James Brown Estate Battle Rages On -- Supreme Court Rejects Compromise

February 28, 2013,

The more assets that are at stake following a passing, the higher the risk that others might pursue all available means to get a piece of the pie--even if it completely contravenes the original wishes of the former owner. Estate planning fills the gap by closing as many opportunities for subsequent legal challenge as possible. Sadly, in many cases, even when some planning is done ahead of time, outsiders may attempt to find any loophole possible to upset the original plan.

That seems to be what happened with the estate of music legend James Brown. Brown died over four years ago from heart failure, but the final resolution of his assets remains in limbo with a potentially long future ahead. That is because the Huffington Post is now reporting that the state's supreme court recently rejected a compromise that was two years earlier between various parties.

The Backstory

Not long before his death Brown created a will that seemed to give the vast majority of his wealth to charity, mostly focusing of the educational goals of needy children. However, after his passing, his purported widow (the couple was not married) and various heirs challenged the will. The feuding escalated quickly, even reaching the point of forcing the singer's body to remain unburied for two months while disagreements were sorted out.

Over the next two years accusations about trustee mismanagement, altered wishes, and undue influence were hashed out in court. Eventually, in a somewhat unprecedented step, the state's Attorney General stepped in and brokered a deal. Per the terms of the deal, 50% of the estate would go to charity, 25% to the purported widow, and the remaining 25% to other heirs.

Not So Fast

That old agreement was reached in 2009. But shortly after a fewer of the former trustees--they had been replaced by a lower court earlier--filed suit challenging the agreement. That legal challenge eventually made its way up to the highest court in the state. In a new ruling that high court threw out the AG-brokered compromise. The main problem, noted the opinion, was that the compromise seemed to give short-shrift to Brown's actual wishes which were to give virtually everything to charity. The judges noted that it should not be that easy to slash charitable bequests via legal challenge. So now the matter will be sent back to a lower court to figure out the next steps.

One of many lessons to be gleaned from this sad case: a simple will is often not enough to prevent others from attacking your wishes, causing legal controversy, and delaying a final resolution for years.

Understanding How a Wealth Transfer Might Affect Insurance

February 27, 2013,

Advisor One shared a useful story this week that touches on an item commonly forgotten in wealth transfers, including those using trusts or other legal tools. It is critical to remember how insurance coverage might be affected by the transfer. That way, changes can be made immediately to guarantee that coverage is in good standing at all times. Sadly, as you might expect, this error is often only uncovered after some catastrophic accident, when insurance coverage is needed. The last thing anyone wants is that "oops" moment, when it is discovered that the coverage does not exist because of the previous transfer via trust or other tool (like an LLC).

The Basic Problem
Insurance policies are written to provide coverage to an owner or titleholder. This is the case for virtually all types of coverage, from home, automobile, and boats to collectibles. Problems arise, however, when a transfer is made and the insurance policy is not updated to reflect the change. For example, if a home is transferred into a trust, it is important to confirm that the proper changes are made so that the homeowners policy covers the new arrangement.

While this may seem like an obvious step that must be handled as part of these transfers, it is all too often forgotten. The article argues that the mistake is more likely to be made in situations where ownership changes but the actual possession of the property remains with the former owner. For example, if a senior transfers title of a house to a trust for tax and planning purposes, the senior is likely to still live in the house. In those cases it is critical to ensure that the insurance covers both the actual owner and the "occupant." The same general idea also applies vehicles and other valuable items.

The specific protocol to ensure proper coverage may depend slightly on the item and the insurance company. In most cases, it is just a quick fix. But, the consequences of failing to making that quick fix before a possible accident are staggering. It goes without saying that it is beneficial to have a decent relationship with your broker such that you can make a quick call after these transfers to get specific information about what needs to be done in your exact case to guarantee that these insurance details are account for.

The bottom line: keep insurance issues in mind when all of these transfers and be sure to bring it up if it seems to be a forgotten detail.

