In my latest Estate Planning Law Report, I discuss the new law that makes it possible to have an enforceable electronic will. I also make the case that although that law is now in place, it may be a while before you can actually take advantage of it. And I caution that the new law does not mean that an electronic copy of your existing will can now replace the physical, paper, original document.
Please read all about it in the news and events section of deconcinimcdonald.com and let me know what you think.
IRS: We’ll get your income tax liability figured correctly with no help from you. Trust us.
Me: Really? Thanks for the offer, but I think I have some information you don’t, and I’m just as likely to get it right as you are.
When I wrote yesterday about the senator who won’t give up on taxation of unrealized gains, I gave him a little too much credit when I said that he apparently figured out that it wouldn’t work on some types of assets (he calls them "nontradeable" assets). No, he’s come up with a Rube Goldberg type contrivance to penalize you for deferring the realization of gains on your "nontradeable" assets. By deferring the gains, what he means is, you didn’t sell the assets. He’s going to fix that (you) by going back and treating the gain as if it was realized in each year that you held the asset, apparently. He still doesn’t really explain how this is going to work.
Here’s the senator’s description of this latest brilliant idea:
Tax due on gain realized from non-tradeable property such as real estate, business interests or collectibles will be calculated at sale or transfer through a lookback charge. The lookback charge would tax accrued gain and minimize the benefit of deferring tax. Senator ***** is evaluating several possible methods of calculating a lookback charge, including an interest charge on deferred tax, a yield-based tax to eliminate the benefits of deferral or a surtax based on an asset’s holding period.
No, I’m not going to link to it. if you really want to read the whole thing, it’s not hard to find.
I have written about this before, and predicted that a U.S. Senator’s proposal for taxing unrealized gains (that’s what “mark-to-market” means) would never be adequately explained. After reading about his latest pronouncement on the subject, I still think that’s the case.
I’m not sure how his new proposal is all that different from the last one. The new proposal does at least concede that taxing unrealized gains on certain kinds of assets is just not going to work, hence the limitation of the proposed tax to “tradeable assets” (whatever that means).
A court said that in denying a homeowner’s request to seal the records of the homeowner’s lawsuit against his insurance company. The homeowner sued the insurance company to force them to pay for water damage to his home. The homeowner claimed that despite the fact that he had completely fixed the water damage, no one would buy his house, nor would any broker even list it for sale.
Where are this university president’s lawyers when they should be telling him that the state can’t ban fliers and flags because the content of those filers and flags is offensive?
Really, it’s not that complicated. If you need an easy to remember example, just think of the one I always go back to: Nazis in Skokie.
DO YOU REALLY WANT TO MAKE YOUR CHILDRENS’ AND GRANDCHILDRENS’ INHERITANCE CONDITIONAL ON THEM DOING THINGS YOUR WAY?
In thirty years as a lawyer, I have had very few estate planning clients suggest conditioning gifts to their progeny on the kinds of restriction described in a recent Wall Street Journal article, excerpted and linked at the Taxprof Blog. I can’t recall a client ever even suggesting that a gift should be conditioned on marrying within the family’s faith tradition, for example. I agree that those kinds of conditions can have detrimental unintended effects.
When a client suggests that gifts should be conditioned on specific future events or activities, I typically simply point out that it’s impossible to predict the future, and equally impossible to even know what circumstances might exist at the future time when those conditions will have to be applied. Usually, the client will agree that they don’t want to put the person who would have to enforce those conditions in what might be an untenable position.
My motto is: keep it simple.
Probate is the process of changing the ownership of the assets of someone who has died. That’s how I describe probate (better referred to, in my opinion, as estate administration) when I am explaining it to clients, and that’s really what it’s about.
The message that estate administration is best avoided has been hammered so relentlessly by some purveyors of estate planning services that many consumers are, perhaps unnecessarily, biased against it. They don’t necessarily know what probate is, but they know they don’t want it.
My Estate Planning Law Report for October is an effort to clear up some of the myths, and give my loyal readers better information, about estate administration so that they can make informed decisions when planning their estates.
The Report is posted now in the News & Events section of deconcinimcdonald.com. If you’d like to be added to my mailing list so that you’ll receive my newsletter directly every month, use the “subscribe to newsletter” button below, or send me an email from the link on the home page of this web site.
MAKING TAX RETURN FILING SIMPLE AND FREE FOR MOST TAXPAYERS IS A WORTHY OBJECTIVE, THE QUESTION IS HOW TO GET THERE
A public interest group thinks that it’s the fault of Intuit that tax filing isn’t simple and free for most taxpayers. You know who Intuit is: they make Turbo Tax, the most popular tax preparation software. The public interest group says that Intuit has lobbied vigorously against measures that would have by now made it unnecessary for taxpayers to pay for Turbo Tax, or any other tax preparation software.
I don’t doubt that a company with as big a stake in tax preparation as Intuit apparently has would lobby against the government replacing their product with its own. But, as I have said before, tax return preparation isn’t complex and expensive because of Intuit. Tax preparation is complex and expensive because the tax code is complex.
Another factor here that makes me less inclined to blame Intuit is that I get advertising all the time about Turbo Tax and competing products offering free filing for simple tax returns, and the government does have its own Free File service.
And one more thing (I’m not defending Intuit, really I’m not): when was the last time that the government made anything having to do with taxes, or anything else, simple?
I’M NOT INTERESTED IN INVESTING IN AN ENTERPRISE THAT DOESN’T CONSIDER THE RETURN ON MY CAPITAL TO BE ITS FIRST PRIORITY
If I invest in a company, I’m an owner. Why would I, or any other owner, countenance that company being managed in any way other than placing a return on my capital at the top of its priority list?
What I’m talking about is simply the fiduciary duty that company managers have to company owners (stockholders). This quote neatly summarizes the problem with CEOs pledging to prioritize the interests of “stakeholders” other than stockholders:
Capitalism is not named after the managers; it is named after the providers of capital, the shareholders. Its foundation is the strict and scrupulous fiduciary obligation (“the punctilio of an honor the most sensitive,” as Justice Benjamin Cardozo said in Meinhard v. Salmon), that gives credibility to capitalism by addressing the agency cost risk of entrusting money to others. Why should investors entrust their money to people who want to turn the fiduciary duty of strict loyalty into some version of “just trust me?”
The contents of this blog, this web site, and any writings by me that are linked here, are all my personal commentary. None of it is intended to be legal advice for your situation.