November 2012 Archives

Celebrity Example Of Need for Living Will and Health Care Proxy

November 30, 2012,

The Huffington Post recently reported on the aftermath of the tragic death of former boxing champion Hector "Macho" Camacho. The boxer had only recently retired from the sport after nearly three decades in the ring against some of the sports biggest stars. In his 50s, the boxer lived in Puerta Rico following his 2010 retirement. Tragically, earlier this month he was gunned down outside of a bar on the island. Emergecy responders were able to stablize the fighter, but not before he was declared brain dead by medical professionals at a nearby hosptial. What ensued was a bit of family feuding over the star's end-of-life wishes--a testament to all of us of the importance of making these wishes well-known before tragedy strikes.

Camacho's family disagreed on whether or not to remove life support to the boxer. Reports indicate that there was mass confusion and infighting. However, in the end, the extra life support measures were removed and the boxer passed away. The disagreement between the family members in the final few hours, however, may very well affect the family dynamic for years to come.

New York Health Care Proxy
It goes without saying that a family will always be in emotional turmoil when a loved one has a medical emergency, particuarly when the situation is grave. Obviously, deciding whether to take a family member off life support is one of the toughest decisions anyone might be faced with. That is why it is always best to make the decision for your loved ones well beforehand, by indicating explicitly what one's wishes are and ensuring someone will have the legal authority to make those end-of-life decisions in as straight-forward a manner as possible.

That is why our attorneys often work with local residents to create a living will and designate a health care proxy as part of their elder law estate plan. As the name implies, the health care proxy is an alternate decisionmaker who steps in to medical decisions on your behalf if you are unable to do so on your own. From car accidents to strokes, one never knows exactly what the future holds, and so it is wise for all of us to name another to act in our best interest if necessary. In addition, the living will is a legal document that explicitly lays out the scope of the proxy's power with regard to termination of life support services. Taken together, these tools ensure that your family will not be forced to agonize over these issues in the event that some tragedy strikes in the future.

See Our Related Blog Posts:

Estate Values Grow Beyond the Grave--The Marlon Brando Example

Irregularity of Estate of Monkee's Star Davy Jones

Benefits for Children Conceived After Father's Death to Be Decided By Court

November 28, 2012,

Medical and technological breakthroughs in recent decades have impacted virtually every facet of life--estate planning is no exception. For example, many rules in the field hinge on definitions of legal heirs. In the past, it was pretty clear who those heirs were, typically biological or legally adopted children. When an indiviual dies intestate (without a will), then each state has specific default rules regarding what to do with the individual's assets. Often the biological or legally adopted children receive part or all of those assets.

But it doesn't end with inheritance rules. Many state and federal programs also use these definitions to make decisions about who qualifies for certain benefits. This includes the federal Social Security program. In many cases, when a parent dies, a family eligible for Social Security assistance for the minor children that remain following their parent's passing. In the past there as little confusion over when a child did or did not qualify for those survivor benefits.

No longer. As recent of improvements in medical research have changed reproductive technology, the line between when a child is considered an heir and when they are not is blurred. That is perhaps best evidenced by a new case that is slated to go before one state court.

In Mattison v. Commissioner of Social Security, the plaintiff in the case is a mother who gave birth to twin boys several years ago. She is seeking Social Security benefits for the children because her late-husband (and the twins biological father) died in 2001. In the past there would have been little controversy surrounding the case, as the boys would typically qualify for support. However, the unique aspect in this case is that the children were conceived after the father's death. The man had battled health problems for some time, and before his death he had his sperm frozen. It wasn't until a few days after his passing that his wife used the frozen sperm to conceive the children. This is unique, because while parents often die before their children are born (when they are in the womb), it is rare to have the children actually conceived after the death.

In a previous U.S. Supreme Court hearing, the high court ruled that the children were not automatically guaranteed the Social Security benefit. Instead, the Court determined that the specific definition of heir in each individual state determines whether the benefits accrue or not. In other words, it is a matter for the states to decide. As such, the case was returned to the state court where, according to a recent MLive article on the matter, a hearing is soon scheduled. However, those familiar with the situation argue that the state court is unlikely to rule in the woman's favor because the law as currently written requires conception before death to be deemed an heir.

