Ashley Flotte’s Legal Blog

As the year draws to a close, most of us start thinking about our ‘New Year’s Resolutions.’ Year after year, it seems the most popular choices include resolving to lose weight, get organized, spend more time with family, quit smoking/drinking, or donate time to charity. At Smith & Garg, we wish you and your families a safe and happy New Year, and want to take a brief moment to offer another suggestion for a resolution: no longer postponing your estate planning.

Planning your estate is not a glamorous, nor even a particularly pleasant, topic. But it truly should not be feared, and certainly should not be put off. You should view estate planning not as ominous, but as a thoughtful gift to your family. No one enjoys considering their own incapacity or death, but refusing to acknowledge and plan for the eventual occurrence of either will very likely place a substantial burden on your loved ones down the road. One of the most considerate things you can do for your family is to undertake thorough, customized estate planning with a qualified Wills & Trusts attorney at Smith & Garg.

And not only will a properly executed Will or Trust likely eliminate anxiety, animosity and expense for your loved ones—it may also substantially increase their inheritance. You work hard to accumulate your estate during your lifetime, and the fruits of your labor should, and can, be passed on to future generations with little to no interference by way of taxes. If estate or gift taxes are a concern to you, it is very important that you discuss all wealth transfer tax-saving options with your attorney and implement in your estate planning those vehicles that are best for your circumstances.

So consider placing ‘Finally making a Will!’ at the top of your resolution list this year. We hope you enjoy your New Year, and look forward to discussing your estate planning needs with you in 2009!

                 Advance directives (such as a Statutory Durable Power of Attorney, Medical Power of Attorney, Living Will, or HIPAA Release) are an important component of any well-prepared estate plan. They are legal documents that direct how your affairs are to be handled or how decisions are to be made in the event you are incapacitated and/or are not able to communicate your wishes to your loved ones or doctors. A question that often arises as I prepare advance directives for my clients is why DNR orders are not typically included in our estate planning package.

                An Out-of-Hospital Do-Not-Resuscitate Order (“DNR” order) is a form used to convey a person’s wish to not be resuscitated if his or her breathing or heartbeat ceases. The form essentially states that certain resuscitative measures should not be used on the individual (such as CPR or defibrillation). In a way similar to a Medical Power of Attorney or a Directive to Physicians, this document allows you to express your personal health care decisions and wishes within specified parameters in the event you are unable to directly communicate with your doctors. The purpose of a DNR order is simply to convey your decision to not be resuscitated outside of a hospital.

                Many clients confuse a DNR order with a Directive to Physicians (or “Living Will”). Remember that a living will is a legal document memorializing a person’s wishes with regard to administering or withdrawing artificial life support in the event of a terminal or irreversible condition. Although both a living will and a DNR order do in a general sense deal with the topic of the use of life-sustaining measures, the scope and applicability of both the life-sustaining methods and the documents themselves are significantly different. It is very important to ask your Estate Planning attorney any questions you have regarding these documents to ensure you understand the difference between the two.

                Again, clients are often curious as to why a Living Will is very often included in attorney-prepared estate plans, but a DNR is not. Although DNR orders are in fact very often prepared by lawyers, they are essentially medical documents. While we can provide you with the form, we always advise that it should be thoroughly discussed with your doctor prior to being executed. In fact, your physician’s signature will be required on the form itself if you choose to sign it. We will certainly be able to discuss the legal scope of the document with you, but most attorneys are hesitant to attempt to advise on whether a particular individual should or should not execute a DNR order (and rightfully so). The choice whether to execute the form is one that should be made with the guidance of a trusted doctor after competent medical advice is given.  

                If you would like to discuss the use of advance directives within your estate plan and the importance of each, we invite you to give us a call today.

                As we approach the close of 2008, it’s important to recall the wealth transfer tax changes that are heading our way in the new year. Changes in the amounts that may be transferred free of tax in 2009 are being increased on both the federal estate tax and gift tax fronts.

                The Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”), which was signed by president Bush on June 7, 2001, provides for a gradual increase in the estate tax exemption between the years 2001 and 2009. You’ll remember that in 2002, the estate tax exclusion (i.e., the amount that can be transferred free of estate tax) was $1 million, with the highest tax rate set at 50%. In 2003, the exclusion amount remained at $1 million, with the highest rate falling to 49%. In 2004 and 2005, the exclusion amount jumped to $1.5 million, with the highest estate tax rate set at 48% and 47% respectively. In the years 2006-2008, there is a $2 million exclusion amount, with the highest rates dipping from 46% in 2006 to 45% in ‘07 and ‘08.  Now it is important to now note that in 2009, our exemption amount will to increase to $3.5 million, with the highest rate remaining at 45%.

                This means that for the year 2009, individuals may transfer a total of $3.5 million at death without federal estate tax ramifications. How this change will affect your estate plan will depend on the size of your estate and your planning goals; therefore, as always, it is important to understand how your “taxable estate” is calculated by recognizing which assets will be included in your gross estate for tax purposes. Further, if estate taxes are a concern, it is vital to discuss your planning options (whether achieved through the implementation of trusts, disclaimers, marital deduction planning, charitable deduction planning, and so on) with the estate planning attorneys at Smith & Garg.

