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December 2010 Archives

Attorney Jonathon Bristol In Potential Ponzi Scheme

Jonathon Bristol, a formal attorney for a financial adviser to celebrity clients, was arrested for charges involving money-laundering. The Associated Press reported a lawsuit against Bristol was filed in Manhattan's federal court and alleged he helped cover up Kenneth Starr's Ponzi-like scams.

Kenneth Starr, who had been a one-time advisor for celebrities like Wesley Snipes and Sylvester Stallone, supposedly embezzled investor money from his clients. The suit claimed Jonathon Bristol helped hide the stolen money and placed them in secret escrow accounts. Bristol pleaded not guilty to the charges held against him and was released on a $1 million bail bond. He may face a maximum of 20 years behind bars if found guilty.

Investing In A Stranger's Life Is Not So Definite

Life expectancies are a major factor for companies that invest in a stranger's life insurance. These businesses, such as Life Partners Holdings Inc., arrange to purchase life insurance policies from insured individuals. The company then sells a portion of the policy's interest to investors who can collect the death benefits of the insured person when he or she dies.

Take 84-year-old Marvin Aslett, an Idaho rancher. The Wall Street Journal reported Life Partners Holdings estimated in 2005 that Aslett had around two to four years left to live. Had the Idaho rancher died as the company projected, investors with a $2 million policy on Aslett's life would have gained a significant return. Instead, Marvin Aslett said he remains "as healthy as a horse" and continues to work on his ranch.

Trust Settlement: What Is The Picowers' Net Worth?

Forbes included Jeffry Picower and his wife Barbara last year among those in its list of wealthy individuals and placed the couple's net worth at $1 billion. Today we hear that the couple is worth at least $7 billion due to huge profits collected from investing with Madoff, according to The Wall Street Journal.

Yet the Picowers were not on Forbes' list in 2008 or 2007, which showed that Jeffry Picower did not even become a billionaire until last year. Jeffry Picower made 950 percent returns on some years, and Barbara Picower recently reached a lawsuit settlement where she agreed to return $7.2 billion to the trustees affected by the Madoff-Ponzi scam.

How Does The Estate Tax Affect Farmers And Family Businesses?

The Wall Street Journal reported some politicians and experts are debating whether farmers and family-owned businesses may be the true victims of the return of estate taxes. The Obama-GOP tax deal says estates over $5 million will be taxed at 35 percent, which differs from most of the Democrats' want for a 55 percent tax rate on estates worth at least $3.5 million.

Democrats argued that the country's current deficit and the inequality between the wealthy and less affluent calls for a higher tax rate. Republicans disagreed and said the estates of farms and family businesses may suffer as a result of lower tax rates. Senator Chuck Grassley said the current agreement on the estate taxes "makes sure the government can't take more than half the estates of farmers and small business owners."

New York Court Rules On Arthur Kramer Life Insurance Case

Alice Kramer filed a lawsuit against Phoenix Life Insurance Co. in New York's Southern District Court to claim life-insurance benefits after her husband Arthur Kramer's death in 2008, according to The lawsuit ended up evolving into a larger issue where the New York Court of Appeals has recently ruled that that individuals in New York may now purchase life insurance policies and sell them to strangers as a means of investment.

As a result, life insurers will now have to honor millions of dollars in claims.

Things To Know For The Return Of The Estate Tax

The uncertainty with the estate tax limbo has finally lifted as Washington finally agrees on some new tax rules for the return of the estate tax, according to The Wall Street Journal. Beneficiaries can potentially receive more benefits as wealthy individuals get a 35% top rate on their estate taxes and $5 million is exempted for each person.

The Senate bill extends the tax rates from the Bush-era on regular income, dividends, and capital gains for two years while reducing payroll taxes by 2 percentage points next year. The House has not announced its version of the bill yet, and it may include different conditions compared to the Senate.

New Legislation On Student Loans May Help Cosigners

Some New Yorkers may not realize that the bill for a student loan often carries on to the student's cosigners after the student dies. According to The Wall Street Journal, a new Senate legislation will change those circumstances for student borrowers and their cosigners where lenders will be required to make clearer obligations for cosigners in the event a student passes away.

The "Christopher Bryski Student Loan Protection Act," sponsored by Senator Frank Lautenberg, was introduced to Congress yesterday. The act was established when Christopher Bryski's parents were forced to still make monthly loan payments after their son died from a brain injury at the age of 25. Even today, Bryski's parents are still paying off the $44,500 private student loan that Christopher took out to attend Rutgers University.

Jack Kirby's Estate Battles Marvel Over Copyright Termination

The estate of comic book artist Jack Kirby, who is recognized for superhero characters like Iron Man and Spider-man, served 45 notices of copyright termination to Marvel Entertainment to end the grant over his work. Marvel, however, filed a lawsuit in New York District Court against Kirby's estate, arguing that the comic book creations are not eligible for termination, according to ABC News.

Yes, even creative works like X-Men and The Incredible Hulk, which are also attributed to Jack Kirby, can be held as part of an estate. Intellectual or intangible properties such as trademarks and copyrights are extremely valuable assets for artists, like Kirby, and his heirs. A NY estate planning attorney can provide a detailed explanation on how intellectual property may be transferred with or without a will.

Roth IRA Basics For New Yorkers

A Roth individual retirement account (IRA) may be the most beneficial retirement planning alternative for those in New York who are eligible for it. According to the PR Newswire, this type of account is tax-free for individuals who do not qualify for an employer match (401)k plan.

Roth IRA accounts may be more helpful to people who can potentially save more money for their retirement compared to the amount an employer could match. An individual's income determines whether he or she may be eligible for a Roth IRA. You contribute less money to the account when you earn more money. Because the income limitations change each year, an NY estate planning lawyer can help determine whether you are entitled to create a Roth IRA.

Knox Family To Receive $25.6 Million From Lawsuit Against HSBC

The lawsuit filed by the widow and heirs of former Buffalo Sabres owner Seymour H. Knox III against HSBC Bank USA N.A. resulted in a major probate court ruling in the state of New York. According to the Buffalo News, Surrogate Judge Barbara Howe found that the bank was "negligent and imprudent" in handling the family's trusts since the mid-1990s. reported the Knox family had accused HSBC and Marine Midland Bank, its predecessor, for mishandling seven trusts, resulting in millions of dollars lost in potential investments and income. The Knox family had a major role in the history of the bank. Seymour H. Knox Sr. served as Marine Midland's chairman between 1913 and 1915, and Seymour H. Knox Jr. held the same position in 1942 to 1970.

Protecting Your Estate Plans From The Estate Tax Limbo

According to ABC News, many families in New York are going through an estate limbo where they are caught between the terms of the 2001 Bush estate tax cuts and the restoration of the tax next year. The federal estate tax break, which began at the start of 2010, will expire on January, 2011.

Chicago partner Richard Lang said "it's wacky to have so many scenarios and not know what the tax is." Only $1 million in assets that have not been left to a spouse or charity will be exempted from the 55 percent tax rate next year. All assets may also get a "step-up," which means they could be raised to their market value and sold without capital gains taxes.