Estate Tax Update

FEDERAL ESTATE TAX:

The Federal Estate Tax law was changed in late December, 2010. The federal estate tax credit is now $5 million, with a 35% tax on the excess. The new law will also allow “portability” between spouses, which means that a married couple essentially has a $10 million federal estate tax credit. This increase is only in effect for 2011 and 2012, scheduled to go back down to a $1 million credit (55% on the excess) in 2013, but will likely be revised before then.

MASSACHUSETTS ESTATE TAX:

Even though the federal estate tax credit is very high now, resulting in most estates being non-taxable for federal purposes, Massachusetts residents still have to worry about the state estate tax, since the Massachusetts estate tax threshold is still only $1 million (not set to change). The $1 million is just a “threshold”, meaning that if your estate exceeds $1 million, the entire estate is taxed in MA, up to 16%. For example, for a $2 million estate (including real estate, liquid assets, retirement plans AND the full value of life insurance), the MA estate tax would be over $100,000.

There are several estate planning techniques and documents that allow you to substantially reduce (and possibly eliminate) the MA estate tax that would be due at death. It is very important for Massachusetts residents, married or single, to learn about Trusts and other techniques to reduce the Massachusetts estate tax and pass more on to their intended beneficiaries.

Robin Gorenberg quoted in NY Times Article

Attorney Robin Gorenberg was quoted in an article entitled “Choosing the Right Executor for your Estate”, which appeared in a special “Retirement” Section of the March 3, 2011 New York Times.  The article discusses the importance of making a well-thought out decision about who to name as the Executor of your Will, particularly in light of new estate tax laws that make the Executor’s job more important than ever.  The Executor is the person who handles your estate when you die, gathering information about assets and values, hiring the lawyer to handle the probate process (if required), and basically overseeing settling the details of your estate. There can be a single executor or one or more people charged with this job.  The person you choose should be organized and able to act as the liason between the attorney, CPA and financial advisors.  Attorney Gorenberg stressed the benefits of talking with the people you are naming, and even those family members who you are not naming, to be sure that the people closest to you are all on the same page.

Led Davidson Successfully Defends Billboard Ownership
As we drive down highways in Massachusetts, most of us notice, but do not give any thought to, the billboard signs that fight for our attention with advertising.  As it turns out, these billboards gained great value when Lady Bird Johnson in the 1960’s was instrumental in the passage of the National Highway Beautification Act.  This Act prohibited new billboards from being erected on highways in an effort to preserve as much of the natural beauty of the landscape as existed at the time.  Billboards that were in place at the time were allowed to remain and therefore obtained “grandfathered” status.  As is the case with most limited commodities, pricing escalated dramatically for this limited, but valuable marketing resource.  Our client, a family business, was challenged by a sophisticated and experienced local billboard company for control of billboards which have been in the family for forty years.  The litigation was conducted on multiple fronts:  in two cases before the Massachusetts Superior Court, before the Massachusetts Outdoor Advertising Board, and at the City of Boston’s Inspectional Services Division.  The litigation lasted more than eighteen months before a settlement was reached resulting in the client obtaining a new lease and a new permit to advertise in the face of a challenge to both.  The opposing party was denied requested relief before the Inspectional Services Department and ultimately was forced to drop their claims in the Superior Court.

Len Davidson Wins Case at Massachusetts Appeals Court
On March 17, 2011, the Massachusetts Appeals Court issued a ruling in favor of our client reversing the Land Court decision in the action of the City of Newburyport v. Woodman, et als.  This case, having to do with our client’s proposed development of a parcel of real estate in Newburyport, reversed a Land Court decision, now paving the way for our client to move forward with the development process that had been held up a result of the litigation.  The case, involving the right of first refusal in conjunction with agricultural land, followed closely the precedent of Franklin v. Wyllie, 443 Mass. 187 (2005), a case that Len had previously argued and won at the Massachusetts Supreme Judicial Court.  The Land Court judge in the Newburyport action had ruled that our client’s offer to purchase the real estate in question was not a bona fide offer as it contained contingencies involving a comprehensive permit under G.L. c. 40B for affordable housing.  The Land Court adopted the City of Newburyport’s argument that such an offer was not a bona fide offer to which the City would have to respond under its right of first refusal.  The Appeals Court disagreed and reversed the Land Court, adopting our client’s argument that even though contingencies were contained in the offer, it was nevertheless bona fide.  The Appeals Court decision restores out client’s rights under their agreement.  In its decision, the Appeals Court cited frequently to the Franklin v. Wyllie case that Len had argued successfully in 2005.

Robin Gorenberg joins Schlesinger and Buchbinder, LLP as Of Counsel
Schlesinger and Buchbinder, LLP is proud to announce that Robin Gorenberg is Of Counsel to the firm concentrating in Estate Planning, Estate Administration and Probate and Estate Tax preparation.  A 1981 graduate of Brandeis University and 1988 graduate of Boston College Law School Robin has over 20 years’ experience in estate planning and administering estates.