Dispute Over Documents Settled Between Harry Belafonte & MLK Estate

April 25, 2014,

Even after a loved one is gone, disputes over his or her estate can continue to arise. For example, nearly forty-six years after the 1968 assassination of Martin Luther King, Jr., his estate is still involved in legal battles. Most recently, the King estate was in conflict with singer and activist Harry Belafonte over documents Belafonte claims were given to him by King and his widow, Coretta Scott King. Among the documents are an outline of an anti-Vietnam War speech written in 1967, a letter of condolence from President Lyndon Johnson to Coretta, and notes to a speech that King was never able to deliver.

The dispute first arose when Belafonte made plans to auction off the documents to the highest bidder at Sotheby's, Inc. In response, the King estate took legal action that resulted in Belafonte's being blocked from selling the documents. Belafonte in turn brought suit in federal court against the King estate. Ultimately, the parties reached a settlement, the terms of which are confidential. It is known, however, that Belafonte will be able to retain possession of three of the documents in question. In a joint statement, the parties' respective lawyers conveyed a message of mutual satisfaction: "The parties express their appreciation to one another for the good -faith efforts that led to this resolution."

Intra-Family Disputes
The dispute with Harry Belafonte is over, but it does not represent the end of the legal concerns of King's family and estate. The children of Dr. King are again fighting in court over possession of his Nobel Peace Prize medal, as well as one of his Bibles. The estate, which is controlled by King's sons Martin Luther King III and Dexter Scott King are embroiled in a dispute with Bernice King over ownership of the medal and Bible. Ironically, the brothers are claiming the right to sell the items, just as Belafonte had with regard to the documents in his possession. Bernice is opposed to any sale of the items, and until an outcome has been reached, the Bible and medal will be held in a court-controlled safe deposit box.

Protecting Your Estate
Careful planning in the present can prevent future confusion, disagreement, and disputes. If you or a loved one have questions or concerns regarding the contents or legal rights of an estate, be sure to contact a New York estate planning lawyer with experience in dealing with these issues.

See Our Related Blog Posts:

Broken Estate Plans May Need to be Fixed

Clumsy Estate Planning: Transferring A House to a Child

What is "Donor Intent" & How Does It Affect a NY Estate Plan

April 22, 2014,

Charity is an important part of an estate plan for New York families. Many residents have important causes that symbolize their own values and morals, including social, political, economic and religious non-profit groups. Donating funds via a will or trust is common for estates of all sizes--this is not just for the wealthy. Even relatively small donations can have a significant impact. In addition, giving funds to valued causes is a key way to pass on a final lesson to future generations.

There are many different ways to give assets to a charity at death. In the simplest form, funds can be given for the charity to use in any way it chooses. However, many donors have more specific wishes, often wanting to direct funds for very specific uses.

Understanding Donor Intent
"Donor intent" is the term used when delineating exactly what was intended by the giver of a gift to a charity. Unfortunately, disagreement often breaks out regarding whether the funds were actually used by the charity in the manner the donor intended. These disputes can arise for many different reasons:

***What if the charity is no longer doing the specific work delineated by the donor?

***What if the organization is in desperate need of operating funds to continue general business, even though the donor specifically wanted to funds to go to sub-set program?

***What if the donated funds are not large enough to actually accomplish the intended purpose? Or if there are extra funds remaining after the purpose is met?

Another layer of complexity is that the actual donor intent itself may not be clear. When written generally (and without proper legal help) there may be many interpretations. After a passing, the donor is not around to clarify his or her wishes and so the stage is often set for contentious disagreement between surviving family members, advisors, the charity, and other interested parties.

Casebooks are filled with drawn-out legal battles related to these issues. Ideally, planning itself should be done to limit ambiguity and prevent conflict before it arises. A legal professional can help by clarifying the specific goals of the donor and ensuring that only an appropriate level of flexibility is included in legal documents. In addition, there are various ways to actually structure a gift--it can be more than just cutting a check--and a lawyer can explain what option makes the most sense in your case.

