The death of famed comedienne Joan Rivers was a shock to the entertainment world. Rivers had a remarkable career and had to reinvent herself more than once to stay relevant in the industry she loved. Even to the very end, Rivers had a schedule that many comedians half her age would envy. Her busy schedule and network of endorsements helped her amass a hefty fortune. According to a trustadvisor.com report, her estate is estimated at being worth $290 million. Other publications suggest that it could $150 million. Nevertheless, Rivers always joked that everything would be left to her daughter, Melissa. It appears that Rivers stayed true to her word.
Despite the competing values, Rivers daughter may be paying a huge estate tax bill to the federal government, as well as to the State of New York. Federal law provides an exemption to the first $5.34 million of an estate. Afterwards, a 40 percent tax is levied on the remainder. Also, the State of New York imposes its own estate tax, which can be as much as 16 percent. Yes, there is a $1 million exemption, but that is quickly exceeded. It is estimated that Rivers lawyers could end up paying $90 million in taxes altogether.
Joan Rivers tax story should be a cautionary tale for those who have amassed fortunes and worry about it being consumed by estate taxes. An experienced estate planning attorney can provide counsel about the various opportunities to pass on assets without the expense of taxation.