Can You Reject an Inheritance You Don't Want?

February 22, 2013,

Communication is absolutely essential to quality estate planning. That includes both sharing of information between client and planner, as well as the client being open and honest with their family about their wishes. Some might want to avoid difficult conversations about inheritances by keeping silent and allowing family members to find out only after they are gone. But this opens up the door to potential feuding and costly legal challenge. The goal of proper planning is to make transfers as seamless and efficient as possible, and meeting that goal requires others to know what to expect when the time comes.

Most of the time, unwelcome inheritance surprises come in the form of not getting what you expected to receive. Many adult children are surprised when a parent leaves assets to someone else or does not distribute equally between siblings. But the opposite may also be true. You may receive an item that you do not want. For a variety of reasons, not all gifts may be welcome. There are steps that can be taken to disclaim a gift that is part of an inheritance but they are often confusing.

Thanks, But No Thanks
As referenced in a NJ News article on the subject, both state and federal law set rules that must be followed to disclaim a gift. Failing to do this properly may result in various complications, including tax issues. Generally, however, a disclaimer must be made in writing and be irrevocable. The disclaimer cannot be made if you already accepted some benefit from the gift. The disclaimer must be received by the executor in a timely manner

There are many other complications that come with disclaiming, however. If the disclaimed gift reverts back to the estate afterwards (and the same person is set to inherit part of the estate generally), then the individual will need to disclaim the gift yet again as a portion of the inherited remainder.

Importantly, the above rules roughly describe the process when a gift is transferred via a will. Options may be far different if alternative methods are used--like trusts. At the end of the day, it is absolutely critical not to make decisions about these matters without first visiting with an estate planning attorney and other professionals to understand the implications and the exact rules that must be followed. At the same time, it is helpful to avoid this possibility altogether by having discussions well-beforehand so that a plan can be crafted whereby heirs know what they are getting and have accepted it.

Retirement Planning -- The Stages

February 19, 2013,

There are no shortage of articles discussing the need to get serious about planning for your retirement. Money is seemingly always tight, and taking a significant portion of assets and putting it away for another day is rarely an easy step. That is particularly true for middle class families who generally have much more pressure to ensure that income is sufficient to meet monthly bills. Of course, regardless of the difficulty, retirement planning is essentially for all of us--health and happiness in one's golden years depend on it.

A recent New York Times article provides some helpful analysis of the "stages" that many go through in putting off retirement planning before eventually buckling down and getting it done. The author argues that the well-known five stages of grief are perfectly adept at describing the stages of long-term financial planning as well. Those five include: denial, anger, bargaining, depression, and acceptance.

At first, many deny that the task is all that important. The article suggests, for example, that the amount of money needed to be saved is usually far higher than most suspect--so much so that many simply deny that the saving requirements are accurate. When that figure is shown accurate, many get angry about the difficulty of planning for retirement. With so many daily financial pressures it sometimes seems unfair that planning for one's retirement is such a burden.

Eventually, many move into the "bargaining" phase. This may involves attempts at shortcuts--saving less than necessary or using do-it-yourself options to plan for contingencies. A few people stop at this phase, leaving in place inadequate plans that are essentially an accident waiting to happen. In the estate planning context, this often means that residents leave their intentions unclear, setting up likely family feuds. Others, after acknowledging that half-measures are insufficient, fall into "depression," feeling dismayed about the task.

Fortunately, most people eventually make it to the final stage--admitting the reality and accepting the need to properly plan for retirement and put long-term affairs in order.

At the end of the day, long-term planning will not go away. Once you get beyond arguing about it, worrying about it, or assuming that the situation is hopeless, it is time to take deep breath and visit with professionals to get it done. That may include tax experts, financial analysts, and New York estate planning attorneys.

