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.

Virtually everyone agrees that it is important to invest for retirement, take care of inheritance details, prepare for long-term care, and otherwise plan for the future. But there is a big difference between understanding the value of these tasks and actually taking the time to do it. Considering the financial and political stresses that come with caring for an aging population, figuring out how to motivate community members to do what is necessary to plan for the future is drawing more and more attention.

One new tactic stems from unique psychological research on financial motivation. In previous studies out of Stanford, experts found that one way to spur real action on long-term planning was getting individuals to visualize their future, elderly selves. Interestingly the researchers found the most benefit not when people just imagined themselves in old age but actually saw digitally enhanced images of themselves when they were older. The surprise of seeing their own face in old age was a real spur to stop putting off the necessary planning.

The lead researcher in the Stanford experiment summarized that, "People who see an age-progressed rendering of themselves are more likely to allocate resources to the future."

See For Yourself
In fact, interest in this technique has advanced to the point that Bank of America's "Merril Edge" program allows anyone to go online, take a picture of themselves, and see how they might look in the future. The tool is known as "Face Retirement." You can check it out for yourself here.

The program allows you to view images of yourself at various ages. On top of that, the tool provides estimated cost of living figures for each of those ages. Those cost of living calculators adjust for inflation so that consumers have a real idea of what they'll need to do to be financially secure well into their golden years. Perhaps expectedly, considering the tool was created by a financial services firm, the program also provides information about steps that can be taken now to prepare for the future.

Action Matters
No matter what you use to motivate yourself to plan for the future, the bottom line is that there is nothing to lose from taking action today. Thinking about money is always stressful. That is particularly true when worrying about retirement and other end-of-life issues. But it is important not to forget that the easiest way to ease the stress burden is to actually do something about it. No matter what your current financial situation--good or bad--there is value to beginning the process of long-term planning.

If you are in New York City, Albany, Fishkill, MIddletown, Nyack, Rhinebeck, Saratoga Springs, White Plains, or elsewhere throughout our state, please feel free to reach out to the attorneys at our firm to see how we can help.

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

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

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

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

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

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

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Court Rules Woman Must Give Up Kafka Papers She Inherited

Protecting Assets While Facing Uncertainty

The occupancy of the White House and party control in the U.S. House and Senate will undoubtedly influence the future tax situation at a federal level That includes the tax that most immediately think of when considering their inheritance--the estate tax.

Last week the Wall Street Journal picked up on a new report that argues that the estate tax burden may affect a large number of households next year. The report--crafted by the well-known consulting group, LIMRA--suggest that without changes from the current trajectory, 15 million U.S. families may have some estate tax liability next year. That would represent 1 in 8 households--a far cry from the assumption that this is a concern only for the super-rich.

The findings were reached by analyzing the Survey of Consumer Finance from the Federal Reserve Board. LIMRA noted that many households might be pulled into the bracket where the estate tax applies because of the wide range of assets included in estate tax calculations--things like real estate, business ownership, and life insurance values.

Right now the exemption level is slightly more than $5 million However, that is due to drop to $1 million (with a 55% maximum rate) in 2013 without federal action. Compromises could be reached, however, which might result in a different arrangement. According to the LIMRA data, the three most likely outcomes are:

1. No congressional action--reverting to $1 million exemption and 55% maximum rate
2. Extension of current plan--$5 million exemption at 35% maximum rate
3. Compromise with $3.5 million exemption and 45% maximum rate.

The bottom line, the report argues, is that many families who never would expect to have concerns about this tax, may be shocked to learn that their cumultive assets will force a tax bill. LIMRA estimates that about 12.5% of households would have some liability without any action. Life insurance can be used to pay the estate tax, but the LIMRA reports estimates that 55% of households would not have enough insurance to cover the tax burden. That may force very difficult choices, like selling a home or business just to pay the liability.

All of this is an important reminder of the need to act prudently to account for these issues ahead of time. In our area, take a moment to reach out to an estate planning lawyer to begin the process.

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Should You Take Advantage of the Tax Situation Now?

Protecting Assets While Facing Uncertainty

New York estate planning lawyers are often tasked with advising their clients as to how to choose the proper people to administer their estates. The people they designate are put in positions of immense trust and responsibility. Whether the client is designating an executor/executrix, a trustee, or a power of attorney, the client must exercise extreme caution as to whom they entrust with these duties.

