Monday, August 3, 2015

ThinkstockPhotos-466616312The New York State Department of Taxation and Finance recently issued a Technical Memorandum explaining the 2015 legislative amendments to the major New York State estate tax reform provisions enacted in 2014 and reported on this blog last year. The amendments are all effective retroactive to April 1, 2015.

The amendments made clear that the following tax tables are permanent.

Basic Estate Tax Exclusion Amount increases are to be phased in as follows for New York residents or non-residents owning real property located in New York State during the period listed:

 

 

April 1, 2014 – March 31. 2015: $2,062,500;

April 1, 2015 – March 31, 2016: $3,125,000;

April 1. 2016 – March 31, 2017: $4,187,500;

April 1, 2017 – December 31, 2018: $5,250,000;

January 1, 2019 and beyond: the basic exclusion amount corresponds with the Federal exemption ($5,000,000 indexed for inflation beginning in 2010). (more…)

Thursday, May 28, 2015

digitalassetsLast year, we told you about the Uniform Law Commission’s approval of the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”), the primary purpose of which is to empower fiduciaries, guardians, and agents with the power to “access, manage, distribute, copy, or delete digital assets and accounts”.

According to the Uniform Law Commission’s website, the UFADAA “is an important update for the Internet age. A generation ago, files were stored in cabinets, photos were stored in albums, and mail was delivered by a human being. Today, we are more likely to use the Internet to communicate and store our information. This act ensures account-holders retain control of their digital property and can plan for its ultimate disposition after their death. Unless the account-holder instructs otherwise, legally appointed fiduciaries will have the same access to digital assets as they have always had to tangible assets, and the same duty to comply with the account-holder’s instructions.” (more…)

Thursday, May 28, 2015

ThinkstockPhotos-88063929On Wednesday, the Cook County Clerk issued a statement reminding couples that the last day for same-sex couples in Illinois to backdate marriages to the date of their civil unions will sunset tomorrow, May 29.

Illinois’ gay marriage law took effect on June 1, 2014 and provided for the ability to backdate marriages for a period of one year.

Tuesday, May 26, 2015

statuteoflibertyThe New York State legislature is considering becoming a directed trust state. In a directed trust, the trustee is allowed to act under the advice or direction of someone else, an advisor or protector, who could make decisions regarding investments, distributions or other trust matters. Earlier this year, the New York State Senate referred a bill to its Judiciary Committee which would expressly allow grantors to establish directed trusts in New York State and sets out general parameters for such trusts. (more…)

Monday, January 26, 2015

177572431As reported on this blog last year, New York State modified its estate tax system by gradually increasing the estate tax exemption along with some other changes. The hope and intent were to keep New York State’s estate tax more competitive and in line with other states within the country to prevent a migration of New Yorkers from the state to avoid state estate tax. However, the language in the New York State stature which made these modifications created some significant problems for New Yorkers. The New York State Society of Certified Public Accountants, through its Estate Planning Committee, has proposed some additional reforms to the New York tax law (the “Proposal”) which attempt to eliminate some of the perceived unfairness in current New York law.

As it currently stands, for a New Yorker with a taxable estate valued between 100% and 105% of the basic exclusion amount, the applicable credit amount is phased out. However, a New Yorker with a taxable estate that exceeds 105% of the basic exclusion amount will be taxed on his or her entire estate, not just the excess over the exclusion amount. So, for example, if you are a New Yorker and you die in January 2015 when the New York State estate tax exclusion amount is $2,062,500 with an estate of over $2,165,625, your estate will be taxed on its entirety not just the amount in excess of the $2,062,500 basic exclusion amount. The Proposal eliminates the cliff altogether by (more…)

Monday, December 1, 2014

177855670When a will contains a so-called no contest clause or in terrorem clause that would cause a beneficiary to lose his or her interest in the deceased’s estate in the event the beneficiary contests the validity of the will, the court is often called upon to determine whether to enforce the forfeiture against the beneficiary if he or she loses the will contest. Just such an issue faced the Mississippi Supreme Court in Parker v. Benoist.