Dying Intestate--The Documents that Later Emerge

February 15, 2013,

If you pass away without a will designating how you'd like your affairs to be handled, you are deemed to have died "intestate." Some of the most significant legal battles and family feuding occurs in those situation because it is essentially a free-for-all. Generic legal rules apply, but without any indication of how to handle property distribution and other matters, all interested parties may decide to pursue different legal avenues to maximize their own interests. Legal fights can still occur when a will exists (often referred to a "will contests"), but the possibility of one's wishes being completely upended are far lower when at least some documentation exists.

Interestingly, it is not uncommon for various documents purporting to explain one's wishes to pop up later on--in the midst of a legal dispute. For obvious reasons, these documents should be examined with much scrutiny, but they still may influence a legal case.

New Document in Lottery Winner's Estate Feud
For example, ABC News recently reported on a new document that was shared with the court in the well-known case involving a poisoned lottery winner. The estate battle gained national attention last year when a lottery winner died suddenly after being given cyanide. Authorities have yet to make any arrests, but various parties (including the man's wife and father-in-law) have been under suspicion for involvement in the matter.

The lottery winner (who also owned a small business) died intestate. Since his passing, various family members have been fighting over the remains of his estate. Most prominently the man's widow and his siblings have spent significant time in court in an attempt to argue why they should receive the bulk of his wealth.

Recently, the widow came forward claiming that she found a new document signed by her husband which purports to leave all of his assets to his wife. Mysteriously, the letter was signed only two months before his untimely death. The document was allegedly an "operating agreement" that was drafted with his business partner. The agreement was submitted to the probate court last week. The man's brother questioned the timing of the find and argued that it was illogical for the agreement to be signed only two months before his death, as if he had any idea that he would ultimately be murdered.

Adding to the complexity are the possible inheritance rights of the man's child from a previous marriage and allegations that the man did not legally marry the widow. Considering all of the complications, this situation is the prototypical example of lack of estate planning gone awry. Accusations of murder, blended families, feuding in-laws, newly discovered documents, and lottery winnings all combined without use of trusts or a will.

Estate Battles More Common Than Ever

February 13, 2013,

Feuding after a death has been common for centuries. However, observers point out that in recent years estate battles have actually grown and more frequent. The trend is noted for all families, both those with sizeable wealth and those of much smaller estates. It is a crucial reminder for residents to take action now to eliminate uncertainty and confusion and ensure in-fighting doesn't tear a family apart following a passing.

Last week the Telegraph published a story on the topic, pointing to data showing an uptick in legal battles over inheritance disputes. The most common explanation for the change is the recession which devastated many families over the past seven to eight years. One observer explained that in tough economic times, "more people are hoping to receive an inheritance and there can be a great deal of trouble if their hopes are disappointed. People are more litigious in general and more willing to assert their rights."

Undoubtedly, the recession acted as a spur, influencing some to start a legal fight in order to secure funds that they desperately needed and might assume are owed to them. However, money troubles aren't the only cause in the change. After all, financial incentives exist even in relatively prosperous times.

Alternatively, the increase in complex family structures may also be at the heart of the rise in will fights. In "traditional" families, there is more obvious expectations about an inheritance, with spouses and children receiving most or all of the property. However, with second marriages, adoptions, and other relationships, those rules do not fit. Without clear estate planning documents in place (wills and use of trusts), then the state is often set for future court battles.

Avoiding Probate Fights
Sadly, in their quest to secure what they believe is owed or protect an inheritance from another, many families find that an estate is exhausted to pay for the legal fight itself. In this way, laying out one's wishes clearly may not only ensure the right person receives the right inheritance but that there is any inheritance at all. Court costs, attorneys fees, and miscellaneous expenses in litigation is substantial, and most estates cannot afford to bear that expense.

All New Yorkers should be aware of this reality and act now to spare their family the cost and stress of a possible feud. Experienced professionals working on these matters can explain the many different options that exist to secure inheritance wishes and protect it against potential legal challenges.