In many cases, the natural choices for these estate administration positions are the family members of the decedent. After all, the decedent's family members are most likely to be in touch with the decedent's wishes and to have an idea as to the decedent's assets. It is not uncommon, however, for a decedent's own family member to abuse his or her position of power over the estate administration. As the following case demonstrates, impropriety is always possible where there is a financial gain at stake, even amongst family.

In re Goodwin, NYLJ, Apr. 10, 2012, at 31 (Sur. Ct. Suffolk County) involves a dispute between a brother and sister over the administration of their mother's will. Mildred Goodwin, the decedent, appointed her daughter, Maureen Burns, as executrix of her estate and executed a durable power of attorney to entrust Burns with acting in the best interest of the estate's finances. Before Mildred Goodwin died, Burns opened several bank accounts that were jointly titled in hers and Mildred's names. Burns consulted a New York elder law estate planning attorney to help execute an inter vivos transfer of estate assets from Mildred's estate to the jointly titled bank accounts. The transfers were characterized as gifts, and there was little doubt that Burns was to be the sole beneficiary of the funds.

Sensing impropriety, Mildred Goodwin's son and Burns' brother, Robert Goodwin, filed a petition with the Suffolk County Surrogates Court to compel Burns, as executrix of the Goodwin estate, to disclose the assets and affairs of the estate. Included with Robert's petition was the contention that Mildred Goodwin was suffering from dementia at the time the inter vivos gifts were executed. Robert submitted medical records as evidence of his contention. He also contended that the purpose of the wealth transfers were to help Mildred qualify for certain government programs, and that Burns' access to the funds before the decedent's death was inconsistent with a Family Agreement they had previously executed. The Agreement, signed by Burns, expressly stated that the same funds were to be dispersed as part of the decedent's will, and not inter vivos.

The Surrogates Court agreed. The Court noted the long standing principle that one who has power of attorney initiating inter vivos transfers to him- or herself is presumed to be acting with impropriety unless he or she can overcome the presumption with a showing that the principal was of sound mind and had the requisite intent to make the gift. Additionally, the purpose of any such gift may not be for the financial benefit of the attorney in fact. The gift must further some type of financial, estate, or tax plans.

Here, Maureen Burns was the attorney in fact. There was evidence that Burns initiated the gift transfers for personal gain, all while Mildred Goodwin was not of sound mind to object to the transfers. Evidence rules barred Burns from testifying on her behalf because Mildred Goodwin was no longer alive to either corroborate or contravene Burns' account of Mildred's capacity and intent at the time of the gifts. Accordingly, the Surrogates Court entered summary judgment on behalf of the petitioner, and the funds were returned to the estate.

New York estate planners see a similar refrain all too often; not even family can be trusted sometimes.

Prenuptial agreements commonly make headlines as celebrities getting hitched try to protect their fortunes. But the focus on celebrities (or the ultra-rich) is misleading. In reality, average Americans should, and frequently do, make use of the benefits of prenuptial agreements. In our area, New York estate planning attorneys know that these agreements are an important part of one's long-term planning, particularly in the event of late-in-life or second marriages. These agreements allow for an individual to prepare and protect themselves and their families. But the creation of these legal documents is not without some pitfalls.

The Basics
A prenuptial agreement is essentially a contract between two people planning to get married. They agree prior to marriage on how they will divide their assets if they are divorced and on any number of other issues. While this process can be emotional, especially because the couples are naturally optimistic and excited about their future, forming this agreement while everyone still cares for each other and wants the best for each other is always the preferred model. If the good feelings should disappear, this agreement allows a couple to separate as fairly and painlessly as possible.

One Common Challenge
In today's global world it is more and more common for couples who live in different states to meet and make plans for marriage. Often the laws for prenuptial agreements vary between the two states. Writing the prenuptial agreement for these couples is proving to be challenging for their lawyers who have to find a way to make the agreement valid despite significant differences in the law.

To overcome some of the difficulties, the Uniform Law Commission has begun drafting model laws that they hope all states will eventually adopt. This Commission is comprised of lawyers, judges, legislatures and law professors. Right now, it is quite a complex process for different-state couples to create agreements. The Commission's hope is that once states have similar laws, the process will be more straightforward.

