Repeal of Estate and GST Tax Provides Opportunities

December 31, 2009 , and Congress never acted as all ( including myself) expected to reinstate the Estate and Generation Skipping Transfer Taxes. The closest it came was when the House passed H.R. 4154 on December 3. The Senate read it once and placed it to be read again on December 24. The Senate won't be back in session again until January 19, 2010. It is unclear whether the Senate will take up the bill or not. Some members of the Senate apparently favor a $5 million estate tax exclusion and a top estate tax rate of 40%. Interested persons can monitor any action from the Senate Finance Committee which Democrat Max Baucus of Montana chairs.

What is also unclear as other blog commentators point out is the legality of making a tax act retroactive. Some extremely wealthy persons with large estates and no plans to die in 2010 will certainly try and take a chance.

To summarize the current status of the law and opportunities:

• No Estate Tax (period)
• Gift Tax rate of 35% (down from 45% in 2009)
• Still lifetime $1,000,000 Gift Exclusion ( rate above applies to gifts above $1,000,000)
• No Generation Skipping Transfer Tax

A Forbes Article Today sums it up well:

"Meanwhile the rich are racing to make taxable gifts. Taxable? Yep. Under the Bush tax cuts, the gift tax, which is paid on wealth of more than $1 million transferred while you're alive, did not disappear as of Jan 1. But the gift tax rate fell from 45% to 35%. Absent a political compromise, it too will rise to 55% in 2011."

Additionally, the Article mentions but doesn't do a great job of explaining the consequences of the Generation Skipping Transfer Tax being repealed ( at least for right now). What this means is that its a great year (potentially) for the wealthy to make large gifts to grandchildren. Because instead of paying an additional tax for any transfers to skip persons on top of any gift tax, there is none ( for the time being).

Some planners for extremely wealthy clients are trying to make use of the repeal of the Generation Skipping Transfer Tax in their GRAT and CLAT instruments. Usually these instruments can't have a generation skipping component because of so called ETIP ( estate tax inclusion period) rules, but if there is no GST in effect when its time for them to distribute the remainder it makes sense for them to go to Grandchildren, particularly if the Grantor's own children are already well off.

It should be an interesting year. Stay tuned for updates!

ABOUT CHRISTOPHER R. TWINING
Christopher R. Twining, Attorney at Law, based in the Westwood Neighborhood of Los Angeles is an innovative estate planning, probate & trust administration, and elder law attorney, who offers in home services for busy and movement challenged clients. The Law Office of Christopher R. Twining serves the cities of Los Angeles, Santa Monica, Culver City, Beverly Hills, West Hollywood, Pasadena, Burbank and the neighborhoods of West Los Angeles, Westwood, Brentwood, Bel-Air, Pacific Palisades, Palms, Pico-Robertson and Encino. Dedicated to helping individuals and couples prepare comprehensive estate plans according to their wishes; he offers them these services at an affordable price, in the relaxed comfort of their homes. For more information about his services, please visit http://www.twininglaw.com or call (310) 492-5990.

CHRISTOPHER R. TWINING
LAW OFFICES OF CHRISTOPHER R. TWINING
1440 VETERAN AVENUE, SUITE 509
LOS ANGELES, CALIFORNIA 90024
(310) 492-5990 Fax (310) 775 - 9774
http://www.twininglaw.com

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Estate Plans Need Updating

Not too long ago I wrote an article indicating that for many people because of the $3.5 million dollar estate tax exclusion , that they needed to revise their estate plans.

Specifically, if you have a marital deduction aspect to your revocable living trust and it was drafted when the estate tax exclusion was far lower ( it was around $675,000 in 2001) then a surviving spouse could see themselves entirely cut out of an estate plan.

Normally one reserves a life estate in income to the surviving spouse along with a right to invade principal for Health, Education, Support and Maintenance in the BYPASS trust. If this is the case there is no great danger. However, for many people who may have children from different marriages it is possible that such a provision does not exist and your kids would take all. It really depends on the terms of the bypass trust.