Richard III Reminder: Set Your Funeral and Burial Plans in Stone

February 11, 2013,

One common excuse for putting off basic estate planning is the assumption that others--spouse, children, siblings, close friends--already know exactly what you want, and so there is little need to go through the legal hoops to solidify it. Sadly, in the aftermath of a passing, there is no way to know exactly what those in control of a situation might do unless there is legal backing to it. That obviously applies with distribution of property, but it also applies to more ceremonial aspects to a passing, like funeral and burial wishes.

Don't Leave it to Chance
For many, their faith dictates how they chose to have their passing honored (or not honored). From deciding what to do with remains or where to be buried, it is critical that desires be set forth clearly. It is a mistake to underestimate the significance of these details or the in-fighting that may bubble up where there is disagreement about how to handle these matters.

To illustrate the significance of burial decisions, one need look no further than the morning newspapers where disagreement is brewing over what to do with the remains of former English King, Richard III. In a scene that seemed pulled from pop fiction, the remains of RIchard III--immortalized as villain by Shakespeare--were recently found buried beneath a parking lot.

The unceremonious burial took place over 500 years ago and no one alive today has any personal connection to the former king. However, that has not stopped a feud from brewing over where the monarch's final resting place should actually be, as recently highlighted in a Times story. Initially, the town where the bones were found--Leicester--took steps to bury the king in the city's cathedral.

However, the nearby city of York is objecting. Representatives for the town argue that York was Richard's home town (he was once known as Richard of York), and that his connection to the city is far more important than where his bones were found. Historians note that he was buried in Liecester only because he died in a battle nearby.

Others are arguing that, wherever he be laid to rest, it should be in a cathedral used by Catholics. Catholicism was the national faith during Richard's time. However, not long after his passing Henry VIII broke ranks and created the Church of England. Many cathedrals formerly used by Catholics were converted to the Anglican faith.Consequently, some observers are arguing that it would be inappropriate to interr the former king in a cathedral used by a faith that was, presumably, not his own.

It remains unclear how the matter will ultimately be resolved. Both the town of Liecester and York have asked the royal family for support, and each are circulated petitions to influence the decision. Even then, it is unclear exactly where the bones will lie, even after the city is chosen.

Obviously, the remains of a former king of England half who died half a millenia ago presents a somewhat unique case. But the same emotions that are tied up in this battle for burial rights applies to similar decisions today. It is critical to contact a NY estate planning attorney to ensure your wishes are not up for dispute.

Taking a "Do Over" for 2012 Asset Transfers

February 8, 2013,

The last few months of 2012 were filled with mass speculation about how many federal tax issues would ultimately be decided. One part of the high-profile "fiscal cliff" proposal and competing options was the estate tax. As oft-discussed, the final tax details could have fallen anywhere between a $1 million or $5 million exemption level, with rates anywhere from 35% to 55%. Fearing that no agreement would be made and the country would "go over the cliff," many local residents conducted last minute wealth transfers to take advantage of what was assumed to be relatively favorable rates in 2012 that might disappear in 2013.

As we now know, the country did not go over the cliff. As for the estate tax, the compromise did not see nearly as sharp a rise as expected, with a $5.25 million exemption level and 40% rate (up somewhat from the 35% in 2012).

Considering that the concerns which led to many transfers in late 2012 were false alarms, is there anything that can be done to reverse the transfers? That was the subject of a recent Forbes article discussing the "Buyer's Remorse" of many who pulled the trigger on different financial plans as a result of tax uncertainties.

The story reminds that wealth transfers to others--usually children or grandchildren--can be reversed only in certain circumstances, depending on how the arrangements were crafted. Fortunately, in most cases the transfers were made via trusts with "controls" attached. Those control often allow changes to be made which can help when seeking to effectively take the gift back.

Alternatively, the story explains how having a spouse can have the same effect. That is because in many cases the transfers gave large gifts to children in trust. Those transfers usually allow one's spouse to use the funds (both income and principal) in any way that they chose. In that way, a couple may still have use of funds as if a gift wasn't made.

