Vader. This means you still have the opportunity to put your affairs in order to ensure all of your goals are met, and thus bring balance to the Force.

Be sure to check out:

The Estate of Darth Vader: Episode II - The Order of Payment

The Estate of Darth Vader: Episode III – The Intestate Menace