The more complex a family arrangement, the more tailored estate plan is likely needed. For local residents this often takes the form of second or third marriages, with children and different step-relatives. The "default" rules may not be good at accounting for these various relationships and balancing the unique needs of wishes of each family member. Yet, even in the most extreme cases, an estate planning attorney is able to craft the best possible arrangements, provided participants are open and honest about their situation.

But, things can get particularly sticky when there are secret relationships or other family dynamics that are not incorporated into a plan.

Mistress & Children Fight for Inheritance
This concern was vividly demonstrated in bizarre and tragic case that is making national headlines. A millionaire businessman, Ravi Kumra, was murdered in late November. A group of men apparently broke into his home, bound the man, and ransacked the home for valuables. Kumra eventually died from asphyxiation as a result of being gagged.

Kumra divorced his wife in 2010. However, his ex-wife still lived with him at the time of the attack--she too was bound and beaten, but survived.

In the aftermath of the murder, much has come out about Kumra unique lifestyle, eventually involving a feud over his inheritance.

Most notably, Kumra apparently was intimately involved with many different prostitutes who often stayed in the home (where the ex-wife still lived). In fact, the group of attackers (who were arrested) were allegedly connected to some of those prostitutes.

Initially Kumra wealth was going to be split between a group of family members, including his two adult daughters from his previous marriage. However, one of the former prostitutes eventually came forward and claimed that she was entitled to a family inheritance because she gave birth to two children (now 9 and 7 years old) who were fathered by Kumra. She sought the inheritance on their behalf as living descendents of the slain millionaire.

The matter was brought to court where, according to a Weekly Times story, a judge recently agreed that there was "clear and convincing evidence" that the children were indeed fathered by Kumra. As a result, the judge awarded the woman and her children $1,800 per child per month for the allowance. According to the mother, Kumra had the children with her intentionally and, since her pregnancy until his death, paid her several thousands dollars every month to be a stay-at-home mother.

This is obviously a unique situation. However, it is a testament to the complexity that can arise in any number of cases when various living arrangements are not handled as part of established estate planning efforts.

Digital estate planning has attracted more and more attention in recent years as online assets become more central to our lives. On a legal front, the rules regarding inheritance destruction, and/or preservation of these online accounts remains unclear. That is because most rules are based on the terms and conditions of each individual social network or online program. For example, the process of taking down a Facebook page of someone who has passed away is not the same as taking down a Twitter account. There is little uniformity.

However, as the issues related to passing on access to these accounts grows, more social networking companies are working to enact different procedures and protocols to make the transition easier.

Passing on Google Account Data at Death
For example, last week the internet giant Google announced a new plan to help account users pass on access to their account in a seamless manner. According to reports on the policy change at the Wall Street Journal, this means that Google "became one of the first major Internet companies to put control of data after death directly into the hands of its users."

Per the policy changes, users of various Google services can now use a dashboard to set up a plan to take effect upon a certain period of inaction. Specifically, users can either delete account data or pass on data to a third party after either 3, 6, or 12 months of inactivity. This service is known as Google's "Inactive Account Manager," but most have colloquially begun referring to it as setting up your "Google heirs." The manager allows one to set up this process for most of Google's major services, including Gmail, Google Drive (cloud storage system), the Google+ social network, and more.

Importantly, even under this new protocol, Google does now allow a third party to actually control access to these accounts. This only refers to passing on data (emails, messages, pictures, etc.). That means that if you'd like to ensure your heir has actual access to manage these accounts, you will need to come up with alternative arrangements. Those alternatives might include having a running list of passwords and account names to be given to a set party upon death. There are many online versions of these "password lock boxes" which one can use. Some are free while others offer more advanced dissemination of online account for a fee.

At the end of the day, it is a good sign that Google is taking step to address the digital assets issue. Hopefully more and more networks take the same steps, preventing what is becoming a clear estate planning problem that many families must deal with in the midst of grief.

Much discussion at the end of last year dealt with the estate tax. As federal officials groped for a compromise to avoid the so-called "fiscal cliff," details about the federal estate tax were one part of the negotiations. Democrats wanted it returned to levels during the Clinton Administration while Republicans wanted it eliminated altogether.