The only way to know your options for sure are to work with your financial advisor and estate planning attorney to get tailored advice. Each financial transaction is different, and there is significant flexibility in how different trusts are set-up. The options for a "do over" hinge on those details. Even if you did not conduct end-of-year transactions in 2012 ,this situation is a helpful reminder of the need to think clearly in the future about whether or not you want certain planning actions to be revocable or irrevocable. There are different benefits to each, but it is critical to understand what steps are permanent and what steps are not when working through long-term financial planning and asset transfers.

E-­Planning: Estate Planning in our Digital World

February 6, 2013,

Like it or not, our world is infatuated with technology. Smartphones conduct intercontinental transactions. Friends across the country communicate through instantaneous text messaging, and telephones and tablets close distances and miles through face to face conversations. Because technology plays such an important role in our daily lives, today's estate planning should include an arrangement for organizing and protecting technological and digital assets.

Dividing Up Digital Assets
We have frequently discussed how there are different kinds of digital assets to think about when drafting your estate plan. First, there are your personal digital assets, which would include any email accounts, personal social media accounts and maybe even a personal web site or personal blog. Personal digital assets might also include any photos or documents stored on different websites, like Snapfish, Shutterfly or Dropbox. Information stored in any cloud storage should also be considered personal digital assets.

Along with personal digital assets, there are also financial digital assets, which would include any online banking or financial account information. Many people choose to pay their bills electronically, and even automatically, through their banking system or their bank's website. Others may use a company's website to pay their bills directly through that site, such as paying a monthly credit card bill using the bank's credit card website or using a utility company's online billpay system. Often, paying bills can be a mass of online passwords, dates and accounts. Any of these passwords, or the information contained in any of these accounts, would be considered your financial digital assets.

Finally, there are your business digital assets, which would include anything related to your business itself or business records.

Planning for Digital Assets
So how do you include your digital assets as part of your estate plan in this age of technology?

Organization is the first step. First, you need to begin organizing your digital assets, so that you know what digital accounts and information you have. Begin to take note of all of your different accounts and passwords, and explore a safe, secure and easy solution for storing your passwords, as explained in this Forbes article. Once you have this list, you will also want to update it frequently with new accounts or password changes. In your organization, you may also want to consider which information you'd like family members to be able to access, like family photographs or important family documents, and create a space in cloud storage for multiple family members to access.

After you've organized your accounts and information, you'll likely want to think about how these accounts and information within these accounts should be handled after your own passing. For example, do you want your social media site to live on after your own passing? Or would you rather it be deactivated? After you've thought through how you'd like this information handled after your passing, then you should incorporate instructions regarding this information into your estate planning. It may be wise to ensure that your estate planner, as well as your executor, knows how to access your organized list of online accounts with passwords, and your instructions for the accounts and information. With a bit of forethought, organization and planning, your digital assets can be a well thought out part of your overall estate plan.

Estate Planning with the Blended Family in Mind

February 4, 2013,

The birth of a child, a soldier's welcome home, a wedding, a graduation, holiday festivities, or even a birthday party are all examples of gatherings where, more often than not, a blended family is present, taking part and celebrating. In the U.S., first marriages, second marriages and remarriages regularly welcome new family members. Plus, people are generally living longer, often outliving spouses and marrying again. Step children, step parents, children from previous marriages ­ are all members of the different types of blended families that now outnumber "traditional" families in the United States. And if you are a member of a blended family, as it grows and changes, new estate planning considerations arise regarding your own children and family members, as well as members of your blended family.

Avoiding Possible Problems
Often, in many family situations, one of the best ways to avoid potential problems is to talk with family members about your concerns. As a recent USA Today article discusses, communication is critical in estate planning, particularly when a blended family is involved. Frequently when a family member passes, the remaining family members aren't just concerned with the transfer of money, they are also concerned with the transfer of special heirlooms and other unique items. Talking about, and planning for the future transfer of not just monetary assets but personal assets as well will hopefully avoid potential problems and disagreements.

