Tuesday, December 30, 2008

I prefer my own bed, thanks.

AARPs research report

A Balancing Act - Funding for Long-Term Care Programs

A summary of the AARP Report and the Utah data.

Eighty-seven percent of people 50 and older with disabilities want to be cared for in their own homes. Yet the Medicaid program continues to allocate the bulk of its resources for institutional services.

Medicaid dollars on average can support nearly three people in home and community-based services for every person in a nursing home.

"The ability of some states to accomplish substantial reforms for older people and adults with physical disabilities—as well as successes in the mental retardation/developmental disabilities movement, which have led to increased home and community-based services options for many—demonstrates that obstacles to change can be overcome."

Compared to the U.S. average, Utah allocates 96% of its Medicaid long-term care spending for older people and adults with physical disabilities to nursing homes.

Utah has one of the nation’s most unbalanced systems and Medicaid trends indicate the little progress has occurred in the state in recent years. The number of participants receiving home and community based services decreased while the number of participants in nursing homes remained relatively constant between 1999 and 2004. From FY 2001 to FY 2006, the increase in Medicaid spending on nursing homes was $52 million, 26 times the increase in spending on HCBS. The increase alone was more than eight times the total HCBS spending for older people and adults with disabilities.

The discrepancy in millions expended (6 - 5 = +2 ?) must be some type of rounding.

Monday, December 29, 2008

End-of-the-year To Do list:

1. Make sure trust and will is up to date.

2. List of accounts stored in a secured place.
(If something happens my spouse or executor will be able act.)

3. Review the beneficiaries on life policies, IRAs, 401Ks, and bank accounts.

Tax news for 2008

Homeowners whose mortgage debt was partly or entirely forgiven during 2007 may be able to claim special tax relief by filling out newly-revised Form 982 and attaching it to their 2007 federal income tax return, according to the Internal Revenue Service.

Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million. The limit is $1 million for a married person filing a separate return.

To help pay for mortgage forgiveness provisions of the legislation, Congres has created a new penalty applicable to S corporations that fail to file a timely return or that file a return that fails to provide information required by law. The penalty applies for each month the failure continues, up to a maximum of 12 months. It is equal to $85 times the number of persons who are shaholders during any part of the taxable year. This applies to returns filed after December 20, 2007

First Time Homebuyers Credit: Taxpayers who purchased a new home for the first time after April 8, 2008, may qualify for a refundable credit up to $7,500. Part of the American Housing Rescue and Foreclosure Prevention Act, this refundable tax credit works like an interest-free loan for all qualified taxpayers. The credit must be paid back in equal parts over a period of 15 years beginning in 2010.

For 2008 individual taxpayers who do not itemize deductions can add a third component, the real property tax deduction. This deduction is the lesser of either the amount of state and local real property tax paid or $500 ($1000 for married couples filing jointly).

Reminder: Nothing that is written here is intended to be legal or tax advice. As always if you have legal or tax questions consult an attorney or qualified professional

Tuesday, December 23, 2008

Two recent cases point to the success of local Elder Abuse and Exploitation Prevention Teams. In Michigan a man was convicted of stealing more than $50,000 from his mother. The theft was discovered during a routine guardianship review conducted by a caseworker. Other investigations have resulted in charges against a man for taking $37,000 from his blind grandmother. The teams are funded by a small tax called a senior millage. 1/4 of a mill from property tax is designated for senior services.

In Utah it is Adult Protective Services that is responsible for investigating abuse or exploitation and to provide protective services and help prevent abuse. The Utah Criminal Code provides for penalties ranging from class A misdemeanor to 2nd degree felony. Anyone who has reason to believe that any incapacitated or disabled adult has been abused is required to report it. Reports should go to statewide intake at 1-800-371-7897 or in Salt Lake County 801-264-7669.

At the national level a bill that was approved by the House but not yet by the Senate. (Elder Abuse Victims Act of 2008)H.R. 5352 would protect seniors in the United States from elder abuse by establishing specialized elder abuse prosecution and research programs and activities to aid victims of elder abuse, to provide training to prosecutors and other law enforcement related to elder abuse prevention and protection.

Thursday, December 18, 2008

December 10, 2008
I found this post at Death and Taxes Blog titled Nudge, Shel Silverstein, Smart, and Negotiation It's just too funny not to pass on. Pretty ironic.

I'll quote from the post . . .

I'm currently reading Nudge: Improving Decisions About Health, Wealth, and Happiness, by the U of C professors Richard Thaler and Cass Sunstein. I'll probably post a review later, but I found one part (on page 77) particularly interesting. Professors Richard Thaler and Cass Sunstein are the authors of are using a Shel Silverstein poem called "Smart" as the basis for an example, and they ask the reader to Google the poem and read it before continuing in the book.

Why not just print the poem? The answer is in a footnote:

Silverstein had originally given Thaler permission to use the poem in an academic paper published in 1985... but the poem is now controlled by his estate, which, after several nudges (otherwise known as desperate pleas), has denied us permission to reprint the poem here. Since we would have been happy to pay royalties, unlike the Web sites you will find via Google, we can only guess that the managers of the estate (to paraphrase the poem) don't know that some is more than none.

Here is the first stanza of the "Smart."

My dad gave me one dollar bill
'Cause I'm his smartest son,
And I swapped it for two shiny quarters
'Cause two is more than one!

and it goes on from there.

The people in charge of Silverstein's estate must not have read the poem.
Many of you are probably familiar with it. If not, it's an quick google search away.

It's time to do that will

"I have two luxuries to brood over in my walks, your loveliness and the hour of my death." John Keats

The Harris Interactive poll, conducted for Lawyers.com, surveyed 1,018 adults and found that more than half (55%) of them didn't have a will. Only one in three African American adults (32%) had a will and only one in four Hispanic Americans (26%).

Obiously people dislike the thought of death, except maybe Keats, but everyone should should have at minimum a good valid will. It's not dependent on how much or how little you have.

A good will can be drafted with minimal expense by qualified attorney. Even if you have little, what little you have should be distributed the way you want it to be. A small piece of your time could prevent family fights and bitter feelings caused by disappointed expectations. And if you have children it's very important to name guardians.

And face it, you need to do this because no one is getting out of here alive. Utah residents can contact Hughes Estate Group Attorneys. Others should contact their local bar assocation for a referral.

Wednesday, December 17, 2008

William's Will Contested

From the Marin Independent Journal

The son of Stanley Tookie Williams is contesting his father's will, claiming it was signed two days before his execution at San Quentin State Prison and its beneficiary probably had a hand in its creation.

Travon Williams, 33, says the executor of his father's estate was a business partner who had the will drafted and says it should be ruled invalid.

It was unclear what the estate may be worth, although Tookie Williams wrote children's books denouncing gang violence that prompted four Nobel Prize nominations.

The executor, Barbara Becnel, 56, of Richmond is the sole beneficiary of the disputed will.

Travon Williams says the will does not reflect his father's intentions and wants the will set aside.

Becnel will fight Travon Williams' efforts.

Becnel became a business partner with Tookie Williams in the mid-1990s as a co-author and editor of his books.

Becnel is quoted as saying,

"I stood by Stan's side for 13 years, fighting to support his work, his innocence and his life," Becnel said. "I will continue to fight, this time to support his honor, his legacy and his desires."

Becnel's attorney, Melvin Honowitz, said the objection to the petition for probate is ludicrous.

Tookie Williams was a founder of the Crips street gang in South Central Los Angeles. He was convicted of four murders in 1981 and sentenced to death.

He was a rebellious prisoner until he turned his life around in the 1990s, denouncing gangs and writing children's books to advocate alternatives to street crime.