Just before the deadline, a law was passed which apparently settled some of the matters of contention. In so doing, it seemed to finally provide some permanence to the federal estate tax. The tax rate now tops off at 40% (a jump from the previous 35%) and begins on parts of the estate over $5.25 million. The exemption level is pegged to inflation, and so it will rise slightly each year.

With news of this new estate tax compromise (and its relatively high exemption level), many have pointed out that the federal tax is now only a concern to a small slice of the population. After all, the majority of residents will not die with assets over $5.25 million, and so estate planning to avoid that federal tax is unwarranted.

Yet, in all the discussion over the tax and the political battle around it, some may be under the impression that the federal estate tax is the only major tax issue with which they need to be concerned regarding their long-term planning. This is misleading. That is because, among other things, many states still have their own separate estate tax. And the state taxes usually kick in at far lower levels than the federal one.

That is certainly true in New York. Our state taxes all assets over $1 million, with a top rate of 16%. While this may still seems like a large amount, there is a mountain of difference between one and five million dollars--and a huge number of families will need to account for New York estate taxes while not worrying about federal estate taxes. When the value of retirement accounts, homes, cars, stocks, bonds, and other assets are all taken into account, it is not uncommon for an estate to pass the $1 million threshold even when community members would not expect it to do so.

The bottom line is that many New Yorkers need to be aware of this estate tax burden. Don't be deceived about news stories touting a $5.25 million exemption level. Be sure to talk with a NY estate planning lawyer and ensure you are best positioned to pass as large a portion of your assets as possible in the manner you desire.

Earlier this year we touched on the possible estate planning implications of the compromise law that averted the so-called "fiscal cliff" in early January. As with many of these issues, the full implications are hard to evaluate immediately, only playing out as planners get to work crafting options for clients. In the first few months of the year, many estate planning attorneys and financial advisers have done just that, getting a better understanding of how the altered legal landscape will affect common techniques to pass on assets securely and with minimal tax implications.

For example, an "On Wall Street" article last week explored a few of these issues, noting how the fiscal cliff deal actually has widespread implications. The main issue, claims the article, is that the apparent permanent federal estate tax will limit the need for many families to engage in complex maneuvers to avoid the significant tax bite. Bypass trusts are pointed to as a tool which may be less necessary because many families will fall well below the federal estate tax exemption level ($5.25 million, pegged to inflation). Yet, one must not forget that this permanently high estate tax level has no impact on estate taxes levied by the state. New Yorkers must still pay that state rate, and it hits far lower than the federal level. In addition, these sorts of trusts are often crucial in addressing other risks, like divorce, remarriage, etc.

The article also touches on potential effects on charitable giving. The fiscal cliff law also calls for a phase out of itemized deductions and personal exemptions for all income over $250,000 annually ($300,000 for couples). This may alter some previously common charitable planning. Though the article points out that it may make charitable remainder trusts more common. These trusts are particularly useful for gifting assets which will appreciate, allowing the defference of capital gains taxes.

In addition, the permanent tax increases for high income earners may make the tax benefits of certain life insurance protections even more popular. The story notes how the fiscal cliff law "substantially enhance the benefit of investment buildup inside the protective skin of an insurance policy."

Of course these issues barely scratch the surface of specific financial planning changes caused by the tax rules in the fiscal cliff bill. Ensure that you speak with an experienced estate planning attorney and other professionals for more tailored advice on your own situation.

Last week is already being referred to as one of the most important in the history of the equality movement for gay and lesbian couples. That is because, as all news outlets reported on significantly, the U.S. Supreme Court heard two cases related to marriage rights for same sex couples. We have discussed these cases frequently over the last few months, one of them deals with the federal law known as the "Defense of Marriage Act" (DOMA) and the other involves a state referendum in California known as Proposition 8.

For New York estate planning purposes, the DOMA case has very obvious ramifications. The very plaintiff in the case is a New York resident (Edith Windsor) who is suing in her capacity as executor of her later partner's estate (Thea Spyer). Windsor and Spyer were married in Canada and that relationship was legally recognized in New York. However, because of DOMA, the federal government did not recognize the marriage. The divergent recognition of the couple's relationship was not merely a symbolic difference, it had very real legal impacts. Specifically, Ms. Windsor was forced to pay over $360,000 in estate taxes to the federal government that she otherwise would not have paid if her relationship to Spyer was recognized. It is a pretty cut-and-dry demonstration of how same sex couples are impacted because of a lack of federal recognition of their marriage.