Experienced Legal Guidance
The complexity of this issue is one reason why it is critical to have the help of an experienced estate planning attorney when crafting these arrangements. Even details that seem straightforward at first--like donating money to charity--can come with unique challenges. It is always prudent to take the time to draft inheritance documents carefully to avoid future disagreements and feuds.

For help on these and similar matters throughout New York, please contact the legal professionals at our firm today.

Undue Influence in NY & Pressuring Vulnerable Seniors

April 21, 2014,

Family feuding is all too common, and finances are often at the root. One argument often made in legal cases involves these matters is that an adult child or other close relative is abusing a position of trust and confidence with a parent to take advantage of them financially. Proving such an abuse is the challenge of an undue influence lawsuit.

Undue influence is usually defined the use of confidence for the purpose of taking unfair advantage of one with a weakness of mind (or other vulnerability). In other words, undue influence is about pressure. The question is when does pressure become excessive, and thereby amount to undue influence. In a legal case where undue influence is an issue, a court may consider a number of factors:

1. Unusual or inappropriate time of discussion of the transaction;
2. Unusual location of the completion of the transaction;
3. Insistence that the transaction be finished at once;
4. Repeated warning of the adverse consequences of delay;
5. Involving multiple individuals to apply persuasive pressure;
6. Absence of third-party advisors.

To illustrate, it is useful to consider a few real world examples:

In 2011, the children of actor Tony Curtis claimed that their father was the victim of undue influence. Curtis, redid his Will and changed other aspects of his estate plan a few months before he died from heart failure. As a result, Curtis's five children, including actress Jamie Lee Curtis, were left with nothing. The Will stated that Curtis intentionally disinherited his children, yet no reason was given. Shocked and deeply suspicious, daughter Kelly Lee Curtis sued, accusing Tony's widow Jill or others of convincing Tony to change his Trust through undue influence, fraud, or duress.

In 2009, comedian Pauly Shore filed a lawsuit against his brother, Peter, alleging the use of undue influence against their 79-year old mother, Mitzi. Mitzi suffers from neurological problems, including Parkinson's disease. Prior to her decline in health, Pauly, Peter, and their mother were joint directors of The Comedy Store, a famous Hollywood comedy club. When Peter subsequently took to managing the club's finances, Pauly requested that Peter turn over about three years worth of tax returns and financial documents. After Peter refused Pauly's request and instead fired Pauly from the club's Board of Directors. Pauly brought an undue influence lawsuit, claiming that Peter orchestrated firing Pauly from the Board by taking advantage of their mother's frail health.

Undue influence doesn't just disturb the families of the rich and famous. Too often it surfaces in the financial matters of everyday people, whether in wills and trusts, or the operation of a family-owned business. When it does, it's time to speak with an experienced attorney about your legal rights so you can protect the vulnerable from the unscrupulous.

Back to the Basics: First vs. Third Party Special Needs Trusts in NY

April 18, 2014,

Families throughout New York who have children with disabilities are frequently questioning how to best provide for their children's needs--both now and in the future. It can be a complex issue, because relatives must balance their ability to provide help via their own private resources with available support through Medicaid and Supplemental Security Income (SSI). SSI is designed to help those with certain disabilities with basic needs and is funded through general tax revenues, not Social Security taxes.

The government programs hinge on the specific income available to those with disabilities, and so relatives who provide support may unintentionally lead to disqualification of their loved one from Medicaid or lower SSI payments.

Special Needs Trusts in New York
Special Needs Trusts (SNTs) are critical in these situations, allowing parents, grandparents, or others to provide supplemental resources without affecting the individual's access to important government programs.

SNTs are relatively straightforward in concept, but the specifics of setting them up and using them properly can prove complex. For example, there are two general types of SNTs: First party and third party.