The Wall Street Journal is at least bringing up the issue, even if they don't discuss it in detail.

ABOUT CHRISTOPHER R. TWINING
Christopher R. Twining, Attorney at Law, based in the Westwood Neighborhood of Los Angeles is an innovative estate planning, probate & trust administration, and elder law attorney, who offers in home services for busy and movement challenged clients. The Law Office of Christopher R. Twining serves the cities of Los Angeles, Santa Monica, Culver City, Beverly Hills, West Hollywood, Pasadena, Burbank and the neighborhoods of West Los Angeles, Westwood, Brentwood, Bel-Air, Pacific Palisades, Palms, Pico-Robertson and Encino. Dedicated to helping individuals and couples prepare comprehensive estate plans according to their wishes; he offers them these services at an affordable price, in the relaxed comfort of their homes. For more information about his services, please visit http://www.twininglaw.com or call (310) 492-5990.

CHRISTOPHER R. TWINING
LAW OFFICES OF CHRISTOPHER R. TWINING
1440 VETERAN AVENUE, SUITE 509
LOS ANGELES, CALIFORNIA 90024
(310) 492-5990 Fax (310) 775 - 9774
http://www.twininglaw.com

Read more On "Estate Plans Need Updating"!

How to Make Beneficiary Designations

Ensuring that your life insurance policies, individual retirement accounts and pension accounts have the proper named beneficiaries is an essential part to any comprehensive estate plan. As recently as October 2008 the U.S. Supreme Court weighed in on the importance of beneficiary designations.

Karri Kennedy, the daughter of a former Dupont Inc. employee had sought her share of her father's retirement plan benefits. She claimed that he had said that he wanted it to go to her but had never changed his beneficiary designations despite getting a divorce from Karri's mother. Instead the court ruled that the mother was entitled to the retirement plan as the designated beneficiary.

A recent online guide from Yahoo Finance, entitled "Naming Beneficiaries of Insurance Policies and Retirement Plans" answers some questions and gives some advice for naming beneficiary of various policies and retirement accounts. Read more On "How to Make Beneficiary Designations"!

House Votes to make permanent 2009 Estate Tax

The U.S. House of Representatives passed a bill today which would make this years $3.5 million dollar per person estate tax exclusion permanent.

You can see a Bloomberg story on this event here.
The bill that passed is H.R.4154, entitled "Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009."

Next the Senate will take up the Estate and Gift Tax Issue. All indications are that the Senate will keep the $3.5 million estate tax exclusion as well.

Indeed in a previous article I noted that all current proposals pending before Congress would have made the $3.5 million Estate Tax Exemption permanent. There are some important differences between the bills involving the use of intra-family discounts, new limitations on GRATS (Grantor Retained Annuity Trusts), and portability of the exclusion.

Stay tuned. When a new bill passes both houses I will write on what changes were enacted.

ABOUT CHRISTOPHER R. TWINING
Christopher R. Twining, Attorney at Law, based in the Westwood Neighborhood of Los Angeles is an innovative estate planning, probate & trust administration, and elder law attorney, who offers in home services for busy and movement challenged clients. The Law Office of Christopher R. Twining serves the cities of Los Angeles, Santa Monica, Culver City, Beverly Hills, West Hollywood, Pasadena, Burbank and the neighborhoods of West Los Angeles, Westwood, Brentwood, Bel-Air, Pacific Palisades, Palms, Pico-Robertson and Encino. Dedicated to helping individuals and couples prepare comprehensive estate plans according to their wishes; he offers them these services at an affordable price, in the relaxed comfort of their homes. For more information about his services, please visit http://www.twininglaw.com or call (310) 492-5990.

CHRISTOPHER R. TWINING
LAW OFFICES OF CHRISTOPHER R. TWINING
1440 VETERAN AVENUE, SUITE 509
LOS ANGELES, CALIFORNIA 90024
(310) 492-5990 Fax (310) 775 - 9774
http://www.twininglaw.com

Read more On "House Votes to make permanent 2009 Estate Tax"!

