My colleague, Mike Hepner (CFP, CEBS, MBA), and I were discussing the importance of taking care of your family and finances. Our discussion turned to the Parable of the Talents from Matthew, Chapter 25. This parable teaches us to be industrious and to take action today to take care of... Continue reading

This post is the first on my law practice's blog, and I will update it from time-to-time to aggregate and describe my presence on the web. With this blog I hope to educate people about how I can be useful to them as an attorney. In this respect, it is... Continue reading

The blog is coming soon. In the meantime, please let us know topics you are interested in. Continue reading

On December 6, 2010, President Obama announced that he reached a tentative deal with republicans to extend the Bush Tax Cuts and reform the federal estate tax. The writers and bloggers at Forbes.com have been covering the issue from many angles. Featured on the Forbes.com webpage are two of my recent blog posts: There are a number of other blog posts to mention, including: Brian Wingfield, How The Tax Compromise Might Affect Estate Planning, Business in the Beltway. Hani Sarji, Obama-Republican Estate Tax Deal Draws Criticism: “The Deal Is Unacceptable”, Estate of Confusion. Janet Novack, Washington's New M.A.D. Doctrine: Mutually... Continue reading

On November 29, 2010, Bloomberg published Return of Estate Tax Looms as Impediment to Extending Tax Cuts, by Ryan J. Donmoyer. Donmoyer highlights different proposals for estate tax reform: With Obama planning to meet with bipartisan congressional leaders at the White House tomorrow, three main factions have formed in the Senate, none of which has the 60 votes needed to advance an estate-tax proposal. One includes Republicans such as South Carolina’s Jim DeMint who favor permanent repeal. Another is led by Democrats including Majority Leader Harry Reid who support a top rate of 45 percent that would apply after a... Continue reading

Rep. Mike Pence [R-IN-6] and Senator Jim DeMint [R-SC] recently introduced the Tax Relief Certainty Act -- H.R. 6415 (in the U.S. House of Representatives) and S. 3975 (in the Senate). The Tax Relief Certainty Act would permanently repeal the federal estate tax. According to Rep. Pence’s website, it would “[p]ermanently repeal the immoral and unfair death tax.” The Tax Relief Certainty Act would extend other Bush Tax Cuts. For more, see my blog post on Estate of Confusion: Pence-DeMint Tax Relief Certainty Act (H.R.6415 & S.3975) Would Extend The Bush Tax Cuts. (I updated Estate Tax Bills in Front... Continue reading

On November 20, 2010, the Wall Street Journal published How to Beat the Tax That Won't Die, by Laura Saunders. This article discusses how the “tax code is giving taxpayers an incentive not to live but to die.” It also provides a few estate planning strategies. The following insight about the state of estate tax reform is informative: Resolution is nowhere in sight, although Congress is expected to raise the 2011 exemption at some point. The Bush tax-cut extension has lawmakers so tied up that they have pushed the estate tax to a back burner. According to BNA's Daily Tax... Continue reading

On November 6, 2010, the New York Times published Estate Tax Issue Offers Quick Test for Congress, by Richard H. Thaler. The article appears in the Business section under “Economic View.” The article is Thaler’s view on the estate tax. Thaler is comfortable taxing the wealthy and giving tax breaks to the middle class: Right now, no one has any idea what rules will be in place in January — or even how to interpret some particulars of the current rules, as we shall see. (And if Congress does nothing, rich relatives might want to watch their backs on New... Continue reading

Tom Herman answers the pressing question: What Will Happen to the Federal Estate Tax? (Wall Street Journal, 11/7/2010). Here is part of his answer: Q: In reading about what will happen to the Bush tax cuts in 2011, the federal estate tax is never mentioned, in my experience. Why so, and what should we expect? —N.M., Santa Cruz, Calif. A: The strange saga of the federal estate tax, dubbed the "death tax" by its foes, has drawn growing attention lately. Nobody knows what will happen -- even though the midterm elections now are history. But there is a chance that... Continue reading

On November 4, 2010, Kay Bell posted Will the estate tax stay dead? on Taxes Blog (a Bankrate.com blog). Bell writes that because of the mid-term election results, "it's looking like there will be a true fight to kill the tax forever": Pre-election conventional wisdom was that Congress would keep the estate tax, but bump up the exemption amount to $3.5 million and drop the tax rate to 45 percent or lower. Now it's looking like there will be a true fight to kill the tax forever. If the estate tax does survive in the lame-duck session, expect the repeal... Continue reading

On November 6, 2010, the Wall Street Journal published Four Burning Tax Issues, by Laura Saunders: Estate Tax Status: Chaotic. . . . This is the most difficult outcome to predict, [Clint Stretch of Deloitte Tax] says. It is unclear what a fix would be, if any, and whether it would happen as part of an income-tax compromise. There is sentiment for providing estates of people who died this year a retroactive choice of which tax rules to use. Continue reading

On November 5, 2010, NASDAQ.com published Business Groups Back Quick Compromise On Estate Tax, by Martin Vaughan: Business groups that oppose the federal estate tax say they are willing to back a short-term compromise with congressional Democrats, in order to avoid the tax returning to its highest level in 10 years. However, Republicans in Congress aren't ready to back down from their demands for an estate tax rate of 35%, setting up one of the more unpredictable tax battles in Congress's lame-duck session. A political stalemate would be the worst possible outcome for the business lobby. . . . Even... Continue reading