On top of that, the Commission wants to make the laws for prenuptial agreements fairer. One example is ensuring the law has provisions to prevent one party from having greater bargaining power. A common example of this is a wealthy spouse pressuring his fiancé to sign an agreement preventing him or her from receiving any of his assets if they divorce. Unfair agreements such as this are not the intent of prenuptial laws, and the Commission hopes to prevent such agreements. With different fairness precedents and rules in different states it is often not easy to draft agreements that will be upheld in different locations.

The bottom line, however, is clear: no matter what your situation, it is prudent to seek legal help on these sorts of issues when preparing for marriage. It not only protects assets, but these agreements protect both spouses from the chaos and frustration of a divorce, should that happen.

In our area, be sure to get in touch with a New York estate planning lawyer for advice on how a marriage might affect long term property, inheritance, and elder law issues.

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Consider Updating Your Estate Plan Before Remarrying

Does Each Spouse Need Their Own Estate Planning Lawyer

Some estate planning concepts may seem so straight-forward that community members try to go it alone. After all, a will is just a document that clearly spells out one's wishes and lists who gets what on a piece of paper. Other assets, like retirement funds, just need a beneficiary named. What could be complex about that?

The answer, of course, is many things.

Take the retirement funds. It may not be as simple as just picking someone. A New York estate planning attorney knows that sometimes special steps have to be taken to guarantee that the desired beneficiary actually receives the funds in as hassle-free a manner as possible. For example, there may be problems when one wants to name children as the beneficiary of an employer retirement plan--like a 401(k). The rule in most cases requires a spouse to give their consent when anyone other than the spouse is named beneficiary This is true even if the named beneficiary is someone like a child-- a stepchild, adopted child, or even a natural child.

Even when that consent is present (or there is no spouse), it is important to be very specific. Leaving a retirement to one's "children" may not be enough if those children are stepchildren. It is not unheard of for the court or an administrator to believe that "stepchildren" do not meet the definition of children as mentioned in the retirement beneficiary designation. For that reason it is usually necessary to list the specific names of the children on top of having some clear language on the definition of children not named who may also be included.

Because you will no longer be around to tell them exactly what you meant, it is critical to have your wishes spelled out clearly, eliminating all chance at ambiguity. These sorts of confusing issues are often mixed-up when doing this legal work yourself.

The same general problems comes with creating a basic will. There are specific rules that must be followed for the document to hold water in court--those requirements are laid out in New York statutes. For example, there must be at least two witness signatures, and those signature must be made in the testator's presence (the person making the will). The address of those individuals need to be included, because they will be called upon to verify the process when the time comes for probate. Those witnesses should also be "disinterested." A court may not give any sort of gift in a will to a witness unless there are at least two other "disinterested" witnesses.

The bottom line is that you only get one bite at the apple with these situations. If a mistake with even a basic process like beneficiary designation or will is not uncovered, then the entire plan will not work as intended when the time comes For this and many other reasons, there is simply no replacement to visiting a New York estate planning attorney and ensuring that things are done right the first time.

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Not All Children Treated Alike

Clumsy Estate Planning: Transferring A House to a Child

With so much attention focused on the future of the estate tax rate and exemption levels, it is easy to forget about other tools to save on taxes while passing on assets. Perhaps the most easily understood is the "annual gift tax exclusion." Each New York City estate planning lawyer at our firm knows that this is a very helpful way to transfer property tax free--and it will likely remain in effect regardless of what Congress does in the future.

The exclusion exists above and beyond the estate tax exemption. It allows each taxpayer to give up to $13,000 per year to anyone tax free. Because the exemption applies to individuals, couples have two bites at the apple and are able to transfer $26,000 yearly to each individual they chose. In fact, due to inflation the annual gift exclusion level is likely to jump to near $14,000 next year according to a recent Wall Street Journal article.

Estate planning lawyers often advise that, considering the uncertainty of the federal estate tax next year, it is helpful to use the annual gift exclusion now to transfer assets beyond the reach of taxes at death. This is especially true in states like New York with state estate tax exemption levels below the federal rate. Therefore, even if one currently has an estate below the federal exemption level ($5.12 million per individual), there will be a state tax so long as the estate is above the state exemption level ($1 million).

This annual gift exclusion is just one of various other ways to pass on assets tax-free regardless of how the federal estate tax ends up. For example, the annual gift exclusion does not even count toward tuition and medical care paid for another if provided directly to the provider (instead of the individual benefitting).

