Authored by: Paul J. Sowell, Esq. A recent amendment to New York law gives more Trustees the ability to fix or otherwise change the terms of a trust.  Specifically, Governor Andrew M. Cuomo recently signed a bill amending Section 10-6.6(b) of the Estates, Powers and Trusts Law, commonly referred to as New York’s “decanting” statute.  In this context, decanting is the process of a Trustee distributing trust property from one trust to another.  Decanting is oftentimes used to change the terms governing an irrevocable trust by distributing trust property from a “broken” or antiquated trust to a newly-created trust with… Read more

Authored by: Dorothy J. Santos A tax apportionment clause, the provision in a Will or Revocable Living Trust governing the payment of estate tax at death, can drastically affect the disposition of your estate and the shares that your beneficiaries receive.  This provision is not mere “boilerplate” and should be fully discussed (and understood) with one’s counsel when the Will or Trust is being prepared. A recent Surrogate’s Court decision in New York demonstrates the importance of the tax apportionment clause and its coordination with the other provisions of the document.  In Matter of Sued, the Executor of the decedent’s… Read more

Authored by: Dorothy J. Santos A recent amendment to New York’s renunciation statute provides a new estate tax planning opportunity to owners of certain types of joint property.  A renunciation (or disclaimer) generally refers to the process of giving up an interest in another person’s property.  Renunciations are often used in the estate tax planning context to carry out the terms of an estate plan.  This recent change in the law may help owners of certain types of joint property to carry out the terms of their estate planning, thereby decreasing their estate tax liability. Under prior law in New… Read more

Authored by: Neeli Shah Loans among family members, especially from parents to children, have recently become a more popular estate planning strategy due to the current low interest rate environment, which makes intra-family loans a valuable tool for both lenders and borrowers.  Lenders won’t have large amounts of taxable interest income to report, and borrowers may have lower interest rates under the Applicable Federal Rates, as explained below.  While intra-family loans are indeed important tools in the broad array of estate planning strategies available to families to transfer wealth to the next generation, most clients are not aware of the… Read more

Authored by: Dorothy J. Santos A recent amendment to New York law gives more Trustees the ability to fix or otherwise change the terms of a trust.  Specifically, Governor Andrew M. Cuomo recently signed a bill amending Section 10-6.6(b) of the Estates, Powers and Trusts Law, commonly referred to as New York’s “decanting” statute.  In this context, decanting is the process of a Trustee distributing trust property from one trust to another.  Decanting is oftentimes used to change the terms governing an irrevocable trust by distributing trust property from a “broken” or antiquated trust to a newly-created trust with new… Read more

Authored by: Dorothy J. Santos In our last post, RAINBOW GETS ITS POT OF GOLD, we discussed the likely effect of New York’s new Marriage Equality Act on the state’s estate tax law as it applies to same-sex married couples.  At the time the new law became effective on July 24, 2011, it was clear to us what its effect on the state’s estate tax law should be, but we have been awaiting a pronouncement by New York’s tax department to confirm our assessment.  Our uncertainty was rooted in linkage between the New York’s estate tax law and federal estate… Read more

Authored by: Dorothy J. Santos Although New York is not the first state to legalize same-sex marriage, it is the largest state to confer these rights.  New York’s same-sex marriage law will not only change the day-to-day lives of same-sex couples in New York but will also likely fuel the gay-rights movement given the state’s size and influence on the legislation of other jurisdictions.  The new law will also drastically affect the estate planning of same-sex couples and the rights of the survivor at the other’s death.  Existing Law Under existing law in New York, a same-sex couple cannot enter… Read more

Authored by: Neeli Shah Watch out, you may be subject to gift tax. The Internal Revenue Service (“IRS”) is paying significant attention to certain tax-exempt entities organized under Sec. 501(c) of the Internal Revenue Code (“Code”) and the donors who contribute to these tax-exempt organizations. The recent Supreme Court case, Citizen United v. Federal Election Commission, 558 U.S. 50 (2010), invalidated long-standing prohibitions in federal campaign finance law on corporate and labor union campaign spending.  As a result, Code Sec. 501(c)(4) tax-exempt organizations (commonly referred to as “social welfare organizations”) have seen an increase their level of political involvement, and… Read more