Third party SNTs are usually more common for New York families in situations where a parent, grandparent, or guardian wishes to provide funds for the child. The trust then operates to provide support for the individual with disabilities throughout their life. At death, the remaining assets in the trust are paid out to relatives--the disabled individual's own children (if there are any), siblings, or other close relatives.

Alternatively, first party SNTs use the disabled individual's own funds to create the trust--not money provided by others. These are slightly more complicated in that they have a "payback" requirement. The disabled child is able to benefit from the trust funds without losing eligibility in government programs. However, upon the individual's death, the funds remaining in the trust must be used to pay back the government for benefits received throughout their life.

Because first party SNFs require use of the disabled individual's own funds and have a payback provision,they are not used as often as third party trusts. However, they may be appropriate in certain situations. Some common examples include: when the child with special needs receives a large inheritance or is granted sizeable funds from a lawsuit verdict or settlement.

Evaluate the Whole Picture
In most cases, the creation of a special needs trust is only done in combination with other planning that may include life insurance, unique inheritance planning, and similar work. Elder law estate planning includes many interconnected parts, and so it is crucial not to view any specific legal tool in isolation. An attorney can explain what combination of steps are needed to best protect you and your family.

Estate Fights for Music Royalties in the Digital Age

April 14, 2014,

Estate planning can have ramifications decades (or even centuries!) after an individual passes away. On one hand, this is true because how one leaves assets and guidance to others can influence their long-term personal legacy. More specifically, however, planning can dictate legal matters far into the future. Whoever is in control of administering an estate has significant control over how some of those legal issues are handled.

Sudden Celebrity Death
Consider a dispute that recently arose between the estate of Rick Nelson and Capitol Records. Nelson was a popular musician an actor in the 50s, 60s, and 70s, best known for his role in the TV series "The Adventures of Ozzie and Harriet." Unfortunately, Nelson died unexpectedly in a 1985 plane crash at the age of 45.

Reports explain that complex feuding took place shortly after the death. Nelson was divorced, had a child outside of wedlock, and was dating a woman at the time of his death who was also killed in the plane crash. The estate was administered by David Nelson, Rick's brother. Fortunately, even though Nelson's death was sudden, he had some steps in place to protect his interests. A will left everything to his children from marriage (his out-of-wedlock child was ignored).

However, even though there was a will, problems arose. Nelson's ex-wife threatened a suit in order to claim life insurance money. She also attempted to take control of the estate away from David Nelson but failed. In addition, the parents of Nelson's then-girlfriend filed a wrongful death lawsuit against the singer's estate.

All of these issues were eventually resolved either via settlement between the parties or by the courts.

Drama Re-surfaces Decades Later
Interestingly, the estate of Rick Nelson made a recent reappearance in the news. That is because the heirs of the estate--his children--filed a lawsuit in 2011 against Nelson's former record label. At issue were royalties that the family claimed were owed to them under his original 1957 contract. Specifically, the family argued that the company was shorting them their share of income from digital downloads and streaming music agreements.

Fortunately, earlier this month, a settlement agreement was reached between the two sides. A spokesman for the record company announced the decision, noting that they are looking forward to working with the family to further promote the singer's most famous recordings.

Planning for an Uncertain Future
This example is an interesting reminder of how these decisions can have ramifications decades down the road. Obviously, at the time of Nelson's passing--and when his will was created--the idea of digital downloads and streaming music were unheard of. There was no way for administrators to understand how those issues would affect a contract, royalties, or inheritances in an estate.

All those crafting long-term plans now must appreciate that new technologies or issues may arise in coming decades that we simply cannot fathom now. As a result, it is critical to create plans that are flexible, providing a framework for any possible dispute to be resolved as efficiently as possible.

The Power of Legacy - Could a Will have Prevented WWII?

April 11, 2014,

Life is about far more than the accumulation of material wealth. Working hard and collecting valuables to enjoy and pass on to others at death is nothing to spurn. But there are many other things that are accumulated over a life and can be passed on at death: morals, lessons, memories, stories of hope, words of kindness, inspiration, and countless other values.

