May 13, 2013

“There is nothing permanent except change.” -Heraclitus

Authored by: Paul J. Sowell Just when those impacted by the moving target that was the gift and estate tax exemption collectively sighed in relief at the passage of the fiscal cliff deal, it appears the celebration may have been premature.  President Obama recently released his proposed budget for 2014 where he seeks to revisit the exemption amounts. Under the President’s proposed budget, the gift and estate exemption would be reduced to the 2009 level of $3.5 million and the estate tax rate would be set at 45% starting in 2018.  In addition to fiddling with the gift and estate… Read more

Apr 16, 2013

You Are Not Finished With Your 2012 Gifting Until You File Your Gift Tax Return

Authored by: Neeli G. Shah Many opportunistic taxpayers rushed to make year-end gifts during 2012. As a result, a record number of 2012 gift tax returns are expected to be filed in 2013. These returns were due yesterday, April 15, 2013, although the due date can be automatically extended by six months.  The importance of accurately reporting and timely filing a 2012 gift tax return should not be understated, even if no gift tax is expected to be due.  This is especially true if you made gifts to a trust for the benefit of your grandchildren; gift-split with your spouse;… Read more

Jun 21, 2012

Wandry – A Significant Step Forward for Defined Value Clauses

Authored by: Neeli G. Shah On March 26, 2012, the United States Tax Court issued a memorandum opinion in Wandry v. Commissioner, which was an important taxpayer victory in the world of defined value clauses (“DVC”).[ref]This article only focuses on certain aspects of the Wandry case.  Clients and taxpayers must fully review the entire case or consult at tax professional prior to using DVCs for personal estate and gift tax planning purposes.[/ref]  A DVC is a formula clause that allows the taxpayers to determine a gift’s fair market value, for federal gift tax purposes, by referencing a fixed dollar amount… Read more

May 24, 2012


Authored by: Steven A. Richman Eduardo Savarin, one of Facebook’s co-founders, recently announced that he renounced his U.S. citizenship in September of 2011, several months in advance of Facebook’s initial public offering (“IPO”).  The resulting tax consequences (not to mention the political fallout from Washington) offer an interesting case study into the Internal Revenue Code’s expatriation rules, which are covered in Section 877A. Per Section 877A, individuals who are “covered expatriates” are treated as selling all of their assets for their fair market value (e.g., mark-to-market) upon their expatriation (thereby triggering income tax on any built-in-gain), even if they don’t… Read more

May 8, 2012

Disposition of Digital Assets: Reasons for Digital Estate Planning

Authored by: Neeli G. Shah Death in the digital age is a lot more complicated than it used to be.  Traditionally, fiduciaries and family members start administering an estate by reading the individual’s mail and sorting through records at the person’s home.  However, with online accounts and paperless billing, these traditional approaches may not be available to fiduciaries today.  The information needed to locate and access tangible and digital assets is often in the digital world itself.  Email accounts are typically the primary access point to all other online assets.  Online statements, notifications, messages, paperless bills etc., will all come… Read more

Apr 18, 2012

Failing to do Succession Planning in New York Based Professional Corporations May Cause Big Problems Later

Authored by: David L. Fox It is common for lawyers to advise their clients when setting up a professional corporation to adopt a shareholder’s agreement. Such agreements, if well prepared, will provide a road map on how to resolve disputes when they arise, and provided a means for orderly succession when one or more of the professional shareholders leaves the business, becomes incapacitated or dies. While many lawyers give such advice, a surprising number of professionals fail to adopt such agreements. Even those that do adopt such agreements may fail or refuse to make the hard choices in these early… Read more

Apr 2, 2012

Going… Going… Almost Gone

Authored by: Paul J. Sowell, Esq. In a day of shrinking state coffers you would think that more and more states, in a last chance to grab revenue, would be looking to the estates of their deceased wealthy residents as a source of money.  Actually, you would be wrong. The growing trend among states which have a gift and/or estate or inheritance tax regime has been to repeal these onerous taxes.  Why would this be you may ask? An interesting study published this year by the Beacon Center of Tennessee looked at Tennessee’s death and gift taxes and concluded the… Read more

Mar 2, 2012

Turnover of Estate Property

Authored by: Dorothy J. Santos One major responsibility of an estate fiduciary is to collect the assets of the estate.  Normally, this process is relatively straightforward, especially if the fiduciary is knowledgeable about different types of assets and comfortable dealing with various types of financial institutions.  However, there are undoubtedly times when the fiduciary has to fight to collect an asset or assets belonging to the estate.  This can occur when there are merely different beliefs as to the technical ownership of property or when property was somehow diverted from the decedent or estate by a third party. In New… Read more

Feb 6, 2012

Encrypted Swiss Bank Files

Authored by: Scott A. Harty The U.S. government continues to levy immense pressure on the Swiss banking system, and the Swiss banks, historically renowned for their secrecy, continue to show cracks.  On January 30, 2012, eight Swiss banks acquiesced to intensified pressure from the U.S. and handed over data on many U.S. clients suspected of tax evasion.  The data includes millions of emails between various bankers and their clients (and, by necessity, the names of those parties involved).  While the data was handed over to avoid potential prosecution by the U.S. government, the data was provided in a heavily encrypted… Read more

Feb 2, 2012

Poisonous Estate Planning

Authored by: Dorothy J. Santos Here’s a case for making sure you choose the right spouse and friends in life. A New York State court recently held a widow and her two friends liable in connection with the production of a “sham” Will for the widow’s deceased husband and its admission to probate.  The court’s decision illustrates a terrible family tragedy and the grave consequences of failing to follow the law in this area and doing “favors” for friends or family. After the death of the widow’s husband in 2005, the widow convinced her two friends to witness a fake… Read more