He was nominated four years in a row for the Nobel Peace Prize, beginning in 2001. He was executed Dec. 13, 2005, despite calls for clemency by anti-death penalty advocates and a campaign based on his redemption that was spearheaded by Becnel.

In his objection to the petition for probate, Travon Williams said his father is survived by his mother, two sons, a sister and grandchildren.

Stacie Nelson, Travon Williams' attorney, said she does not know the value of Stanley Williams' estate.

"The executor has possession of Mr. Williams' assets," Nelson said.

Tax Liens and the mortgage crises

IRS officials are worried that struggling homeowners are not refinancing or mortgage modification because of tax liens.

Homeowners or their representatives and lenders can request a "discharge" of the claim if the home is being sold for less than the amount of the mortgage lien. The discharge does not relieve the debt and the tax payer still has the responsibilitly to pay the delinquent taxes. It merely removes the lien from a particular property such as a home so it can be sold

The IRS can can also subordinate the lien to a refinance loan.

The process to discharge or subordinate a tax lien usually takes about 30 days after submission of the completed application, but IRS officials say they are working to speed up that process.

For information about how to discharge or subordinate a federal tax lien, call the IRS at 800-913-6050 or visit their Web site at www.irs.gov.

Sad News

Sad news. Columbo actor Peter Falk has Alzheimer's disease and dementia. His daughter, Catherine Falk has started the legal process of asking for a conservatorship stating in papers filed with a Los Angeles court that he "requires full-time custodial care for his health and safety. He has memory loss and can no longer recognize familiar people, places, and things.

Friday, December 12, 2008

Do we need stronger power of attorney laws?

Any quick Google search will land you a handful of stories about abuse and betrayal. As America ages, elder abuse and financial exploitation are growing problems.

In Allentown PA a trial began for a couple who cared for an elderly man with Alzheimer’s disease, but in the mean time drained 85K from his accounts, buying a Mercedes, an SUV, and taking money to pay their taxes.

A soldier gave his wife a power of attorney before he left for Iraq. After he left she emptied his savings, sold the house and moved away.

In Erie the mother of a dying man used a power of attorney he signed years earlier to change the beneficiaries of his estate from his step-daughters to her own children.

In Connecticut a neighbor received Power of Attorney from a sick elderly woman and promptly empties her bank accounts.

In Upper St. Clair they are still sorting through the mess of a 16 million dollar estate after POA was given to a prominent lawyer

In Billings MT a state legislator was charged with defrauding her stepfather. She told the jury that she thought the man had only a month to live when she withdrew all of his savings.

Springfield Massachusetts woman was charged with stealing $813,000 from the 91-year old woman she had been caring for. An investment house sounded the alarm.

AARP has released a report on Power of Attorney laws and advocates for stronger laws that would make individuals who abuse Power of Attorney authority liable for damages among other changes.

Powers of Attorney are easy to abuse because they generally grant broad decision-making authority. Often exploitative transactions are well within the actual authority authorized. Often there is no third-party monitoring, and the abuse is discovered only when it’s too late.

The AARP is urging support for the New Uniform Power of Attorney Act finalized in 2006. So far that act has been enacted fully in two only two states, Idaho and New Mexico, and only a small number other states have provisions that are similar. In 2009, Colorado, Georgia, Indiana, Maine, Maryland, Michigan, Nevada, Ohio, Oregon, Pennsylvania, Virginia, and Wisconsin will consider adopting the law.

Some of the provisions the UPOAA . . .

1. Permit interested parties to petition a court to terminate the POA if the agent is acting improperly.
2. Set forth default standards for agents’ fiduciary duties.
Require express authorization for certain authority, such as gift-making and changing beneficiary designations.
3. Require notice by the agent when no longer willing or able to act.
Revoke a spouse agent’s authority upon annulment or filing for divorce.
Provide for remedies and sanction for abuse.

Here are a couple of comparisons of the Utah State Code versus the new Uniform Code.

UPOAA Section 108(a) & (b)

In a power of attorney, a principal may nominate a conservator of the principal’s estate or guardian of the principal’s person for consideration by the court if the protective proceedings for the principal’s estate or person are begun after the principal executes the power of attorney. (Except for good cause shown or disqualification, the court shall make its appointment in accordance with the principal’s most recent nomination.)

(b) If, after a principal executes a power of attorney, a court appoints a conservator or guardian of the principal’s estate or other fiduciary charged with the management of some or all of the principal’s property, the agent is accountable to the fiduciary as well as to the principal. The power of attorney is not terminated and the agent’s authority continues unless limited, suspended, or terminated by the court.

Utah Law


(5) A conservator may be appointed for a principal even though the principal has a valid power of attorney in place. If a conservator thereafter is appointed for the principal, the attorney-in-fact or agent, during the continuance of the appointment, shall account to the conservator rather than the principal. The conservator, pursuant to court order as provided in Subsection 75-5-408(1)(d), has the same power the principal would have had if he were not disabled or incompetent to revoke, suspend, or terminate all or any part of the power of attorney or agency.

Here are the sections on designating specific duties.

Section114(b) Agent’s Duties
(b) Except as otherwise provided in the power of attorney, an agent that has accepted appointment shall
1. act loyally for the principal’s benefit
2. act so as not to create a conflict of interest that impairs the agent’s ability to act impartially in pthe principal’s best interest.
3. act with care, competence, and diligence ordinarily exercised by agents in similar circumstances
4. keep a record of all receipts, disbursements, and transactions made on behalf of the principal
5. cooperate with a person that has authority to make health-care decsions for the principal to carry out the principal’s resouagle expectations to the extent actually known, and otherwise, act in the principal’s best interest
6. attempt to preserve the principal’s estate plan, the the extent known, if preserving the plan is consistent with the principal’s best inetrest based on all reveant factors, including
a. the value and nature of the principal’s property
b. the principal’s foreseeable obligations and need for maintenance
c. minimization of taxes including income, estate, inheritance, generation-skipping transfer, and gift taxes
d. eligibiligyi for a benefit program, or assistance under a statute or regulation.
Section 201(a)
Requiring specific grants of authority to
1. create, amend, revoke, or terminate a trust
2. make a gift
3. create or change rights of survivorship
4. create or change a beneficiary designation
5. delegate authortiy granted under the POA
6. waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan
7. exercise fiduciary powers that the principal has authority to delegate
8. disclaim property, including a power of appointment.

Utah Law


A power of attorney may not be construed to grant authority to an attorney-in-fact or agent to perform any of the following, unless expressly authorized in the power of attorney:
(1) create, modify, or revoke an inter vivos revocable trust created by the principal;
(2) fund, with the principal's property, a trust not created by the principal or by a person authorized to create a trust on behalf of the principal;
(3) make or revoke a gift of the principal's property, in trust or otherwise; or
(4) designate or change the designation of beneficiaries to receive any property, benefit, or contract right on the principal's death.

Wednesday, December 10, 2008

Charitable Giving the IRS way

IRS Offers Tips for Year-End Donations

IR-2008-138, Dec. 9, 2008

WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years.
One provision offers older owners of individual retirement arrangements (IRAs) a different way to give to charity. There are also rules designed to provide both taxpayers and the government greater certainty in determining what may be deducted as a charitable contribution. Some of these changes include the following.
Special Charitable Contributions for Certain IRA Owners
An IRA owner, age 70 ½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charitable organization. This option, created in 2006 and recently extended through 2009, is available to eligible IRA owners, regardless of whether they itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible. There is more information on transfers allowed and qualified charities. Read the IRS publication if this applies to you.

Rules for Clothing and Household Items

To be deductible, clothing and household items donated to charity must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to be in good used condition or better if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances, and linens.

