Tuesday, February 26, 2013

TIDYING UP YOUR ESTATE PLAN IN 2013

It is well established that an individual is entitled to direct the disposition of his or her property upon death in accordance with that individual’s own desires.  With a few exceptions, there is no legal requirement that a person’s property be left to his or her heirs at law.  Perhaps a person chooses to leave a portion of his or her estate to a friend or confidant, or even to a favorite charity.  Often times, when a person determines to leave property to someone other than a family member, the estate planning attorney will take care to properly document the file to make clear that the person was making a conscious decision to leave his or her property in the manner set forth in the documents.
 
Generally speaking, estate planning documents such as trusts and wills are designed to reflect the wishes of the person or persons creating the documents.  There are times, however, when we are contacted by a deceased person’s legal heir based upon concerns by the heir that the documents presented do not in fact represent the wishes of the person who has passed away.  In these cases, it is important for the attorney to work with the concerned family members to gather all of the available information surrounding the preparation and execution of the estate planning documents by the deceased person.

In Nevada, there are basically two grounds to contest a trust or will.  The first basis is lack of testamentary capacity; and the second one is undue influence.  There are legal guidelines to help determine if a person had legal capacity to execute a trust or will.  As a threshold matter, an individual must be of “sound mind” at the moment he or she signs the will.  In addition, the person would need to know the extent of his or her property, as well as to whom such property would normally be expected to pass absent any estate planning.  The person would also need to understand the legal implications of executing the trust or will.  The test for undue influence, on the other hand, focuses on whether or not the person was acting freely or, rather, pursuant to the influence of one or more other persons.  Undue influence occurs when the will of another person overrides the will of the  person making the trust or will based upon factors such as coercion, duress and/or fraud.
When it appears that there are sufficient grounds to contest the making of a trust or will, an interested person has the option to file a trust or will contest with the court.  Such contest proceedings are typically conducted similar to most civil cases, in that all parties will be given an opportunity to tell their side of the story and present evidence in support of their position.  Witness testimony is common, and medical evidence often plays an important role in these types of proceedings.
 
Trust and will contest actions should not be taken lightly.  It is important to thoroughly discuss the risks and benefits of bringing such an action with an attorney who is knowledgeable in handling these unique types of cases.  There may be certain limitations on the time in which an action may be filed.  Additionally, there are costs and expenses associated with any court proceeding.  Moreover, there often exist “no contest” clauses in trusts and wills that will need to be carefully reviewed and considered prior to bringing a contest.

For the most part, the estate planning documents that a person leaves behind are truly reflective of his or her desires.  There are, however, a handful of instances in which a trust or will contest is clearly warranted.  When there do exist concerns regarding the validity of any estate planning document, we encourage you to review any such concerns with one of our qualified attorneys without delay to preserve and protect your rights going forward.
 

Thursday, February 21, 2013

AFR's for March Announced

The Section 7520 rate is 1.4%
The AFRs Annual Semi-annual Quarterly Monthly
are as follows
Short-term 0.22% 0.22% 0.22% 0.22%
Mid-term 1.09% 1.09% 1.09% 1.09%
Long-term 2.66% 2.64% 2.63% 2.63%

Tuesday, February 12, 2013

Vegas, Inc. 2/4/13 Top Tax Attorneys Article

Jeffrey Burr & Associates attorneys, from left, Collins Hunsaker, Jason Walker, Corey Schmutz and Jeff Burr pose in the Law Firm of Jeffrey Burr & Associates, 2600 Paseo Verde Parkway, Henderson, Tuesday, January 29, 2013.
 

 Read about us at http://www.vegasinc.com/news/2013/feb/04/minimizing-pain-lawyers-job-save-you-money-and-mig/
 

Parents and Children - Living Together

Confirming what many have suspected, the Census Bureau has released figures that increasingly seniors are living in multi-generational families. These are families where grandparents, parents and often grandchildren share a home together.