Obviously, the Supreme Court's ultimate determination of the constitutionality of the challenged portion of DOMA will affect the planning of same sex couples.

What will they decide?

Some "court watchers" have made a career out of making predictions about how the U.S. Supreme Court will rule on any given matter based on the questions that the judges pose to attorneys during the hearing. However, it is critical to concede that those questions are hard to judge, and any predictions be taken with a grain of salt.

However, that being the case, there was a clear consensus among pundits about what the hearings suggest about how each Justice is leaning. All told, the justices spent a considerable time discussing the issue of "standing." This refers to whether the group defending the law was the proper party to defend it.. In the DOMA case this is a group of House Republicans referred to a BLAG. Usually these laws are defended by the U.S. Justice Department, but the Attorney General and the President have stated that they believe DOMA is unconstitutional and have refused to defend it. If the Court decides that BLAG does not have standing then essentially they will not reach a judgement about the law itself, and a lower court ruling will stand--the lower court ruling found DOMA to be unconstitutional.

If they determine that BLAG does have standing, then they will actually weigh in on whether DOMA comports with constitutional Equal Protection requirements. Most observers are skeptical that, if the Court reaches the merits, they will keep DOMA in place. The 4 "liberal" justices as well as moderate Justice Kennedy all seemed very concerned about the equal protection issues of excluding same sex couples for federal purposes during questioning.

Ultimately, we won't know anything for certain until late June when the Court will likely release its opinion. It is important for all local families who may be impacted by this decision to keep abreast of the ruling and to visit with their estate planning attorney for guidance on how any ruling may affect their own affairs.

Money is always at the top (or near it) of lists describing issues that most commonly bring stress into our lives. It's cliche to say that "money is the root of all evil," but its obvious that dealing with financial issues is a common concern for families of all shapes, sizes, and even income levels. There is so much different advice out there about what you should be doing or could be doing as it relates to money matters that it is hard to distinguish between the useful and the fluff.

One such story posted in Yahoo Finance this week offers a somewhat helpful distillation of seven basic concepts that can be used for those of all income levels and at different life stages. They are referred to as "paradigms" of financial health. The entire list is worth browsing, but a few of the items on the list include:

***If you are a couple with two incomes, you can pay for "essentials" with only one spouse's income. Those essentials are things like the mortgage, insurance, child care , and similar items that cannot be cut easily. Essentially this is one way to check whether you may be living above your means. It is an easy shortcut to figure out if you can survive in the event of a lost job or other emergency.

***You only have one car payment or a "car replacement account." This is another shortcut to emphasize the concept of not having too many cash flow demands at any given time. One of the biggest concerns related to financial health is ensuring that you can survive in an uncertain future. One challenge is having too many bills that must be paid each month. Obviously, there is no way around obligations, mortgages, student loans, insurance, etc. However, in those areas where it is possible to cut back (i.e car payments), minimizing obligations is helpful.

***You have conducted estate planning. The article says is succinctly, "Estate planning isn't just for wealthy people. You're steps ahead of the game if you have a will and durable power of attorney for finances and health care in place after turning 18, the age at which you're considered an adult by law." As we repeatedly remind local residents, taking care of these matters does not hinge on your age, income level, or other life factors. It's essential.

For help with estate planning or similar issues, please get in touch with our lawyers for guidance. We have offices in New York City and throughout the state. We are proud to work with families in all situations on estate planning and elder care issues.

The need to plan for the transfer of digital assets after a death is the "topic du jour" in many recent estate planning discussions. The issue remains timely because while more and more people are understanding the important role that online assets and accounts have on their lives, the law in many areas (including New York) has yet to fully catch up. Confusion, uncertainty, and disagreement reign, making it an important topic to be shared.

For example, PBS Newshour recently aired a segment on the minimal clarity in the digital estate process. A full transcript and video of the exchange can be viewed here. The segment includes a conversation between two involved in the issues--a law professor and legal author--who discuss both the legal as well as ethical issues that are tied up with transferring access to online accounts and property that exists solely in digital form.