Guidelines for Monetary Donations

To deduct any charitable donation of money, regardless of amount, a taxpayer must have record - canceled checks, bank or credit union statements, and credit card statements, pay stubs for payroll deductions, pledge cards, etc. showing the name of the charity and the date or credit transaction date, and amount of the contribution. date, and the transaction posting date. Donator must obtain an acknowledgment from the charity for each donation of $250 or more.
To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following additional reminders:

• Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of the year count for 2008. This is true even if the credit card bill isn’t paid until next year. Also, checks count for 2008 as long as they are mailed this year.

• Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions. The searchable online version can be found at IRS.gov under Search for Charities. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even though they often are not listed in Publication 78.

• If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.

Never adopted children to inherit

Billy Tipton's "sons" inherit

In one of the most unusual probate cases ever, a Spokane County judge has ruled that the three illegally adopted sons of Kitty Oakes and Billy Tipton can inherit equal shares of Oakes' $300,000 estate. Oakes was 73 when she died last year. She had cancer and dementia. The estate proceeds come from the sale of her home.

Kitty Oakes was a former stripper known as Irish Venus who lived as the wife of bandleader Billy Tipton. They separated in 1980. When Tipton died in 1989, paramedics discovered that the person who’d lived as a man was actually a woman.
Obviously the three sons were shocked. Two of the sons changed their names.

A little bit of background

In 1933, Tipton began dressing as a man, which allowed him to blend with the other members of the jazz bands with whom Tipton played in small Oklahoma bars. Tipton took his father's nickname, Billy, and began living consistently as male. Living as a man made it possible to continue a career in jazz, where opportunities for women were limited. At first, Tipton only presented as male in performance, but by 1940 he was living full-time as a man. Tipton gradually gained success and recognition as a musician

The cover of the Billy Tipton Trio album

For seven years, Tipton lived with Betty Cox. Tipton kept the secret of his biological sex by telling Betty that he had been in a serious car accident which required him to bind his chest to protect broken ribs, and which had badly damaged his genitals. This became the story he would also tell subsequent women with whom he was involved. Betty remembered him as "the most fantastic love of my life."

After Betty ended their relationship, he quickly became involved with Maryann Catanach. She did not know that Tipton was biologically female. Two of Tipton's female cousins were the only persons privy to both sides of Tipton's life, and Tipton kept in contact with them for years.

In 1960, he ended a relationship with a Maryann to “marry” stripper Kitty Kelly (later known as Kitty Oakes), who was known professionally as "The Irish Venus." Tipton was never legally married, but several women had drivers' licenses identifying them as Mrs. Tipton. Kitty said that they never had sex but had an otherwise normal life. They were involved with their local PTA and with the Boy Scouts. They adopted three sons, John, Scott, and William. Although Kitty denied having any knowledge of Tipton’s ruse, John and Scott did not believe her.

Tipton finished his life living in poverty in a mobile home park. It was while paramedics were trying to save Tipton's life that his watching son, William, learned for the first time that his father was biologically female, a secret which the coroner soon confirmed. Tipton was pronounced dead at Valley General Hospital, and Kitty arranged for his body to be cremated in an attempt to keep Tipton's secret.

The ruling invokes “equitable adoption.” Not something generally recognized in Washington Law. In closing arguments, Lynn St. Louis, attorney for the personal representative of Oakes' estate, told Price there are "compelling facts" to allow the three sons to inherit under the doctrine.

The legal doctrines of equitable adoption and adoption by estoppels typically arise when a person who took care of a minor child for many years dies. The decedent may have died without a Will and the child presents a claim to all or part of the estate based on one of these doctrines. If the decedent died with a Will and the child was not mentioned in the Will, the child may still present a claim for a portion of the parent's estate on the basis of being an omitted or pretermitted child.

Washington law bars illegally adopted children not named in a will from inheriting out of fears that they'd be able to collect inheritances from two sets of parents.
But the case of Jonathan Clark, Scott L. Miller and William A. Tipton is unique, and the sons should not be penalized for their parents' deceit, St. Louis said.
Oakes and Tipton "brought into their home three boys. The natural mothers apparently relinquished custody, yet none are legally adopted. None of these boys were Kitty's biological child.

And the Tiptons were a family... Billy was dad; Kitty, mom," St. Louis said.
A photograph Oakes kept at her bedside as her health declined at a nursing home was shown to Price and displayed on the witness stand during this week's testimony.
It shows a happy, 1970s-era South Hill family; Kitty, the scout den mother; Billy, the smiling father, the teenage boys and little William, dressed in his Cub Scout uniform, who had just won a national art award.

For a while, the photo and reality coincided, at least in part.

In their testimony, the sons recalled how they joined the Tipton family as infants in the 1960s and were later told they were adopted. They recalled big Thanksgiving and Christmas celebrations, Scouting, church on Easter and camping trips to Yellowstone and the Grand Canyon.

In his ruling from the bench, Price agreed.

"Until trial, the court didn't grasp the incredible life ramifications the Tipton children had dealt with... they should know that they did nothing wrong here. They just tried as best they could to live with the hand they were dealt," Price said. The three men will inherit equal shares of the estate, minus appropriate lawyers' fees.

If their claims had not held up, a scattered clan of paternal uncles and cousins in the Midwest and South stood to inherit Oakes' estate as "second tier" heirs.

Home for the Holidays

The Courrant's Rick Green reported on December 7, 2008 That Marily Plank has been allowed to return to Michigan. She was detained for over a year in Connecticut by probate court in Greenwich.

She was greeted at the assisted living facility she is moving to by cheering family and friends, who had been fighting to bring Plank back for the last 18 months. Apparently brought to Connecticut by two daughters without the knowledge of the rest of the family, Plank found herself in probate court where the judge granted an involuntary conservatorship, essentially trapping the elderly Michigan resident. It took a year to rule on a request by Plank's daughter that she be allowed to return home.

Monday, December 8, 2008

Online Tax Code


Complete and searchable U.S. Tax Code.

Small time farmer leaves big time inheritance

From the Pittsburgh Tribune-Review A tiny church in western Pennsylvania inherited more than $2 million from a farmer who lived in a mobile home. John Ferguson left his entire estate to Hopewell United Methodist Church near the town of Black Lick. The church has 80 members.

Wednesday, December 3, 2008

From Scientific America
Ghost Stories:Visit from the Deceased, After a loved one dies, most people see ghost
By Vaughan Bell

In a fascinating article, Vaughan Bell explains that hallucinations are a normal part of grieving.

“The dead stay with us.” They remain in our hearts and minds. They linger in our senses, as sights, sounds, smells, touches or presences.

Hallucinations are a common part of mourning. A study by the researcher Agenta Grimby at the University of Goteborg in Sweden found that 80 percent of elderly people experience hallucinations associated with their dead partner one month after bereavement. The visions can be so vivid that almost a third of the people reported that they spoke in response to their experience and that some of them evoked the very essence of the deceased.

Few are likely to experience grief without re-experiencing the dead. We often fall back on the catch all “ghost” while the reality is in many ways, more profound. Our perception is so tuned to their presence that when they are not there to fill that gap, we unconsciously try to fill it.

On his blog mind hacks Bell says that though the phenomenon is common, most don’t talk about their experiences because they worry about what others might think. You should read the whole article, and don’t skip the comments section. A lot of people don’t accept this explanation at all. I especially liked the story of the ghost dog who brought his master’s walking cane.

“Is Art an Industry or a Luxury”
The Wall Street Journal
by Daniel Grant

Sens. Pete Domenici (R., N.M.) and Charles Schumer (D., N.Y.) have co-sponsored legislation, endorsed by both Christie's and Sotheby's auction houses and the Art Dealers Association of America, to equalize the tax treatment of capital assets. This will be their third try. Why, so far, have they not persuaded their congressional colleagues, and why have two other bills affecting art collectors and museums run into similar resistance?

