In these troubled times, we at Jaspan Schlesinger LLP extend our best wishes for the coming year to all.

Before my colleague Sally Donahue continues her series on guardianship matters next week, I thought I would fill in the gap and digress from the world of Trusts and Estates with some thoughts on the role that live music and theatre plays in making New York the world capital of the performing arts.  I hope COVID-19 does not change that verb “plays” into the past tense “played.”

Many have suffered terribly in this pandemic, many of our friends and relatives have died or have mourned, many have lost their jobs, especially at the lower end of the earnings spectrum. Wall Street is fine; Main Street not so much. So, if you don’t mind, I would like to write about a group of artists who have been sidelined from displaying the fruits of their years of dedication, work, and talent.  Even during the pre-pandemic times, when the New York live music and theatre scene was booming, making a living as performer was always a daunting challenge.

As I write, the Jazz Standard has closed and Birdland is in dire financial straits. The Metropolitan Opera, never a profitable enterprise, is suffering.  Jazz at Lincoln Center is struggling. They have done their best to continue their work on the streaming services available on the internet and your support would greatly assist in keeping them alive. For example:

From the New York Times, “Ten Classical Concerts to Stream in January”

NY Times Concerts to Stream in January

From Jazz at Lincoln Center, “New Online Jazz Programs”

Jazz at Lincoln Center

Two samples of what we are missing.

From Jazz at Lincoln Center, “El Cantante, from Una Noche Con Rubén BladesJazz at Lincoln Center Orchestra with Wynton Marsalis featuring Rubén Blades.”  As a fortunate member of that audience, I echo the sentiments  that, “the Jazz at Lincoln Center Orchestra with Wynton Marsalis welcomed a very special guest to their Manhattan stage: nine-time Grammy winning singer, songwriter, actor, and activist Rubén Blades. For one unforgettable night—music-directed by the JLCO’s bassist and ’emerging master in the Latin jazz idiom’ (DownBeat) Carlos Henriquez—the worlds of salsa and swing collided. Backed by one of the world’s leading big bands, Blades took the audience on a tour through his greatest hits. In their write-up of the show, the New York Times said ‘Mr. Henriquez’s arrangements delivered consistently… Radically beautiful.’ ” Any fans of Jazz in general and Latin Jazz in particular will share this sentiment when listening to this song and taking advantage of the internet to watch other selections form that great institution, Jazz at Lincoln Center, and its great leader Wynton Marsalis.

Youtube Lincoln Center

From Broadway, “Girl From the North Country” was a great hit  just as everything shut down. The innovative musical combined the music of Bob Dylan with the story telling of playwright Conor McPherson to produce a memorable night at the theatre. If it returns to the stage, it is a performance  that is guaranteed to break your heart.  Here’s a review from Ben Brantley of the New York Times.  (It seems to strike an appropriate evocation of times past and perhaps times present for those of our neighbors suffering from the hardships of the pandemic.)  Mr. Brantley, if you please,  “A nation is broken. Life savings have vanished overnight. Home as a place you thought you would live forever no longer exists. People don’t so much connect as collide, even members of the same family. And it seems like winter is never going to end. . . Yet while this singular production, which opened on Thursday night at the Belasco Theater under McPherson’s luminous direction, evokes the Great Depression with uncompromising bleakness, it is ultimately the opposite of depressing. That’s because McPherson hears America singing in the dark. And those voices light up the night with the radiance of divine grace. . . ‘As we know, pain comes in all kinds,’ Dr. Walker tells the audience early in the show. ‘Physical, spiritual, indescribable.’ Those varieties of pain are all palpable in ‘Girl [From the North Country],’ and they’re never going to be healed. And then the music starts. You don’t know where it comes from, or even exactly what it means. But there’s no mistaking the sound of salvation.”

Here’s a preview from the London production:

Youtube London production

 

 

 

 

 

Mom needs help with her finances and daily life.  She is no longer capable of paying her bills, doing her banking, managing her medications, and is generally failing mentally.  As a doting child, you want to help her, but how?  Well, you certainly can take her to the doctor, manage her healthcare, bring her groceries, or even have her move into your home.  After all, who would not help Mom in her time of need?  (That begs the question, left unanswered in this blog entry.)  But, what about paying her bills, managing her finances and applying for Medicaid?  That requires being an agent under Mom’s Power-of-Attorney.  But, Mom never executed one, and she no longer has the capacity to do so.

