February 2011 Archives

As some New Yorkers may have heard, the estate of pop music icon Michael Jackson has earned more than $310 million since his death in June 2009. His estate administrators were able to pay off most of his debt by negotiating deals for new music albums, the movie “This Is It,” and video games like “Michael Jackson The Experience.”

But CBS News reported a filing in Jackson’s probate case revealed he died with over $400 million in debt while an additional $159 million was spent between June 2009 and December 2010. Court records show that Jackson’s extravagant spending in the past still requires lawyers to develop new financial deals and sort out his old debts.

Former Chicago Bears football star Dave Duerson, 50, left his wife Alicia with a final request via text message before he killed himself: to donate his brain for research. The New York Times reported Duerson was later found dead at his South Florida condominium after he shot himself in the chest.

But before he died, Duerson made sure to repeat his request in a handwritten note in case it had not been received by text. "Please, see that my brain is given to the N.F.L.'s brain bank," the note read.

You might, if you live in New York or Massachusetts.

Since February 15, 2011, the District of Columbia and 22 other states, including New York, have begun imposing estate, inheritance, or both of these taxes. According to Forbes, these state estate taxes are becoming a large concern for many families this year even with federal estate taxes currently allowing a $5 million tax exemption.

Most of the states that have estate taxes, such as New York, Massachusetts, and Maine, generally impose a top rate of 16 percent while exempting $1 million or less for every estate, while other states may vary from the norm. North Carolina, for instance, has a top tax rate of 16 percent but allows for an exemption of $5 million.

The estate tax deal for 2011 clarified that estate tax exemptions had been raised to $5 million for each person or $10 million for married couples. But some New Yorkers may not have realized that the lifetime gift tax exemption was also expanded this year and kept in sync with the estate tax exemption.

Susan Colpitts, a co-founder of the Virginia wealth advisory firm Signature, said this year's gift tax exemption gives people an "opportunity to see that money be used and appreciated by your beneficiaries." According to The New York Times, there is also a greater incentive for people to give away their money during their lifetime instead of after death.

Some individuals and families might choose to donate money or other important assets to a group, charity, or other foundation to leave behind some sort of legacy after they die. One way New Yorkers can give gifts to eligible organizations, such as schools and most charities, is to set up something known as a charitable contribution or donation.

Take James Forman, a former Civil Rights leader and organizer who passed away in 2005. Not only did he leave behind a legacy of activism and writing, the New York Daily News reported Forman also left a diverse assortment of numerous books, political leaflets, and audio and videotapes in addition to his FBI file after he died.

New York City locals may have heard about 26-year-old Valley Cottage resident Tenisha Eurie, who has been accused of stealing thousands of dollars from her son's trust fund set up when he was 21-months-old. According to the New City Patch, Eurie allegedly transferred the money from the trust into her own personal bank account.

Rockland County District Attorney Thomas P. Zugibe said a trust fund was set up for the boy after he suffered critical injuries in a car accident in 2007. The child was riding his scooter when a car crashed into him, and the collision led to a civil settlement for $31,395. A court ordered that the money be kept in a trust fund that could not be touched until Eurie's son reached the age of 18.

While some New Yorkers are still criticizing the Obama Administration's estate tax laws and the tax cuts provided to the rich, personal wealth advisors specializing in philanthropy believe those same tax cuts can benefit numerous charities.

According to The New York Times, the estate tax law exempts $5 million for each person from estate and gift taxes. This means a couple can give or donate assets that are tax-free and worth up to $10 million this year and until the law stays in place. Families may start expanding on offering charitable gifts while they update their wills and plans for giving to their children and grandkids.

When it comes to estate planning, many New Yorkers may wonder whether inheriting a loved one’s estate could also mean potentially inheriting his or her debts.

Texas local Lisa Boesen, for instance, was left with $60,000 in credit card debt after her parents passed away, according to Fox Business. She was surprised when creditors began calling her to pay for the remaining credit balances because her parents had never discussed their finances with her or her two siblings.

“It was a terrible experience,” said Boesen. “We were already stressed from grieving and managing the estate. Managing debt was an added stressor.” The debts were eventually paid off after a year, but only after Boesen negotiated a reduced payment.

Many NY estate planning attorneys may encourage New Yorkers to develop a living will or health care directive, which communicates a person's preferences for medical treatment in the event he or she becomes incapacitated and unable to express him or herself. Living wills may often direct health care providers with explicit instructions, such as withholding treatment.

In the case of 85-year-old Al Barnes, the Minneapolis Star Tribune reported his 1993 healthcare directive specified that he did not want to be supported by any life-sustaining care. If there was no realistic expectation that Barnes could recover, the directive asked that he then "be allowed to die and not be kept alive by medications, artificial means or 'heroic measures.'"

New Yorkers who become incapacitated or die without sharing digital information with survivors risk leaving huge problems with the handling of important matters left in cyberspace. Without knowing the right online IDs and passwords, executors of an estate may not know what bills have been left unpaid, or whether some online accounts even exist.

According to MSN Money, it is crucial for people to make sure they leave behind the digital details essential to managing one's financial and private matters on the internet. When it comes to finances, individuals who are unable to communicate because of an injury or illness can risk having their bank accounts closed, insurance coverage fall, or unpaid bills destroy their credit scores.

The Defense of Marriage Act is going to require a defense of its own again soon. The Act, which is a federal law prohibiting the recognition of same sex marriages has long been under fire from the head of the federal government, President Obama. Yet, similar to the government position defending don't ask don't tell in court even while pushing for its repeal in Congress, the Obama Administration is currently working on a legal defense for the Act in court.

Two new lawsuits filed in New York federal courts are going to present another challenge to DOMA, reports The New York Times. According to the report, the courts in this area are one of the only federal circuits without current case law to follow regarding how a court should evaluate a law that is challenged as discriminatory towards homosexuals. This may require government lawyers to take a more specific stand on the issues presented by DOMA.

Surveys and studies show that most Americans support the gift of life that comes with organ donation, and yet so many of us don't do it. Is it just the difficulty of facing our mortality that keeps us from an act that can save a life, or is it the fear that the process is too complicated, legally or morally? Here are a few questions and answers that might help you decide if organ donation is right for you.

According to the New York Department of Health, more than 8,000 New Yorkers are still on waiting lists for transplants of organs like kidneys, livers, and hearts. One organ donor can save up to eight lives or with tissue donation, can improve 12 or more lives by restoring eyesight, helping fight infections in burn patients and preventing disability.