WITH the federal tax on estates now kicking in at $5.25 million — or $10.5 million for a couple — it may seem that only the very wealthy need to worry about paying the tax. But that doesn’t mean that everyone else can forget about an estate plan.

Consider the people who fill out forms designating who inherits assets like an insurance policy and then never go back and revise the forms when, for instance, they divorce and remarry. And then, there are the parents who have not determined who will serve as guardians for their children.

“Even though you have less than $10 million or even if you have more, you really want to guide the family as best you can,” said Stuart Kessler, a certified public accountant and director at the accounting firm CohnReznick.

Having just filed tax returns, many people may not want to think about how the changes to the tax code under the American Taxpayer Relief Act, passed in early January, could affect them.

But if they don’t, they may be shocked come next year’s tax season. Or worse they may end up making financial plans based on a cursory understanding of what the changes mean for them and regret it later.

Over the next couple of weeks, I am going to look at how the tax changes could sway people’s thinking on estate planning, investments and insurance and why people need to think clearly about how they are responding.

This week, I’m looking at estate planning, where the focus over the last decade has been on the exemption amount and the tax rate above it. The exemption rose steadily and the tax rate fell from 2001 until 2010, when the estate tax disappeared for most of that year. When the tax returned in 2011 and 2012, the exemption was set at a historically generous $5 million indexed for inflation and a 35 percent rate above that.

The American Taxpayer Relief Act made the exemption permanent at the 2011 level, indexed for inflation, and set the tax for anything exceeding that amount at 40 percent. It also kept the exemptions and taxes the same for gifts made in a person’s lifetime.

Here is a look at why people at different income levels need to pay attention to their estate plans.

THE NECESSITY OF FEAR When his nephew was about to marry in March, Mr. Kessler took the young man to lunch and offered advice: draft a will. While not exactly a romantic thought, it was a practical one. And Mr. Kessler said he often pressed clients with far less than $10 million to do the same — and to revisit it often.

“They feel they’ve set this in motion and don’t have to deal with this for 10 years,” he said. “I’m not crazy about that idea. I usually bug them in three years.”

It is easy to imagine a family with a modest amount of money having a child with a spending or substance abuse problem or a checkered marital history who would benefit from having an inheritance put into trust.

But there are simpler issues that could be overlooked if people figured there was no longer a need to think about an estate plan.

One is the beneficiary designation form, which determines who gets assets like a retirement account or an insurance policy. Many times, people fill out these forms when accounts are opened and then forget about them, even as the account or insurance policy grows or people’s life situations change. That form overrides a will.

People with dependent children also need an estate plan to make sure they have life insurance and guardians for their children. “That’s one of the major issues here,” Mr. Kessler said. “Forget about when the kids get the money. It’s, Who’s going to take care of them?”

Some states intervene when a person dies without a will — and charge fees to sort things out. In California, a will alone is not enough to avoid the state’s getting involved in the probate process, said Andy Katzenstein, a partner in the personal planning department at Proskauer, a law firm.

A better plan, he said, would be to set up a revocable, or living, trust that holds the assets. It has the added advantage of keeping prying eyes out of someone’s affairs.

“Michael Jackson’s will is being probated,” Mr. Katzenstein said. “He actually had a living trust, but he didn’t put his assets in it.”

- Spencer

When Roman Blum died last year at age 97, his body lingered in the Staten Island University Hospital morgue for four days, until a rabbi at the hospital was able to track down his lawyer.

Mr. Blum, a Holocaust survivor and real estate developer, left behind no heirs and no surviving family members — his former wife died in 1992 and the couple was childless. His funeral, held graveside at the New Montefiore Jewish Cemetery in West Babylon, N.Y., was attended by a small number of mourners, most of them elderly fellow survivors or children of survivors.

Much about Mr. Blum’s life was shrouded in mystery: He always claimed he was from Warsaw, although many who knew him said he actually came from Chelm, in southeast Poland. Several people close to Mr. Blum said that before World War II, in Poland, he had a wife and child who perished in the Holocaust, though Mr. Blum seems never to have talked of them, and the International Tracing Service in Bad Arolsen, Germany, has no record of them in its database. Even his birth date is in question. Records here give it as Sept. 16, 1914; identity cards from a German displaced persons camp have it as Sept. 15.