Now what?  Where do you turn when it seems there is nowhere to turn?

New York State Mental Hygiene Law Article 81 to the rescue.  This blog entry, and several to follow, will explain some of the benefits, and some of the pitfalls, of applying to be appointed as a guardian for the personal needs and property management of an individual who can no longer take care of himself or herself, if that person meets the legal criteria for such an appointment.

According to the Urban Institute, as well as the United States Census Bureau, the number of Americans ages 65 and over is growing exponentially and is expected to reach 80 million in the next twenty or so years.  It is no longer the exception that people live well into their eighties and nineties.  Although the subject of an Article 81 proceeding often is an older person, the statute  extends its reach to any New York State resident who is “unable to provide” for his or her personal needs or property management, cannot “adequately understand and appreciate the nature and consequences” of that inability, and “is likely to suffer harm” as a result, and requires a judicial determination of incapacity after a hearing by a justice of the New York State Supreme Court based on “clear and convincing evidence.”  The reason for the high level of judicial scrutiny is that such a finding and the concomitant appointment of an Article 81 guardian is a limitation on the incapacitated person’s liberty interests.

Who can petition under Article 81 for the appointment a guardian?  That is broader than one might think.  It includes a relative of the alleged incapacitated person (“AIP”), a person with whom the AIP resides, the director of a facility in which the AIP is a patient or resident, or anyone concerned with the AIP’s welfare.  Even the AIP can petition for the appointment of a guardian.

A word to the wise:  Take care of your estate planning while you are able.  In particular, be sure to execute a Power-of-Attorney.  If you have a relative or a friend who can no longer handle his or her activities of daily living, and did not plan for this event, be aware that an Article 81 proceeding can be the remedy.  In upcoming blog entries, I will explain the process of commencing and litigating an Article 81 proceeding, but know that help is just an email or telephone call away.

For further information about estate planning or commencing an Article 81 proceeding, please contact Sally M. Donahue, Esq., at sdonahue@jaspanllp.com or at 516-746-8000.

 

 

Continuing our theme of odd bequests (last time the blog considered the adventures of Trouble, Leona Helmsley’s millionaire Maltese), let’s consider some other weird or questionable estate plans if only as a warning to the reader.

“Item I gyve unto my wife my second best bed with the furniture.” Thus did William Shakespeare make the sole provision for his wife in his will. While this has puzzled scholars for centuries, the current opinion seems to be that it was not a slight at all (Anne was entitled to one-third of the estate by Medieval law anyway.) To wit:

“In Shakespeare’s time, a bed was an expensive and luxurious item, generally regarded as a valuable heirloom to be passed down the generations rather than given to a surviving spouse. In a world where social status was highly prized, people were keen to show off their wealth at every possible opportunity. It wasn’t uncommon for the ‘best bed’ to be kept in one of the rooms downstairs, as a way of making sure all your visitors could see how well you were doing. It was also the bed that would be offered to staying guests, so the ‘second best bed’ referenced in Shakespeare’s will is likely to have been the actual marriage bed, the one that he and Anne shared as man and wife.” (Shakespeare  Birth Place Trust, Shakespeare second-best-bed.)

Make of the foregoing what you will. Perhaps we are being too harsh if we conclude any aspersion being cast on Anne. Shakespeare always knew what he was doing and Anne apparently was a beloved and crucial partner to the Bard because there is no record of family discord in his final years with Anne or any litigation in the wake of Shakespeare’s death. Moreover, Germaine Greer wrote a fine book called Shakespeare’s Wife. Nothing if not provocative, she argued that the relationship was a one of devotion and affection (reflected in the plays and their sympathetic views on marriage in general and wives in particular) and that Anne deserves great praise. Of course, this view was pilloried by the Shakespeare scholarly establishment (despite the book’s meticulous scholarship and Ms. Greer’s PhD in Elizabethan drama from Cambridge with her thesis being “Love and Marriage in Shakespeare’s Early Comedies”). Greer’s knowledge, verve for style, and imagination make a persuasive case for Anne being the actual head of a considerable household (mostly in Will’s absence) and as an effective businesswoman and partner to her husband.

