Authored by: Roy P. Kozupsky, Esq. It is always interesting to follow important trends in how affluent families think about their wealth and plan for how it is transferred to the next generation. Thus, a recent study by U.S. Trust* is important to take note of.  The nationwide survey studied 450 affluent families with $3 million or more in investible assets (excluding the primary residence).  Detailed below are some of the more interesting findings. LESSONS TO BE LEARNED: HARD WORK PAYS OFF! Over three-fourths of those studied accumulated their wealth through earned income from their occupation. Only a minority of… Read more

Authored by: Neeli Shah  OVERVIEW On February 8, 2011, the U.S. Internal Revenue Service (“IRS”) announced a new voluntary disclosure initiative designed to bring additional taxpayers back into compliance and offshore funds back into the United States tax system.  The IRS’s new program, formally titled the “2011 Offshore Voluntary Disclosure Initiative” (“2011 OVDI”), which has a deadline of August 31, 2011, covers eight tax years (2003–2010) and includes a penalty structure that is harsher than the previous program (the 2009 Offshore Voluntary Disclosure Program or “2009 OVDP”). The IRS’s 2011 OVDI has the following general requirements: A miscellaneous offshore penalty… Read more

Authored by: Dorothy J. Santos In order for a person to contest a Will in New York, he or she must have grounds – that is, a reason based in the law that the Will is invalid and should not be admitted to probate.  The most common grounds for challenging a Will are improper execution, lack of testamentary capacity, and undue influence.  Although each of these common grounds are often (or almost always) alleged in the beginning of a Will contest, lack of testamentary capacity and undue influence are the most hotly-litigated grounds. Due Execution – Not Just a Formality…… Read more

Authored by: Neeli Shah In two recent Tax Court cases, the Tax Court agreed with the IRS and included the decedents’ interest in certain real property (that the decedents thought they had transferred during life) in their respective gross estates.  This illustrates that taxpayers have not fully understood and embraced the concept that “you cannot hold strings to property you once owned without having it included in your taxable estate.” In Estate of Adler v. Comm’r, T.C. Memo 2011-28 (Jan 31, 2011) the Tax Court agreed with the IRS and not only included the entire value of Mr. Adler’s ranch… Read more

Authored by: Dorothy J. Santos It is sometimes necessary during the course of the administration of an estate or trust for a fiduciary to request that a Court determine the legal result of certain provisions of the governing document.  This is done through a process known as a Construction Proceeding.  In such cases, the fiduciary asks the Court to construe one or more provisions of the governing document so that the fiduciary can properly carry out the intent of the creator. As you may suspect, Courts exercise this power sparingly and give great deference to the wishes of the creator of the document.  For instance,… Read more

Authored by: Neeli Shah While the 2010 Tax Act signed by President Obama on December 17, 2010 creates significant opportunities, it also creates dilemmas for wealthy families who are considering whether and how to take advantage of such opportunities.  The 2010 Tax Act raises the tax-free limit on lifetime gifts from $1 million to a hefty $5 million ($10 million for married couples) before a gift tax applies.  When it does, the rate is a maximum of 35%. Many wealthy families are contemplating whether they should rush to make large gifts to their kids during the next two years in… Read more

Authored by: Michael C. Levy, Esq. With less than a third of 2010 remaining, we once again find ourselves on the verge of a major change to the federal estate tax system.  If Congress fails to pass estate tax legislation by the end of the year, the estate tax will return on January 1st with a $1 million exemption per decedent and a maximum tax rate of 55%.  That’s the bad news.  The good news is that in addition to the estate tax returning, the rules regarding “step up” basis will return, replacing the current carry-over basis rules which are… Read more