On November 4, 2010, NASDAQ.com published Obama Tax Agenda Likely Sidelined By GOP House Take-Over by Martin Vaughan (Dow Jones Newswires): The Republican takeover of the U.S. House will sideline much of President Barack Obama's tax agenda, including proposals to repeal tax breaks for multinational firms and oil companies. . . . But the new political landscape does little to dispel the uncertainty that has clouded the future of individual tax rates, the estate tax and popular business tax breaks like the research tax credit. Republicans are vowing to resist any and all tax increases, casting doubt on whether there... Continue reading

A number of articles are publishing comments by Rep. Cynthia Lummis [R-WY] regarding a perverse incentive in 2010 -- Estate tax rise has some planning death (Associated Press, 10/30/2010): U.S. Rep. Cynthia Lummis says some of her Wyoming constituents are so worried about the reinstatement of federal estate taxes that they plan to discontinue dialysis and other life-extending medical treatments so they can die before Dec. 31. Lummis, a Republican who holds her state's lone seat in the House, declined to name any of the people who have made the comments. But she said many ranchers and farmers in the... Continue reading

On October 20, 2010, the New York Times published, Leave the Children the House, Without a Hefty Tax Bill, by Deborah L. Jacobs. Jacobs explains that 2010 is a good year to give the house to children because the gift tax rate is at 35% in 2010 and it is scheduled to be at 55% in 2011. Jacobs provides the following strategies: Give partial interests. Use a grantor trust. Create a QPRT. Create a legal entity. Jacobs explains that there are drawbacks: Perhaps the biggest hurdle, though, is the awkwardness of having business relationships with family members . . .... Continue reading

On October 30, 2010, the Wall Street Journal published Last Chance to Foil a Gift Tax, by Anne Tergesen. This article is excellent, but its title does not reflect the great insight that the article provides on the GST tax. For the right people, there are excellent estate planning opportunities in 2010: When the GST tax returns on Jan. 1, the Internal Revenue Service will allow each grandparent to shield a total of about $1.34 million, according to JPMorgan Private Bank. Advisers are urging families with a desire to give more to take action by Dec. 31. "We're having a... Continue reading

On October 27, 2010, Bloomberg published Democrats’ Estate Tax Plan Trips Next Secretariat, an opinion by Amity Shlaes: The estate tax is one topic getting lost in the dust of the midterm races. That’s a pity. This tax, now quiescent, is set to roar back like a stallion in 2011 if lawmakers don’t rein it in with new legislation. The destruction caused by the estate tax can be hard to capture. This is partly because the family business dynamic, so affected by the tax, is also hard to describe. Nonetheless, if left unchecked, this levy can trip up not only... Continue reading

On October 28, 2010, MSN Money published Biggest-ever tax hikes just ahead?, by Jeff Schnepper. Schnepper gives his estate tax prediction: After the November election, there should be a compromise. I expect the maximum rate to phase downward from 45% to 35%. I also predict an exclusion of $3.5 million for 2010 and 2011, phasing up to $5 million with a return to full step-up in basis. I suspect the law to be retroactive for 2010, but the estates of those dying before passage could follow the current zero-estate-tax rules. Continue reading

On October 26, 2010, the Los Altos Town Crier published 2010: Not the year to die, by Artie Green. Green believes that 2010 is not a good year to die because in 2010 carryover basis rules replaced the typical step-up in basis rules that apply when someone dies: The year 2010 is not the time to die. No, I’m not talking about you – I’m talking about your rich Uncle John. . . . “Wow!” you might be thinking. “That sounds great! If there’s no more estate tax, that leaves more money for me to inherit from his estate, doesn’t... Continue reading

On October 21, 2010, FoxBusinessNetwork posted 2010: A Good Time to Go on YouTube. The advice might sound callous, but Neil Cavuto gives reasons for it. Continue reading

On October 20, 2010, Ashlea Ebeling posted A 60% Estate Tax Rate Could Be Around The Corner on The Best Revenge – Forbes. Ebeling explains why, for some people, the top estate tax rate in 2011 is scheduled to be at 60%, not 55%: So where does the 60% rate come in? A 5% federal surtax, in addition to the 55% rate, applies to estates with assets between $10 million and $17.184 million. The surtax (for estates that pay all of it) wipes out the benefit of both the lower marginal rates applicable to the first $3 million of an... Continue reading

On October 18, 2010, Fox News published Will Congress Take a Pass on the Estate Tax and Send Us Back to 2001?, by Rodney P. Mock (assistant professor at the Orfalea College of Business of California Polytechnic State University). Mock discusses the possibility of a retroactive estate tax. He provides a summary of U.S. v. Carlton. The following language captures the spirit of Halloween: Reaching into the graves of wealthy, dead taxpayers across the county to collect unpaid tax debts may seem reminiscent of a low-budget horror film, but it’s not. In fact, after the November midterm elections, Congress may... Continue reading