Nasdaq:  “House Democrats are retreating from a plan to move permanent estate tax legislation by the end of the year, spooked by high unemployment and budget deficits.  Members of the House Ways and Means Committee said that instead they hope to move legislation that extends current estate tax levels for one year. They could then revisit a permanent fix to the estate tax in 2010, when other tax cuts enacted under the administration of former President George W. Bush are slated to expire.”

Bloomberg:  “The imminent expiration of the federal tax on multimillion-dollar estates and a pledge by congressional Democrats to renew it retroactively next year marks a new phase in an ongoing battle over the levy.  Senate Finance Committee Chairman Max Baucus yesterday [December 16, 2009] said Congress will seek to restore the tax retroactively in 2010 after Republicans objected to his efforts to adopt a stopgap measure to extend the current law for three months.”

Forbes:  “Lawyers see litigation and administrative nightmares resulting from political impasse.  Barring a last-minute political deal, the federal estate tax is set to disappear as of Jan. 1, 2010–for just one year. Democratic leaders of Congress are vowing to resurrect the tax retroactively sometime next year, but the impending lapse has estate planners in a tizzy. They worry the lapse could turn into a nightmare for some families.  ‘We may have to change every other client document,' laments Carol Harrington, the head of the Private Client Group at McDermott Will & Emery.

Estate of Denial:  “As U.S. Senate leaders try to wrap up the debate over governmental control of health care, some dangerous characters are lurking in the wings.  Grave robbers, property poachers, walker stalkers and other opportunists seeking to loot estates are likely applauding this move. Disgruntled family members, wannabe heirs or unscrupulous members of the legal industry will find Obamacare helpful with Involuntary Redistribution of Assets (IRA) actions in which probate venues or instruments like wills, trusts, guardianships and powers of attorney are used to divert assets from intended heirs or beneficiaries.”

Wall St. Journal:  “A key Democrat in the U.S. House of Representatives said he believes the estate tax will be repealed as scheduled Jan. 1, as House and Senate negotiators tried to strike a deal on a two-month extension to block repeal of the tax.  Rep. Earl Pomeroy (D., N.D.) said plans to include a temporary extension of the estate tax in end-of-year defense-spending legislation have been dropped because of Senate opposition.”

Washington Times:  “Battles under way in Congress and the courts.  As the end of 2009 draws near, Congress is racing to meet self-imposed deadlines to pass a climate bill and health care reform by the end of the year. But the clock is running out on another serious issue if Congress doesn't do anything to fix the law by Dec. 31.  Next year one of the most reviled and cumulative taxes in the federal code – the death tax – gets phased out pursuant to tax-cut legislation passed in 2001. The death tax, politically known as the estate tax, is set to disappear for one year at the end of 2009 if no congressional action ensues before then.  But this victory is fleeting, and, like

Washington Business Journal:  “The House passed legislation that would permanently extend this year's estate tax rates and exemptions, but the Senate may not act on the bill before Jan. 1.   If an estate tax bill isn't enacted by then, the federal tax on inherited assets would go away in 2010.  The tax, however, would be scheduled to return in 2011 at much higher rates and lower exemptions. . . . it's not clear whether that chamber will address the estate tax's future before the end of the year.”

The Probate Lawyer Blog:  “Tom Carvel was the creator of soft serve ice cream and one of the founding fathers of the franchise system in America.   When his ice cream truck suffered a flat tire in New York in 1934, he sold his melting ice cream from a parking lot. Those humble beginnings led to the first soft-serve ice cream store and eventually grew into the Carvel ice cream chain with 850 locations.  Carvel died in 1990 at age 84, with a fortune conservatively estimated at around $80 million.   The legal fighting started soon thereafter.  And it hasn't stopped yet.  The battles have passed through federal courts in three states, along with state courts in New York, Florida, Delaware, and even England (not

The Independent World:  Liliane Bettencourt, 87, has given her friend François-Marie Banier, 62, “an estimated €1bn in cash, paintings and life insurance policies.  A French court will consider . . . whether there is prima facie evidence that Mr Banier has systematically abused the “weakness” of an elderly and, it is alleged, mentally confused woman. . . . Ms Bettencourt's only daughter, Françoise Bettencourt Myers, began the legal action two years ago.  Liliane Bettencourt, 87, is France's richest woman and the principal shareholder of the world's largest cosmetics company, L'Oréal.”

American Statesmen:  “The estate of legendary Houston lawyer John O'Quinn, killed in a one-car accident in October, has agreed to pay $46.5 million to almost 3,500 former clients, ending a legal scrap begun 10 years ago by Austin lawyer Terry Scarborough.  The proposed settlement gives Scarborough a lifetime 3-0 record in breast implant-related lawsuits against O'Quinn, a flamboyant and effective trial attorney Fortune magazine once dubbed a “lawyer from hell.” O'Quinn's law firm took billions of dollars from breast implant manufacturers, tobacco companies, makers of the diet drug combination fen-phen and other big businesses.”