The program mentioned how unlike some estate planning issues (dynasty trusts, estate taxes, etc.), this is not an issue that only affects a slice of the population. It affects virtually everyone. Consider just one social media site: Facebook. About one billion people worldwide currently use the site. Because of its size, about one user dies every three minutes. What happens to their profile, uploaded photographs, messages, history of postings, and other details? There is no easy answer. Courts, legislatures, social media operators, and community members have been grappling with the legal and ethical implications for the past few years.

The PBS program included a discussion with one father's about a sad case that highlights the real-world ramifications of the lack of legal clarity. The father explained how his 15-year old son committed suicide in 2011. The family was completely blindsided by the tragedy, without any idea what might be the underlying cause. In the hopes of getting insight into what might have spurred the suicide (and to receive even a fraction of closure), the family sought access to the young man's Facebook account. Unfortunately, Facebook officials did not allow the family access to most of the account, citing privacy issues and pointing to the agreement the minor accepted when creating the account.

This is not to say that the situation pits the family against the big-unfair social media giant. There are very good reasons why the social media company has a strict terms for service agreement that limits third parties from gaining access to personal profiles. More and more private, embarrassing, and otherwise intimate information is making its way onto online profiles, and most users have the expectation that the assets will remain private. It is not necessarily as allowing just anyone to control that space after a passing.

Until the law catches up, it is critical for private individuals to include information about handling these affairs in their estate planning documents.

It is often argued that estate planning is necessary to prevent family feuding in the aftermath of a passing. Disagreements about "who gets what," how to handle funeral issues, and other concerns are known to tear friends and family apart. Being explicit about one's wishes ahead of time--and letting relatives know early on--is the ideal way to avoid surprises and present the best opportunity for disputes to be squelched.

But proper planning does more than prevent feuding after a passing; it can also prevent it before one's death. That is because disagreements about caring for aging relatives is often a bone of contention. Arguments about who is going to make decisions on their behalf, what type of long-term care will be pursued, and similar concerns can cause ruined relationships just as much as any inheritance dispute. All of this makes it imperative for local community members to visit with an NY estate planning lawyer early on to ensure legal documentation is in place so that there is no uncertainty about how any of these issues are to be decided. Considering the prevalence of cognitive brain issues (i.e. Alzheimer's and dementia), prudent planning requires these matters be handled as soon as possible.

Celebrity Example
To get an idea of how these sorts of disputes play out, one need look no further than newspaper headlines discussing the situation around legendary actress and international celebrity Zsa Zsa Gabor. As reported by My Desert News, a court recently ruled in a case caregiving dispute that originally pitted the actress's husband against her daughter.

The 96-year old Gabor's health has apparently been in decline for some time, and she requires close support to manage her affairs. Last year her daughter allegedly learned that the actress's home was in foreclosure as a result of missed mortgage payments. This led her to question the care her mother was receiving from her husband. Eventually a out-of-court agreement was reached between the parties that resulted in the husband (Frederic von Anhalt) being appointed conservator of the estate.

In court papers released this week, it seems that the temporary conservatorship was extended by a court. This is notwithstanding the fact that von Anhalt a six figure loan against his wife's real estate holdings (valued at over $10 million).

The Gabor case is a reminder that it is critical to delineate who one wants to make decisions in the case of incapacity. Leaving the question open is often an invitation to dispute. That is especially true in blended families or where second or third marriages and adult children are involved.

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.

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.

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.

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.

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.

Late last year the U.S. Supreme Court agreed to hear two separate cases impacting various same-sex marriage issues. As we have frequently discussed, in ruling on these issues the Supreme Court may set precedent which impacts marriages across the country, including in New York. In so doing the Court may set in motion legal changes that impact estate planning issues for all of the thousands of same sex couples living throughout the state.

However, we will have to wait a while longer before anything is finalized. That is because agreeing to hear the case was just the beginning of the process. The next step was the setting of specific dates for hearings in which both sides argue their case and answer questions posed by the nine justices.

This week the Court released its schedule for those gay marriage cases. As reported in the Huffington Post, the hearings will take place over two days in late March. First, on March 26th the court will hear arguments in Hollingsworth v. Perry. Perry is the case related to Proposition 8 out in California. Beyond "standing" issues, this legal matter may clarify what the U.S. Constitution has to say about the substantive right to marry for same-sex couples. Depending on what they decide, nothing can change, gay marriage may be allowed in California, or, theoretically, gay marriage could become the law of the land across the country.