See Our Related Blog Posts:

Questions Remain Regarding Rights of Posthumously Conceived Children

Planning for Your Digital Life After Death

The Hobbit & Long-Term Estate Planning

November 27, 2012,

One of the biggest movies set to debut this holiday season is "The Hobbit," based on the well-known fantasy novel by J.R.R. Tolkien. This film follows in the footsteps of the very successful "Lord of the Rings" movies made over the last decade and a half. However, the release of the film is coinciding with a lawsuit filed by Tolkien's estate against certain companies using material from the series. The case is a testament to the fact that proper estate planning can have implications many years after a passing --even half a century later . That is because the assets passed on at death are not necessarily just physical property, bank accounts, and other material that is finite at the time of the passing. Instead, trademarks, copyrights, and patents can also be given which may have implications far into the future.

Estate Lawsuit
In this case, according to a story published recently by Guardian News, Tolkien's estate is claiming damage to his legacy as a result of certain gambling products and games using the Hobbit character and themes. The defendants in the case include the producers of the upcoming film version of The Hobbit. More specifically, the estate claims that the copyrights which were granted to the producers were infringed by use of the material in this way--for gambling and online games.

The sale of the copyright was alleged to be limited, occurring decades ago in 1969. The family's suit suggests that the limited sale of the copyright allowed use of the story for films as well as the sale of "tangible" products. The family claims that this did not include use of the likeness for online games or other digitial material. Of course, considering the copyright sale took place in 1969, well before the rise of the internet or personal computing, it is unlikely the sale included much reference to these online efforts.

According to the claims in the suit (the complaint can be read here), the family attempted to negotiate with the production companies but have not been able to reach agreement. As a result, they were forced to file suit in order to stop the infringing conduct and seek recourse for the losses sustained as a result of the infringing copyright.

New York Estate Planning
When reading stories like this one, it is easy for New York families to assume that these sort of details are unique only to high-profile celebrities or artists. However, issues over use of copyrights, patents, and similar material are common among many different local families. Many businesses, for example, have significant assets related to their protected material beyond cash, stocks, and bonds, real propert, and personal property. For that reason, it is critical that all families act prudently when conducting estate planning, so the use, value, and financial benefit from those more unique assets ultimately go to the intended beneficiary, instead of being exploited down the road by others.

See Our Related Blog Posts:
Estate Values Grow Beyond the Grave--The Marlon Brando Example

Irregularity of Estate of Monkee's Star Davy Jones

Estate Planning, Values, & Spirituality

November 21, 2012,

A perennial hot-button topic in estate planning and the creation of inheritance documents involves the passing on of personal values. Of course, the majority of work related to estate plans invovles physical assets: who gets the house, the bank accounts, the stocks, the insurance, the family china, and more. Making these allocations efficiently and saving on taxes are the hallmarks of these preparations. But our team often discusses the other aspects of estate planning, including setting in place material that ensures one leaves a legacy for those they are leaving behind.

This often includes spiritual issues but can just as well include secular notions like hard work, the importance of charity, and other values.

But how are these issues woven into an estate plan?

For one thing, as discussed in a recent article, "spiritual" estate planning is on the rise. This includes making inheritance allocations based on values, such as donating to religious charities or non-profits that support favored causes. In fact, according to one industry group--Charity Navigator--bequests to charities are up 19% this year as opposed to last year. Working with a professional beforehand can be crucial if one wants to leave sums to charity, because the gifts can be structured in various ways to ensure they are of maximum value for all parties.

On the other hand, some may want to incorporate their faith or values more directly into their plans, including trying to influence the actions of heirs with regard to respecting the faith. For example, a recent Wall Street Journal story on the tricky subject of using an estate plan to pass on religious values.

The article explained how there are a wide range of throny legal issues tied up in connecting inheritances with these faith-based requirements. Perhaps the most common heavy-handed approach invovles disinheriting those who are not spiritually devote or who marry outside of the faith. In most cases courts have upheld these requirements so long as they are not written to encourage divorce. Yet, even when legal, those familiar with these situations frequently explain that this often comes with very severe family controversy and confusion. As such, while the intentions are to honor one's religion, the ultimate consequences of this sort of feuding often do little to advance that cause.