When thinking about life transitions and estate planning, it is important to consider those intangibles just as much as those items that have a monetary value. This is why, in addition to creating legal wills and trusts, we work with New York families on "ethical wills" to pass on all of those moral and spiritual items that solidify a legacy.

Advice for the Future -- Preventing a War
One common part of an ethical will is the sharing of advice to the next generation. The value of passing on advice should not be underestimated. An extreme example suggests that one of the greatest horrors in human history--World War II--may have been prevented if only a last will and testament was more widely disseminated.

A Daily Mail story last month discussed the will of the former President of Germany, Baron Paul von Hindenburg. Hindenburg led the nation until his death in 1934. He was widely respected in the country, particularly among the powerful political class.

Recently declassified information suggests that Hindenburg's last will and testament did far more than dispose of his property. The will also contained very specific advice to his country about the preservation of democracy and limiting the power of the up-and-coming populist leader at the time: Adolf Hitler. Recognizing Hitler's goal of taking complete control of the government, Hindenburg's will explained that the country need to maintain established principles, like an independent army and separation of powers. The document was intended specifically to prevent Hitler from fulfilling his ambition. One historian described the will as "a bomb timed to go off posthumously and blow Hitler off course."

Unfortunately, it did not work out as intended. That is because before the will was made public, Hitler found out about the contents. He immediately ordered the document seized, and the German people never learned of the lessons their statesman wanted to impart. Instead, a forged document was released to the public which wrongly asserted that Hindenburg had nothing but glowing praise for Hitler.

While this example is a bit different than the lessons that many New York seniors wish to impart, the underlying principle stands. Estate planning offers a chance to think wholistically about the meaning of life and how one would like to be remembered by the generations to follow.

Developments with the New York Estate Tax

April 9, 2014,

We often discuss the importance for local families to account for the New York estate tax. Far more media coverage is given to the federal tax, and some local residents are under the mistaken assumption that the state law mirrors the federal. It currently does not. Even families who do not have asset to trigger the federal tax may still need to plan appropriately for the New York tax on estates.

However, if current plans are carried out, in a few years .there may be much more congruence between the state and federal rules. That is because earlier this month New York changed exemption levels for the estate tax. Previously, assets over $1 million were exposed to the tax at a 16% top rate. Now, however, the exemption level is raised to slightly more than $2 million ($2,062,500). Not only that, but that level is set to steadily increase or five years until, in 2019, the exemption level matches the federal exemption amount at that time (projected to be $5.9 million).

Important Provisions in the Estate Tax Law
There are other aspects to the new state rules that must be understood by local residents seeking to minimize their obligations and legally save on taxes. Some items to keep in mind:

***There is no "portability" as there is with the federal tax. This means that surviving spouses cannot use unused portions of their partner's exemption amount to lower their burden.

***Under the law, all gifts made within a three year window will likely be included in the estate to calculate the tax burden (at least for gifts made starting this April and extending to 2019). Naturally, this means that one must act early to move assets in ways that take them out of the estate and lower its value.

***There is a risk of falling of the estate tax "cliff" during the phase-in which could mean those with assets just slightly over the exemption amount may face a tax on the full value of their estate. This issue is complex, but in a helpful comment letter the New York State Society of CPAs provides a more detailed analysis of how this may come about.

***The new law repeals the state's generation-skipping transfer tax while also providing more relief for some surviving non-citizen spouses.

Contact our NY estate planning lawyers today for tailored guidance on how these rule changes affect your financial future.

April is Financial Literacy Month - Plan for Your Future

April 8, 2014,

In the spirit of raising awareness of sound money management, April is officially deemed "National Financial Literacy Month." The U.S. Senate even passed a resolution on the matter a few years ago. The National Foundation for Credit Counseling usually leads the yearly effort, and many others in the financial world also use the occasion to discuss important money matters.

For example, Money Management International, a non-profit credit counseling agency, created a robust website sharing a variety of resources for consumers: www.FinancialLiteracyMonth.com. The website provides helpful tools on basic financial information, income worksheets, debt load calculators, financial goal tracking, and more.

