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New Law Makes Significant Changes to New York Estate and Gift Tax

April 1st, 2014 Comments off
The New York State legislature passed a budget bill on April 1, 2014 which will increase the New York State estate tax exemption over a four year period to $5,250,000 and, by 2019, bring the state estate tax exemption in conformity with the federal estate tax exemption.  The increased amounts are as follows:
– April 1, 2014 $2,062,500
– April 1, 2015 $3,125,000
– April 1, 2016 $4,187,500
– April 1, 2017 $5,250,000
– January 1, 2019 $5,000,000 (plus the cost of living index from 2010 – thus making the exclusion the same as the Federal exclusion amount).
In addition, the top New York State estate tax rate will be gradually reduced from 16% to 10% over the same four year period and the generation skipping transfer tax enacted in 1999 will be repealed.  More significantly, the new law will require that the value of any lifetime taxable gifts made by a New York resident decedent after March 31, 2014 be added back into the New York gross estate.  This will increase the amount of estate taxes due.   Contact Kiley, Kiley & Kiley to determine if and how the new law will impact your estate plans.

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WHAT HAPPENS TO OUR FACEBOOK ACCOUNTS WHEN WE DIE?

May 7th, 2012 Comments off

Recently, an aunt of mine was clearing out some personal items and came across a letter my grandfather had written to his mother-in-law (my great-grandmother) soon after my grandparents’ honeymoon in 1924.  It was a beautiful letter- the kind that people years ago were skilled at writing, a skill not often displayed these days in e-mail, texts and on social media. Lets face it, the art of letter writing has been lost in our digital age.  Traditionally, people have always hung on to such letters or cards for posterity- keepsakes to remember and pass on to a child or grandchild.  Is this also being lost in our digital age?

As recently reported by NPR, consider the plight of a mother in Portland, Oregon, who continued to use her son’s Facebook account to read postings on his wall after his accidental death.  Her son’s wall contained photos and postings from personal friends, many of which she had never seen before. However, when Facebook learned of the son’s death, it changed the password and closed the page.  Thus began a long legal battle by Karen Williams to regain access and obtain years worth of her son’s life on Facebook.

Now, lawmakers in many states are considering legislation that would require social networks like Facebook to grant loved ones access to the accounts of family members who have died.  In Oklahoma, a recent 2010 law grants the administrator of an estate the power to act on behalf of a deceased individual and access social media accounts.  These laws beg larger questions for the individual estate plan.  Whereas in the past, people have always properly considered the disposition of tangible personal property in their Wills, shouldn’t they now also be being given consideration to their “on line” property- the treasure trove of photos, messages and postings that accompanied them through life?

My grandfather died in 1963- 6 years before I was born.  I only know him from family stories… but his letter gave me great insight into his character.  I smile at the notion of how much more my great grandchildren will know of me.

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What if St. Patrick Had a Will

March 17th, 2011 3 comments

 

A will has no force nor effect until it is probated and the Surrogate determines that it is genuine, that the testator had testamentary capacity, that he was not unduly influenced by another person, and that he published the will before signing it. When a proposed executor submits a probate petition, he must notify all of the deceased’s heirs at law. Each must either waive his or her right to contest the will or be cited to appear in court to oppose the will. Problems arise when the testator’s family cannot be located. Petitioners frequently must hire a genealogist to locate lost heirs. The task becomes more difficult and expensive when the decedent emigrated from another country and his birthplace is unknown.

Yesterday, I met with a client who must locate the heirs of a man who was born somewhere in eastern Europe. Thinking about this problem and given that today is St. Patrick’s Day, I started wondering how difficult it would be to probate St. Patrick’s will.

Some historians have postulated that St. Patrick was not a living person, but a fictional character of legend. They’d get an argument, but not absolution, if they confessed their sinful thoughts to Father O’Shea this morning at the Cathedral which bears the Saint’s name. And they’d get a beer in their face but not in a glass if they voiced their opinion today in any Irish pub in Woodside.

For the true believers, St. Patrick is as real as the sun setting over Galway Bay.  But experts dispute his birthplace.

Various accounts have St. Patrick being born in Scotland, see: http://www.catholic.org/saints/saint.php?saint_id=89 and in England, see: http://www.vortigernstudies.org.uk/artgue/guestjelley.htm and in Wales, see: http://www.historic-uk.com/HistoryUK/Wales-History/StPatrick.htm and in Boulogne, France (as per Dr. Lanigan, author of The Ecclesiastical History of Ireland) as referenced in this scholarly article, http://ads.ahds.ac.uk/catalogue/adsdata/PSAS_2002/pdf/arch_scot_vol_005/05_261_284.pdf and, in Gaul, see this scholarly article: http://www.sangrial.com/pdf_files/saintpatricksfamily.pdf . To confuse things even further, Gaul was a Roman province which covered the area from France, Belgium, and westernmost Germany, see: http://en.wikipedia.org/wiki/Roman_GaulSince St. Patrick was a Roman Citizen and the territory of Gaul also included the Italian Alps, even the Italians have laid claim. 