For example, one possible blended family pitfall is leaving an ex-spouse in your estate planning documents. If your marriage status changes, and you already have an estate plan in place, there are several things that you need to consider changing in your plan to avoid possible problems later. It may be wise, if you no longer wish for your former spouse to have a share in your inheritance, to change your estate plan. You may want to revise your plans, including but not limited to your will, your life insurance policies and your retirement plans, so that your former spouse no longer has any share in your assets or wealth. You may also want to rethink your beneficiary designations on different policies, to accommodate your changing family dynamic.

Another option to think about is designating different assets in different kinds of trusts. By putting assets into certain kinds of trusts, a grantor can detail exactly how the assets are transferred. Often, using a trust in estate planning can be a useful way to avoid potential problems by specifically indicating how certain assets will be shared and how assets will be controlled.

As you can imagine, blended families often add much joy to an extended family. But, in many cases, a blended family can also provide challenges for estate planning. With careful considerations, planning, and communication to family members regarding your intentions, the circumstances of any blended family can be managed in any estate plan.

Passing on Digital Passwords After Death

February 1, 2013,

Over the past few years more and more attention has been paid to the value of "digital" assets and the need to account for them in estate planning. Yet, for all the increased awareness, there is still a long way to go before all families properly plan for handing online access and property issues. A Private Wealth story recently highlighted one of the main problems: failing to provide others with access to crucial username and password details.

Extra Burden on the Family
Many of us have a myriad of usernames and passwords that we use to control our online lives. These include social media accounts (Facebook, Twitter, blogs), email addresses, online banking data, and more. Many families are plagued with administrative nightmares when a loved one dies without providing a way to access these accounts.

Those families who do not have access to digital assets are often faced with two options. On one hand they can try to guess the information, but this is often a frustrating and unsuccessful chore. On top of that, it may actually violate privacy laws.

Alternatively, the family can contact the service provider themselves (i.e Google, Yahoo, Facebook, Instagram, Blogger, Wordpress) and try to get them to provide access. Unfortunately, there is no uniform process by which these companies provide information. Their own "Terms of Service" vary significantly regarding what hoops have to be jumped through and what information will be released. After all, there are some who might want to keep information private, even after death, and so the companies are careful in what information they provide to others.

For this reason, it is important to think through exactly what you want to provide digital access to others and put plans in place to make the transition easy. This might including written information on those usernames and passwords with other testamentary documents. It could also mean using certain online tools (i.e. Legacy Locker) to safeguard the information and release it appropriately.

More Than Just Paperwork
Providing access to online accounts is about much more than allowing family members to close accounts and handle administrative details. It is also about providing them access to important assets that may have immense sentimental value. Photos, videos, blog entries, emails, and other correspondence may prove to be a critical heirloom that family members use to remember their loved one. For example, nowadays traditional photo albums are becoming obsolete and replaced with online albums. It is critical to ensure loved ones have access to things items.

For help with these and many other estate planning concerns in Manhattan, Albany, White Plains, and throughout the state, please contact our NY estate planning lawyers for help.

Trusting Kids with Large Inheritances Remains a Challenge

January 30, 2013,

One of the most common concerns that parents have when creating an estate plan in New York is worrying about passing on too much wealth to children who cannot properly handle it. After a lifetime of hard work, ingenuity, and prudent planning, the last thing many families want is to see a child obtain an inheritance and then lose it. One need only check newspapers headlines to see celebrity examples of younger individuals with too much money whose lives take a turn for their worst as they fail to handle their wealth carefully.

A Wall Street Journal article last week discussed this issue in the context of the now seemingly permanent federal estate tax rates. Per the "fiscal cliff" agreement, the estate tax law will allow each individual to shield up to $5.25 million. For a couple, that allows $10.5 million to be given to others tax-free.