VIDEOTAPING YOUR ESTATE PLAN

An article in Today's Wall Street Journal discusses the pros and cons of videotaping your will signing or estate plan. It does a good job of discussing the advantages and disadvantages.

Among the pros identified are:

• It can head off a fight over your estate plan, by demonstrating your competence and reasons for why you might give unequal amounts to children etc.
• Ofcourse, if a dispute does materialize after you die, it can serve as evidence of your testamentary capacity and your desires.
• It can also serve as a more personal legacy than a legal document on paper.

Among the potential cons identified are:

• It can serve of evidence of a lack of capacity if the person on the videotape seems senile, unresponsive, or uncomfortable, and therefore ultimately lead to a dispute that might not have materialized otherwise.
• It can of course cost more. (You will need to have your attorney consulted and present to ask appropriate questions.)
• It can create confusion as to the intent of the person, if they make statements that conflict with the terms of the estate planning documents.

It also cautions that this is not something that you want to do yourself or have one of your children videotape. First of all this document is going to serve as evidence in any potential proceeding, you need the advice of an attorney. Secondly, if a non neutral party like a child makes the videotape it can be argued that its evidence of undue influence.

And the article makes the excellent point that if you are going to leave unequal amounts to children or other similarly related relatives, you may want to let them know that you are leaving them unequal amounts while you are still alive so that you can set their expectations early instead of having them be shocked when they discover that after you pass.

ABOUT CHRISTOPHER R. TWINING
Christopher R. Twining, Attorney at Law, based in the Westwood Neighborhood of Los Angeles is an innovative estate planning, probate & trust administration, and elder law attorney, who offers in home services for busy and movement challenged clients. The Law Office of Christopher R. Twining serves the cities of Los Angeles, Santa Monica, Culver City, Beverly Hills, West Hollywood, Pasadena, Burbank and the neighborhoods of West Los Angeles, Westwood, Brentwood, Bel-Air, Pacific Palisades, Palms, Pico-Robertson and Encino. Dedicated to helping individuals and couples prepare comprehensive estate plans according to their wishes; he offers them these services at an affordable price, in the relaxed comfort of their homes. For more information about his services, please visit http://www.twininglaw.com or call (310) 492-5990.

CHRISTOPHER R. TWINING
LAW OFFICES OF CHRISTOPHER R. TWINING
1440 VETERAN AVENUE, SUITE 509
LOS ANGELES, CALIFORNIA 90024
(310) 492-5990 Fax (310) 775 - 9774
http://www.twininglaw.com

Read more On "VIDEOTAPING YOUR ESTATE PLAN"!

Importance of Sharing Your Estate Plans with Others

My practice is always interesting. In my conservatorship cases ( cases where an elderly person either is unable to take care of their personal needs ( medical, housing, food, clothing, health etc) or their financial matters ( person cannot resist undue influence, or is unable to manage their financial affairs) I have recently come across some troubling situations.

These cases illuminate why you should share your estate plan with those you intend to represent your estate as well as those who will inherit.



In these cases a child has had to petition the court because some other person is acting under a durable power of attorney or other Estate Planning document. But the situation could just as easily present itself in a will or trust contest.

In these cases, I believe that the Conservatee ( person for whom the court appoints a conservator) should have shared their intentions as well as perhaps the actual documents with their intended heirs or those the Conservatee wanted to represent their Estate after he or she dies. In one case the Conservatee had shared a letter from his/her attorney which stated the name of the estate planning documents in the attorney's possession and the execution date. However, obtaining the actual documents themselves has been extremely difficult.

But if the Conservatee had not given his/her children such a letter and instructions to contact his attorney should anything happen to him, they would be unaware of the documents that Conservatee's significant other persuaded Conservatee's long time attorney to draft, effectively changing who would inherit from the Conservatee. Additionally, they would lack any evidence that the Conservatee had previously planned to provide for them. This could become extremely important if a contest ensued after Conservatee passed away.