One can only imagine the litigation such an instrument would have caused today. The provision for his wife was apparently made in a very shaky hand as an interlineation; there were other interlineations; the document was prepared at several different times.  Probate proceedings, construction proceedings, accountings, rights of election.  It is enough to make a trust and estates litigator like your writer cry tears of joy. Avoiding such a result should be a prime goal of defensive estate planning. (There’s more to estate planning than tax efficiency!)

Apropos of nothing, a slight digression. Shakespeare’s life gives lie to the modern conceit that creative genius and business acumen do not mix. Shakespeare was not just the supreme poet and dramatist of the English language (a hard thing for an Irishman to admit), he was also an actor, a producer, a very astute business person, and not a college graduate.  Perhaps these factors figure in the academic debates (then and now) on the “true” identity of Shakespeare and the backlash experienced by a non-academic like Germaine Greer whose brilliance, achievements, daring,  and iconoclasm can disturb mainstream minds. Your writer suspects Ms. Greer would agree with Shakespeare’s jibe at professional scholars in Measure for Measure:

. . . scholar, proud scholar,

Dress’d in a little brief authority,

Most ignorant of what he’s most assur’d–

His glassy essence–like an angry ape

Plays such fantastic tricks before high heaven

As makes the angels weep . . .

We moderns are not immune from making odd bequests, even with the help of professionals. Perhaps the salient example of late is the mess the late actor Philip Seymour Hoffman made of his estate. His will, executed ten years before his death when he had only one child, gave everything to the actor’s then partner and the mother of his three children. By the time of his sad and untimely death, the couple were separated. His taxable estate was estimated to total $35 million. Upon reading this, the trusts and estates professionals will recoil in horror. They are imagining upwards of $12 million flying out the window and into the waiting arms tentacles of the IRS. Say what you want about the institution of marriage (and I am very happily married, thank you), it does have its tax advantages.

But that is not all. In his will, Mr. Hoffman also requested that his son (and presumably his after born children)  live in New York City (Manhattan, specifically), Chicago, or San Francisco or that they visit one or more of these cities at least twice a year. Why? “The purpose of this request is so that my son will be exposed to the culture, arts, and architecture that such cities offer.”  The story is also told that one of the motivating factors to Mr. Hoffman’s testamentary intent was to avoid his children becoming “trust fund kids.”  As if there is something wrong with that.

 

 

 

 

Cutting right to the chase, a spoiler alert: Trouble is dead!  She shuffled off this mortal coil some years ago at the tender age of 12. You recall (don’t you?) that Trouble was a Maltese owned by Leona Helmsley. Trouble was the beneficiary of a $12 million bequest to a trust established for the dog’s benefit. The court later reduced the bequest to $2 million figuring that the reduced sum would be enough to keep Trouble in dog biscuits and out of trouble for her life. The court was right and Trouble died without ever appearing in the tabloid press linked to any hint of scandal. Trouble even received an obituary in the New York Times. There is no record of Trouble ever appearing in the Wedding Announcements Section, however.

But seriously, folks, the care of our loved ones extends beyond the two-legged variety of friends and relatives. The number of celebrities who leave bequests to their animal companions is staggering. And who is to blame them? Charles De Gaulle, not a noted sentimentalist, once said, “The better I get to know men, the more I find myself loving dogs.” Albert Einstein was a well-known pet lover. He had a dog named Chico Marx. Whether either of these notables provided for their pets is unknown.

New York allows you to make a provision for your pet in your Will, or even in a living trust. Provision for the benefit of a pet may be made in  variety of ways and the New York City Bar Association did a very useful monograph a few years ago on the topic. A copy is attached to this blog entry. (It is supplied for informational purposes only, with no warranty either express or implied that it is current. Its main benefits were that it is informative and available to the public.).

It is interesting to note that when New York first enacted the law authorizing pet trusts (Estates Powers and Trusts Law §7-8.1) it limited the duration of such trusts to 21 years. That was changed to allow the trust to exist for the life of the animal beneficiary. After all, some varieties of parrots can live well over 60 years. And should you have a tortoise near and dear to your heart, then expect the creature to need provision for a century or more.