On the following day, March 27th, the Court will conduct hearings on the second case, United States v. Windsor. This is the legal matter that originated with a New York couple and has more direct bearings on the rights of local same sex couples. The Windsor case, if it survives past the standing issues, will decide whether or not the Defense of Marriage Act (DOMA) is constitutional. As readers know, DOMA acts a bar that prevents federal recognition of even state marriage for same sex couples. This has implications on issues like estate taxes and qualification for federal benefits, including Social Security.

Obviously it is important for all couples who may be affected to follow as these cases are argued and then decided. Following these March hearings, it will likely be several months before the justices reach their opinion and release it to the public. While the final date is impossible to predict it is likely that the judgement will be issued sometime in late June. Also, the changes may not take effect immediately. Depending on what is decided it could be weeks or even months before the implementation date of certain components. In any event, it remains critical for same sex couples to be diligent about their planning so that they are protected right now, no matter what the future holds.

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.

Interestingly, the National Philanthropic Trust and other sources provides data on the sharp rise in use of these funds. Many of the largest charitable entities increased anywhere from 60% to 80% in use of these funds this year as compared to last year. And that is on top of the fact that last year saw a 10-15% rise in use from 2010.

Most accounts can be opened with $5,000--large sums are not needed. The donations can then be given out in small increments of as little as $50. In other words, there is a lot of flexibility for those with assets of all sizes. When using these tools however, it is important to have tailored advice on the best manner in which to give. For example, it might make sense to donate stock that has appreciated, instead of donating the profit after sale of the stock. By selling the stock directly some capital gains can be saved and a larger charitable deduction can be taken.

Of course, these donor-advised funds are just one of many ways that might be appropriate to give to charities smartly. Various trusts and other legal arrangements are available to ensure your gift is maximized. No matter what the case, though, it is important to act quickly, as the future remains uncertain and it is helpful to lock in current rates as soon as possible.

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You cannot turn on the TV, flip open a newspaper, or pull up a news website this month without seeing the words "fiscal cliff." As many are aware, this refers to sweeping, mandatory federal tax and budgetary changes that are set to take effect January 1st unless the Congress and White House pass legislation with an alternative plan. Essentially the "cliff" is about $7 trillion worth of tax increases combined with significant spending cuts across the board--including everything from Medicare and Medicaid to the military.

What is interesting about the cliff is that virtually no one on either side of the aisle actually wants it to take effect. Instead, it was only put into place as a compromise over a previous debt ceiling legislative fight. The idea was that that the cliff would be so abhorant to both sides that its impending appearance would force a compromise. However, as the end of the year gets closer, more and more observers are worrying that even with the serious consequences of the cliff, no compromise is in sight.

Currently, the Obama Administration and Congressional leaders (most notably, the Republican House leaders) are trying to reach agreement on an alterantive to prevent the mandataory changes. As part of that effort, President Obama recently released his "first offer." As summarized in a recent article, the offer is far from what the Republican leaders have proposed, so it is unlikely that it will be taken seriously. Essentially, it calls for around $1.6 trillion in tax increases over a ten year period--mostly related to expiration of the so-called "Bush tax cuts." In addition, it calls for modest stimulus spending. The proposal would also permanently eliminate Congressional control over the debt ceiling level (which caused the current crisis to begin with).

On the one issue that has the most direct impact on estate planning, the proposal calls for estate tax rates to return to 2009 levels. That is a $3.5 million exemption level and a top rate of 45%. That is compared to a current $5.12 million exemption at 35%.

What Does It Mean For You?

No matter what the final resolution, advocates, advisors, attorneys, and others on all sides of the issue agree that stability is key. For planning purposes, it is always advisable to know what the rules will be for the future, instead of having the risk of major changes every two years.

For those hoping to dig deeper, the Tax Policy Center has a "Fiscal Cliff Calculator" that allows you to plug in your own details and see how various proposals and the cliff itself will personally affect you. You may be surprised at the significant nature of the results. For example, the "cliff" affects everything from unemployment benefits to payroll taxes, and so everyone is likely to be affected, no matter what their current situation. Be sure to keep a close eye on the possible proposals as they are discussed in the coming weeks. It is also important to talk to your financial advisors and visit with estate planning attorneys to learn more.

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Forbes Estate Tax Article Catches Fire on Social Media

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

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

But how are these issues woven into an estate plan?