Certainly, the economic downturn has provided some of the impetus for these increasing numbers, but other factors seem to be contributing as well. When a surviving parent can no longer drive, for example, or is experiencing mild dementia, or has suffered a stroke, it is now quite common for a senior to move into an adult child’s home. According to the Pew Research Center, nearly 30% of seniors will at some point live in a multi-generational household.

AARP reports joined households can be a positive experience for everyone. While the economic and care benefits are obvious, the multi-generational family has an opportunity to bond in a manner uncommon in our busy world. Children, and especially grandchildren, come to know their grandparents in ways they might not otherwise experience.
Even so, the multi-generational family in not without its challenges. Grandparents might not feel comfortable in an adult child’s home. They will not be "the boss" and there may be differences over pets. And if there are teenagers in the home, there are certain to be differences in social norms and expectations, not to mention noise.

The adult child must understand the needs and demands of the parent. There are likely to be additional time, energy and possibly even financial demands in sharing their home with an aging parent. Not infrequently these dynamics can add stress to a marriage. And adult families often underestimate the amount of care Mom might require. Even if Mom is healthy when she arrives, her care needs could change overnight.

Both generations should talk through these issues prior to making a decision to share a multi-generational home. Our office suggests the list of topics might include privacy and space allocation, shared meals, recreation, chores and especially finances. Shared cost for meals, utilities, phone and cable bills, or even a home addition, is certain to make a parent not so much an intruder, but rather a partner in the home.
 
Another issue is what to do with a parent’s furniture and possessions. Our office recommends the family plan a 6 month trial to ensure the new arraignments will work to everyone’s satisfaction. During this time it is wise to put the bulk of the furniture in storage and defer any decision as to its disposition until a later date.
 
Obviously, these are only a few of the considerations for a family thinking of a multi-generational household. Should your family be planning for your future home together, our experienced attorneys and staff are here to help ensure its success.
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Adapted from Kiplinger’s Retirement Report
 

Wednesday, February 6, 2013

Portability Is Made Permanent

The American Taxpayer Relief Act (2012 Taxpayer Relief Act) was signed into law on January 2, 2013. The Act in part permanently increased the federal estate tax exemption to $5,000,000.00 to be indexed annually for inflation (which is $5,250,000 for 2013) and established a top tax rate of 40%. As part of the new law, “portability” was also made permanent. The portability aspect of the law did not receive the publicity or attention the other aspects of the law did.  Many persons and some professionals are not familiar with portability, which permits the federal estate tax exemption to be “portable” between a husband and wife.  Portability is only available to the surviving spouse of the decedent and no other. When one spouse dies, the surviving spouse can preserve the deceased spouse's unused exemption amount for use in the future when the surviving spouse dies.  This unused exemption amount is added to the surviving spouse’s own exemption in effect at the time of his or her death.  For example, Jim Smith dies in 2013 when the federal estate tax exemption is $5,250,000.00.  He leaves a surviving spouse, Mary Smith.  Jim’s taxable estate is $3,250,000.00.  The $2,000,000.00 unused portion of Jim’s federal estate tax exemption ($5,250,000.00 exemption less $3,250,000.00 taxable estate) is portable to his surviving spouse, Mary, to be used by her in the future.  If portability is elected in Jim’s estate and Mary subsequently dies in 2013, her total federal estate tax exemption is $7,250,000.00 ($5,250,000.00 exemption plus Jim’s unused exemption of $2,000,000.00). However, portability must be properly elected by the successor trustee of Jim’s trust or the personal representative of his estate by timely filing a Form 706, United States Estate Tax (And Generation-Skipping Transfer) Tax Return, for Jim’s estate.  Mary can also utilize Jim’s unused tax exemption against any tax liability that would otherwise arise from subsequent lifetime gifts made by her.  Portability is an important and valuable estate planning tool to be considered when a person dies with a surviving spouse.