In most cases, the best bet is still to share one's faith and values while alive, instead of trying to force the matter via inheritance details in an estate plan.

See Our Related Blog Post:

Passing on Religious Values At Death

Thinking Beyond the Paperwork--Creating an Ethical Will

Hurricane Sandy, Pets, & Planning

November 19, 2012,

Many lessons can be taken from the beating that our state took in recent weeks as a result of Hurricane Sandy, not least of which is the resiliency of New Yorkers. However, as we piece things back together, some advocates are reminding community members of one overlooked victim of lack of preparation: pets. A story from Today discussed how many families were forced to make tough choices about their pet, partiularly when they had to evacuate or seek other shelter that did not allow animals.

Of course, there were no easy answers, but in all cases it was a reminder of the need to have some preparations in place ahead of time so that beloved animals are taken care of no matter what the circumstances. While few expect severe weather patterns to disrupt the care of an animal, there are some events which we all must plan for: death and disability.

The article points to statistics from the American Society for the Prevention of Cruelty to Animals (ASPCA) that nearly 100,000 pets are forced into shelters each and every year as a result of guardians who pass away or become disabled without planning for their care. The future for those animals is unclear. Resources are incredibly tight, and so, depending on where the animal is taken, their long-term prospects are varied. It is truly a tragic sitaution that affects far too many pets that were devoted companions to their owners throughout their lives.

Fortunately, there are steps that all pet owners can take to eliminate the uncertainty. Basic estate planning tools can be used to provide for the care of a pet for the rest of their lives. New York allows the creation of pet trusts, which are essentially pools of money set aside to be managed by a trustee and used for the animal's care. For legal purposes, an animal is the property of the owner. Thefore, the animal cannot receive money directly. You can write a will leaving money for your dog, for example, but it won't have the intended affect, because an inheritance cannot be left to property. However, by using a trust, the animal can receive the fruits of those funds in a way that is binding under the law.

A representatives from the ASPCA summarized by noting that "Oftentimes, it's natural disasters like Hurricane Sandy that push people into action. Storms like this could be what motivates people to update their will or draft one in the first place. We want people to consider making those same arrangements for their care of their pets, so they don't end up homeless with no one to care for them."

For help with these and related estate plan issues in New York, please take a moment to call or visit one of our many offices across the state.

See Our Related Blog Posts:

Entire Estate Left to a Dog?

Estate Plan Can Provide Lifetime Care for Pets

Forbes Estate Tax Article Catches Fire on Social Media

November 15, 2012,

The popularity of social media sites has led to an outburst in use of the word "viral." "Viral" videos and articles are frequently pointed to as a product of the mega-popularity of sites like Facebook and Twitter. This just refers to stories and movies/clips that spread very quickly from person to person over these channels.

It isn't very often that any story related to estate planning in any way "goes viral." However, this week one story in Forbes on the estate tax was shared, re-tweeted, and "liked" far more than anything else on the topic. In the world of financial planning and long-term legal preparation it is fair to say that this artcle went viral. You can take a look at the story here.

The issue discussed in the article is one that we have frequently touched on--the likely changes to the estate tax starting January 1st. The summary is that while over $5 million can be used on gift and estate tax exemptions per individual this year (double that for married couples), the exemption will likely drop to $1 million on the first of the year. In other words, large chunks of assets can be given without any tax implications right now, but hundreds of thousands (or even millions) might be lost in taxes if that transfer does not occur until 2013.

Importantly, local residents should remember that taking advantage of this opportunity does not automatically mean that one gives up total control of the assets transferred. Various trusts can be used, along with business entities and insurance options to structure the transfer so that total control is not given up while still benefiting from the 2012 favorable tax rates.

Then again, it is impossible to know for sure what the future holds. The Obama administration and the Republican Congress have different ideas about what the gift and estate tax should look like, and they will be negotiating in the coming weeks to perhaps hammer out a deal. Right now though, as the article notes, "The only certainty is that the rest of 2012 is a bargain, and you don't have to die to take advantage of it."