But perhaps the greatest mystery surrounding Mr. Blum is why a successful developer, who built hundreds of houses around Staten Island and left behind an estate valued at almost $40 million, would die without a will.

That is no small matter, as his is the largest unclaimed estate in New York State history, according to the state comptroller’s office.

“He was a very smart man but he died like an idiot,” said Paul Skurka, a fellow Holocaust survivor who befriended Mr. Blum after doing carpentry work for him in the 1970s.

Gary D. Gotlin, the public administrator handling the case, sold Mr. Blum’s home on Staten Island, auctioned off his jewelry and his furniture and is putting other properties that he owned on the market. Mr. Gotlin’s office, which is overseen by Surrogate’s Court in Richmond County, is also using Mr. Blum’s estate to pay his taxes, conduct an in-depth search for a will and hire a genealogist to search for relatives. If none are identified, the money will pass into the state’s coffers. That, Mr. Blum’s friends said, would be a tragedy, compounding the one that befell him as a young man in Eastern Europe.

“I spoke to Roman many times before he passed away, and he knew what to do, how to name beneficiaries,” said Mason D. Corn, his accountant and friend for 30 years. “Two weeks before he died, I had finally gotten him to sit down. He saw the end was coming. He was becoming mentally feeble. We agreed. I had to go away, and so he told me, ‘O.K., when you come back I will do it.’ But by then it was too late. We came this close, but we missed the boat.”

Roman Blum was, by all accounts, an emotional man with a large personality. Six feet tall and handsome, he was a ladies’ man, a gambler and a drinker. He was also enterprising and tough in business.

“He had deeds on his desk piled up to the ceiling of properties he owned,” said Vincent Daino, who was Mr. Blum’s neighbor for 25 years and became his unpaid driver when the older man’s eyesight began to fail. “There were royalties from oil rigs in Alaska, money from his stocks — about once a month he would have me drive him to the bank so he could deposit $100,000 checks.”

Much of what is known about his life comes from a circle of fellow Holocaust survivors who met in displaced persons camps after the war.

They said that when war broke out, Mr. Blum was in Poland and, fearing capture, ran alone across the border to Russia, where he was briefly detained and placed in prison. The Russians soon released him along with thousands of other prisoners to fight the Nazis. The fate of his wife and child, if they existed, is unclear.

In the months after the war, Mr. Blum met a family of survivors with two daughters. One of them, Eva, had been in the Auschwitz concentration camp.

He married her, although by all accounts it was not a love match. “It was immediately after the war — he thought she was the last Jewish woman alive, and she thought there were no more men,” said a friend and fellow Holocaust survivor who met Mr. Blum around that time. The friend would speak only anonymously, for fear that he would seem to be trying to make a claim on the Blum estate.

In 1946, Mr. and Mrs. Blum made their way to Zeilsheim, a displaced persons camp on the outskirts of Frankfurt. In the chaos of postwar Germany, Mr. Blum became a smuggler, as many Jews did, Mr. Skurka said: He pirated cigarettes into Belgium while biding his time waiting for a visa to the United States. During that period, Eva remained in Zeilsheim and Mr. Blum preferred the livelier Berlin.

Mr. Skurka related a story from those days that, he said, Mr. Blum had told him. One day while in Berlin, Mr. Blum walked into a barbershop and asked the proprietor for a shave. When the barber finished, Mr. Blum said he had no money, shrugging his shoulders and smiling as he walked out the door. “He had chutzpah, that’s the kind of man he was,” Mr. Skurka said.

In 1949, the Blums came to New York and settled in Forest Hills, in Queens. There, they joined a tightknit community of survivors, many of whom they knew from the Zeilsheim camp.

“They all lived the same type of lifestyle, going to the bungalow colonies together, the Catskills, everything was done as a group,” said Jack Shnay, a child of survivors who grew up in Forest Hills with the Blums. “Initially, they all lived in apartments in Rego Park; then they starting buying or building private homes.”

“Every weekend was a party,” said Charles Goldgrub, the child of survivors and Mr. Blum’s godson, who also grew up in Queens. “They had survived Hitler so they thought they would live forever.”