Grant says that that it is because it defies standard economic practice or public policy, or both. It makes sense only if one believes that art is just one more and equally important investment realm. The government wants people to invest in businesses or the housing market, entrepreneurship, places where the money is more productive.

Tyler Cowen at Marginal Revolution disagrees . . .

"Buying art shifts money from one set of hands to another and it doesn't discourage investment in factories or elsewhere. (And if it did, investing in houses would involve the same problem, I might add.) The recipient of the money, the art seller, can invest the money just as well as the spender might have. Or in other words, the transfer of the arts doesn't consume much in the way of real resources. Admittedly there is a second-order effect: higher prices diverts more labor energy into the arts, although for Old Masters this effect is very small. Or you might cite shipping and transfer costs for the art, noting that on that logic we should tax shopping carts at higher rates as well.

There is a good argument for the higher tax rate on art, namely that art yields otherwise non-taxable pleasures -- the pleasure of hanging it on your wall -- unlike say holding Chrysler stock. Or you might think taxing art is another way to hike the tax burden on the rich. But the cited argument just doesn't fly."

Death Goes to the Movies

Bleak House



As an estate planning and probate attorney, this is why I think death is so entertaining! My favorite movies that deal with estate planning or probate issues.

      1. Bleak House. This 2005 BBC production of Charles Dicken's novel is stunning--keeps you on the edge of your seat. Gillian Anderson plays Lady Deadlock, and Charles Dance is brilliant as the no-nonsense attorney Mr. Tulkinghorn. "Jarndyce v. Jarndyce": the most famous probate case in history. BBC-Bleakhouse; Amazon.com.

      2. The first few minutes of Superman Returns. What a great scene when Lex Luther (Kevin Spacey) finances his evil schemes by ripping off the billion dollar estate of his aunt as she lies on her deathbed. The image of Lex holding Aunt's shaking hand as she signs the final documents giving him everything is priceless. Even better is the scene of Lex walking out of the room and snubbing every family vulture hovering in the house. Educational on so many levels, not to mention just good entertainment.

Part mentioned starts about 5:25

      3. Joseph. This is the great 1995 TNT production of Joseph in Egypt. Ben Kingsley, Paul Mercurio, Martin Landau, Lesley Ann Warren. Epic in its cinemetography, beautiful music, great acting, Emmy Award Winner for Outstanding Miniseries. The scene among the brothers when Joseph reveals himself is the most emotionally moving scene in film I have witnessed. A great film about inadequate business succession planning, lack of communications, family jealousies, and--in this case (but rarely in cases I litigate)--family renewal, forgiveness, and redemption.

      4. The Ultimate Gift. A fun movie about a grandfather who sets up his estate plan by mandating that his selfish grandson fulfill twelve tasks before receiving his inheritance. James Garner, Drew Fuller, Brian Dennehy, Bill Cobbs, Abigail Breslin. Shows the power a Grantor has in using his or her wealth to teach beneficiaries the values important to him or her. Entertaining and thought provoking.


Fun Fact. If you set aside $5 a day for twenty years you would have $36,500. If you invested with 9% return you would have $100,000. in 35 years you'd have $440,000. If you're smart enough and save from age 22 until you retire at 65, you'll retire in style with $1,000,000. Five dollars doesn't seem like much, but saved and invested steadily will provide you with a nice little nest egg.

Tuesday, December 2, 2008

Are you covered?

Market Watch

According to a Wall Street Journal Market Watch article "Coming Up Short"(Dec 2 2008), 95% of Americans make it a priority to protect their kids by using seatbelts, but only 20% have enough life insurance for family protection.

American families are increasingly in danger of missing goals like paying off a mortgage, funding college education, or saving for a secure retirement.

Americans believe they have enough life insurance to protect their families. But studies show that on average, household breadwinners have enough life insurance to cover expenses for only four years.

People don’t buy life insurance even though most people understand the need for it.

Only about 20% of today’s private sector workers are covered by a defined benefits pension plan. Today’s economy demonstrates how quickly financial circumstances can change. Life insurance can mean the difference between secure retirement and one of constant struggle.

The cost of doing nothing can be enormous, insufficient insurance leaves families exposed to undue financial risk. Look at life insurance as an asset rather than an expense.

According to the Insurance Information Institute www.iii.org premium rates for individual term life insurance are expected to fall about 1% from 2007. The general downward trend began several decades ago. The III estimates the annual premium for a 40 year old male nonsmoker buying a $500,000, 20 year level term life policy in 2008 will be about $725. Rates for women and younger people are even lower.

Wednesday, November 26, 2008

Paul Newman was a star to the end. He acted in more than 65 movies over more than 50 years. He was also an entrepreneur, and a major philanthropist, funding schools, refugees and many other causes. See here and here. He died on Sept. 27 at his home in Westport, Conn., at 83. Newman’s proudest achievement was reportedly The Association of Hole in the Wall Camps located in the United States and abroad that provide adventure and empowerment for children with serious medical conditions. More than 135,000 children have attended the camps free of charge.

Mr. Newman founded Newman’s own in 1982. The food company gives all of its profits to charity. In its 26 years, it has earned and given away over $250 million through the Newman’s Own foundation.

Mr. Newman always felt that his good fortunate was based a lot on luck. On the website for at Newman’s own Foundation is this statement:
“Paul Newman's craft was acting. His passion was racing. His love was his family and friends. And his heart and soul were dedicated to helping make the world a better place for all.

Paul had an abiding belief in the role that luck plays in one’s life, and its randomness. He was quick to acknowledge the good fortune he had in his own life, beginning with being born in America, and was acutely aware of how unlucky so many others were.”

The will touches on the concerns he had as a father, a philanthropist, and a movie star. His Oscars and his stake in his food company go to his charitable foundation. The old farmhouse and his personal effects to his wife. Mr. Newman created the will in accordance with his long-standing wish that the majority of his wealth go to charity.

He was also concerned with his personal image and intellectual property rights. He wanted to ensure that they are protected from being used in any way that he would not approve of during his life. He also didn’t want his likeness to be used by technology current or future in any virtual performance or reanimation of past performances.

A review of the will and codicil that Paul Newman left when he died in September reveals an simple 18-page document. It was released by a probate court in Connecticut last week. He is identified as Paul L Newman of Westport.

You can see the will here.


IRS publishes inflation adjustments each year on personal exemptions, deductions, and contribution limits. Here are some for 2009.

$13,000 annual gift tax exclusion per individual per recipient (up from 12K in 2008).

$3,500,000 estate tax exemption equivalent per individual (up from 2 mil).

$1,000,000 gift tax exemption equivalent per individual (unchanged)

$5000 IRA and Roth IRA with $000 catch-up for individuals 50 and older (unchanged).

$49,000 or 100% of income (which ever is less) Sec. 415 limit for defined contribution plans (up from $46K) and for profit-sharing plans. Individuals 50 and older at the end of 2009 may increase their maximum to $54,500 if theu elect to increase their elective deferral by the available $5,5000 catch-up provision.

$49,000 or 25% of income (whicheveris less) for SEP plans. Owners of Pass-through entities may be limted to 20% of income.

$16,5000 elective deferral limit for 401(k), 403(b) and certain 457 plans ( up from $15,500) with catch-up provisions for those 50 and older.

$245,000 individual compensation limit for calculating pension and profit-sharing plan contribution limits (up from $230K).

$11,500 SIMPLE plan contribution limit (up from $10,500)

$195,000 or 100% (whichever is less annual benefit limit for defined benefit and Section 403(b) fully insured pension plans.