On top of that, gifts can be made to a special fund known as a "529 education savings account." The account is used for education funds for others--like children or grandchildren. However, unlike all other gifts, the one who created the account is able to withdraw the original gift amount if necessary without incurring a penalty. This means that the account truly offers little risk, because the gift can be made with applicable tax benefits while the funds can be "taken back" down the road if some situations arises and the money is needed.

The bottom line is that many options exists to pass on assets smartly. Those tools exist no matter what the federal estate tax rules. In our area, contact a New York estate planning attorney today to learn more.

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Giving a Gift or Inheritance with Strings Attached

Estate Tax "Portability" Trap

Consumer Reports came out with a helpful new report which is of value to all local residents thinking about creating a New York estate plan.

The study examined the value of "Do It Yourself" (DIY) websites for legal documents, including wills. Obviously everyone values efficiency, and maximizing value while minimizing time and expense is of value in the legal arena. But it is crucial to properly balance those needs. The cheapest option, for example, often proves costly if it results in errors that led to serious problems down the road. Unfortunately, that is the case with most DIY wills.

The Consumer Reports analysis on the effectiveness of these wills found clearly that there is no replacement for actually visiting an estate planning lawyer. The testing found that the most popular DIY wills were not only ineffective for all but the simplest of plans, but in many cases they likely led to "unintended consequences" which distorted the actual intent of the involved parties.

Experts used a blind test to evaluate the services offered by companies like Rocket Lawyer, LegalZoom, and Nolo They all found that none of the services were close to the advice of an actual lawyer. Some of the programs are far too limiting, and others open the door to clauses being added that are contradictory to other parts of the will.

Another common problem is that documents are rarely tailored to specific jurisdictions. Our New York estate planning lawyers know that this can cause serious problems, as rules and procedures are different depending on where one lives--if DIY programs do not take that into account fully, serious problems are bound to creep up.

Perhaps the biggest problem is that even the best template wills of the bunch are woefully lacking in opportunities for those needing anything but the simplest wills. Tremendous tax savings can often be had with more tailored work, and more detailed inheritance issues are often needed for families splitting assets among various people. When actual attorneys are not consulted, many crucial strategies are not taken advantage of, with serious financial and time-saving opportunities lost.

It is understandable for some of these programs to be tempting to local residents in order to save time on this process. But corners should never be cut. If estate planning is worth doing, it is worth doing right. That means visiting with a local attorney, explaining your goals, and learning about all of the very specific options available to plan for the future securely.

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It May Not Be As Simple As Updating a Will

Broken Estate Plans May Need to be Fixed

The estate tax saga wages on in the halls of Congress as both sides seem to be engaging in more symbolic acts on the measure with little progress on reaching an agreement which might actually become law. New York estate planning lawyers appreciate the limbo this places on many local families.

For example, Politico reported late last month on changes to the Democrats proposed tax plan. The changes come, insiders say, in order to present a united Democratic front during the election season--there is still not actual consensus among Democrats on the appropriate estate tax level. The move is likely an attempt to re-focus the election debate away from estate taxes (on which there is intra-party disagreement) and toward another tax issue--whether or not to extend Bush-era tax rates or let them expire.

The main concerns over the estate tax has been explained often by estate planning attorneys. Right now estates worth more than $5.12 million face a 35% tax rate. However, if Congress does not act, next year estates over $1 million will be hit with a 55% tax rate. Disagreement reigns regarding whether to extend current rate, let them expire to old rates, or find some middle ground.

While Republicans are generally aligned in their hope of extending the lower rates or ending the tax altogether, Democrats are split. Recently, the Senate Democratic caucus issued a tax plan that rolled the estate tax rate back to its old $1 million exemption and 55% rate. Yet, over fear of Democratic defections, that proposal has been removed. The hope is that the removal will allow the party to attract a majority of votes in the body for a tax bill focused solely on the Bush era income tax rates (though still below the 60 needed for passage) in order to make a political point about the cause of the failure to act.

So what does this mean for local families? Not much.

The truth is that it is almost impossible for this issue to be resolved before the election. Agreement or compromise is next to impossible in the months leading up to a heated presidential election. But compromise is exactly what is needed for this issue to be resolved and for local families to have the stability they need to plan their long-term affairs with an accurate understanding of what the law is and will likely be in the future. No matter what, however, this situation is not at all a reason to forgo New York estate planning altogether. Accommodations can be made in the future to account for possible changes.