In this case, Bronwyn Benoist Parker (“Parker”) filed a will contest, contesting the validity of her father’s 2010 will. The 2010 will changed the disposition of the father’s estate from an equal division between Parker and her brother, William Benoist (“Benoist”), to a disposition where Benoist received a significantly greater portion of their father’s estate and Parker received a significantly lesser portion of the estate. (more…)

Monday, November 24, 2014

451428613Advances in medical technology have made it possible for a child to be conceived after the death of one or both of his or her genetic parents with the use of stored sperm or ova. Recently, the New York State Legislature has sent a bill to Governor Coumo which clarifies when a child born after the death of his or her genetic parents, a so called posthumously conceived child, will be deemed a child of such parents for the purpose of inheritance and intestacy law. This issue may arise when a genetic parent who will ultimately have a posthumously conceived child dies without a Will or with a Will using the generic term child or issue. Does the posthumously conceived child take a share of his or her genetic parent’s estate? (more…)

Tuesday, November 4, 2014

180197523There is much confusion about what a trust protector can and cannot do with respect to a trust for which the trust protector is serving. First and foremost, the trust protector’s powers provided by state statute are often limited to the powers authorized in the trust instrument, as reflected by the Court in Schwartz v. Wellin, 2014 WL 1572767 (D.S.C., April 17, 2014).

Keith Wellin created the Wellin Family 2009 Irrevocable Trust (“Trust”), a dynasty trust for the benefit of his three children and their respective lineal descendants, with his children and the South Dakota Trust Company as the Trustees. After creating this Trust, Milton sold his interest in the Friendship Partners LP (“FLP”) to the Trust, taking back a promissory note for $50 Million. Apparently in 2013, a dispute arose between Keith and his children, when his daughter, Cynthia, as manager of the LLC that was the general partner of the FLP, proposed to sell all of the assets of the FLP, liquidate the FLP, set aside $50 Million to pay the promissory note and distribute the remaining $95 Million to the three children.

In order to prevent such actions, Keith appointed Schwartz as the Trust Protector. The same day, Schwartz amended the Trust to give the trust protector “the power to represent the Trust with respect to any litigation brought by or against the Trust if any Trustee is a party to such litigation”, and “to prosecute or defend such litigation for the protection of trust assets” (“Litigation Provision”). Schwartz also immediately removed the corporate trustee, and the individual Trustees completed the sales and distributions as proposed. The individual Trustees believed their actions were justified to avoid a $40 Million tax liability that would be incurred when Keith turned off the Trust’s grantor trust status. (more…)

Friday, October 10, 2014

samesexmarriageIn light of all of the changes in same-sex marriage laws happening over the past couple of weeks, we thought we’d share some of the information presented by our attorneys at the CLE presentation in our St. Louis office on Wednesday morning, “Same Sex, Different Day:  Estate Planning for Same Sex Married Couples (Post Windsor decision), co-sponsored by the Bryan Cave LGBT Affinity Group.  Presenters were Kimberly Civins, Stephen Daiker, and Douglas Stanley, along with Tony Rothert from the ACLU of Eastern Missouri.

Get income tax advice regarding amending returns and filing returns going forward

The sooner the better, as there is a 3 year statute of limitations for amending returns if filing as married achieves a better tax result!

Get estate documents reviewed/updated to take advantage of spousal tax reduction opportunities

Double-check beneficiary designations for retirement plans

Remember–spouses have to consent on some retirement plans to someone else being named as beneficiary!

Review any marital or co-habitation agreements regarding income tax benefits affecting property rights

Thursday, October 9, 2014

guysheartsIn light of all of the changes in same-sex marriage laws happening over the past couple of weeks, we thought we’d share some of the information presented by our attorneys at the CLE presentation in our St. Louis office on Wednesday morning, “Same Sex, Different Day:  Estate Planning for Same Sex Married Couples (Post Windsor decision), co-sponsored by the Bryan Cave LGBT Affinity Group.  Presenters were Kimberly Civins, Stephen Daiker, and Douglas Stanley, along with Tony Rothert from the ACLU of Eastern Missouri.

Plan, plan, plan:

  • Will/Living Trust
  • Healthcare Directives
  • Pre-nuptial Agreement
  • Beneficiary Designations
  • Asset re-titling

Consider income tax consequences

Consider whether various federal agencies will honor marriage based on residence state

Consider state of residence laws regarding other family issues such as adoption and divorce

Consider ceremony jurisdiction (California, Delaware, DC, Hawaii, Minnesota and Vermont are favored because of favorable divorce laws)

  • These states will issue divorces for couples married in the state even if they don’t reside there at the time of the divorce, which could be important if your state of residence doesn’t recognize same-sex marriage and, therefore, may not issue you a divorce