$106,800 Social Security wage base (up from $102,000)

Taxing Art

The Artist-Museum Partnership Act, a bill introduced by Senator Patrick Leahy (D VT) would amends the Internal Revenue Code to allow taxpayers who create literary, musical, artistic, or scholarly compositions or similar property a fair market value tax deduction for contributions of such properties or the copyrights, or both, to certain tax-exempt organizations, if such properties are properly appraised (value determined at the time of contribution)and are donated no sooner than 18 months after their creation.

Another art-related Tax bill has sponsored by Pete Domenici R-NM and Charles Schumer D-NY would provide the same capital gains treatment for art and collectibles as for other investment property. Currently capital gains tax rate for art and collectibles is 28%, compared to 15% for other types of investments.

Thursday, November 20, 2008

Creative Uses of Life Insurance

Life Insurance is the least expensive and most flexible way to resolve a host of challenges faced by individuals doing their estate planning. Life insurance can be used to do the following:
  • Pay taxes due at the death of the insured.
  • Replace income no longer available at the death of the insured.
  • Pay off the personal or business debts of the insured.
  • Ensure the surviving spouse has sufficient income for the remainder of his or her life, especially where the bulk of the insured's estate is the personal residence or other assets that are difficult to liquidate or that do not generate income.
  • Ensure that children will receive something, when everything else is going to the surviving spouse. Some people want to give everything to a spouse, but are afraid the spouse will remarry and the new spouse will eventually take everything, cutting out the children of the original marriage. Insurance can easily resolve this problem.
  • Estate Equalization. A person may have a business he wants to give to one son. But what about the other son? Insurance solves the problem.
  • Ensure long-term care. I am not talking about long-term care policies, but rather using traditional life insurance policies that can be accessed during the insured's life for any reason.
  • Provide funds to charities or that nephew or some favorite cause, and still have the bulk of your assets go to the traditional heirs such as children.
  • Transferring money to the insured's business partner to be used by the partner to pay the insured's family for the insured's interests in the business. This makes the surviving business partner happy, because it keeps the insured's spouse or family out of the business. And it makes the insured's family happy, because they are receiving the value of the insured's interest in the business without dealing with the insured's business partner. (A Buy-Sell Agreement.)
  • Transfer money to a business to cover the costs of getting someone to replace the insured at the insured's death. (Key Employee Indemnification.)
  • Reimburse a business for benefits paid to key employees (Recapture of Deferred Compensation Costs.)

There are numerous other creative uses of life insurance or life insurance in combination with annuities and other options that make life insurance the most efficient, least expensive way to resolve a host of challenges.

And you think your real smart, don't you?

This one is definitely my favorite!


blog readability test

And just who do you think your are?

More fun with online analytics -


We have strong indicators that http://estatestreet.blogspot.com is written by a man (93%).

What Kind of a Blog Do You Think Are?

A little harmless fun from a site called Typealizer.com

The analysis indicates that the author of http://estatestreet.blogspot.com is of the type:
ISTP - The Mechanics

The independent and problem-solving type. They are especially attuned to the demands of the moment and are masters of responding to challenges that arise spontaneously. They generally prefer to think things out for themselves and often avoid inter-personal conflicts.

The Mechanics enjoy working together with other independent and highly skilled people and often like to seek fun and action both in their work and personal life. They enjoy adventure and risk such as in driving race cars or working as policemen and firefighters.

Even though I am afraid of flying, heights, closed spaces, and fire, I think this is all true.

Advantages of Aging

Getting older isn't always bad. If you're fifty or older -

The Osher Lifelong Learning Institute at The University of Utah offers opportunities for intellectually stimulating, affordable, non-credit learning and for meaningful social engagement to people 50 and over. It is part of a network of over 100 Osher Institutes at colleges and universities across the country, all funded by the Bernard Osher Foundation.

"The Institute offers a rich and evolving array of courses, lectures, and special events to enhance the lives of its members. Our instructors are distinguished emeritus faculty, scholars, and experts from the community."

For about a hundred bucks you can learn about history, art, computers, literature, gardening, Photoshop, digital photography, foreign language, yoga, and others. For complete information go here.

New Legal Guide

Coming in 2009. . .

Navigating Your Way: The Utah Legal Guide for Those 55 and Over.

The Utah Division of Adult Aging Services says that the guide is comprehensive information and resource legal book. It will give general information on various legal issues and programs including estate planning, guardianships, housing, social security, and more. It is supposed to be the ultimate source for Utah's older residents and their caregivers. We will be watch for its debut and let you know where to get it.

Jenny Jenny who can I turn to (867-5309)
for the price of a dime I can always turn to you

Courier Mail

AN elderly man has lost his bid to regain control over his financial affairs which were taken over because he made hundreds of calls to sex chat lines.

The man, who says he made the calls for companionship, was first placed under orders in late 2006 after members of his family alleged he had made up to $20,000 worth of 190 calls a month over two years. They also alleged he was incapable of looking after himself and that he suffered dementia. He has since been cleared by medical experts of any clinical, cognitive and psychiatric dysfunction.

The man, who made tens of thousands of dollars worth of calls to 190 different numbers - told The Courier-Mail the tribunal had ruled that the financial administration orders, which gave control over his financial affairs to the Public Trustee, were to remain. But the tribunal revoked guardianship orders which had vested control over other aspects of his life to the Office of the Adult Guardian.

Wednesday, November 19, 2008

Ward Bosses

AP Story - November 18, 2008

GRINNELL, Iowa - A Deep River woman wants to change a state law to require that mentally disabled voters be supervised when they cast a ballot. She was upset when staff at a group home in Grinnell took her 26-year-old son, who is developmentally disabled, to vote on Election Day against her wishes. She said she's not trying to take away a person's right to vote. "It's just that a lot of us, (group) homes and parents, need to work together and agree on what's best for our loved ones."

The woman, who has guardianship over most of her son's legal decisions, unsuccessfully challenged his ballot. She supported Republican John McCain and her son voted for Democrat Barack Obama, but said that's not why she challenged him. She didn't think he had the capacity to choose for himself.

It was at least the second case in which a relative challenged a family member's ballot in this month's presidential election in Iowa. In Council Bluffs, a woman challenged her elderly mother's absentee ballot, claiming her mother suffered from dementia and was coerced into casting the ballot by Democratic campaign workers who were going door-to-door asking potential voters if they wanted an absentee ballot. In that case, the woman supported McCain and her mother reportedly voted for Obama. That challenge was also unsuccessful.

Think there has ever been a case where the guardian challenged the vote of a ward who voted for the same candidate as the guardian?

From the Archives (NYT Collection)

Rosa and Josefa Blazeck were congenital twins jointed at the hip. They made their living traveling with carnival shows. They caused a ruckus when Rosa became pregnant and had a baby boy named Franzl in 1910. Many doubted that the baby was actually hers. It is also said that the father wanted to marry Rosa, but couldn't because it would be considered bigamy.

The death of Rosa and Josefa Blazek left the Cook County Probate Court with an unprecedented legal problem. If they were one person the son will inherit a $200,000 fortune which was accumulated by the twins during their exhibition tours of the world. If they were two distinct persons, Rosa being the mother and Josefa the aunt, only Rosa's half of the estate would go to the lad while Josefa's closest relatives, her father and four brothers, would be entitled to her half.

Friday, November 14, 2008

Will my love for you die in 2010?

The 2001 tax act repealed the estate tax for one year, 2010. In the intervening years, the amount exempt from estate tax has steadily risen. This year it will be 2.5 million and next year $3.5 million. The tax rate is currently 45%. It will vanish for a year and come back 2011 with $1 million exemption and 55% maximum tax rate that applied before 2001.