On weekends, the survivors would often gather to play high-stakes poker and drink plum brandy. They rarely discussed their wartime experiences, but sometimes, as a group and tipsy, they would grow emotional. Mr. Blum’s favorite tune was the 1968 single by Mary Hopkin, “Those Were The Days,” recalled Michael Pomeranc, a hotelier who grew up in Forest Hills and whose parents, also survivors, were close to the Blums. “He was always singing that song, and especially if he’d had a bit to drink, he’d try to get everyone to join in with the lyrics,” Mr. Pomeranc said.

Many of the men started businesses together, the majority becoming homebuilders and hotel developers. They referred to themselves as griners, a Yiddish term meaning greenhorn or newcomer. “They were known as the griner builders,” said Robert Fishler, a Staten Island real estate lawyer who represented Mr. Blum for nearly three decades.

The men also had affairs. “There were lots of women on the side,” Mr. Goldgrub said. “It was a way of life, everyone knew — the wives just closed their eyes to it.” By many accounts, Mr. Blum often had female companions other than his wife. “It was really more like growing up in the Italian mob than your typical Jewish upbringing,” Mr. Goldgrub said.

While the people in the group liked having fun, they were not showy, despite their growing wealth. Most drove the same Buicks and Oldsmobiles for years and remained in the same middle-class neighborhood. Their modesty might also have been a desire to keep their wealth under wraps. “They didn’t want anyone to know what they had. They had been so scrutinized they didn’t want to call attention to themselves,” Mr. Goldgrub said.

The Blums struggled to start a family. Mrs. Blum told her friends that she was unable to have children, and the couple spent thousands of dollars on doctors’ visits. According to stories that swirled around the couple, Mrs. Blum had been a subject of the dreaded Dr. Josef Mengele while at Auschwitz, and his experiments had rendered her infertile.

In the 1960s, on a five-week trip to Israel on the Queen Elizabeth, Mr. Blum found a boy, an orphan, whom he wished to adopt. But friends who were with them said Mrs. Blum begged him not to go through with the adoption, convinced that her doctors would ultimately be able to help them conceive. They did not adopt the boy and never had children.

Then, in 1964, the Verrazano-Narrows Bridge opened, linking Brooklyn and Staten Island, and many in the group, including Mr. Blum, began buying land on Staten Island. Prices were low, and Mr. Blum began developing land and building homes in neighborhoods like Eltingville, Huguenot and Manor Heights.

“Everybody knew Roman. He built hundreds of homes over the years,” Bruno Betro, a broker at Volpe Realty, said. “Last time I tried to sell a piece of property for him, I’d give him an offer and he’d tell me he wanted $1 million more.”

By the 1980s, with his business thriving, Mr. Blum decided to relocate to Staten Island. He built a large brick house in the upscale neighborhood of Southeast Annadale, with four bedrooms and five bathrooms, a two-car garage and a pool.

Mrs. Blum did not want to move. “He wanted her to go live with him in his big house with a swimming pool, but she loved the city,” said the friend who wished to be unidentified. “All her friends were there, and with his lifestyle, if she went with him, she knew she would be alone a lot.” Mrs. Blum stayed in Queens and Mr. Blum moved into the new house.

“Fifty years of marriage and he just left,” said Sherri Goldgrub, who married Charles Goldgrub in 1980 and knew the Blums well. “He would sometimes come back and bring her his laundry, but she sat home waiting, thinking he’d be back for dinner.”

The Blums eventually divorced, and Mr. Blum lived the life of a bachelor. There were women and lots of poolside parties. “Every Sunday we would swim in the pool, drink and eat — he’d like to make steaks this thick on the grill,” said his friend, holding his fingers five inches apart.

As for the group back in Queens, the divorce caused a rift and many distanced themselves from Mr. Blum.

“People were offended,” Mr. Goldgrub said. “People took sides, and our family took Eva’s side.” The last time Mr. Goldgrub saw Mr. Blum was at the bar mitzvah of his son in 1995. Mr. Blum was furious that he was not asked to light a candle for the boy, an honor, and told Mr. Goldgrub’s father he was taking his godson out of his will.

But Mr. Blum’s business on Staten Island was growing. Known as shrewd and hard driving, he could often be found early in the morning, cup of coffee in hand, sitting in the garage of one of his model homes, displaying sample materials and giving prospective buyers the hard sell.