 
Two thing are certain. First, the genealogist’s bill would be very expensive. Secondly, everybody wants to have a piece of St. Patrick. And who can blame them. Look at all the royalties they could claim for his parades, and memorabilia.  I wonder what his wife, Sheilagh, would think about that?!?  Yes, some people in Newfoundland claim that he WAS married.  See: http://able2know.org/topic/20682-1

 

While the proponent of the will would have a huge problem, his birthplace is not of concern to his many fans.  We can all share St. Patrick today, because everybody’s Irish on St. Paddy’s Day.   Slainte!  

 

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Estate Planning for the Elderly (With Apologies to Dr. Suess)

March 9th, 2011 Comments off

It’s a dilemma that every estate planner faces. Mrs. Martinez’ grandniece, once removed, (GNOR) makes an appointment for her to make a will. At the appointed time, they arrive together . . . alone. Mrs. M. is a lovely lady somewhere between 80 and 120 years old, has a strong accent and doesn’t hear well. GNOR offers to sit in on the consultation and translate. During the introductions, GNOR explains that Mrs. M. is a widow and lives in a large, old house. Her four grown children live out-of-state. GNOR lives in Mrs. M’s basement, pays no rent, but helps with the chores. She says that Mrs. M. wants to give her a power of attorney and devise her the house when she dies. She offers:

My Aunt’s an old woman who came from Peru;
She needs an estate plan but doesn’t know what to do
Her children are absent, don’t visit or call
As God is my witness, they don’t help at all.
One is a doctor who lives in St. Paul
Another’s in Georgia and speaks with a drawl
I moved in last year when my aunt had a fall
I’m here to help her for the long haul.

At the ends of the story Mrs. M. starts to bawl. What’s the real story? Should my skin start to crawl? As I offer her a tissue and a glass of water, I suggest that I speak to Mrs. M. privately.

Many elderly people find themselves alone when their spouses die and their children are grown. They need assistance and companionship but their traditional family supports have collapsed. So they look for other options. Hopefully they have well-meaning extended family members or friends who fill the breach. But too frequently, they are preyed upon by grifting wolves who cloak themselves in a shroud of love and friendship. The lawyer’s job is to help the client tell the difference. It’s a delicate but necessary task. You must separate the client from the “helper” so that you hear the clients’ wishes without interference. It’s essential to know if he or she is able to make an independent decision and isn’t unduly influenced. If you sense that the “helper” is helping him or herself, it’s time to pull the plug on the consultation as a lawyer is ethically estopped from preparing an estate plan for a client who is unduly influenced or mentally impaired. It’s a hard call, especially when the client is a stranger and seems to be in danger. The meeting is fleeting and physical infirmities like hearing loss or speaking impairment, may make an elderly person seem mentally incompetent when they are not.

The elderly client and the “true helper” are better served when the lawyer makes careful inquiries such as I have described. If he doesn’t, the will may be denied probate when a distributee challenges it.

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Concerned about the welfare of your pet if you become sick or die? Consider a pet trust.

January 20th, 2011 Comments off

Believe it or not, in America, more adults have pets than children.  Most people consider their pets as part of their families.  A 2007 survey of the American Animal Hospital Association found that 83 percent of pet owners refer to themselves as their pets “mom” or “dad”.  

So what happens to these pets when their “parents” die or become incapacitated?   The best way for an owner to ensure the continuity of care for their pet is to establish a pet trust.  New York’s Estate Powers and Trusts Law § 7-8.1 allows for such trusts for the care of pets and protects trust funds from being used for anything other than the pet’s benefit.

Many people have traditionally provided for pets in their will.  But this is a flawed plan and can pose many problems.  First, a will is usually not read or produced for days, if not weeks after the owner’s death.  Second, the caretaker named in the will holds only an honorary position.  He/she may abscond with funds intended to care for the pet or leave the animal in a shelter and the courts don’t have the authority to enforce the owner’s instructions.  So, by example, if you write in your will that you leave $10,000 to your niece with instructions that the money is to be used for your beloved beagle Fido, your niece can pocket the money and abandon Fido without the fear of any legal reprisals. 

Courts, however, can enforce the owner’s instructions if they are contained in a pet trust.  Additionally, the terms of a trust can be enforced during the owner’s lifetime, whereas the terms of a will only apply after the owner’s death- significant for the pet of an owner who becomes incapacitated and unable to care for their pet.   An owner who becomes disabled an unable to care for their pet can direct in their trust that the caretaker bring the pet for visits.  The effect a pet can have on people’s physical and mental health is well documented.  Whether its playing a game of catch with a stroke victim or being a calm, familiar face for an owner suffering from the diseases of old age, pets can play an important role in a sick person’s life.

So how does it work?  First, the owner should establish a pet trust. Second, the owner’s will should be written or amended to name the trust and arrange for its funding.  Every pet trust, of course, should name a trustee.  The trustee disburses funds to a named caretaker, who shall carry out the owner’s instructions for the care of the pet.  These instructions can be detailed- from the food the pet prefers, to the park the pets likes to walk, to the owner’s preferred vet or groomer.  A client with more than one pet can direct that the pets live together.   

How much money should be placed in the trust?  This can be tricky.  You’ll want to feel comfortable that your pet is well provided for.  However, if you fund the trust lavishly, you open the door to legal challenges.  Other potential heirs might seek to invalidate the trust claiming that you were not of sound mind.  Therefore, always give good reasons in the trust document for the amount you transfer to a pet trust.  This will substantiate your good judgment and enforce the pet trust in case of a conflict.

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