A few wealthy families have lobbied hard for a total repeal, but insurance and estate planning interests are against it. Politicians, have hedged their bets.

Now, however, now we have a tax code that creates an incentive for heirs in late 2010 to off their aging benefactor.

President-elect Obama has called for a permanent 3.5 million exemption and a rate close to 45%.

If the law passes, people in that wealth bracket will need to review their plans to make sure they take advantage of the increased exemption in 2009, and for whatever congress does going forward.

If congress doesn't act, it's time to think hard about health care and appoint a trusted person to take care of your medical decisions, if you can't.

Wednesday, November 12, 2008

Planning for Special Needs Children

Forty percent of children with Down syndrome have congenital heart defects. They have higher incidence of respiratory, vision and hearing problems, childhood leukemia, and thyroid conditions. All people with Down syndrome have developmental delays and intellectual impairment. The range can be from very mild to very severe.

The Washington Post ran a story I picked up in the Kansas City Star. Today's twenty-somethings with Down syndrome will be the first generation that will outlive their parents. The life expectancy of Down syndrome people has gone from 25 to 50 years. In 2006, 61% of people with an intellectual disability were living with their families, and 700,000 of them were living with parents or family members older than 60.

Government payments can cover much of a disabled person's expenses if their personal assets don't exceed a certain amount(not including a home, a vehicle and basic personal items). In 1993, Congress permitted special-needs individuals under age 65 to have trusts funded with their own money -- such as assets from a legal settlement or an inheritance -- and still have access to government benefits. More common, however, are so-called third-party trusts, in which parents provide funding for trusts that benefit their children.

Funds transferred to a trust are not considered to be assets of the special-needs individual, if there's an independent trustee who controls the money.

There are lots of problems for people with disabilities and their families to contend with from achieving independent living, estate planning, supervisory programs, to guardianships.

Lots of resources at National Down Syndrome Society.

Plan ahead for your child by writing a special needs trust. Find out about special needs trusts from a competent estate planning attorney in your state. It's never too early to plan.

If you are in Utah can find information at Utah.gov.

Other Utah resources on our web site at probateheg.com.

Friday, November 7, 2008

At Wills, Trusts, and Estates blog a great article about Pet Trusts - -America gets what it wants: Pet Trusts and a future for its companion animals By Breahn Vokolek

American Pet Product Manufacturers Association estimates that 63% of American households own a pet. Yes we love our pets! And in America pets are more than ever considered to be part of the family.

The development of pet trusts is a result of the failures of other alternatives to meet American pet owners’ need to provide for their animals. Unfortunately pets are often overlooked in the confusion associated with unexpected sickness or death. Many end up in a shelter.

“Legal disputes over property can ad delay to the distribution of the property, which includes companion animals. Living pets cannot be stored, unlike other property, while the details are resolved.”

One alternative to the pet trusts involves the outright gift of the animal to a pet retirement home. This alternative is usually available only for dogs and cats.
Here's one I found through the AARP web site, but there are lots of others. This one truly pampers your pet. Check this out!

Our estates pets will be allowed to socialize and play outside on the premises throughout the day. Playtime includes swimming, boating, hiking and many other outside & inside activities. Senior citizens are welcome for visitation, which is therapeutic to both pets and seniors.

Living arrangements are all custom designed to enhance the lifestyle of your pets. Condo units overlooking pond includes enclosed porch, living quarters, and play area, providing your family's pets with the comforts of home. Condos include a TV and VCR , for daily viewing of pets and family videos. Pets can relax to music from the stereo along with their heated beds.

(It's probably real pricey.) If you can't leave Fido in the lap of luxury, maybe you can leave him with a friend.

One can attempt to create a moral obligation by making a gift to a caretaking fund that is contingent on the caretaker using the funds for the benefit and care of the animals, but they are difficult to enforce. Once the estate has been probated continuing control or accountability for the care of your pets virtually ends.

Pet trusts can solve many of these potential problems. Unlike a will, a trust can provide for your pet immediately and apply not only if you die, but also in the event of your incapacity.

Usually a trust is established through a written legal document and often involves a Trust Agreement which explains how the assets are to be managed and distributed.

The court’s handling of pet trusts has been varied, but several states, including Utah, have enacted statutes recognizing valid pet. Utah’s pet trust is found in Utah Code Ann. Section 75-2-1001.

The statute reserves for the court the right to reduce the amount in the pet trust if it determines that the amount substantially exceeds the that required for the intended use. This is what the court did in the case of the 12 million dollar pet trust of Leona Helmsley estate we wrote about in an earlier story...

Today a pet trust can be sixty pages and cost thousands in legal fees. It is reported that Betty White will leave all of her five mill dollar estate to her pets. She's a real animal lover.Others leave just enough to cover vet bills and compensate the new caretaker.

Changing views and attitudes are making pet trusts increasingly popular in the U.S. An estimated 12 to 27 percent of pet owners include their pets in their estate planning. The development of pet trusts has been extraordinarily fast and is serving a growing need. The increasing desire of American’s to provide for their pets after their own death is widely shared and deeply emotional. If you live in Utah and want more information about how to set up a trust email us at questions@hegattorneys.com
More information at www.probateheg.com. Others can get information at the web site of the American Society for the Prevention of Cruelty to Animals ASPCA.

Tuesday, November 4, 2008

US Estate Taxes for 2007

IRS Data on 2007 Estate Taxes *All figures are estimates based on a sample. Money Amounts are in thousands of dollars. IRSTax status and size of gross estate

All Returns #Returns Net Estate Tax
Under $2.0 million 17,416 22,508,292
$2.0 million ‹ $3.5 million 1409 136,472
$3.5 million ‹ $5.0 million 8483 2,352,847
$5.0 million ‹ $10.0 million 2860 2,371,313
$10.0 million ‹ $20.0 million 2906 5,173,865
$20.0 million or more 654 8,027,849

Utah Net Estate Tax # is 34, amount is $73,585.

States with largest number of estates paying taxes

California 3637 4,697,954
Florida 1667 2,863,861
Texas 906 1,282,736
New York 1339 2,209,342
New Jersey 569 520592

Lowest Amounts Paid by states
Alaska*Gross # filed 29 / Gross tax - 115,862

Idaho 6 50825

N Dakota* Gross # filed 71 / Gross tax amt - 261,436

RI40 49960
South Dakota5153,347

*Data deleted to prevent disclosure of individual taxpayer data.

Total Returns with estate taxes due17,416
Net amount due22,508,292

Estate Tax Calculator at www.mystatewill.com
If you are in Utah and have estate tax issues or need help with estate planning, filing 706s, etc. get more information at our website or contact us for more information. website. We can help.

Monday, November 3, 2008

Halloween Probate News

ADRIAN, Mich. -Daily Telegram. Adrian, Michigan

A 16-year-old girl admitted to poisoning her grandmother at their Addison-area home two years ago. She pleaded guilty to killing her 53-year-old grandmother by slipping her morphine pills. The woman had been the girl's guardian since the girl was 8 months old.

Though only thirteen at the time of the murder, Kristina Adkins was given life and sentenced as an adult.

Why Kristina would kill the woman who raised her since she was an infant remains unclear. She never revealed her motive.

“Things are not like they seem to be, that’s all I can say,” said Doris Dupuie, Virginia Bentley’s mother and Kristina’s great-grandmother.

Defense attorney Michael McFarland of Adrian said Kristina never gave a direct explanation for wanting to kill her grandmother.

“I think it was cumulative of her entire life experience,” McFarland said.

At the sentence hearing, McFarland told the court that Kristina had a troubled childhood that included mental health problems and drug abuse.

Lenawee County Prosecutor Jonathan Poer asked the court for an adult sentence.