No doubt the pent-up debates and feuding related to the election played a role in the popularity of this estate tax article. Many people are looking for "what now" stories in the aftermath of the election, trying to figure out how laws, rules, and regulations might be changed as a result of President Obama's re-election. That was likely amplified by the fact that this story is very time-sensitive: Act Now Before Its Too Late.

For New Yorkers, the story is simply yet another reminder that now is a perfect time to visit with a legal professional and handle some long-term financial matters. Immense tax savings might be in play by doing this work now instead of waiting. The attorneys at our firm are ready and able to help all local residents with these matters, no matter how big the estate.

See Our Related Blog Posts:
What the Election Might Mean for Long-Term Care Issues in New York

Selling Memorabilia Before Estate Tax Changes

Updates in Gay Marriage Cases That Might Head to Supreme Court

November 13, 2012,

The uncertainty about whether or not the United States Supreme Court will intervene and decide the constitutionality of the Defense of Marriage Act or determine whether the Equal Protection Clause of the U.S. Constitution requires marriage equality will soon be over. That is because, as discussed in a recent, helpful ABA article on the subject, the members of the Court are set to meet next week, November 20th, to determine what cases (if any) they will hear on the subject.

This November 20th meeting will be a private conference. That means that it will occur behind closed doors, and the public will not be appraised of the discussions. In general, it takes 4 members (out of 9 total) for the Court to agree to hear a case. Maneuvering around these sorts of issues is very delicate, and filled with legal strategy. That is because the high court only considers the exact facts and arguments presented before it when hearing a case. But there are several cases that might be considered on any given topic, and so advocates on all sides of an issue, including this one, often jockey to have their preferred case used as the one the Court hears to decide the legal matter.

Observers note that the most likely case to be heard on DOMA is Windsor v. United States. This is the high-profile case involving a plaintiff from New York who was forced to pay several hundreds thousands of dollars in estate taxes that she otherwise would not have paid because the federal government, pursuant to the "Defense of Marriage" Act, did not recognize her marriage to another woman. Earlier the 2nd Circuit Court of Appeals struck down the part of the law that prevents federal benefits from going to married same-sex couples in states that permit such unions.

Another case on the same subject that the Court might hear--and preferred by supporters of DOMA--is Gill v. Office of Personnel Management. The 1st Circuit Court of Appeals also threw out some parts of the law in that case. However, if that case makes it to the Court, then Justice Elena Kagan may have to recuse herself. That is because Justice Elena Kagan was the solictor general for the Obama Administration when this case was heard, and she actually argued for the constitutionality of the law at that time, as her position required. The Obama administration has since refused to defend the law and have explained their belief that it is unconstitutional.

In any event, most believe that the Court will cetainly agree to hear at least one of these cases challenging DOMA. However, there is far more uncertainty regarding whether the Court will hear the so-called "Prop 8" case. That matter argues that state bans on gay marriage violate the U.S. Constitution. Unlike the DOMA cases, if the Prop 8 case affects the law in states that currently ban gay marriage.

See Our Related Blog Posts:
Keeping an Eye on Upcoming Supreme Court Cases

The Story Behind the New York DOMA Challenge

LucasFilm's Sale to Disney & Estate Planning

November 8, 2012,

Before being overshadowed by the election, the talk of the social media universe in the past week and a half was Disney's purchase of the George Lucas film business (LucasFilm). The film company owned all the rights to the mega-popular Star Wars francise, and the purchase might mean that another Star Wars film will be in the works in coming years. Perhaps the most eye-popping part of the deal was the sale price. Disney apparently paid a staggering $4.05 billion in cash and stock for LucasFilm.

Since the deal was announced many professionals in the fields of tax and estate plannining have chimed in, noting that the decision to sell now was likely a smart one by Lucas. It will probably pay many divideds in the future for himself and his family. At a general level, by cashing out now Lucas will spare his family the very difficult and complex challenge of handling these matters upon his passing. At 68 years old, hopefully that time is still several decades in the future; however, prudent planning is timely planning. In addition, selling the company allows Lucas to spend more of his times on philanthrophy--something that he has been committed to for decades. He explained recently that he plans to donate most of his wealth to educational efforts around the world.