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New Documentary on Financial Elder Abuse

Losing Home Over $400 Tax Bill

An appraisal is an expert assessment of the value of a particular asset at a given time. Many factors involved in the appraisal of a property can easily distort its value--overvaluing or undervaluing it.

The IRS uses appraisals in the process of assessing property taxes, which requires the appeal of experts in the subject. As such, the IRS's Art Appraisal Services' (AAS) job consists of assessing the value of works of art for tax purposes. Our New York estate planning lawyers work with families who have valuable art collections and whose tax burden is significantly affected by these appraisal services.

A recent article in Accounting Today discusses the IRS' need to improve its appraisal of the value of art and the Government Accountability Office (GAO) report on the matter.

The GAO report set the spotlight on the lack of comprehensive quality review and continuing education requirement for the IRS' appraisers, which consistently result in a misstated and most times unfavorable appraisal for the taxpayer.

The report examined not only the appraised values of artwork but also other categories of property such as real estate, automobile and businesses, reaching the conclusion that the burden on taxpayers could be reduced and selected practices improved.

Concerning art appraisals, the report found that the valuation of the property has a huge impact on the tax liabilities of individuals who make non-cash charitable donations or who receive inheritances or gifts of property. Appraisers' task requires them to be familiar with the subject matter and be able to note any factors that may affect the value of the property (e.g., location, surrounding area and condition of the property). But, some properties such as art, real estate, businesses and easements have very unique characteristics, making an independent appraisal essential to determine exactly how much the taxpayer should report to the IRS.

The GAO recommended that the IRS offer a continuing education program to its appraisers, along with a comprehensive quality review program, specifically for the AAS staff. They also suggested that Congress should consider raising the dollar threshold at which qualified appraisals are required for noncash contributions to reflect inflation.

The IRS having agreed with the GAO's recommendations, we should be expecting some changes which may have ramifications for future New York estate plans.

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Losing Home Over $400 Tax Bill

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One of the more unique estate planning feuds in recent memory remains under investigation, three years following the death of the family matriarch that started the debacle. While few families descend into physical violence, our New York estate planning lawyers appreciate that this case is a stark reminder of the mix of extreme emotions often present in these cases.

According to a Seacoast Online report, when Eugenia Boies died in 2009 at the age of 96 she left a family fortune valued at $12 million. The estate had mostly passed to her when her longtime husband passed away in 2007. The family wealth originated on the husband's side of the family, dating as far back as a Civil-War era gunpowder company. The wealth included over a million dollars in the bank, real estate in North Hampton, and millions in stocks.

Before her death Eugenia named her nephew, Peter, as one of three executors of her estate. Shortly after Eugenia passing, while the probate process was underway, Peter and his wife were awoken in the middle of the middle to a drive by shooting, with dozens of high-caliber bullets shot into the family's bedroom. The family home was riddled, but fortunately the couple survived the ordeal.

Investigations into the motivation behind the shooting eventually led to questions about Peter's position as executor of the estate and potential inheritance.

The Controversy
According to reports, Peter suggested this is aunt name a third executor to manage the estate so that there would be an odd number if necessary. His aunt then asked Peter to be that third executor, along with a trust company and local estate planning attorney.

Eugenia's will left everything to her two children and her nephew, Peter. Records indicate that her nephew was added later, in the last years of the elderly woman's life. This addition of the nephew was apparently the cause of the family feud. One of the woman's two children was reportedly so anger at his inclusion that she was heard to say she "wanted to kill him."

In police investigations following the shooting, one of the two children told authorities that she felt Peter had ulterior motives for befriending their mother and helping with finances near the end of her life. She denied committing the crime but bizarrely noted that "maybe, Peter got what he deserved."

Three years later no arrests have yet to be made in the ordeal. In fact, three years later, the probate process itself has yet to be entirely resolved, with various assets still awaiting final disbursement.

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Inheritance Disputes Among children While Parents Still Alive

New York Estate Planning Feud Ends for Astor Family

Most local residents understand that a New York estate plan needs to be updated to account for changing life circumstances. If one is divorced, has a child, has a falling out with a relative, acquires a significant asset, or experiences countless other life changes, then planning documents need to be altered to take that into account.

