USA Today: “Nearly 60% of Americans don't have a basic will. There are all kinds of reasons for this oversight. Some people just haven't gotten around to creating a will or trust. Others think they don't need an estate plan because they don't have much. Some people fear that as soon as they write a will, they'll die. . . . And if you die without an estate plan, you could leave a legacy of bad feelings and attorneys' fees.”
Wall St. Journal: Kelly Greene answers the following questions in an article dated October 24, 2009:
“If I leave a Roth IRA to my wife, does she have to make required withdrawals every year? And if my wife then names our two adult children as equal beneficiaries of the same Roth IRA, as long as it hasn't been depleted at the time of her death, can they split it 50-50? How should they retitle the IRAs? Assuming they have to take required distributions, how would this work? And given the fact that they would have to title these accounts as inherited IRAs, would they have full authority to manage and direct the allocations of their portfolios?”
New York Times: “While Brooke Astor’s son and a lawyer who worked on her estate face prison time after a jury convicted them of defrauding and stealing from her, experts say the verdict may be felt by others: namely, the people who make wills and the lawyers who help them. The trial has certainly provided talking points for estate planning experts across the country . . . . “
Wealth Strategies Journal: “We insure our life, health, our houses, our cars, teeth, eyes, our jewelry, our art, our voices, our pets ……. why not our stocks and bonds? . . . In this article the term portfolio insurance should be reckoned the very same way as we think of insurance – protection against or the mitigation of pure loss.”
Mail Online: “An icy atmosphere has descended across the vast marble halls of the Palazzo Doria in Rome of late. Amid the Renaissance cloisters, the scent of lemon trees and the gentle sound of birdsong have done little to disguise the family drama being played out within its walls. The Palazzo is home to Prince Jonathan Doria Pamphilj and his sister Princess Gesine, who had been abandoned as babies in a London orphanage and adopted in the Sixties by a London-born Italian princess and her British naval officer husband. The rags-to-riches story of how they were rescued from poverty and brought up in the lap of luxury in the Italian capital is a romantic tale which, by any reckoning, deserves a happy ending.”
CNN: “Michael Jackson's mother fired the lawyers helping her fight for control of her son's estate, but her new lawyer missed a key hearing where the judge gave more power to the men she is opposing.”
The Probate Lawyer Blog: “The Associated Press submitted a Freedom of Information Act request to the FBI and received hundreds of pages of documents that revealed how the FBI investigated Anna Nicole in 2000 and 2001 as a suspect in a murder plot against her late husband's son. She and the son had been fighting over the multi-billion dollar estate of Anna Nicole's 90-year old husband since he died in 1995. The FBI suspected she may have hired a hit-man to commit murder!”
the fight over Howard Marshall's money is not over, even though it started 14 years ago. Even in death, the two are battling — but now, their estates are duking it out.
The Probate Lawyer Blog: “The Michael Jackson probate dispute between his mother and his two executors has been active since it started this summer. But it looks like it's about to really get heated up.”
Wall St. Journal: “Changes in the Way Inherited Assets Are Valued Could Cost Heirs and Cause Hassles – Many people hope the federal estate tax will disappear next year, as scheduled. They could be sorry if it does. Back in 2000, Congress enacted a gradual loosening of the estate exemption. It has since risen to its current level of $3.5 million per individual, or up to $7 million per couple. The tax is scheduled to lapse just for next year and return in 2011.”
New York Times: This October 22, 2009, story summarizes the recent history of the federal estate tax and includes a graph that shows the historical relationship between the estate tax exemption amount and the percentage of deceased Americans who are subject to the tax.
Forbes.com: “Seven steps to make sure your family doesn't end up like the Astors. The recent fraud and grand larceny conviction of socialite Brooke Astor's son, Anthony Marshall, highlights how dangerous a power of attorney can be in the hands of an abuser. Among the 14 counts the New York jury found Marshall guilty of: misusing his power by giving himself a retroactive $1 million raise to manage his mom's finances. . . . The Astor case is a reminder to families that it's important to make sure you get this basic estate and disability planning document right.”
Wall St. Journal: “Have you checked your will lately–or your spouse's? If not, there may be a trap lurking in the language that could cause an unintended calamity after death.”
UPI.com: Author Michael Crichton's daughter filed papers with the probate court asking that the court remove her step-mother as a trustee of the deceased author's estate. Crichton was a prolific author whose works include “Jurassic Park” and “ER. ” He was in the process of updating his estate plan, but died before he could complete the revisions.