Beyond that, the timing of the move was likely motivated by smart assessment of the current tax climate. As recently discussed in a Forbes article on the subject, the current capital gains tax rate and brackets are set to be far less favorable in the coming year. No matter who was elected this year, increases in the tax rates to some degree were likely. However, by acting now, Lucas may have saved significant sums on taxes as a result of the immense gain in value of his company since it was founded.

Estate Planning/Transition Lessons
Of course, the savvy move by Lucas is a reminder to all residents, particularly those with businesses of their own, to think prudently about these transitions details. This is true no matter how big the business. In fact, smaller business owners often require more complex transition details. That is because, unlike LucasFilm, most business owners cannot simply sell everything to a large conglomerate like Disney. Instead, more nuanced details have to be worked out to transition an enterprise to another while ensuring resources are available for retirement and an inheritance.

If you are in this situation, please act prudently and seek out help to ensure the best is done for you and your family long-term. In many situations a combination of estate planning lawyers, tax professionals, and others are needed to ensure that everything works to maximize your interests. Considering the likely tax and legal changes on the horizon at a federal level, it is also critical to act soon to best meet your goals.

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Farm Families Reminded of Need for Unique Estate Planning

Succession Plans are Essential for Family Businesses

Two Teens, a Custody Battle, and $1 Billion New York Trust

November 7, 2012,

DNA Info in New York shared an interesting story on the intersection of a custody dispute, estate planning, and a one billion trust fund waiting in the wings. The tale is a reminder of how money and the emotions following a death are a breeding ground for feuding and conflict among many different parties. It is always best to proceed with the assumption that strong disagreement will arise and to crafts plans and take those into account. Perhaps those worst fears won't materialize, but, if they do, they must be accounted for.

The situation in this story concerns two teens who are set to inherit the $1 billion inheritance from their great aunt's fortune--the New York philantropist Doris Duke. Duke was a tobacco heiress andspent much of her time in a $44 million Upper East side apartment. Duke obtained the fortune after the death of her husband--Lucky Strike cigarette magnante "Buck" Duke--and holding from her own mother's fortune. Upon Doris's death in 1993, the fortune passed down to her nephew with whom she was close--the father of the twins. Sadly, he died in 2010 at age 57 due to a methodone overdose. He had divorced the teens'mother in 2000 and was awarded custody at that time.

As one might expect, confusion broke loose following the father's death. The children's biological mother was given custody at first, though serious concerns have been raised about her ability to raise the children, with past reports identifying her as suffering from paranoia and post-traumatic stress disorder. The twins' stepmother has been trying to obtain custody of the children but has thus far been unsuccessful.

In this midst of this tragedy and custody fighting, the children's mother has been making strange requests of the $1 billion trust fund that the two teens will inherit when they turn 21 years old. The large fund is currently managed by JPMorgan with specific rules about how much funds are dispersed to the children while they remain minors. Recently, the mother has been making large, somewhat bizrre requests of the trustees, claiming that the children "feel like they are poor" because of the trustee's denial of many of the requests.

Right now the family received a range of monthly allotments, including $8,000 for housing, $1,800 for food, $3,600 to rent a car, $500 for gas, $2,000 for random monthly expenses, and pre-pad nanny service, tuition, medical insurance, and more. All of this, however, is apparently not enough and the mother has been making repeated calls for more money. For example, $6,000 was requested for a Halloween party, with the trustee providing only $2,800. At Christmastime, the mother asked for $50,000 to cover expenses for gifts and several trips. That request was denied.

In the midst of all of these financial requests, the trustee asked a Manhattan Court for guidance on how to respond to the financial requests. As often happens in these cases, the court has appointed an independent guardian to act in the children's best interest in the matter. It is still pending with the court.

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Court Rules Woman Must Give Up Kafka Papers She Inherited

Protecting Assets While Facing Uncertainty

The Importance of Having a Will Even if You are Young, Especially with Children

November 5, 2012,

Do you really need to conduct estate planning if you are only in your 30s, don't have many assets, and don't have a lot of money to spend on legal and planning services? Absolutely.