Unfortunately, some are under the mistaken assumption that this is a very simple, straightforward process involving some changes to a will. Our New York estate planning attorneys appreciate that this sort of thinking often leads to serious problems down the road. Failure to take a full range of issues--beyond a will--into account following life changes may mean one's plans do not work as desired when the time comes.

For example, the Alternative Press shared an interesting story about a man who wanted to remove a daughter from an inheritance. However, the man only updated his will (and nothing else). The result was the that daughter still received almost half of the man's estate

The man in this case had a some sort of falling out with his daughter. He passed away and left a will that included express language indicating that the daughter was being left out intentionally. He was likely under the assumption that being so explicit in his will meant that the daughter would not receive anything, as was his wish.

Not so.

The reason was that, like many local residents, the man had many "non probate" assets that passed to another automatically, outside of the will. In this case, the father had previously named the daughter as beneficiary of a substantial IRA, several "pay on death" bank accounts, and a life insurance policy. None of those designations were changed after the falling out. Therefore, upon the father's death those assets went to the daughter directly, irrespective of the man's wishes indicated in his will.

Each New York estate planning attorney at our firm works with local residents to explain the fundamental difference between probate and non-probate property. In fact, much of our work involves helping avoid the probate process altogether, ensuring that families do not have to deal with complex, uncertain, and lengthy court proceedings to settle an estate. However, taking advantage of probate alternatives--usually in the form of trusts--means that it is particularly critical to update plans accordingly to account for life changes. Simply editing of a will is insufficient. Assets held in trust, beneficiary designations, and jointly owned property must all be considered when updated the plan to ensure everything is in place when the time comes.

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What is an "estate" anyway? Many local residents mistakenly assume that they have no use for New York estate planning, because they don't really have a large cache of assets to pass on or save from being consumed by taxes. After all, when most people hear the word "estate" they think of a palatial home surrounding by lush gardens and filled with shimmering treasures and majestic antiques. Not many have that kind of estate.

But it is crucial to understand that no large "estate" is necessary to get value out of meeting with a legal professional to plan. That is because even if you do not own a big house, virtually everyone has some estate to protect: including personal property, bank accounts, retirement plans, life insurance, and more. Failure to conduct any estate planning means that when you die your estate will pass to others via intestacy laws. These are default rules in each state which essentially give priority to certain individuals regarding inheritance. A recent Forbes article shared a helpful new website (www.mystatewill.com) which outlines intestacy rules in each state. You can visit the site and see how the default laws in the state would divvy your property depending on your family situation.

For example, in New York if you have an estate worth $100,000 and had a living spouse and two living children, then the spouse will receive $75,000 and each child will receive $12,500. However, it is unlikely that the $100,000 is in the form of a big pile of cash that can be easily divided. Instead, it might take the form of a home, retirement plan, or other physical property. That means splitting it up as required will present serious problems. Not only does estate planning allow one to decide what percentage of an estate each person will get, but the exact form of the inheritance can be decided--such as the spouse getting the house, the child getting the second car, or whatever other combination fits in your case.

Beyond inheritance designations via will or trust, our New York elder law estate planning lawyer also help many clients with issues that affect everyone--preparing for long-term care. Receiving advice on Medicaid applications, Medicaid Asset Protection Trusts, and long-term care insurance and similar issues can mean the difference between being forcefully moved into a substandard nursing home and aging in place. These are important issue for the rich and poor alike.

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Our New York estate planning attorneys often help clients create "ethical wills." An ethical will refers to a document left by an heir to pass along intangible assets like morals, lessons, and memories. Creating one of these wills is an important way to clarify the meaning of one's life to family and friends, sharing gifts of the heart and mind.

Recently, a Time magazine article discussed how, following the recession, the importance of this ethical legacy planning was growing. While no one welcomes a difficult financial climate, some observers note that a positive side-effect is the growing importance of relationships, experiences, and memories for many families. The article author notes:

"Born out of national need, this national (if not global) rethinking of what is most important has had remarkable staying power, even as the economy has started to improve."

Notice of this "rethinking" comes amid survey results which indicate many Baby Boomers are changing what they consider to be the most important part of their legacy. A recent "Allianze Life" study found that 86% of respondents listed "family stories" as the most important part of what they are leaving behind. This was far ahead of things like material possessions or financial inheritances.