—————————————

Editor’s correction to writer: Dude, you’re showing your age. “Pet” is not the preferred nomenclature. “Animal companion,” please.

Editor’s note to reader:  please feel free to substitute “animal companion” for “pet” in this blog entry.

New York City Bar Association, Committee on Animal Law, May 2016, “Providing For Your Pets in the Event of Your Death or Hospitalization”

Providing For Your Pet NYC Bar.org

 

A bonus joke. A guy goes into a bar with his dog. He has a drink and tells the bartender that his dog can talk and if he can prove it then he should drink for free. The evening’s early, so the bartender rolls his eyes and says, “OK, buddy, let’s hear it.”

The guy says to the dog, “Dog, what  does sandpaper feel like?” RUUUF, RUUUF! says the dog.

The bartender says, “you’ll have to do better than that Mac.”

The guy then says to the dog, “Dog, what’s on top of a house?”  ROOOF,  ROOOF! says the dog.

The bartender is losing his patience and is about to throw the guy out along with his barking dog when the guy says, “Wait, wait, once more, watch this. Dog, who was the greatest baseball player of all time?” RUUUTH, RUUUTH! says the dog.

With that, the bartender grabs the guy by the ear and the dog by the tail and throws them both to the curb outside. The pair are sitting there nursing their bruises when the dog looks up at the guy and says,  “DiMAGGIO?”

  1. In earlier entries, we warned of the changing tax landscape and the possibility that a new administration will bring a new set of tax laws and regulations. One aspect of the Internal Revenue Code particularly ripe for change is the high level of exemption amounts applicable to estates and gifts.

The Internal Revenue Service announced today the estate and gift tax exemption limits for 2021: the estate and gift tax exemption will be $11.7 million per individual, up from $11.58 million in 2020. That means an individual could give or bequeath $11.7 million to heirs and pay no federal estate or gift tax, while a married couple could shield $23.4 million. (The exclusion amount  for annual gifts remains at $15,000, or $30,000 for married couples under certain conditions.)

For high net worth individuals, this presents an opportunity. If these exemption amounts are reduced next year, any gifts made now will most probably be secure and free from IRS recoupment if and when new and much lower limits are enacted.  If you are in such a category, then it is worthwhile to consider some planning moves now.

See linked article from The Journal of Accountancy for this and additional income-tax related changes:

2021 IRS Tax Tables and Inflation Adjustments

—————————————————————————-

  1. Also, the Treasury Department just announced inflation-adjusted figures for retirement account savings for 2021. For the new year, one can save for retirement in tax-advantaged accounts the inflation-adjusted amount of $58,000. For more information, seek out the advice of your counsel or  accountant. We at Jaspan Schlesinger are fortunate to have as one of our colleague Victor M. Finmann, a nationally-recognized authority on such esoteric topics.

See linked article from Forbes  for this and additional pension plan and retirement savings accounts:

Forbes.com 2021 IRS Changes

 

‘Tis the Season to be scary. Halloween was grafted onto the ancient Celtic pagan holiday of Samhain. There are said to be places and times when the barrier between this world and that “other world” is very thin. In fact, the Irish have a word the “thin places,” Caol Áit. The holiday of Samhain is one of those times when ghosts and goblins are said to walk among us more freely and with greater insolence. What is the difference between these things that go bump in the night and timeshares? Unlike the ghosts and goblins, a timeshare can be a horror that is always with us.

For many, the burden of increasing annual maintenance costs and the diminishing satisfaction with their timeshares has resulted in a considerable number of attorneys who represent owners trying to get out of their timeshare contracts.  While some timeshare companies will release you from your obligation – for a price, others will prove less cooperative.

Most timeshares are like real property – they can be sold, given away in your Will, or pass by intestacy to your distributees.

The day may come when Mom or Dad says to child, “I’m leaving you my timeshare in my Will.”  In keeping with the season, is this a trick or a treat?  The prospect of owning a timeshare may be more of a horror than a delight.  The location is unpalatable, the process of swapping for other locations is a headache (if the option is even available), and those expenses keep rising.