The specific costs of these planning efforts can always be arranged to meet your resources. And it is critical not to forget that the planning includes components that apply to all parites, regardless of how old they might be or how wealthy. For one thing, an elder law estate plan in New York includes preparations related to long-term health and extreme medical care wishes. Serious accidents affect community members of all ages, and it is critical to have legal documentation in place to explain how you'd like things handled in the event you are seriously incapacitated or disabled.

The need for these documents is even more paramount if children are involved. It goes without saying that parents usually devote their lives to ensuring their children are cared for, protected, and secure in their future. Yet far too many young mothers and fathers forget to take a simple step to prolonged that security indefinitely--use legal documents to identify child care issues in the event of their passing. There is no way to completely prepare for the death of young parents on a child. Yet, dealing with the tragedy is always made a bit easier when the parent or parents had taken some time to identify clear successor guardian wishes in the event of their own death or disability. It is critical that all parents--no matter how old--have very clear plans in place for alternative caregiving.

Informal plans, however, are often of little use. Telling a relative or a friend that you'd lke them to take care of your child in the event of a tragedy is nowhere near enough. There has to be actual legal effect to one's wishes, otherwise, the long-term care of your child may be left to decisions made by the court and agents of the court who have no personal connection to you or your family. It is critical for guardian identification's to be made in a legal document, like a last will and testament, that will affect how the court handles these matters.

Many young parents assume that there is no need for this legal planning because there is an obvious choice for alternative guardian and the court will clearly see things that way. However, one of the most important lessons shared by estate planning attorneys is the fact that relationships are often frayed in the aftermath of a death. While it may not seem like a possibility now, in the aftermath of your death different family members may begin feuding over the guardianship of your child. This fighting will obviously leave real scars on family relationships and will have serious impacts on the child's long-term living. Taking away this uncertainty and doubt should be a high priority for all parents, and it is only fully accomplished as part of an estate plan that puts legal effects to your wishes no matter what the future holds.

See Our Related Blog Posts:
Court Rules Woman Must Give Up Kafka Papers She Inherited

Protecting Assets While Facing Uncertainty

Charitable Giving Tips: What to Consider

November 2, 2012,

Charitable giving is a critical part of many estate plans and not just for the super-wealthy. Many New Yorkers have worked hard their entire lives to ensure the financial well-being of their families. Besides passing on assets to loved ones, many local residents consider it an incredibly important testament to their values to share some wealth with charitable organziations that they hold dear. That does not have to mean donating enough money to have your name placed on the side of a new building. Instead, it often simply means providing a concrete indication of one's commitment to having a goal beyond oneself and the merit of giving back to others.

However, it is important to be educated about some pitfalls in charitable giving and the ways to make the donations prudently. For example, a brief article from The Hill this month provided a helpful "Do and Don't" list with regard to charitable donations. The issues shared in the story are worthwhile for donations made at any point in the year as well as long-term gifts like those crafted into estate plans. The underlying theme of the article is a basic checklist of tips to ensure the money you give actually acts to help the individuals that you hope it will and will be used in the manner you desire.

The story points to a list of "charity watchdog" groups that offer comprehensive analysis and recommendations to ensure that your donation is used as efficiently as possible. Those websites include: Charity Navigator, GuideStar, CharityWatch and The American Institute of Philanthropy.

The most important thing to understand about a potential charitable organization is how they are spending the money they receive. Charitable donors are entitled to basic information about the budgets of these organizations. The watchdog groups suggest that a general rule of thumb is that these non-profits should spend no more than 35 cents on fundraising for evey dollar taken in to actually provide the help they claim. Asking for that information is a critical first step. It also might be helpful to learn about the leadership organization. What is their vision and where do they plan on going in the future?

Money is a bit tighter for everyone these days and that includes charities. In these belt-tightening times helping others is often more important than ever. But at the same time it is of utmost importance to ensure that donations are used as efficiently as possible. Taking the time to ensure the organizations to which you are providing money are doing the best they can to use those funds wisely is a prudent way to make choices about both short and long-term gift giving.

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Improvement in the IRS Art Value Appraisal Service

Estate Planning Factors Beyond Taxes