While this is good news for those who have this much wealth to pass along, it does raise some questions for families. Is your child--no matter what age--prepared to handle an inheritance of this size? Will it be lost to creditors? Taken by a spouse? WIll the money change the child's motivation or long-term goals?

It is entirely prudent to ask these questions and work with estate planning attorneys to come up with creative ways to protect against one's concerns.

Of course, the trust is the crucial legal instrument that allows wealth to be passed on with certain protections and limitations set up, depending on your specific situation. Every trust is managed by a trustee. The trustee can administer the legal entity to ensure that beneficiaries are taken care of while protecting the principal. For example, the trustee can work with the beneficiaries to dole out funds when necessary--for college or a wedding--while not giving the beneficiary free control right away. Alternatively, disbursements to the beneficiary can be made in pieces, with a certain percentage of the inheritance given in five year increments.

At the end of the day, there are many different options that are available to families of considerable wealth to ensure that they pass on an inheritance without concern about how it will be used or affect their children. The first step is to visit with an estate planning lawyer who can provide tailored advice about what legal tools can be used to meet the specific needs of your family.

Is the IRS Going to Crack Down on Non-Cash Charitable Deductions?

January 28, 2013,

Our estate planning attorneys often help New Yorkers create trusts that are used to pass on assets to charities. When structured properly, gifts to favorited causes is both a great way to give back and a smart financial move to save on taxes and ensure that your long-term inheritance wishes are met.

A Charitable Remainder Trust, for example, is sometimes a prudent estate planning tool. This is particularly useful for those with assets that have significantly appreciated who wish to save on taxes while generating an income stream on something that will eventually go to charity. Essentially, this works by creating a trust that is managed by the charity to which the asset will go. The trustee (the charity) then pays you a portion of the income generated by the trust for so many years or the rest of your life. Upon your passing the charity retains the principal.

These trusts have many benefits. They can take assets out of one's estate for estate tax purposes. Also, income tax deductions can be taken on the fair market value of the interest that remains in the trust. By using appreciated assets, the capital gains tax can also be avoided.

Changing in the Future?
All those considering leaving sums to favorite causes should learn more about the charitable remainder trust option to see if it is a good fit. It is also crucial for individuals to remain aware of any possible changes in the tax code which might alter how charitable donations affect one's tax obligations. With tight budgets on the federal level specifically, policymakers continue to make noise about limiting the tax benefits of giving to these organizations in certain ways.

Part of the problem, as discussed in a recent Accounting Today story is that many taxpayers may mistakenly take income tax deductions that violate current law. Specifically, the story points to a new Treasury Inspector General for Tax Administration report which found that nearly $4 billion of deductions are taken by taxpayers annually for "noncash" charitable contributions erroneously. While it is perfectly legal to take deductions on noncash contributions (like those that are often part of charitable remainder trusts), there are specific reporting requirements that must be met Many taxpayers are apparently skirting over those rules.

All of this may lead to IRS changes to crack down on those taking these deductions and lowering their tax liability without following proper protocols. The report itself identified six recommendations, such as better educating taxpayers and more aggressively enforcing the rules.

It is unclear what specific changes, if any, will be made in the coming year to deal with this issues. But, at the very least, this is a key reminder of the need to have professional help with all of these inheritance and tax issues to ensure that the law is following every step of the way.

The Legacy of Dr. Martin Luther King Jr.

January 22, 2013,

Yesterday marked the official federal holiday chosen to honor civil rights hero Dr. Martin Luther King Jr. It also happened to be Inauguration Day for President Barack Obama. In a unique twist, the President chose to be sworn in on the Bible that was read by Dr. King on the day that he gave his "I Have a Dream" speech in Washington D.C. It is a stirring reminder of the connections that echo throughout history.