From an estate planning perspective, there is no obligation to accept a gift, bequest, devise, or even a distribution from an estate of a person who died without a Will. Disclaiming the interest in the timeshare is possible, but the timeshare may remain an estate obligation that burdens the other distributees or residuary beneficiaries. Therefore, a season’s warning to parents out there: keep in mind the risks and benefits of your timeshares and their impact on your loved one when you pass from this world to . . . .

Some reference guides:

Timeshares and Vacation Plans, from the United States Federal Trade Commission:

Time Shares Consumer Guide

Before You Buy a Timeshare, New York Office of the Attorney General:

Real Estate Finance Bureau Timeshare updates

Vacation Timesharing, The Better Business Bureau of New York:

BBB Timeshares

Michael P. Ryan is chair of the firm’s trusts and estates and estate litigation practice groups. He counsels individuals, families, and owners of closely held businesses regarding estate and succession planning, charitable giving and tax matters. He also represents clients in contested estate proceedings, such as probate contests, administration proceedings, discovery and turnover proceedings, accounting proceedings, proceedings to suspend and remove fiduciaries, and guardianship proceedings.  Mike can be reached at mryan@jaspanllp.com or (516) 393-8253

 

 

For very wealthy individuals and families, the strong possibility of a change of administrations in Washington portends massive changes in tax policy and it is not too soon to consider the possible changes and to plan for them.

For example, on the estate tax side of the ledger, the current estate and gift  tax exemption thresholds, which in 2020 are $11,580,000 per individual and $23,160,000 per married couple, are most likely to be drastically reduced. Transfers made before the end of the year will qualify for these high exemption levels and when the exemption amounts are reduced transfers made now in anticipation of those changes will in all likelihood remain effective and the Internal Revenue Service will not seek to “claw back” the savings achieved in this calendar year (at least that is their current position as stated in regulations issued in 2019). Hence, there may be great savings to be had if one acts now rather than later.

On the income tax side, it may be wise to realize long-term capital gains and to take those gains in the 2020 tax year rather than wait until 2021. The tax rate for such gains will probably be higher in the coming year, depending of course on the outcome of the election.

There is a wealth of information available for further study on the internet, but the best source of advice is to seek the individualized guidance of a trusted and experienced estate planning attorney. In the meantime, see the link below for an introduction to the shape of things to come. As one steeped in years of high school Latin classes, the old maxim comes to mind: “praemonitus, praemunitus,” or, “forewarned is forearmed.”

Financial Planning.com: Voices Prep Clients’ Tax Estates Now For A Potential Democratic Sweep

A cousin is a solicitor in the U.K. He describes a Will as a ‘crisis purchase.’ In other words, it is decision frequently delayed until the end. Hence, our title is taken from Shakespeare (another Will) and his play Richard II when the king realizes he is close to his royal and violent end. Then thoughts of mortality and executors force themselves upon his thoughts. And ours.

There are many misunderstandings about your choice of executor or executors or any such fiduciary such as a trustee.  Here is an article from MarketWatch that discusses the topic in an amusing “Dear Abby” sort of way:

Market Watch “My Mother Refuses To Appoint an Executor”

The article only scratches the surface of the issues involved, but it is useful for an entertaining read and commentary. Some selections from the article:

“My husband and I are not wealthy, but we do all right . . . Except for the fact that this is my mother’s wish, I couldn’t care less about her money. Call me corny, but I’d rather have the good memories.”

– OK, you’re corny. This quote is sure to bring a smile to the practitioners reading this. As we used to say in the  Brooklyn of my youth, the times of stickball and kick the can, “Yeah sure.”

—————————————————

“My mom doesn’t have an executor, impartial or otherwise. She wants my sister and me to work out the details after her death.”

– Choosing an executor or executors is much more than an honor. It entails work and liability. When the relationship between multiple fiduciaries is troubled the usual outcome is discord and litigation. Whether Mom chooses one or both of her children to serve as executor(s), or she chooses a third party (who is not required to accept the nomination), the choice is hers. It’s a choice that should be made carefully and with an eye on ability and fairness of the person designated.

————————————————–

“Should I suggest (again) my mom get an impartial executor?”

– The choice of an executor is a personal choice of the person executing the Will. While the testator may discuss her plans with her children, the children (especially the good child) should be careful not to provide ammunition to her sibling (the bad child) should there be litigation over the probate of Mom’s Will.