While much of the information is focused on very general money management skills, if recent poll data is accurate, a majority of Americans remain far behind in prudent planning. Consider that a recent National Foundations for Credit Counseling (NFCC) survey found that over 60% of Americans do have any sort of budget. In addition, the survey found that nearly one in three Americans do not put anything from their annual income toward retirement savings. It is perhaps no wonder then that "retiring without having enough money set aside" is the most commonly cited financial issue that worries Americans according to the NFCC survey.

All of this suggests that far too many residents are living each month without a clear assessment of how their spending may affect their savings and long-term financial future.

Estate Planning - Thrive in your Golden Years
It is impossible to know exactly what the future will look like. That holds true for every aspect of life, from health and relationships to finances. Yet, that is not an excuse to avoid any long-term planning. In fact, the uncertainty counsels toward the opposite--taking steps to best position yourself to meet goals regardless of the future. Elder law estate planning is a key component of that preparation. Beyond designating one's wishes at death, this work also ensures steps are taken to secure a happy retirement with appropriate senior care.

Our team of legal professionals is proud to work with families throughout New York on a range of estate planning matters. We encourage all residents to take use National Financial Literacy Month as a time to re-evaluate current practices and take necessary steps to lead a safer financial life. From personal budgeting and saving to crafting long-term plans, getting a handle on these issues brings enormous peace of mind. Give us a call today to see how we can help.

U.S. Tax Court: New IRA Rollover Decision Strongly Criticized

April 3, 2014,

Intricate financial and estate planning details are understandably hard for many residents to wrap their head around. There are hundreds of thousands of page written in federal statutes, case opinions, and regulations dictating what can be done and what cannot. Making matters even more complex is that fact that even professionals can disagree on how certain rules should be applied.

For example, many financial planners are up in arms following a recent opinion by a U.S. Tax Court related to IRA rollovers.

The Case
The ruling examines a provision in the tax code that allows one to withdraw money from an IRA without tax or early withdrawal penalties so long as the funds are put into a different account within 60 days. Based on federal law, account owners are required to wait one year before making the move again. In other words, you cannot keep changing accounts every month.

According to many, based on guidance repeatedly published by the IRS for nearly three decades, this "one year wait" rule applied separately to individual IRA accounts.

However, earlier this year a federal Tax Court judge issued a ruling in a case that the once per year rule applies to all IRA account collectively. Essentially then, as an American College of tax Council brief in the case explained, the issue is whether the once per year rule applies per IRA or per taxpayer.

In the aftermath of the decision, many tax attorneys and other practitioners are calling for the decision to be vacated. They argue that it undermines public confidence for taxpayers to be punished even when following the IRS's own guidance. However, following the ruling, IRS officials released information suggesting that updated guidance will reflect this most recent decision, limiting IRA rollovers to once per year per individual.

Keeping an Eye Out for Legal Changes
The specifics of this case are somewhat nuanced and based on statutory interpretation. But rolling over IRA funds is a common practice that is used by residents of all income brackets, and so this issue has direct relevance for many.

In addition, one of the many lessons to take from this particular debate is the fact that you need to constantly have eyes on your long-term plans to determine if they need to be updated or changed. That is one value of having professional oversight of your affairs, peace of mind comes with knowing someone else watching out for changes on the legal landscape that must be reflected in your planning.

Do Not Act Too Quickly After a Passing

April 2, 2014,

Much of estate planning involves preparations that can streamline matters in the aftermath of a death. The probate process can be long and drawn-out, forcing families to wait months before working out the basic details of asset transfer. Alternatively, by using trusts, the process can be far more seamless, saving time and taxes. Trusts are important for all New York families, not just those with significant assets.

While it is prudent to handle legal and financial details in a timely fashion following a death, as a practical matter, it is important to not "overdo" it. A helpful article from Mondaq offers a few thoughts on ways that family members can "jump the gun" and cause more complications by rushing to deal with various matters.