As we often point out, in the world of estate planning and elder law, history is also a great guide to understanding what should or should not be done to help prepare yourself and your family for whatever the future might hold. Dr. King himself was taken far too soon, dying in 1968 at the age of thirty nine as a result of an assassin's bullet. Because he passed away so suddenly--and relatively young--he had not conducted much estate planning at all.

The King Estate
At the time of his death in April of 1968, Dr. King did not have a will or any other estate plans in place. This has subsequently led to significant disagreement between involved parties. Many are surprised to learn that some of that disagreement continues today, many decades later.

According to various reports, Dr. King had about $30,000 when he died. Most of those funds passed along to his widow. However, the real confusion began only later, when the value King's legacy and other materials connected to the national legend began to increase in value. This is a common occurrence for those with some national celebrity. It is not uncommon to find estate battles raging between parties related to high-profile. writers, actors, politicians, and others fifty or one hundred years after their passing.

Right now, for example, Dr King's family is currently mired in litigation with the relatives of a former secretary of the civil right's leader. At the center of the dispute are papers written by Dr, King's that the family claims should have been part of the estate. The secretary's son, conversely, argues that those papers were given to his mother as a gift by Dr. King. Some of the material may be of significant value, including a handwritten letter from Dr. King to Rosa Parks.

In a sign of how complex many of these matter's become, years ago a corporation was actually created to handle Dr. King's estate. Known at the Estate of Dr. Martin Luther King, Jr., Inc it is charged with handling the many different issues that arise related to the slain civil rights hero. It was that corporation that filed suit seeking ownership of the papers owned by the son of the former secretary.

At the end of the day, because there was no legal documentation in place, the litigation may come down to a "he said, she said" battle. What matters is Dr. King's intent when he gave the papers over. If he intended the secretary to have them permanently, then that ends the matter. But if he intended for her to hold them for safe-keeping, then they may not belong to her. Yet, divining this intention decades later may be next to impossible.

Estate Planning Help
For help with these issues in New York City, Albany, White Plains, and many other communities throughout the state, please get in touch with the estate planning attorneys at our firm to see how we can help.

The Pitfalls of Going It Alone--The Forged Will

January 21, 2013,

Drafting a will can be a delicate process, because various legal requirements must be met before the document will have any legal effect. Cases abound of wills which were thrown out because they did not conform to the technical requirements. Ensuring that everything will be done pursuant to legal rules is one key reason to have the aid of an estate planning attorney.

Beyond that, when planning professionals are not involved in these matters, there is a far greater chance that fraudulent and illegal practices might be undertaken. When money is on the line, sometimes the worst characteristics in everyone seeps out. For one thing, it is not uncommon for entire wills to be forged, and when outside observers to the planning are few and far between, those forgeries sometimes even work.

Forged Will
Recently, RTE News published a story of this nature, as several men stand accused of trying to create fake papers following the passing of an 82-year old farmer. It is a cautionary tale, and an important reminder not to leaves loose ends when it comes to ensuring your inheritance wishes are locked in.

The man in this case died over fourteen years ago, on Christmas Day in 1998. At the time of his passing he owned 162 acres of land, property, and assets in various accounts. When he died a Last Will and Testament was produced which suggested that the man left everything that he owned to a distant relative. The will was allegedly signed about four month before the man's passing. The executors of the will happened to be the distant relative's best friend and the friend's brother.

Little did the authorities know at the time, but the will was apparently a fake--forged via agreement between the distant relative and two executors.

The crimes were only uncovered years later when one of the executors, for reasons that are not clear, felt guilty and confessed his crimes to local authorities. He explained how the distant relative was the instigator, convincing the other two men to participate with promises to pay money.

The three men involved in this case will face jail time and significant fines. However, it is impossible to know how many similar crimes are committed every year that never result in accountability. It is important for New York families to act prudently to forestall any chance of another using their passing as an opportunity to become unjustly enriched. You cannot speak for yourself after you are gone, so it is vital to ensure your voice is heard loud and clear via preparations made early on.