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NOTES and Updates
- Spring 2002
The season of renewal has arrived! As Teale put it, "The world's favorite season is Spring, when all things seem possible," and we at Carney Law Firm couldn't agree more. With a successful US Olympics behind us, sunny days ahead and terrific clients like you, all things do seem possible–and we look forward to continuing to meet your legal needs in the months and years to come.
: As reported in our last newsletter and in our July correspondence, the estate tax exemption amount for 2002 has risen to $1,000,000 per person. In addition, the top estate tax rate dropped from 55% to 50%, and the 5% surtax was eliminated. The estate tax exemption rate will remain at $1,000,000 per person in 2003; however, the top estate tax rate will drop to 49%. These changes to the estate tax system will be beneficial for all of our clients, and some may find that their estate is no longer taxable for estate tax purposes. For married clients whose total estate is less than the one million dollar exemption amount, we would be happy to reevaluate your current estate plan with you to determine if any changes might be in order. For married clients with estates in excess of about $1,200,000, the change means that the Bypass Trust will be funded with a greater portion of the estate than may have been anticipated, leaving the surviving spouse with less complete control over the total estate. Should you have questions regarding how these and the future changes to the estate tax system may impact your existing estate plan, please contact us. The drafting and enforceability requirements of premarital agreements were just increased, making it more difficult to locate attorneys willing to draft such agreements. In order for a premarital agreement to be enforced, a court must now find that the party against whom the agreement is to be enforced (1) had independent legal counsel, (2) had at least seven (7) days to seek advice regarding the agreement, (3) had waived his or her rights to counsel, if he or she was not represented, (4) did not execute the agreement under duress, fraud, or undue influence and had capacity to enter into the agreement, and (5) was not subject to any other factors the court might deem relevant. As the court can now take any components it finds relevant into account, it is increasingly difficult to rely on any premarital agreement to be enforceable. These new rules appear to block signing documents on the way to the church, require independent counsel or an informed waiver of counsel on both sides, and demand proof as to capacity. Also, under the "other factors" test, the courts will probably be looking at whether the agreement was "fair" at the time it was signed and, possibly, at the time it is challenged. Finally, and importantly, this new law applies to all premarital agreements, even those previously executed, and may result in current agreements being found unenforceable. This conservatorship case involved a man who suffered severe brain damage in an automobile accident. While he was comatose for a period of time, Mr. Wendland did regain a certain level of consciousness and was not in a vegetative state. Prior to his accident, Mr. Wendland had expressed his desire not to live in a vegetative state, but had never executed an Advance Health Care Directive. Mr. Wendland's wife sought to remove her husband's feeding tube, based on his previously expressed statements regarding not wanting to live in such a state. The California Supreme Court found that these oral statements did not meet the required burden of clear and convincing evidence and refused to permit the removal of the feeding tube. This case has implications for our elderly citizens who suffer from mental deterioration or Alzheimer's Disease. The California Supreme Court did not want to establish a precedent which might allow the withholding of medical treatment absent a clear directive from the person impacted. Thus it is critical, while you have capacity, to execute a valid Advance Health Care Directive and make your wishes for life-sustaining care known. back
to top Please remember that anything sounding too good to be true, probably is. To report a suspected tax fraud to the IRS, you can call 1-800-829-0433. In recent years, ordering prescription medications and other drugs from other countries has become increasingly popular. Consumers who use this resource commonly cite reduced cost and even the ability to get drugs which are regulated in the United States, without a prescription,as their primary reasons for purchasing controlled drugs abroad. According to the FDA, foreign pharmacies who ship prescription drugs to citizens of our country are in violation of federal law. A main concern is about the quality and drug strength of products outside the U.S. Do be aware, however, that the FDA will sometimes permit the importation of illegal drugs in order to treat certain patients with serious medical conditions. Trust Mills are companies which "sell" expensive boilerplate estate planning documents which are not prepared by attorneys, are not appropriate for most of their clients, and are often defective. These trust mills operate under many different names and mainly target their "products" to seniors. Often these trust mills use the confidential financial information obtained to also sell the client on inappropriate investments. Clients are told that they should not see an attorney about the estate plan or investments as the attorney probably will not "understand." Some recent names these companies have used are National Trust Service, Alliance for Mature Americans, Legacy Legal, Estate Protection Planning Corporation, and Senior Informational Services. Always encourage elderly friends and family members to seek reputable estate planning attorney assistance, preferably an attorney who is a certified specialist in Estate Planning, Trust and Probate Law. If you hear someone was told not to consult an attorney, encourage that person to get help immediately. These trust mill representatives are con men/women and not to be trusted. back to top |
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