—————————————————-

“Your mother can name a professional fiduciary . . . an executor (if there is a will) — and that would help eliminate or at the very least minimize conflict after your mother’s gone…”

– True. But just because you nominate a professional fiduciary, like a bank or trust company doesn’t mean the nominee has to accept the nomination unless the assets are sufficiently large to entice them to do so. In New York, the court will always appoint a fiduciary and as a last resort there is even a public official to step in and act as a fiduciary of a decedent’s estate should no one come forward to act. It is called the Public Administrator.

——————————————————-

“I feel like this is my mother’s way of forcing me to have a relationship with my sister, using the inheritance as bait. It’s like a guillotine hanging over my neck.”

– A manipulative parent? Whoever heard of such a thing? To quote Wallace Shawn in The Princess Bride, “Inconceivable!” And to quote Mandy Patinkin’s response, “You keep using that word. I do not think it means what you think it means.” Issues like these are above the pay grade of any of us and Sigmund Freud is no longer around to help.

 

On Friday evening, September 18, 2020, along with countless millions of others, I was stunned to learn of the untimely passing of my legal hero, The Honorable Ruth Bader Ginsburg. Her death is a profound loss as our country suffers from intense division among party lines, unprecedented fires in the west, and the loss of 200,000 souls, so far, in a pandemic the likes of which have not been seen in more than 100 years. Because she survived bouts of cancer and other serious ailments for so many years, as well as the loss of her husband and greatest advocate, Martin D. Ginsburg, Esq., a decade before, I thought of Justice Ginsburg as invincible, almost immortal. But, there it was, the great “R.B.G.” had died.

As I compose this blog entry, I know there are many others writing blogs, articles, essays, tributes, and books about the life and legal career of this great woman. What can I say that has not or will not be said about Justice Ginsburg? We all know that she was a fierce advocate, a brilliant legal strategist and writer, and a champion for those who needed one and those who still do. By advocating for women, she helped to achieve equality for both woman and men. By advocating for the underprivileged, she helped to elevate all of us. By being a voice of reason, she helped foster civil relationships with the other Justices of our Supreme Court despite their ideological stripes, thereby leading them, at least on occasion, to join her ideological bent. But, there is so much left to be done. And, it is imperative now in the political climate raging in America, a country I love, that her good work be remembered and continued.

I concluded that perhaps the best way to honor Justice Ginsburg is with a quote of hers. But, which of the vast number of her words, all of which are worth living by? I have chosen one I think epitomizes Justice Ginsburg, the great woman she was: “If you have a caring life partner, you help the other person when that person needs it. I had a life partner who thought my work was as important as his, and I think that made all the difference for me.” To me, those words apply not only to life partners, but to all relationships among people. Do not undervalue others because in so doing you undervalue yourself. Rest in peace, Justice Ginsburg.

In the coming weeks we will be posting about elder abuse and the role of estate planning and guardianship proceedings in addressing a growing crisis.  As an introduction to the novel legal and medical issues posed by living longer lives, we link to two public presentations that you might find interesting. The first is from the American Bar Association and examines the many legal issues presented by elder abuse. The second is from a Harvard Law School seminar on the way science is expanding our definition of what constitutes “undue influence” in estate planning for the very elderly. For the estate planning attorneys out there, the concept of “undue influence” is changing and science will compel us to challenge the conventional wisdom of what constitutes undue influence with the very elderly.

The American Bar Association, Elder Abuse. July 7, 2020:

The American Bar Association, Elder Abuse

Our Aging Brains: Decision-making, Fraud, and Undue Influence

From the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School:

Harvard Law School, Our Aging Brains

From the Harvard seminar: “With over 70 million Baby Boomers retiring, elder financial exploitation has been labeled the “Crime of the 21st Century.” In this half-day event, we explored the neuroscience, psychology, and legal doctrine of financial decision-making in older adults. How does the aging brain make financial decisions, and when is it uniquely susceptible? How can courts best use science to improve their adjudication of disputes over “competency”, “capacity”, and “undue influence”? Is novel neuroimaging evidence of dementia ready for courtroom use?”