As the years went by, Mr. Blum became increasingly stingy and, according to those who knew him, paranoid that people were after his fortune. He hid $40,000 in the ceiling of his bathroom, according to Mr. Daino, and when it went missing, Mr. Blum accused another neighbor of stealing it. “He told him, ‘Give me back $30,000 and I’ll let you keep $10,000,’ ” said Mr. Daino.

Months before he died, Mr. Blum fell down the stairs of his home and broke his leg, lying on the floor for four hours before a cleaning woman found him, according to Mr. Daino. It was Mr. Daino who took him to the hospital and who eventually signed him out.

“He had no one else, I was the only person he had,” Mr. Daino said. The leg never fully healed, and Mr. Blum, who remained at home in a hospital bed with 24-hour care, died in early January 2012.

After the hospital rabbi found his body in the morgue, he notified Mr. Fishler, the lawyer, who then notified Mr. Blum’s old friends from Queens. To the surprise of many, Mr. Blum had bought a cemetery plot next to his former wife’s. He was buried there.

“It is a heartbreaking story, a tragedy,” said Mr. Pomeranc, who was one of the few people who attended Mr. Blum’s funeral. “I spoke with him three days before he died. We were going to get the whole group together and take a ride out to see him that weekend. But it didn’t happen, and then the next week he passed away.”

None of Mr. Blum’s friends know why he never wrote a will. Those close to him say it may have been superstition or, after coming so close to dying during the war, a refusal to contemplate his own mortality. He may also have been unwilling to share the full details of his estate with a lawyer, the desire for secrecy a holdover from his experiences during the war.

Had the Blums had children, the estate would have gone to them, even without a will. While Mrs. Blum, as his former wife, would not have been eligible — only a current spouse or a blood relative can claim an inheritance in the absence of a will — his friends hope that Mr. Blum had siblings back in Poland with whom he was not in contact or that, if he had had a child before the war, some distant relations are still living in Europe.

“It wouldn’t be that uncommon to uncover collateral heirs,” said Burt Neuborne, the civil liberties defender who was the lead counsel in recent Holocaust litigation against Swiss banks. “We often found that someone, like a third cousin twice removed, would come forward.”

Yet despite a worldwide search that included Poland and Israel, Mr. Gotlin said, “to date, there is no evidence of any living relatives.”

Mr. Gotlin continues to work on liquidating Mr. Blum’s estate. According to people familiar with his accounts, Mr. Blum had about $4 million in cash in his checking account. His house was put on the market for $729,000 and is now in contract, and an eight-acre parcel he owned on Forest Avenue, worth about $4.5 million, is also in contract. A safe deposit box had more than 70 $100 bills, coins from Canada and South Africa, and gold jewelry including a watch, a bracelet, cuff links, several necklaces and a ring.

Mr. Blum’s few remaining personal items, including photographs and a book on the Holocaust, have been put in a box in the basement of the public administrator, where they will remain sealed unless claimed by a blood relative.

Once Mr. Gotlin completes liquidating the assets, and if investigators fail to find a will or surviving kin, whatever money is remaining from Mr. Blum’s estate will be passed to the city’s Department of Finance. If, after three years, no one comes forward, the money would go to the state comptroller’s office of unclaimed funds, which has $12 billion in its accounts dating to 1943. That office keeps a portion of the estate and transfers a portion to the state’s general fund. If an heir comes forward, the entire amount is returned.

The last time his old friend from Zeilsheim saw him, the man pushed Mr. Blum to discuss the topic of a will. “I told him, ‘Look, I know you don’t want to talk about it, but’ — and he was already a little bit drunk — I said, ‘You have to do something,’ ” the friend said. “And he told me, he said, ‘I promise you, if anything happens to me, you are going to be proud. You’ll be proud of me.’ ”

The friend still clings to hope. “I believe a will is written,” the friend said. “Somewhere there is a plan: he made arrangements to use the money to build a home for children and to dedicate it to his child from before the war. I am sure of it.”

- Dan

- The Partners of JGB

- The Partners of JGB 

- The Partners of JGB

Please follow this link for the full article: http://www.vsb.org/docs/valawyermagazine/vl0413-powell-award.pdf.