Wall St. Journal:  “In less than three weeks, the hated death tax is scheduled to expire—with the rate falling from 45% to zero for 2010.  Then the tax will be resurrected in 2011 at a rate of 55%.  This bizarre policy dates back to 2001 when Democrats wouldn't let President Bush permanently kill the death tax, so Republicans bet that if the tax were eliminated for one year, it would never come back. . . . most Americans think that it is immoral for the government to confiscate the fruits of a life's effort merely because of the fact of death.”

Question:  I am an Arizona resident in the process of getting a divorce.  If I form an Arizona limited liability company before my divorce is final, will my wife own a community property interest in my interest in the new LLC? Answer:  It depends.  How's that for a lawyer answer.  Arizona Revised Statues Section 25-211.A defines community property.  It states: 25-211. Property acquired during marriage as community property; exceptions; effect of service of a petition. A.   All property acquired by either husband or wife during the marriage is the community property of the husband and wife except for property that is: 1. Acquired by gift, devise or descent. 2. Acquired after service of a petition for dissolution of marriage, legal separation or annulment if the

CNN:  “Michael Jackson's father will have to wait until next month before a judge decides whether he'll get a monthly allowance from the pop star's estate.  Joe Jackson, who was not included in his son's will, is asking for as much as $20,000 a month.  At a hearing Thursday, Los Angeles County Superior Court Judge Mitchell Beckloff delayed arguments until January 28, because not all of the lawyers involved had been notified.”

Tax Girl:  “Taxpayer asks:  Can you tell me what the tax implications are for donating inherited items? My mother passed away about a year ago and I’m the executor of the estate. Now, my siblings are interested in taking deductions for items they feel they “inherited,” yet were actually immediately donated to charity without my siblings ever having taken actual possession of the items. Is this legal? No documentation exists showing a transfer of the property to the beneficiaries so it could be argued that the items were actually donated by the Estate.  Taxgirl says:  I can’t tell you how many times this comes up in an estate

Wealth Strategies Journal:  “One common issue facing those who create trusts is how to protect beneficiaries from creditors. One of the biggest, baddest creditors out there is the Internal Revenue Service (IRS or Service), wielding two weapons of mass collection: the federal tax lien and the federal tax levy. These weapons regularly pierce boilerplate spendthrift provisions. Discretionary trusts do not fare much better. Court decisions over the past ten years make it increasingly likely that even pure discretionary trusts contain clauses that traitorously turn over the treasure house keys to the federal tax lien. Once the lien attaches, the IRS can enforce it through either administrative or judicial attachments, blowing through state law barriers that keep out other creditors.” This Article offers some ideas on

Yakima Herald:  “Eric Gustafson has seen it too many times.  Families estranged or survivors forced to spend large sums of money in the absence of an estate plan or — just as importantly — a plan that hasn't been updated to account for changed circumstances such as divorces or deaths.  Such plans should include a durable power of attorney for health care and finances, a will, a community property agreement for a couple and, in some cases, a revocable trust.”

Wall St. Journal:  “Videos offer a chance for the dying to offer some final thoughts—as well as head off legal disputes.   Some individuals have found a way to breathe life into dry estate-planning documents:  They're supplementing them with personal messages via video.”

Commerce Clearing House prepared a summary of the recent federal estate tax bill passed by the House of Representatives on December 3, 2009.  The bill is called the Permanent Estate Tax Relief for Families, Farmers, and Small Business Act of 2009.  CCH has issued a Special Tax Briefing on the House bill's provisions which, if adopted by the Senate, will provide certainty for estate taxes and estate planning, largely by freezing the status quo as of this year.   The bill provides: $3.5 million estate tax exclusion amount Top estate tax and gift tax rate of 45 percent Not indexed for inflation No portability of spouse’s unused exclusion Continuation of stepped-up basis Permanent repeal of state death tax credit

The age.com.au:  “TWO penniless brothers who live in a cave outside Budapest are to inherit most of a reported $A7.2 billion after an astonishing twist in their family fortunes.  Zsolt and Geza Peladi have no fixed address and eke out an existence by selling junk they find in the street.  But their scavenging days are about to be over. The brothers have been told they are entitled to their long-lost grandmother's fortune, along with a sister who lives in America.  Charity workers in Hungary broke the news to them after being contacted by lawyers handling the estate of their maternal grandmother who died in Baden-Wurttemberg, Germany.”