However, if the Conservatee had provided his/her children with copies of the actual documents they would have had good evidence to seek emergency type orders from the court. ( these types of orders are called ex parte orders).

In short if you trust your heirs and future representatives of your Estate, you must provide them with information as to your wishes, a description of where original documents are kept, and possibly even copies of the documents. This will serve as valuable evidence, in the event that someone tries to fraudulently induce you to sign documents while you are drugged up in a hospital or otherwise change who your property will pass to.

ABOUT CHRISTOPHER R. TWINING
Christopher R. Twining, Attorney at Law, based in the Westwood Neighborhood of Los Angeles is an innovative estate planning, probate & trust administration, and elder law attorney, who offers in home services for busy and movement challenged clients. The Law Office of Christopher R. Twining serves the cities of Los Angeles, Santa Monica, Culver City, Beverly Hills, West Hollywood, Pasadena, Burbank and the neighborhoods of West Los Angeles, Westwood, Brentwood, Bel-Air, Pacific Palisades, Palms, Pico-Robertson and Encino. Dedicated to helping individuals and couples prepare comprehensive estate plans according to their wishes; he offers them these services at an affordable price, in the relaxed comfort of their homes. For more information about his services, please visit http://www.twininglaw.com or call (310) 492-5990.

CHRISTOPHER R. TWINING
LAW OFFICES OF CHRISTOPHER R. TWINING
1440 VETERAN AVENUE, SUITE 509
LOS ANGELES, CALIFORNIA 90024
(310) 492-5990 Fax (310) 775 - 9774
http://www.twininglaw.com Read more On "Importance of Sharing Your Estate Plans with Others"!

Lessons from Michael Jackson's Death

What Lessons can even the poorest person learn from Michael Jackson's death?

Answer: This is a prime example, for rich and poor alike, of one of the most important reasons to execute a last will and testament. Anyone who has minor children be they married, separated, divorced, never married etc., should take lesson.

You can see from this copy of Michael Jackson's Last Will and Testament that he named his mother Katherine Jackson to be guardian of his children should he die before they were the age of 18. He likely also provided for them until a later age, financially in his Michael Jackson Family Trust that earlier pages of the will reference. He also named a backup guardian of Dianna Ross, in the event that his mother was not able to serve.


Notice Michael Jackson did not nominate his mother and his father. This was smart because you never know what the status of couples can be at the time when they would be called upon to act. Although in Michael Jackson's case there were likely other reasons also influencing his choice to not name his father.

Now bear in mind that the probate court judge who officially approved Katherine Jackson to be the childrens' guardian could still have denied her petition and approved someone else. Usually this only happens when someone makes an allegation that the proposed guardian is unfit to be a parent. Possible reasons include a proposed guardian with a criminal background, who is a substance or heavy alcohol abuser or someone who has a history of child abuse.

But the lesson is clear, that the judges give the wishes of the person who died, the most weight absent a substantiated allegation that the proposed guardian is unfit.

I have not bothered to ascertain who drafted his Will, but in my opinion from what I have seen so far, the Estate Planning attorney did a fine job

ABOUT CHRISTOPHER R. TWINING
Christopher R. Twining, Attorney at Law, based in the Westwood Neighborhood of Los Angeles is an innovative estate planning, probate & trust administration, and elder law attorney. The Law Office of Christopher R. Twining serves the cities of Los Angeles, Santa Monica, Culver City, Beverly Hills, West Hollywood, Pasadena, Burbank and the neighborhoods of West Los Angeles, Westwood, Brentwood, Bel-Air, Pacific Palisades, Palms, Pico-Robertson and Encino. For more information about his services, please visit http://www.twininglaw.com or call (310) 492-5990.

CHRISTOPHER R. TWINING
LAW OFFICES OF CHRISTOPHER R. TWINING
1440 VETERAN AVENUE, SUITE 509
LOS ANGELES, CALIFORNIA 90024
(310) 492-5990 Fax (310) 775 - 9774
http://www.twininglaw.com

Read more On "Lessons from Michael Jackson's Death"!