Causing More Complications
Conduct that should be avoided in the immediate aftermath of a passing includes:

Acting as executor before officially be appointed by a court: A last will and testament names an "executor" to handle many of the administrative details. However, the appointment is not official until a court actually names the executor in the probate process. It is reasonable for a soon-to-be executor to take some basic steps to prepare for their role. However, in certain situations, this can go too far, such as when one signs contracts or enters into agreements beforehand. For example, one cannot sell the decedent's home before officially being given the power to do so by the court.

Canceling accounts and credit cards immediately: Closing down a decedent's financial life is often far more complex than family executors realize. There may be an urge to just cancel everything immediately. However, this can be a mistake, because there may be outstanding bills to be paid automatically from those accounts. Shutting them down can lead to bounced checks, late fees, and,ultimately, more hassle than if the financial details were handled more cautiously.

Quickly disposing of personal property: It is not uncommon for family members to be overwhelmed in the immediate aftermath of a death. A common response is to try to "get over it" as quickly as possible, often by getting rid of personal effects immediately. But this is often a mistake. Some items may need to be properly appraised, and it is important that the property (or the value of the items) go to the designated heir. Rushing this process can lead to tax problems and potential feuds.

For more tailored, specific help with any issues related to estate planning, probate, and administrative complexities following a death, please contact our New York estate planning attorneys today.

Planning for Immortality - A Legacy in the Online World

March 28, 2014,

http://legacylocker.com/

Passing on assets and saving on taxes are viewed as the hallmark of estate planning. But as we often share with clients, there are many intangible aspects to long-term planning that are often even more valuable that homes, cars, and savings accounts. A legacy.

An important part of many elder law estate plans is an "ethical will." This refers to non-legally binding document that shares values to friends and loved ones. An ethical will is about one's legacy, sharing information about one's life purpose and reminding family members of morals and cherished principles.

Leaving a Legacy in the 21st Century
Ethical wills made their way into Shakespearean plays and existed in various forms in ancient Rome and Greece. The world has changed dramatically over the centuries, and that includes the way a legacy is left to others. In fact, with the proliferation on various online account and social media services, more and more individuals are finding out how one can become "immortal" online.

An interesting story last week discusses how the permanence of one's online life can come as both a comfort or burden to surviving family members. For example one adult son explained the stress that comes on his mother's birthday every year--as old friends post Facebook messages, sending well wishes without knowing that she passed away three years ago. On the other hand, Facebook allows pages to become "memorialized" serving as a slightly more appropriate setting.

It is critical to think ahead about how these pages will be preserved. Considering their permanence, they will undeniably become a key component to your long-term legacy. There are no one-size-fits-all approaches to handling an online legacy. There are many different questions that you should consider, perhaps putting the details down in writing to ensure it all works as requested. Some things to consider include:

**Should someone have access to your email account after your passing?
**What should happen to your Facebook page? Should it be deleted, turned into a "memorial" or managed by another person?
**Are there any online photos, comments, or conversations that you would like shared or deleted?
**Would you feel comfortable using a special online legacy account, such as Legacy Locker?
**Should another have access to your online purchase record, at Amazon, ebay, or similar retailers?

Preserving an online legacy and creating an ethical will is a reminder of the comprehensive nature of estate planning. Doing this work is far more than just filling in the blanks on legal forms. It requires careful consideration about long-term goals, understanding of intricate legal details, and honest consideration about the most treasured values in one's life. For help crafting a comprehensive elder law estate plan throughout New York, please contact our experienced legal professionals today.

Federal Estate Tax "Portability" - Should It Always Be Used?

March 27, 2014,

The idea of "portability" is an important part of many estate plans. Portability is technically an informal word referring to a federal tax-saving option using the deceased spouse's unused exemption (DSUE). Essentially, portability is a tool for married couples that, when used prudently, can shave millions of dollars off an estate tax bill.