- The Partners of JGB

The possession of firearms by US citizens has always been a controversial topic, but with the recent tragic events the debate has significantly intensified.  The Second Amendment that grants “the right of the people to keep and bear arms” is sure to be weighed and considered over the coming months as new firearm laws are voted on at both the State and the Federal level.  The debates will undoubtedly touch on what constitutes responsible possession and permissible transfers of firearms in our country.

Firearm possession and transfer laws are very important for anyone assisting with the incapacity and/or the estate of a firearm owner.  Someone unfamiliar with firearms can easily make an innocent mistake with serious implications.  The most common mistake would probably be the sale of a firearm for significantly less than the fair market value.  The undervalued sale is the least of someone's concerns if that sale is to someone who cannot legally possess a firearm.  Even the failure to file the appropriate transfer paperwork on a firearm transfer can result in severe criminal liability.

A firearm owner may wish to proactively address the need for discretion and leave a list of instructions for the control of their firearms by creating a “Gun Trust”.  The Gun Trust is also known as a “NFA Gun Trust” and should have specific instructions and information for the Trustee regarding each firearm in the Trust.  The trust instructions are specific as to whether the firearm owner is incapacitated or deceased.  Sometimes the instructions can include a list of firearm values or even who a specific firearm is to be sold to.  With the assistance of a Gun Trust, as well as sound legal advice, the Trustee can effectively navigate the transfer of the firearms.

- Spencer

Elizabeth Petrakis is now committed to helping other individuals cope with divorces.

Elizabeth Petrakis signed her prenup just four days before her 1998 wedding to Long Island real-estate mogul and millionaire Peter Petrakis. According to Elizabeth, her then-fiance promised to tear up their agreement once they had children.

But after twin sons and a daughter, the prenup stayed intact.

Elizabeth has spent seven years arguing to have the prenup torn up. Last month, 15 years after she tied the knot, a Brooklyn appellate court upheld the decision to void the contract.

Its a game changer, Elizabeths lawyer, Dennis T. DAntonio, said of the Brooklyn Appellate panels ruling. Im unaware of a vacated prenup in the state of New York on these or similar grounds.

The court ruled in favor of the plaintiff, Elizabeth, on the grounds of fraud in the inducement recognizing that Peter misled Elizabeth in the contract, finding his credibility to be suspect.

You can enter into prenups, but you shouldnt when youre marginalizing your spouse or being too greedy, said DAntonio.

That, he argues, is the difference in the case of Cioffi-Petrakis v Petrakis. The argument was helped by inequality of the prenuptial agreement...

For the full article please visit: http://www.today.com/id/51148829/ns/today-relationships/t/court-voids-prenup-wife-signed-days-wedding-millionaire/

- Jeremy

An army of lobbyists has been mobilizing in the halls of Congress over recent months in anticipation of what could be a monumental struggle later this year over reforming the tax code.

While the standoff over sequester spending cuts and other budget battles have been grabbing headlines, momentum has quietly been building toward a once-in-a-generation push to overhaul federal taxes, an effort that would likely affect nearly every family and business.

Tax reform edged closer to center stage in recent days after President Obama opened conversations with Republicans over a deal to tackle the federal deficit. A broad rewrite of the tax code could figure in such an agreement, along with cuts in such entitlement programs as Medicare and other changes in federal spending.

The prospect of a tax overhaul has already kicked the capital’s influence industry into high gear. From corporate chiefs and hedge fund lobbyists to Montana ranchers and Broadway producers, the players have already begun their campaigns, pressing for everything from lowering the corporate tax rate to preserving cherished deductions and, in some instances, inserting new tax loopholes into law...

- Dan

Paul Geisert was always tech savvy and good at managing his finances until one day seven years ago when he couldn't complete his tax return. The TurboTax software that he normally used seemed complicated. And when he went out to eat, he found it hard to estimate the tip.

Geisert, then 73, quickly realized that he couldn't ignore the problem. He went to a doctor for mental tests. They confirmed that his slippage in finances was a sign of mild cognitive impairment, or MCI.

Fortunately, Geisert could turn to his wife, Mynga Futrell, for support. The couple also hired a CPA to handle their taxes, and Geisert decided to stop driving. "I really don't work now," he says. "But I have things to do. I take care of the dog. I still do the yard work, and I repair some things in the house."

