Matthew Curtiss, Esq

The story on Elizabeth Edwards' omitting John leaves out much of the story

(CNN) -- Elizabeth Edwards left everything to her children, with no mention of her estranged husband, John Edwards, in her will.

"All of my furniture, furnishings, household goods, jewelry, china, silverware and personal effects and any automobiles ... to be divided among them ..." Edwards says in the document dated December 1.

It names her daughter, 28-year-old Catharine, as the executor of the will.

Elizabeth Edwards died on December 7 after a battle with breast cancer. She was 61

via edition.cnn.com

This story makes a nice soundbite for people rightly disgusted with John Edwards' behavior; but the story fails to address many things.

1. Was the divorce final? Can John claim a spousal share of her assets under North Carolina state law?

2. The rest and residue of her estate, after passing out all tangible personal property to her kids, pours over to a revocable trust. This trust is not part of the public record and could leave a nominal amount to John or even a Marital Bequest (usually the excess value of the estate above the applicable federal estate tax exemption).

3. Did they continue to own homes or large portions of property as joint tenants with rights of survivorship? These properties would be distributed by operation of law and not by the terms of the will.

The fact that the Will was redone about six months ago and mentions the trust was amended and restated makes me think that the trust was probably amended at that time as well (why wouldn't it be?). But I still have to question lazy journalism that paints an emotionally charged picture.

The Day - Realigned probate court system is ready to go

East Lyme - The historic reorganization of the state's probate court system starts today with the closing of more than half of the courts.

It's a profound change, but Judge Jeffrey McNamara, who is scheduled to be sworn in today as probate judge of the East Lyme district, said he and his staff are ready.

"We've ironed out any issues," said McNamara, who has been judge from the district that was exclusively East Lyme for 12 years. "So far everyone seems on board."

In addition to East Lyme, the district will now serve residents from Montville, Salem and Old Lyme.

The consolidation is the result of a reform bill passed by the General Assembly to make the court system more efficient and cost-effective. The number of probate districts statewide has been reduced from 117 to 54.

Notices of the changes were posted at the town halls this week and last. Offices in some towns are empty, and files and computers have been moved.

via www.theday.com

And today it begins. I, for one, am hopeful that the changes that the legislature made accomplish their goals of creating a self-sustaining court system. I do worry that the fiscal goals will outstrip the personal contact which the old system fostered. I know that at least in our little corner of Connecticut, not much will change at least in terms of the faces of the court (clerks, judges); but as the system matures, I hope the Probate Court system doesn't turn into the impersonal machine that is now the Small Claims court.

Ezra Klein - An estate tax primer

It's important to keep in mind the cramped space of this debate: If the tax goes back to its scheduled levels, it'll tax 2 percent of estates, If the Lincoln-Kyl levels are put in place, it'll tax 0.25 percent of estates. But the difference between the hundreds of billions the tax could raise and the miniscule number of estates it would affect explains the immense energy Republicans and some Democrats (notably Blanche Lincoln, who has traditionally raked in campaign money from the Walton family) give to the issue. In a report called "Spending Millions to Save Billions," Public Citizen and United for a Fair Economy estimated that a handful of the country's richest families had spent more than $400 million lobbying for the tax's repeal -- and of they were successful, they stood to save more than $70 billion.

For the rich, fighting the estate tax is simple a good investment. And it looks like it's paying off.

via voices.washingtonpost.com

Which is why it always amazes to view the millions upon millions of Americans on which this tax will likely never have an impact get red-faced over it.

Obama Announces Estate Tax Deal With Republicans: 35% Tax Rate And $5 Million Exemption, For Two Years - Hani Sarji - Estate of Confusion - Forbes

Significantly, the estate tax would come back in 2011, but at an exemption and rate that many Republicans have been arguing for. Under the deal, the estate tax exemption would be up to $5 million for individuals and $10 million for couples. The tax rate would be at 35%.  The exemption and rate would be in effect for two years. 

via blogs.forbes.com

Well, I was right on the exemption, but 10 points off on the top rate (I split the middle and guessed 45%).

I don't necessarily see a 45% rate as terribly unfair considering the amount of estates being subjected to the tax would shrink.

How to Protect Your Family From Estate Tax Uncertainty

An Illinois woman inherited not quite $100 million this year. Estate taxes could consume 53 percent, 45 percent, 16 percent or none of it, depending on whether the federal and/or Illinois estate taxes -- which both lapsed on Jan. 1, 2010 -- are reinstated retroactively. "It's wacky to have so many scenarios and not know what the tax is," complains Richard A. Lang, a Chicago partner of McDermott, Will & Emery representing the estate.