“While she may be a teenager, the result of her conduct is undeniable and permanent,” Poer said. Society would not be protected if Kristina was placed in a juvenile facility, he said, adding that she told a probation officer she is not sure if she might kill again. Poer said that Kristina saw her grandmother in pain for several days from the morphine before increasing the dose to a fatal level.

Noe agreed the severity of the crime and the risk to society are too great for a sentence to a juvenile facility.


Norwalk Connecticut Stamford Advocate

NORWALK - Although a jury found Mary Ann Langley guilty of killing her husband by throwing gasoline on him and lighting him on fire, she could still inherit his $1.2 million estate, family members and attorneys said.

This turn of events was made possible by a jury of eight women and four men who did not convict Langley of murder two weeks ago after a seven-day trial at state Superior Court in Stamford. The jury was unable to find beyond a reasonable doubt that Mary Ann Langley intended to kill her husband by throwing the gasoline on him, and instead found her guilty of intentional first-degree manslaughter in the December 2006 death of her husband, James, 55.

State statutes prohibit only murderers from inheriting from their victims, not individuals convicted of manslaughter.

The state's slayer statute says that when a defendant has been convicted of killing another person, such as in the case of Langley's manslaughter conviction, her rights to inherit shall be determined under common law.

According to Willie Langley and his probate attorney, Alan Williams, the will could be contested in Probate Court, or a wrongful death suit could be filed in Superior Court. Langley said last week that his brother's estate, which includes two homes on Woodward Avenue, a contractor's lot and other contracting equipment, is worth about $1.25 million.

"Under the statutory scheme in place in Connecticut, it is clear that Mrs. Langley can inherit," Seeger wrote in an e-mail from Chicago on Friday.

"Under the common law analysis that follows the initial determination, there is an issue of a beneficiary's motives that needs to be determined," Seeger said. "Generally, if the motive of an individual is to gain benefits by causing the death, the person can be disinherited. It is our position that no such evidence exists in this case."

Stephen Keogh, a probate attorney practicing in Norwalk for 23 years, said, "Connecticut has a black-and-white rule on murder: that someone convicted of first- or second-degree murder cannot inherit from someone they murdered. All other cases of somebody who might inherit from someone they killed are left to common law, which is a big body of law that allows the case to be resolved on a case-by-case basis."
- - -

Seems to me that if you throw gas on a person and purposely light them on fire, you've made your're intentions pretty clear. Just sayin.

Wednesday, October 29, 2008


ABC news ABC News reports that their latest polling shows Obama with a ten-point lead over McCain on the issue of taxes.


WSJ Republicans are losing ground in the battle over taxes, turf they have dominated since the Reagan administration.

Calculate your 2009 taxes here.

Which plan is better for you?
New study on the estate tax

Nonpartisan Economic and Social Policy Research.

Back from the Grave
Revenue and Distributional Effects of Reforming the Federal Estate Tax
Leonard E. Burman, Katherine Lim, Jeff Rohaly

The estate tax is the most progressive component of the federal tax code. In 2000 even before substantial cuts were made, it applied only to two percent of wealthy decedents. Critics call it a “death tax” and say it is too complex, unfair, and a deterrent to savings and investment. Under Economic Growth and Tax Relief Reconciliation Act of 2001, the estate tax has been phasing out will disappear entirely in 2010 before being reinstated the following year in its pre-EGTRRA form. Congress has resisted repeated attempts to repeal the estate tax.

Both 2008 presidential candidates would scale back- but not eliminate- the estate tax which, as the law now stand will generate $490 billion through 2018. Senator McCain proposes to apply the 15% capital gains tax rate to estates worth more than $5 mil and Obama wants a 45% tax on estates worth more than 3.5 million. Obama’s plan would preserve around 60% of the current-law revenue and McCain’s would reduce revenues by about 4/5ths. Read the rest here.
Social Security Benefits to rise 5.8 percent for 2009.

A news release from the agency dated Oct 16th states that benefits for more that 55 million Americans will increase 5.8 percent in 2009. It is the largest increase since 1982. The rise is based each year on the Bureau of Labor Statics' Consumer Price Index.
Other changes are based on the increase in average wages (from 102,000 to 106,800) that will be subject to the Social Security tax.

And news from Medicare -

Stay or Switch

You can switch your Medicare health or prescription drug coverage for 2009 between November 15, 2008–December 31, 2008.

This is the official government handbook with important information about changes in 2009.

● What's new

● 2009 Medicare costs

● What Medicare covers

● Health and prescription drug plans

● Your Medicare rights

● Fraud and identity theft

Monday, October 20, 2008

Technically Unjust

Rick Green of the Hartford Courant is a vocal critic of the Connecticut Probate Courts. He reported on the terrible injustice done to Daniel Gross. Several years ago, even though he was a New York resident, Daniel Gross was held against his will in a Connecticut nursing home for 10 months when he fell ill in while visiting in Connecticut. Judge Joseph Gormley determined that this was "a terrible miscarriage of justice" and allowed Daniel to return home.

Another instance here.

On July 13, 2006, Judge Gormley said about jurisdiction:

"The statute is absolutely clear that you can't appoint a conservator of someone's person unless that person is domiciled in the state of Connecticut or resides in the state of Connecticut."

"This gentleman ... has never lived in the state of Connecticut, has lived and raised his three children in New York, his only assets were in New York, his house and his bank account, his driver's license is in New York, his registration is New York, his mail goes to New York. There is to me not a scintilla of evidence supporting residency."

"You can't appoint a conservator of the person for someone who lives out of state... the man lives somewhere else."

Now just this month comes the Story of a 96-year-old Michigan woman. When a daughter from Ohio came to visit her, she became concerned for her well-being. The daughter moved her from Michigan to an assisted-living facility in Ohio. She then filed a motion to become her guardian. Ohio law does not allow for the appointment of a guardian that lives outside the state. A second daughter objected challenging Ohio's jurisdiction.

The question at the heart of the dispute is whether the mother left Michigan voluntarily and if she had the intention to reside in Ohio.

In a 4-3 decision, the objecting daughter was found to lack standing to bring the case because of a failure to file a motion to intervene in the earlier litigation. Their justification was basically that the rules for intervention allow a court to maintain control of the proceedings. Creating a guardianship can involve many people, family, friends, neighbors, etc., and it can get out of hand.

A rebuttal that was complete and at times heart-felt challenged the majority assertion, claimed it didn't even use the right case law, and failed to construe the Rules of Appellate Procedure correctly.

"This court has consistently adhered to the policy of exercising all proper means to prevent the loss of valuable rights when the validity of a notice to appeal is challenged solely on technical, procedural grounds."

The judges felt it unjust and inequitable to prevent the daughter from challenging the lower court proceedings.

An attorney, who was not the guardian ad litem, appeared at the proceedings below representing the ward and stated that his client had indicated that she would prefer to return to Michigan and have her affairs handled by her daughter Jenny.

"She is concerned that her mother was removed from her home and forced to live out the rest of her days in a strange location. Anyone with an elderly parent can imagine the pain of seeing that parent held against her will; I consider Hull to be aggrieved by the lower court decision."

One of the problems this case brings up is the incentive an Ohio resident has to move a parent to Ohio to prevent a non-Ohio sibling from being eligible to serve as guardian. “We should not wait for the General Assembly to address this problem. Our legal system should help resolve family conflict, not provide a ready avenue to exacerbate it.”

The decision also prevented a case that the objecting daughter filed in Michigan to decide the issue of the mother's residence, which really was at the heart of the dispute.

Monday, October 13, 2008

Check your Trust Plans

From the North Bay Business Journal Commentary: Even if Just 2 or 3 Years Old, Trusts Need to be Reviewed
by Joni Fritsche, CPA AEP.