                The IRS has also indicated that the per-donee annual exclusion amount for federal gift tax purposes will be increased to $13,000 for the year 2009. This means that in 2009, you may make $13,000 qualifying inter vivos gifts to as many donees as you choose without triggering the federal gift tax ($26,000 if made as a joint gift by a married couple). Any gift in excess of this amount will impact your lifetime gift tax exclusion (which is still scheduled to remain frozen at $1 million).

                Of course, the practical considerations of the gift tax include understanding what qualifies (or more likely, what does not qualify) as a gift, as well as how to ensure your intended gifts are treated as gifts “of a present interest” to satisfy the IRS. For answers to your burning gift tax questions and to discuss how a lifetime gifting scheme could benefit your estate plan, again, the estate planning attorneys at Smith & Garg are here to help.

                For more details on the estate tax, the gift tax, the 2009 increased exemption amounts, and how these issues affect you, give us a call today.

Um, have you heard of this? Body spray that smells like burgers?

Apparently Burger King, in a bout of marketing genius, has launched a new men’s body spray called “Flame,” which evidently has been made to resemble the smell of a flame-broiled Whopper. BK describes the product as “the scent of seduction with a hint of flame-broiled meat.”

I thought it was a joke, but according to the Associated Press, this cologne is actually being sold by New York City retailer Ricky’s NYC as well as online, for $3.99 a pop. And just in time for the holidays!

I guess the guy in the creepy King mask wasn’t moving enough hamburgers, and it was time to up the ante. Don’t they have anything in a Frosty? Wait, that’s not Burger King.

It makes me think of a conversation I had with one of my girlfriends several years ago when we were in college. Although we are both now happily married, at the time, we were discussing dating—specifically, our “types.” It just so happened that at that particular time, I seemed to have dated a string of exceptionally skinny fellows, while she had been systematically drawn to a more robust variety. She joked that when we went for a night out, to attract the types we seemed to have been attracting, she should rub French fries on her instead of perfume, and I should bathe in Slim-Fast.

OH, how her ideas were ahead of their time.

Around the holidays a couple of years ago, I remember reading an article showing a very creative take on the term “Santa Suit.” Some witty fellow had come up with a fake lawsuit, drafting a “Complaint” said to be submitted by the Children of the World, Plaintiffs, versus Santa, Defendant. After tireless searching (read: a quick Google search), I found the article on www.lawhaha.com, and saw that it was written by one Andrew J. McClurg. His site great; I recommend you check it out.

Here’s a taste, for your reading enjoyment:

Children of the World, Plaintiffs
     
     vs.
     
     Santa Claus, Defendant.
     

COMPLAINT

     Plaintiffs, consisting of the class of all children who on or about Dec. 24, 1999 were hanging stockings by the chimney with care in the reasonable belief that St. Nicholas soon would be there, sue defendant and allege:
     
     1. This is an action for an accounting, damages and injunctive relief.
     
     2. Upon information and belief, defendant is a citizen and resident of the North Pole, where he maintains his principal place of business. The court has subject matter jurisdiction of the action pursuant to 28 U.S.C. § 1332.
     
     3. Count I – Breach of Contract. Throughout the fall of 1999, plaintiffs met with agents of defendant at various shopping malls to negotiate the delivery of certain goods on the evening of Dec. 24, for which plaintiffs paid valuable consideration in the form of exorbitant tie-in charges for photographs of the negotiating sessions. Plaintiffs repeatedly informed defendant, through his agents, that time was of the essence in completing such deliveries. As of this date, many of the contracted goods have not been delivered. Other goods were nonconforming and lacked batteries, rendering them of no use of plaintiffs.
     
     4. Count II – Deceit. Defendant fraudulently induced plaintiffs to improve their conduct against their will by misrepresenting that defendant knows if plaintiffs have been bad or good, when, in fact, defendant lacks sufficient knowledge upon which to form a reasonable belief regarding such matters. In justifiable reliance upon these representations, plaintiffs invested substantial labor in not shouting, pouting or crying and at all times relevant hereto were good for goodness sakes.
     
     5. Count III – Infliction of Emotional Distress. On the relevant night, defendant knew or should have known that plaintiffs were snug in their beds with visions of hand-held video games and name-brand athletic apparel dancing in their heads. Despite such knowledge, defendant willfully and maliciously concealed off-brand goods and inherently worthless property such as sweaters and umbrellas in packages that misrepresented their true contents. Plaintiffs suffered severe emotional shock and fright upon opening such packages.
     
     6. Count IV – Trespass and Conversion. Defendant’s implied license to enter plaintiffs’ premises terminated upon his substantial breaches of contract, rendering all subsequent entries actionable trespasses. Once on the premises, defendant exercised substantial dominion and control over an estimated 200 tons of cookies and 44,000 gallons of milk, converting such property and depriving plaintiffs of its beneficial use.
     
     WHEREFORE, plaintiffs demand judgment for compensatory and punitive damages, injunctive relief and an accounting.