You're not crying for the heiress or her lawyer? Then consider another Lang client, a widow trying to divide her late husband's modest estate with the children from his first marriage without incurring ill feelings or big lawyers' bills. The husband's will was tied to the defunct federal estate tax. Now, by one legal reading the widow gets everything outright. By another, all the assets go into a trust that ultimately goes to the children, with the widow having access to the trust's earnings (and, if need be, principal) while she's alive. "This is going to be worked out," Lang vows.

via abcnews.go.com

For us in Connecticut, we have the added fun of working with the probate courts to facilitate the 2011 consolidation.   Smaller courts which will be closing shop early next year do not want estates left open, if possible, before handing cases off to the new regional courts.  Executors for estates on the edge of federal taxation  likely being advised to wait until Congress finally acts (or not acts) rather than distribute out assets to beneficiaries (running the risk of incurring tax liability and having no assets on hand to cover the bill).

What makes a Will Islamic? (via Slate)

Incredibly specific inheritance laws. Verses 11, 12, and 176 in the fourth book of the Quran lay out exactly how a Muslim should dispose of his wealth after death. Two-thirds must be distributed as follows, when applicable: One-sixth should go to your father; one-sixth to your mother; half or one-quarter to your husband, depending on whether you've had children; and one-quarter or one-eighth to your wife, also depending on whether you've had children. As for those hypothetical kids, the fractions vary, but boys get two shares for every one share that girls get.

via www.slate.com

As the article goes onto say, the distribution of the remaining third depends on what sect you follow: Sunnis can give the 1/3 share to to anyone, as long as they aren't getting any portion of the other 2/3. Shi'ites can give it to anyone, even persons receiving the 2/3 portion... including daughters who are prohibited getting more than their 2-to-1 proscribed ratio.

I can't actually see where the application of Federal or state law would invalidate a will drawn up ion Oklahoma using these rules, but perhaps if the Quran was cited in the will itself, some probate courts would be prevented from admitting it.

Thanks to Attorney Matthew Berger for the tip.

What Will Happen to the Federal Estate Tax? - WSJ.com

"I can't believe Congress would let this happen," says Nadine Gordon Lee, president of Prosper Advisors, a wealth-management firm.

"The most likely option for a lame-duck session compromise seems to be restoration of the 2009 rules," says Tim Hanford, a consultant in Bethesda, Md., and a former tax staffer on the House Ways and Means Committee. "However, many members of Congress would like to provide even more estate-tax relief."

Much of the speculation focuses on setting the basic estate-tax exemption level somewhere between $3.5 million and $5 million and cutting the top rate to somewhere between 35% and 45%.

via online.wsj.com

my prediction: $5M exemption and 35% top rate

Judge of probate: Chuck Norris bucks Guinan to secure Norwich, one of few judge slots

On the heels of a budget-driven consolidation of the state’s probate court system, voters in Eastern Connecticut elected a whittled-down crop of judges on Tuesday.

via www.norwichbulletin.com

A good group of judges: I'm confident that the scheduled 2011 probate court consolidation will go smoothly.

Death tax showdown at the OK Corral - CSMonitor.com

Thus, we have a specter of a tough and independent Clint Eastwood-like cowboy who chooses to head prematurely for that great roundup in the sky, all to save his hard-earned herd from some Internal Revenue Service bureaucrat hovering over his hospital bed, awaiting that final breath. It brings a tear to the eye.

Except it is all a carefully crafted myth.

Start with the cowboy. Some Wyoming ranchers have been on their land for generations—property stolen fair and square from Native Americans in the 19th century. Others are grazing their herds on federal land while paying cut-rate fees for the privilege. And still others are LA doctors, lawyers, and actors who spend a few weekends a year on their ranchettes, where they enjoy both spectacular scenery and generous income tax subsidies for grazing a few head of someone else’s cattle.

The second myth is that their heirs will lose their ranches to the taxman. To start, there is no serious discussion in Congress of allowing the estate tax to return to 2000 levels. Even President Obama and the congressional Democratic leadership would at least return the law to where it was in 2009, exempting the first $3.5 million ($7 million for couples) from tax and setting a rate of no more than 45 percent. In addition, family farmers and small businesses get an extra $1 million exemption ($2 million for couples) for a total exemption of $9 million. And in the rare case where farm estates do owe tax, they can defer the debt for up to five years and extend payments for a decade after that.

via www.csmonitor.com

more proof that scare tactics and propaganda win out over reality

Steve McNair's widow, children given $500,000 each - ESPN

NASHVILLE, Tenn. -- The widow of Steve McNair has won a request to get $2.5 million from the late NFL quarterback's estate.

Mechelle McNair had asked a Nashville judge to unfreeze a portion of the estate so that she and Steve McNair's four sons could each have $500,000 until the probate case gets sorted out.

She and Steve McNair had two sons together. The other two are from previous relationships.

The estate of the former pro, who played 11 seasons with the Tennessee Titans and two with the Baltimore Ravens, was initially valued at $19.6 million. The bulk of his assets have been frozen since his death.

Steve McNair was 36 when he was killed by his mistress in July 2009. The woman shot him four times before turning the gun on herself.

He died without a will.

via sports.espn.go.com