See also the Probate Lawyer Blog article called “Family fight over control of Michael Crichton's trust.”
Attorney Jonathan G. Blattmachr and Scott A. Nammacher have written an article in which they examine HR 436, a bill introduced by Representative Earl Pomeroy (D. North Dakota). This bill “would have significant impact on the value of interests in real estate, investment holding and possibly operating entities, for estate and gift tax purposes. This echoes proposals made during the Clinton Administration. Certain aspects of the proposed bill seem to be difficult to discern and further refinements and debate are surely going to come if it moves forward in committee. But, if enacted, it or similar bills, will likely will change the valuation of these kinds of “property,” in many cases.”
Arizona Republic: Columnist Russ Wiles writes “Anyone who has signed a financial-incapacity document has to be squirming a bit over Brooke Astor's estate case. Her son, Anthony Marshall, recently was convicted of stealing millions of dollars from Astor while she suffered from Alzheimer's disease before her death. Although the case largely centered on a contested will purportedly signed by Astor, other estate-planning issues also came into play.”
There was a recent taxpayer victory involving transfers of interests in a limited liability company and valuation discounts. The United States Tax Court case of Suzanne J. Pierre v. Commissioner of Internal Revenue, 133 T.C. No. 2 (2009), found that “the transfers are to be valued as transfers of interests in [the] LLC, and [the] LLC is not disregarded under the ‘check-the-box' regulations to treat the transfers as transfers of a proportionate share of assets owned by LLC.” The IRS wanted the opposite result so it could disallow valuation discounts taken for lack of control and lack of marketability.
P transferred cash and publicly traded securities to LLC, a New York limited liability company, in exchange for a 100-percent interest in LLC. P subsequently made four transfers of her interest in LLC to trusts established for the benefit of her son and granddaughter: P transferred as a gift a 9.5-percent interest in LLC to each trust and then sold a 40.5-percent interest in LLC to each trust in exchange for a promissory note. In valuing the transfers for Federal gift tax purposes, P applied substantial discounts for lack of marketability and control and therefore paid no gift tax on the transfers.
R argues, inter alia, that the transfers should be treated as transfers of the underlying assets of LLC because a single-member limited liability company is a disregarded entity under the “check-the-box” regulations of secs. 301.7701-1 through 301.7701-3, Proced. & Admin. Regs.
Held: For purpose of application of the Federalgift tax, the transfers are to be valued as […]
Independent.ie: “Two British orphans who were plucked from obscurity by an Italian princess and given the names Prince Jonathan and Princess Gesine are fighting each other in court to decide whose children will inherit the family's magnificent Renaissance palace and £1bn (€1.068bn) fortune. . . . When the princess died at the age of 78 in December 2000, the two children inherited her 1,000-room palazzo in the centre of Rome, another in Genoa, 14 noble titles and one of the world's greatest art collections, including works by Raphael, Titian and Caravaggio.”
Tax Analysts: “In less than 100 days, the estate tax goes on hiatus for a year. The buzz in Washington, as well as within the trusts and estate bar, is about three possible options for Congress.”
Washington Supreme Court: “Albert M. Luth devised all of his real property in Benton County, Washington, to the Kennewick Public Hospital District (Hospital) in perpetuity so long as the property was not ‘transferred, incumbered [sic] or otherwise alienated from the purposes herein expressed and intended.' . . . The property was to go to Benton County (County) or the State of Washington (State) if this direction was violated. That provision violates the rule against perpetuities and is therefore void. The question before us is whether the interest that remains is fee simple absolute (as the Hospital maintains) or whether, instead, it is fee simple determinable (in which case the Diocese of Olympia, Inc. . . . would have an interest under the will of one of Mr. Luth's beneficiaries). We conclude that the resulting interest is fee simple absolute in the Hospital . . . .”
The rule against perpetuities is a rule of law in most states that is derived from English law of the same name. Washington's rule against perpetuties is typical of the rule and it is:
The rule against perpetuities requires that future estates vest or fail within “a life or lives in being at the time of the testator's death and twenty-one years thereafter.”
The purpose of the rule is to prevent the control of real property from the grave. See the Court's opinion.
For more on the rule, watch one of my all-time favorite movies “Body Heat” with Kathleen Turner and William Hurt. Rottentomatoes.com compiles ratings of critics […]