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

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

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

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

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Thinking Beyond the Paperwork--Creating an Ethical Will

It is an all-too-common problem: A family business is decimated following a patriarch's death because of feuding and fighting between family members over the estate. Preventing family feuds and ensuring seamless transfers of assets is the centerpiece of all estate planning efforts. But that need is paramount when certain issues are at play--such as a family business. It is important to remember that this planning invovles much more than just creating a will. Instead, long-term thinking is needed which looks not just as who should inherit certain pieces of property immediately, but instead considers how the business might look decades into the future. Thinking only about who will receive the assets immediately upon a death can lead to mistakes, particuarly because once those assets are transfered, the new owner can do whatever he or she likes with them.

The dangers of thinking too provincially on these issues are demonstrated in a high-proifile family estate planning feud that raged over the past few years. The Journal-Sentinel reported on the fighting surrouding the assets once own by David Derzon--the founder of a well-known coin and collectibles business. Mr. Derzon died in 2008, leaving all of his assets to his second wife (who he had been married to for 30 years). Mrs. Derzon ultimately died 8 months after her husband. However, within that 8 month time-frame Mrs. Derzon apparently drafted a new will which cut out Mr. Derzon's own two sons and entirely removed the family fortunate from the Derzon name. Instead, the new will provides mostly for Mrs. Derzon's half sister. This is surprising, considering that the half-sister admits to not seeing her sibling for decades at at time before befriending her again only shortly before her death.

As expected, this led to a protracted legal battle with upwards of $3 million at stake--including ownership of the business itself.

The main issue in the legal battle was whether or not the half-sister unduely influenced the ailing woman to change her will. Also, lawyers for the disinherted sons argued that Mrs. Derzon's mental state was a concern at the time that her will was re-written. They point out that she was depressed and frequently intoxicated following her husband's death. However, because Mrs. Derzon received all of her husband's assets without condition, she was free to pass them on however she saw fit. However, in August a judge voided the second will, claiming that the step-sister exercised undue influence on the woman who may not have been in her right mind when signing the second will.

It is only this week--four years after the deaths--that the business was re-opened under the stewardship of the two sons. While it is fortuante that the business in this case was able to survive the prolonged estate fight, many other companies might not have been able to do so. The story is a clear reminder of the need for all families, particuarly those with businesses and unique family dynamics, to think through all possible situations when conducting estate planning.

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Less Than 90 Days Left Before "Estate Tax Time Bomb"

Life insurance is an important piece of long-term financial security for local families. It is entirely reasonable for parents and family breadwinners to wish to provide some security to their loved ones in case the unthinkable happens. However, with money tight and uncertainty about financial security remaining, some are unsure about the benefits of life insurance. Those in the life insurance industry have argued recently that their market is shrinking and returns are dropping. To jump-start the industry, some are now turning to a new product to sell to more community members.

A recent story in "The Motley Fool" provides some context for the product that may or may not be a good fit for some local families. This unique insurance option is actually a prepaid life insurance policy. It has been called the "marvel of simplicity." The product, spearheaded by a unique collaboration between MetLife and retail giant WalMart, is essentially a short-term one year life insurance policy that provides up to $25,000 in coverage. These are not huge sums, but the idea is to open the insurance up to a much larger market. MetLife likely sought out the arrangment so that they could tap into Walmart's large consumer base while saving costs of middlemen broker fees.

Interstingly, this approach is not the first of its kind. In the past Canadian insurer Manulife offered life insurance products through the U.S.-based big retailer Costco. In addition, in the past Walmart has sold customer various financial products, even including things like mortgages.

The article argues that MetLife is engaging in this somewhat unique life insurance marketing tool as a way to bolster sales in a slagging market. This latest move seems targeted at the less affluent and perhaps less financially aware community members. Selling financial products to this base--like prepaid debit cards--has proved lucrative in the past, and so MetLife may see long-term benefit down the road.

But is this sort of very short time prepaid life insurance plan right for you?

It is impossible to make any specific pronouncements about the merit of these financial tools. However, it must be noted that these one-year agreements are far different than long-term plans that provided security well into the future. As always, it is critical to seek out the help of financial experts, estate planning lawyers, and others who can explain what issues to consider and how any financial move might affect long-term plans.

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