Geisert's story should be a wakeup call to Baby Boomers. They not only have to make sure their nest eggs can last all their retirement years, but they also need to start planning for financial care before they experience memory loss and can't make smart financial decisions.

RETHINKING RETIREMENT: Baby Boomers are reinventing themselves in retirement

Already, older Americans are losing $2.9 billion a year to financial abuse, according to a 2011 study by MetLife Mature Market Institute.

And financial exploitation is considered much worse because many older Americans, especially those who have MCI are unlikely to report fraud. That's because they may not recognize a scam or they may be too embarrassed to tell anyone.

MCI is considered much less serious than dementia, but is "much more scary in terms of the likelihood that you'll still be behind the wheel of your financial life," says David Laibson, professor of economics at Harvard University.

MCI is more common among older Americans than Boomers may realize. It affects about 20% of Americans over age 70, according to the American College of Physicians.

RETHINKING RETIREMENT: Ways to a healthy, happy retirement

"We don't like to look ahead to things like that," says Futrell, Geisert's wife. "But it's necessary to invest some resources into planning and try to cover your bases. And then if those things don't happen, lucky you."

How to prepare for memory loss

• Develop a support team. It should include those who are willing to take care of you on a daily basis and those you can trust to take care of your finances, says Louise Schroeder, a financial planner in Stillwater, Okla., who specializes in planning for aging successfully. Make sure that they are willing to handle these responsibilities and understand your wishes and how you want your finances handled, she says.

Unfortunately, it's not always easy to find younger family members to rely on. The Baby Boomer generation is the largest in U.S. history. As they are growing older and living longer, their family members are fewer and living much further apart.

LIFESTAGES: Caring for elderly parents catches many unprepared

Some people may prefer to rely on a lawyer or a financial adviser they know and trust. But if your adviser is older than you are, be sure the firm also has younger employees you can rely on. Some financial planners, such as Locker Financial Services in Little Falls, N.J., are adding elder-life advisers to provide more support for aging clients.

• Prepare documents. After you decide on whom you will rely, you need to put it in writing. By creating a power of attorney document (POA), you will give a person authority to act on your behalf if you are incapacitated.

Be sure you also have medical directives, which include a living will and health care proxy. And keep copies of your documents in a place at home where they are easily accessible.

RETIREMENT LIVING: 5 things to do now to prepare

You also should consider writing down a list of your desires and goals in case you have cognitive impairment and end up living in a nursing home. "Think about these things as a way to maintain control over your future," says Janet. L. Lowder, elder law attorney at Hickman & Lowder in Cleveland. Because if you have not done this and suddenly have cognitive impairment, others can make decisions for you that you don't want.

• Simplify your investments. "A very complicated portfolio, with all sorts of individual stocks, non-publicly traded investments, related partnerships, is not good for an 85-year-old person to be running," Laibson says.

Before you reach that age, either delegate control to a very trustworthy adviser or change your portfolio to less-complex financial investments. Some people prefer to buy an annuity because, even if costly, it provides a steady stream of income.

Many people in their 60s start planning to move to a warm climate and live in a one-story home so they don't have to climb upstairs. But just as their knees will get creakier as they get older, their brains will react differently. A recent study of brain scans found that older Americans often have misplaced trust in others, says the University of California-Los Angeles research.

Their skills for making good financial decisions can start deteriorating as early as early to mid-50s, according to Shelley Taylor, lead UCLA researcher. That's why it's important to plan ahead and rely on close friends and family members as you grow older.

But not all older Americans are willing to listen to family members. Jody Thomas, vice president for the Better Business Bureau of Greater Maryland, became worried about her 81-year-old stepmother when her father, who is 86, mentioned that the couple often went to many free financial investment lunches. And he told Thomas that her stepmother had invested most of her money in real estate investment trusts.

"I went to FINRA's (Financial Industry Regulatory Authority) website and started finding out about investment fraud and senior abuse," Thomas says. "And REITs are given as one example of unsuitable investments for senior citizens."

When Thomas tried to bring up the issue with her father and stepmother, they became upset and refused to talk about it. "I know this is a really difficult subject," she says. "It has a lot to do with fear of losing independence."

- Dan