When New York Yankees owner George Steinbrenner died this month, he left an estate with an estimated value of $1.15 billion, primarily the Yankees major league baseball team. The fact that he died in 2010, during the one-year repeal of the federal estate tax and the Generation Skipping Transfer (GST) tax, was especially good timing for those he left behind. In baseball, timing is important to hitting the ball. Estate planning attorneys know that Steinbrenner’s timing was a homerun—and may have … [Read more...] about Steinbrenner Hits a Homerun–Even in Death
Judge Rules DOMA Unconstitutional: What It May Mean For Estate Planning
Last week, Judge Joseph Tauro of the Massachusetts federal district court ruled that the Defense of Marriage Act (DOMA) is unconstitutional on Tenth Amendment and Equal Protection grounds. DOMA is the 1996 federal law that defines marriage as the legal union exclusively between one man and one woman. It also prohibits the federal government and its agencies from extending the benefits of marriage, which are available to married heterosexual couples, to married same-sex couples. Examples of the … [Read more...] about Judge Rules DOMA Unconstitutional: What It May Mean For Estate Planning
The Incredible Shrinking Privity Doctrine
Strict privity of contract used to be the rule in estate planning cases. In other words, only the client could claim that the estate planning attorney had been negligent in planning their estate. Obviously, this severely limited malpractice actions against estate planning attorneys. Over the years, the number of states adhering to the doctrine of strict privity of contract has been on the decline. Now, an ever-shrinking minority of states, allows estate planning attorneys to be insulated … [Read more...] about The Incredible Shrinking Privity Doctrine
Gary Coleman Probate Clouded by Common Law Marriage
Gary Coleman’s dead? "What'choo talkin' 'bout, Willis?!" Gary Coleman played “Arnold,” the little brother on TV’s “Diff’rent Strokes,” for eight years beginning in 1978. Coleman appeared in dozens of television films and series over the years. Coleman is perhaps the stereotype of a childhood star with a troubled life. Coleman had a variety of legal and financial problems over the years. In 1993, a court awarded him over $1.2 million in his lawsuit against his parents and former advisors … [Read more...] about Gary Coleman Probate Clouded by Common Law Marriage
Avoid Attorney Discipline and Malpractice: Don’t Dabble
Attorneys routinely get themselves in trouble by dabbling in practice areas about which they know little. Estate Planning and Elder Law are complicated areas with much to stay on top of. 2010 is a great example of that. The rules have changed completely and there is much uncertainty. There is no estate tax. But, the basis “step-up,” long a mainstay of Estate Planning, has been replaced, temporarily, by a carryover basis regime. It’s enough to make even dedicated estate planners heads’ … [Read more...] about Avoid Attorney Discipline and Malpractice: Don’t Dabble
Estate Planning Attorneys and Their Clients in Limbo
As we know, January 1, 2010, brought the beginning of a temporary period without a current federal estate tax. However, it also brought a year of tremendous uncertainty. Even a year ago, most people thought allowing the estate tax to be repealed – even for a year – unthinkable. Now, there is uncertainty even as to whether there might be legislation that would reimpose an estate tax retroactive to the first of the year. There are increasingly strong arguments that doing so would be … [Read more...] about Estate Planning Attorneys and Their Clients in Limbo
Get it While You Can: Short-Term, Zeroed-Out GRATs
Estate planning attorneys routinely look for ways to help their clients with little risk. There is a strategy which can be used to pass significant value to the next generation without the use of any lifetime applicable exclusion. The strategy is the Grantor Retained Annuity Trust or “GRAT.” With a GRAT, the grantor retains the right to annuity payments during the term of the trust. Whatever is left over at the end of the term goes to the remainder beneficiaries such as the grantor’s … [Read more...] about Get it While You Can: Short-Term, Zeroed-Out GRATs
Community Property Traps in Estate Planning
Community property is a regime of marital property. It traces its roots to civil law systems. This is compared to the common law marital property regime tracing its roots back to common law. With community property, all earnings are owned by the “community” and each member of the community has an undivided one-half interest in that property. This sounds simple enough but attorneys from non-community property states typically do not understand this concept completely. There are two common … [Read more...] about Community Property Traps in Estate Planning
Estate Planning Attorneys and Tax Scams
Estate Planning attorneys may come across scams that their clients may be involved in, wittingly or unwittingly. It’s important that we are up on the latest scams to protect our clients and ourselves. Here are some of the latest scams reported by the IRS: Return preparer fraud. Tax return preparers have access to sensitive, personal financial information. Especially if your client is using a tax preparer other than an attorney, CPA, or enrolled agent, keep your eyes open for potential … [Read more...] about Estate Planning Attorneys and Tax Scams
Common Law Marriage Could Be a Wrench in Your Estate Plan
As we know, an estate plan must be crafted carefully to achieve the desired results. Hopefully, through the coordination of various strategies, the result is reached. Imagine the upheaval if you crafted an estate plan for someone whom you thought was unmarried and he or she turned out to be married! In several American jurisdictions, it is still possible for someone to be married without a formal license certifying their relationship. “Common law marriage” can occur when a couple holds … [Read more...] about Common Law Marriage Could Be a Wrench in Your Estate Plan
Retirement Plans and the Spouse: Special Relationship, Special Rules
It is often beneficial to name the spouse as the primary beneficiary of a retirement plan or IRA. In fact, with a retirement plan like a 401(k), 403(b), etc., the spouse must be named as the primary beneficiary unless they sign a “spousal waiver” consenting to having a different beneficiary named. Even if the participant were not married when they completed the beneficiary designation form, their surviving spouse would have a right to the retirement benefits unless the spouse signed a waiver. … [Read more...] about Retirement Plans and the Spouse: Special Relationship, Special Rules
Natalie Choate’s Academy Summit Session and Offer!
As Academy members know, Natalie Choate, the author of the definitive resource Life and Death Planning for Retirement Benefits, will be speaking at the Academy’s upcoming Spring Summit event in Boston. The Summit will be from April 29th – May 2nd, 2010. Life and Death Planning for Retirement Benefits is currently in its 6th edition. A 7th edition is well underway. Natalie will be selling the book at our Spring Summit event. As a special deal, for those purchasing the 6th edition at the Academy … [Read more...] about Natalie Choate’s Academy Summit Session and Offer!
