Trusts

December 18, 2012

Donor-Advised Funds for Charitable Giving

The holiday season is a popular time for charitable giving. It is helpful for those considering gifts–particular sizeable donations–to properly think through all of the tax and legal implications. There are smart ways to make contributions and clumsy ways. As always, an estate planning lawyer or similar professional can explain how any such decision is best carried out.

For example, the Wall Street Journal reported recently on the rise of “donor-advised” funds. The use of these tools is likely spurred by two tax uncertainties in the upcoming year. Will charitable deductions on taxes be limited in the future, counseling toward a large gift this year? Will income tax rates increase next year, counseling toward using the deduction next year instead of this year? It is a somewhat tricky problem, as no one knows for sure what lawmakers might decide.

That is where these donor-advised funds come into play. They are accounts managed by national charities and foundations. The basic idea is that a donor can give the gift this year–locking in a tax deduction–while waiting to actual disperse the funds to the charities as they see fit over time. The funds grow tax-free throughout this period.

December 10, 2012

U.S. Supreme Court to Hear Two Same-Sex Marriage Cases

by Ettinger Law Firm

The U.S. Supreme Court made headlines on Friday when it agreed to hear two cases which may have significant implications on the rights for same-sex couples in New York and throughout the country. The stage is now set for a few months of speculation and commentary on possible outcomes before the Court finally hears the cases. It is important for same-sex couples to understand the implications of each case, as the legal issues in each are different.

DOMA & State Bans on Marriage

One of the cases which the Court will hear is United States v. Windsor. As we have often discussed, at the center of the Windsor case is the Defense of Marriage Act (DOMA). Several appellate courts have now found that parts of DOMA violate the U.S. Constitution in that they deny federal benefits to legally married same-sex couples solely on the basis of their sexual orientation. In granting the petition of those appealing the lower court rulings, the U.S. Supreme Court will likely settle the matter once and for all.

November 27, 2012

The Hobbit & Long-Term Estate Planning

by Ettinger Law Firm

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.

November 21, 2012

Estate Planning, Values, & Spirituality

by Ettinger Law Firm

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?

November 19, 2012

Hurricane Sandy, Pets, & Planning

by Ettinger Law Firm

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.

November 15, 2012

Forbes Estate Tax Article Catches Fire on Social Media

by Ettinger Law Firm

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.

November 13, 2012

Updates in Gay Marriage Cases That Might Head to Supreme Court

by Ettinger Law Firm

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.

November 7, 2012

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

by Ettinger Law Firm

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.

November 2, 2012

Charitable Giving Tips: What to Consider

by Ettinger Law Firm

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.

October 31, 2012

Selling Memorabilia Before Estate Tax Changes

by Ettinger Law Firm

As the end of the year gets closer, and possible increases in the federal estate tax become more likely, many are coming up with various ways to take advantage of the current favorable rates. For exampe, a story at the National Review this week suggested that a move by several former sports stars to sell various memorabilia might be motivated, in part, by the possible tax changes to take effect January 1st.

The article explained how New York Yankee great Don Larsen was planning to sell the baseball jersey that he wore in 1956 when he pitched a perfect game in the World Series–the only time that has ever happened. Larsen explained that he was motivated by a desire to help out his grandchildren. He plans to use the proceeds to pay for their college education. He indicated that while the jersey obviously has importance to him, the value of helping his loved one’s outweighs the value he places on the 56-year old jersey.

Don Larsen is not the only sports figure selling valuable items. Apparently well-known college basketball coach Bobby Knight is selling NCAA championship rings along with several other valuable sports items. Like Larsen, his motivation is to acquire funds to use on his family member’s education. Former world heavyweight champion boxer Evander Holyfield has also sold various items related to his boxing days in recent months.