Under the current law, assets under $5.34 million are exempt from the federal estate tax (though the New York tax kicks in far lower at $1 million). Importantly, there are unlimited tax-free transfers allowed between spouses. That means that if one spouse dies and leaves everything to the other, then there will not be a federal estate tax burden, regardless of how many assets are passed on.

However, when the surviving spouse passes away and transfers those assets to others--perhaps adult children--then the tax would apply to assets over the individual exemption level of $5.34 million. But portability changes that. Instead of using only an individual exemption, a surviving couple may be able to use any unused exemption from their former spouse in addition to their own. This means that up to $10.68 million may be exempt from the tax. In short, portability can save an estate millions of dollars in taxes.

Importantly, portability must be "elected," meaning that failing to file the appropriate paperwork upon the first spouse's death may result in the extra exemption being lost.

Should You Always Take Advantage of Portability?
Considering the benefit of portability, it is critical to determine how it may fit into your plan. One potential downside, as discussed in a recent Wealth Strategies Journal article, is that there may be a mistaken reliance on portability. Because of the advantages couples may believe that it always makes sense to simply leave everything to a spouse and then taking more sophisticated planning steps for the second spouse.

Also, the majority of families will not have estate nearing the level where the tax may come into play, and so serious thought needs to be given regarding whether the election is even worth it in their case. In addition, there is a New York estate tax which may require use of other shelter trusts, even when portability would solve the problem at the federal level. Re-marriage may also add complexity, as the rules regarding portability with multiple spouses can be confusing, depending on how much of an exemption was used by a former spouse.

For help on these very complex legal issues, seek out an experienced estate planning attorney as soon as feasible.

Don't Leave Your Planning Up to a Coin Toss

March 25, 2014,

A headline-grabbing story last week in the New York Post offers a good reminder of the need to be crystal clear in certain estate planning situations to avoid drawn-out legal battles.

According to reports, two siblings are engaged in a dispute over how to divide up an inheritance that they are to split from their uncle. The two men are the nephews of David Barrett, a well-known Manhattan interior designer who passed away in 2008 at the age of 85. Per the terms of Barrett's estate planning, his $5.6 million estate is set to be split between the two men.

However, the division of those assets into two is apparently not going smoothly.To help determine how the various assets are to be split, an executor of the estate apparently recommended that a coin toss be used. For example, to determine ownership of a painting valued at around $45.000 a coin toss was performed, with the younger brother winning.

This did not sit well with the older sibling, who has reacted to the loss by making aggressive accusations against his sibling and executors in addition to filing a lawsuit challenging the distribution plan. The most recent suit has put a hold on the process, slowing the ultimate distribution and preventing any named heirs from receiving property from the estate.

In defending the lawsuit and his concern about the distribution plan, the older brother explained "This case is about more than my share of my uncle's estate. It is about my uncle, his legacy, his reputation, and his family."

Planning Lessons
All those who follow high-profile estate planning matters appreciate that feuds of this nature are not rare. When significant assets are at stake, all those involved are frequently willing to go to extreme lengths to ensure the matter is handled to their liking. Unfortunately, there are often no winners in these situations, as the drama often causes significant delay and enormous resources spent on the legal battle itself. There are various lessons that can be taken from this Barrett story:

Be As Specific As Possible - While it is impossible to specifically list every single item big or small, it is usually worthwhile to explicitly indicate where every valuable item will go. This is particularly true when an estate is divided between various parties who may disagree on who is to get what piece of personal property.

Understand the Personalities Involved - Certain friends and family members may be a more "hot headed" than others. Conflict is more likely to be prevented with those unique personalities are accounted for.

Prevent Surprises - Dispute often arises when one party is unprepared for some outcome. By having clear discussions with heirs ahead of time, all parties are able to come to terms with how the affairs will be handled This may prevent a knee-jerk, defensive reaction when unexpectedly confronted by an unfavorable part of the plan.

More Wealth Transfer Tax Changes on the Way?