Of course, the estate planning lawyers at our firm appreciate that many local residents will still leave inheritances to children and other loved ones. However, there may be a shift in consciousness after many residents have watched their nest egg dwindle. More adult children recognize that they are less likely to receive a large inheritance. In fact, the same survey found that less than 5% of adult children thought it was their parents "duty" to leave an inheritance.

What does all of this mean for New York estate plans?

Just because material inheritances might be smaller does not mean that steps do not still need to be taken to ensure financial and physical assets are properly planned for. Yet, it is increasingly important to conduct planning that also accounts for intangible items, like life lessons, family stories, memories, and advice.

When conducting your elder law estate planning, it is important for your legal professional to share information on ways to preserve these intangible assets, often via creation of an ethical will. This might include writing down those lessons to be passed down and taking time to clearly talk about these issues with the most important people in your life. This process may also include creating special photo scrapbooks or video libraries. Family poems, stories, or mementos can also be collected and preserved to easily pass on to future generations.

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Most local residents cherish their privacy. That extends to privacy in sensitive matters like estate planning. When considering estate planning, the first thing that comes to mind for many is the traditional will. Our New York estate planning lawyers frequently explain how there are now many more tools beyond wills to properly tailor these affairs. Trusts are often far-superior ways to pass on assets and protect loved ones down the road. One of the many benefits that a trust can provide is privacy. Wills do not provide that privacy.

Public Records
Even though wills contain private, sometimes sensitive information, at a certain point they become public records, open to view to anyone interested. A will must be filed with the court during the probate process to settle affairs following a death. The court will eventually file the will in its records, where it becomes available to the public. This means that anyone can usually access the documents at a courthouse, often having the ability to make their own copy of the material.

Joe Paterno's Will Sealed
The public nature of wills is the general rule; however, there are a few exceptions. For example, a recent report this week explained how former Penn State football coach Joe Paterno's last will and testament was ordered permanently sealed from public view. The request for permanent seal was made by the family's attorney and approved by the judge. A spokesman for the family noted that the request was made to provide "a measure of privacy."

Paterno's will entered the probate process in early April--he died of lung cancer in January.

The family spokesman claimed that the measure was "not an unusual request for high-profile individuals." However, observers have noted that sealing wills is, in fact, very unusual. An examination of local records indicates it was the only will sealed in the county in the last year and a half. Many families have reasons to keep their affairs confidential, but almost no one else receives the same treatment. Simply a wish for privacy is usually never sufficient for these records to be sealed from public view.

Keeping Matters Private
The sealing of the Paterno will is certainly an exception that proves the rule. Almost all of these documents become public record, and the few exceptions are usually only in high-profile cases with very unique circumstances. However, local residents can keep their affairs private (and avoid the probate process altogether) by visiting with a New York estate planning attorney to take advantage of trusts. These alternative arrangements are often much better for tax purposes and are far more flexible, offering residents much more control over the process.

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One of the most common estate planning mistakes is failure to change names on the title of assets and beneficiary designations. This rarely a problem when one first visits with an estate planning lawyer to create a new plan, because, so long as the work is competent, the professional will ensure these issues are properly handled. However, when one tries to handle matters on their own or does not properly update their plan to account for life changes, then even a plan that was good at the time will not work when needed.

Wills and trusts are legal documents that name beneficiaries for assets that pass via the will or are placed in the trust. However, regardless of what is said in a will or a trust documents, many significant assets may have their own beneficiary designations. Those designations will control who gets the asset.

Beneficiary designations apply frequently with assets like IRAs, 401(k)s, company benefit plans, and insurance plans. These assets have their own "payable upon death" designations which decide who will receive benefits, regardless of what other estate planning documents indicate.

In New York, real property assets, like a house, designate ownership via deed. Property laws allow individuals to own these assets in various ways, such as retitling to a trust. If titled in this way, at an individual's death, the real property will be distributed to those beneficiaries named in the trust.

Our New York estate planning attorneys appreciate that these errors occur frequently. They are most common in situations where estate plans are not thoroughly reviewed after a second marriage. For example, it is common for retirement or insurance plans to name a spouse as a beneficiary. That may not automatically change upon divorce. Even if a subsequent document indicates a different intent, the beneficiary designation will control.

Proper checklists and consistent review of one's plan are the best avenues to avoid mistakes with titles or beneficiary designations. Unfortunately, some residents are under the mistaken assumption that new planning documents will somehow automatically trump old designations.