If your trust agreement is more than 2 to 3 years old, I urge you to dig it out, dust it off and read it.

Things that indicate you're overdue for a check-up:
1. New Spouse
2. Is everyone getting along? Has there been changes in family relationships.
3. Is your tax planning current? Marital deduction is 2 mil now and increasing again in 2009.
4. Are your children grown up? Are they okay or even more than ok financially? Are they healthy?
5. Do you own a business? Has it grown?
6. Are your choices for Trustee still appropriate?

Like Mr. Fritsche, we encourage our clients to stay up on their estate plan. You should review your plan often and understand all the details.
If it's been a while for contact your attorney. If you're a resident of Utah and need someone to help you evaluate or change your plan, we can help at Hughes Estate Group Attorneys.

Monday, September 29, 2008


On writing . . .

A sentence should contain no unnecessary words, a paragraph no unnecessary sentences, for the same reason that a drawing should have no unnecessary lines and a machine no unnecessary parts. ~William Strunk, Jr., The Elements of Style, 1918

Also from an article in the May edition of the ABA Journal on the new book by Antonin Scalia and Bryan A. Garner "Making Your Case, The Art of Persuading Judges"

Value clarity above all and make your points and ask for relief in a blunt, straightforward manner.



The undersigned counsel do hereby for and on behalf of their clients, for the reasons explained hereinbelow, respectfully request that this Honorable Court consider and hereby rule that no issues of material fact do exist in the instant controversy, and that a final judgment be entered in favor of the client of the undersigned counsel (sometimes herein referred to as “Defendant” or “Cross-Plaintiff”) and against Plaintiff.


Johnson requests entry of summary judgment.

Clarity is amply justified on the ground that it ensures you’ll be understood. If your arguments are clear it will be harder for your opponent to mischaracterize them.

Whereas this seems to make lots of sense, I heretofore and hereinafter will strive to above all else be clear.


A sentence should contain no unnecessary words, a paragraph no unnecessary sentences, for the same reason that a drawing should have no unnecessary lines and a machine no unnecessary parts. ~William Strunk, Jr., The Elements of Style, 1918.

Make your points and ask for your relief in a blunt, straightforward manner.


The undersigned counsel do hereby for and on behalf of their clients, for the reasons explained herein below, respectfully request that this Honorable Court consider and hereby rule that no issues of material fact do exist in the instant controversy, and that a final judgment be entered in favor of the client of the undersigned counsel (sometimes herein referred to as “Defendant” or “Cross-Plaintiff”) and against Plaintiff.


Johnson requests entry of summary judgment

From a May 2008 ABA Journal Article on Making Your Case, The art of Persuading Judges by Antonin Scalia and Bray A. Garner.

Love goes to the Dogs

Jeffrey Toobin has a greet article in the Atlantic about the late Leona Helmsley and the inter vivos trust that she executed leaving millions to her dog Trouble.

For estate planners the salient part Pet-lovers have engineered a quiet revolution in the law to allow nonhumans to inherit and spend money. It is becoming routine for dogs to receive cash and real estate in the form of trusts, and there is already at least one major foundation devoted to helping dogs. And they are already making plans for the Helmsleys' billings, according to Toobin.

The author asks "Is it right to give so much money to a dog - or to dogs generally? Are there limits? Will there be a time when a dog can sue for a new guardian, or to avoid being put to sleep?

Leona had contentious relationships with almost everybody except her husband Harry. Her life was a trail of bitterness, strained relationship, fired employees, etc.

Unhappy associates turned her into the IRS knowing that she had billed millions of dollars to her hotel chain company for what amounted to grand-scale renovation of her Greenwhich Connecticut mansion. She was convicted of multiple counts of tax evasion and served federal prison time.

After her release from prison, she became reclusive and when her husband died in 1997she got her Maltese dog. She never had a dog before an article source is quoted as saying and she trieated her like aperson, and took her everywhere. She would take that dog to bed with her every night." He even appeared in ads for her hotels.

In spite of her vast wealth Leona left small, controlling bequests to her realtives; Trouble's 12 million is the largest single bequest in the will. In her 2nd mission statement, she removed caring for indigents and children making her priority for her chartible trust #1 care of dogs, and then charities as determined by trustees.

Helmsley's instructions for care of the dog subsequently caused a lot of trouble for Trouble. First Helmsley wanted Trouble buried in the family mausoleum, but that is not possible under NY law. Then custody was to be given to her brother or grandson, but neither man wanted the dog. After the trust provisions were made public, the dog received death threats.

Later, an alternative custodian was found. He is paid 5000 a month, security for the dog costs a hundred thousand, grooming-eight thousand, food-twelve hundred, and the vet up to eight thousand.

Update h/t Wills Trusts and Estates Prof Blog

Manhattan Surrogate Judge Renee Roth reduced amount in the pet trust in April to $2 million with the $10 million balance passing to Leona's charitable foundation.

Monday, September 22, 2008

Probate News Sept 2008

http://www.telegraph.co.uk/ The London Telegraph has an article in todays paper "How to make sure your will is not contested"

Fay Copeland of the firm Wedlake Bell says it used to be that the only questions asked where about the validity of a will. The firm claims that will and trust disputes have trebled over the past few years. Now as people are leaving more wealth it is financially feasible to contest a will. Another factor in the rise in disputes is the more complex family structures created by a rising divorce rate. Beneficiaries are looking past what the will says and more about what they think they should have been entitled to.

The gist of the article is that writing a will or a trust may be insufficient to stop family arguments when you die.

Know what and how much you own.

Name your executors and make sure they understand the responsibility that they are taking on.

Talk to your heirs in person to explain the reasons for your decisions.

Leave a letter of intent, especially if you disinheriting or are leaving unequal bequests to your heirs.

Make sure your document is signed and witnessed properly and that the right people know where you keep it.

If you have children under 18 years of age, write a letter of wishes to your appointed guardians giving guidelines as to how the children should be raised.

Make sure to keep your will updated.

Friday, March 7, 2008

Zoom Zoom Zoom, Part 2. Which son is the heir?

Our Client is a young woman who inherited a sizeable estate when her first husband died tragically in a plane crash. She has since remarried. She has two minor children from her first marriage. Her current husband has a son from a previous marriage. She and her current husband are considering having another child.

The Trusts says in the Distribution Provisions the Estate will be divided as follows:

The client’s husband and two sons will each receive a 1/3 share of her estate. If her husband dies before she does or for some other reason can’t claim his share, that share will be divided equally between the two boys. If one of the boys can’t claim his share, his entire share goes to his surviving brother.

The Trust goes on to direct that two subtrusts be created, one for each of the sons. These subtrusts will each receive a 1/3 share of the estate. The Trust says that when the conditions and requirements for the Subtrusts are satisfied, the beneficiaries will receive full and outright distribution of remaining assets.

And here’s the real contradiction in this clause,

“If any beneficiary set forth in part (a) above (meaning the two boys) shall predecease the termination of his or her subtrust . . .
Such subtrust shall be terminated forthwith and the principal and accumulated income distributed to the surviving heirs of the deceased beneficiary.”


Here we have a case where the distribution provisions say that if one son dies, his share goes to his brother. Under the subtrust division, if one son dies, his share goes to his surviving heirs. His brother could be that surviving heir and there would be no conflict, but in a few years, he may have a son of his own. So who would inherits? Our client’s surviving son or her deceased son’s son?

Even worse, what if the current husband dies. Who gets his share? Will it be split between our client’s two sons as directed in the distribution provisions or will it go the husband’s legal heirs as directed in the Termination of Subtrust provision? That provision directs it to go to his heirs, which is likely to be his son from his first marriage.

Probably not what our client had in mind.

More on Monday . . .