March 18, 2014,

Politicians are engaged in a seemingly endless debate about tax rates, "loopholes," spending cuts and similar issues. That is because a new budget must be passed every year, and each proposal undoubtedly comes with suggested changes to various tax and spend rules and regulations. For example, President Obama recently released his proposed 2015 budget. Even a cursory glance at the document reveals that, if passed, it would have clear implications on wealth transfers and estate planning for New York residents.

Estate Tax Proposal
Most notably, the proposed budget calls for the estate tax provisions to revert back to where they were in 2009--an exemption level of only $3.5 million and a top tax rate of 45%. This is in contrast to the current $5.34 million exemption level and 40% top rate. The current tax is pegged to inflation, and so the exemption level will rise slightly each year. Per the terms of the proposed budget, this new tax level and rate would not go into effect until 2018.

Even with this presidential proposal, many do not expect federal officials to actually change the estate tax details, especially considering a high profile compromise was just reach a year and a half ago. The current estate tax rules were only codified at the beginning of 2013 as part of the compromise plan known as the American Taxpayer Relief Act.

Many Other Possibilities
As a helpful Forbes article discusses, beyond the estate tax issue, the President's budget also suggests changes to various estate planning tools. These include limits on annual tax-free gifts to trusts, changes to the use of grantor retained annuity trusts (GRATs), and eliminating "dynasty trusts."

As always, it is critical to re-iterate that these are mere proposals. With a divided Congress, it is likely that any final budget would look far different than the one proposed by the President. In most cases, the executive's first proposal is strategically written in order to position it for debate and negotiation. That said, however, the fact that some of these options were specifically included in the proposal means that they are on the radar screens of officials seeking to limit resident rights to transfer assets freely.

It is impossible to predict what policymakers in the future might do. However, an experienced estate planning attorney can ensure that you are best positioned to take advantage of all legal options to lower tax burdens when passing on assets. An attorney can also update and review your plan on a regular basis to determine if changes in the law necessitate altering any provisions of the plan.

Not Allowed to Disinherit - Spousal Right of Election in New York

March 17, 2014,

New York residents are urged to craft an estate plan so that their assets are passed on per their own wishes--and not based on arbitrary state laws. Unless you explicitly make your desires known, then all decisions will be left up to others. However, there are actually a few rare instances when the law explicitly prohibits you from making certain planning choices. These situations are not common, but it is important to be aware of them in case they conflict with your plans

The most notable rule of that nature relates to disinheriting a spouse. In most cases, the law automatically allows a spouse to inherit certain assets if he or she chooses--regardless of the specific estate planning provisions.

Marriage is deemed a special legal relationship that is voluntarily entered into under the law. As a result, state statutes include default rules that protect the relationship. This is somewhat different from other close relationships--like parent-child. A resident can always end a marriage to legally break the spousal relationship. That is why it is usually possible to disinherit a child but not a spouse.

NY Spousal Right of Election Law
There are countless different scenarios where one may want to remain married to an individual but not leave them assets as an inheritance. This can be a strategic choice and not necessarily motivated by animus. An estate planning attorney can explain if a strategy that does not leave assets to a spouse makes sense.

However, it is important to understand that there is a NY law that allows a spouse who is disinherited to voluntarily choose to collect various assets--even if they were designated for others. Specifically, the spouse can choose to take either ⅓ of the deceased "net estate" or, alternatively, $50,000. Under the law, the net estate may include many different assets. Beyond those indicated in a will, it can include joint accounts, living trust assets, and some assets where a beneficiary is designated. In addition, that net estate may also include certain gifts given within the last year. In other words, giving away asset to others as a means to deplete an estate is not a viable alternative.

This spousal right of election does not happen automatically. The disinherited spouse has to affirmatively exercise their right to take advantage of the provisions. There are various time limits to doing so. In addition, the right may be curtailed in some instances based on a pre- or postnuptial agreement.

For help creating a tailored elder law estate plan to fit your needs, please contact our NY attorneys today .