When these mistakes are made the consequences can be far-reaching. Of course, it means assets may flow to the wrong person. There also may be unintended estate and income tax consequences. Well-tailored estate plans have interconnected components. Careful calculations are made about who is getting what and how they are getting it in order to account for tax laws. If those calculations are off because of unknown beneficiary or title designation issues, then the entire tax strategy might not work as desired.

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"Lawsuit-proofing" an estate is a common goal in estate planning. Of course, this refers to use of strategies and tools to ensure the inheritance process does not lead to legal fights down the road. A benefit of having an experienced New York estate planning lawyer involved in the preparations is that the legal professional will be able to anticipate possible challenges and incorporate those risks into the work that is performed. In this way, proper planning requires strategizing and unique legal maneuvering, not simply filling out lines on legal documents.

For example, one of the most common ways that an inheritance plan in attacked is by questioning the capacity of the settlor. If one is unhappy with the way that a senior decided to manage their estate or dispose of their trust assets at death, challenging that senior's mental capacity is a common. A Lake County News article last week discussed this possibility by highlighting real appellate cases where capacity was at issue.

In one case, an elderly settlor decided to leave most assets to his long-term romantic partner instead of his children. The senior, who was known to be forgetful, changed his trust documents to leave the majority of the assets to the partner. He also named her as beneficiary for his retirement accounts. The man's children, with whom he had strained relationship, did not find out about these changes until the man's death. They initiated a legal suit seeking to attack the changes to the trust and retirement plan. The argument that they made in the legal challenge was that their father did not have the requisite capacity to control his affairs at the time that he made changes to his trust documents. A key issue in that case is obvious: what level of understanding is required to make the senior's actions legally sufficient?

The court found that the level of understanding required in all of these cases depends on the specifics of the situation. In other words, the nature of the activity dictates the capacity requirements. When making basic changes about who receives what in trust documents, the court will likely apply a capacity standard that is similar to those used to determine capacity in the creation of a will. This is known as "testamentary capacity" and it is generally the "lowest" standard. In other words, much deference will be given to the actions of the senior in these cases. However, other alterations to the documents that are more complicated may require higher levels of capacity.

Our New York elder law estate planning attorneys know that there are ways to blunt attempts to argue lack of capacity if one suspects that it might become an issue down the road. Being aware of these potential issues ahead of time is crucial in avoiding extended legal fights and ensuring that planning works as it should when the time comes.

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For many the end of March represents the beginning of spring, warming weather, and the looming approach of baseball season. For others, this time of the year is consumed with the dread of having to deal with a fast-approaching tax deadline. There is usually little to look forward to in tax season other than completing piles of paperwork and learning how much was lost in the last year to Uncle Sam. However, our New York estate planning attorneys suggest that the trudge through tax season can be turned into a positive and used as motivation to come up with long-term strategies to lower tax burdens for the future.

Death and taxes are inevitable. But the process of aging and the stress of tax-paying can vary tremendously depending on how well one plans ahead. Helping with these issues is what our New York City elder law estate planning lawyers do each day. Much can be gained by putting affairs in order and crafting long-term tax saving strategies. Tax season is the perfect time to finally take the plunge.

A recent article from USA Today Money explores the ways that planning ahead can (and can't) help local residents save down the road. On one hand, it is undeniable that that short-term tax picture is hard to predict, because so much hinges on federal legislative conduct in the next year. Barring action, various tax rates are set to rise at the end of the year (expiration of the so-called "Bush tax cuts"). Top income tax rates, capital gains, dividends, and estate taxes may all rise. In addition, the "marriage penalty" will return along with an increase in payroll taxes.

The tax uncertainty extends to assets that are frequently part of inheritance and retirement planning. For example, without Congressional action, the capital gains tax rate will rise from 15% to 20% at the end of the year and the stock dividend rate will be taxed as ordinary income. It is highly unlikely that any of this uncertainty will be resolved before the election. Therefore, some investors may be tempted to sell these investments before the end of the year to lock in the low tax rates. However, it is important to note that these tax changes won't affect those with 401(k)s or tax-deferred retirement plans.

There is no way to entirely eliminate tax uncertainly. However, individuals and business should not mistake uncertainty as a reason to avoid long-term planning. Accountants, financial planners, estate planning lawyers and other professionals can explain in detail what can and cannot be done in the future to better position yourself, your family, and your business to save on taxes down the road.

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