Aging America: Elder abuse on the rise

This is a very important and upsetting expose of the growing violence and other abuse against our elders. Having appropriate resources in our communities, education for the families of aging relatives and access to them for the victims of elder abuse should be one of our nation's priorities.

Aging America: Elder abuse on the rise

How The American Taxpayer Relief Act of 2012 May Effect You

On January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 (“ATRA”) in an effort to stave off increased taxes that were required to take place at the beginning of 2013 under previously enacted laws. Below is a brief overview of the major issues dealt with in ATRA for your consideration along with other estate planning strategies.

Unified Estate and Gift Tax Exclusions

             Federal Estate Tax Exclusion

The Estate Tax Exclusion amount will remain at $5.120 million, with adjustments for inflation, as set forth in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and extended in ATRA. In 2012, the inflation adjustment resulted in an Exclusion Amount of $5.120 million. Therefore there is no federal estate tax on estates that amount to less than $5.120 million.

             Lifetime Gift Exclusion

The Lifetime Gift Exclusion is tied to the Estate Tax Exclusion of $5.120 million, with adjustments for inflation. The estate of an individual who made a gift of $2 million during his or her life time (and filed the required gift tax return), will not be taxed on that amount.

            Generation-Skipping Transfer Tax

The Generation-Skipping Transfer Tax (where a decedent has skipped a generation in making a gift to a family member, such as giving a portion or all of his estate directly to the grandchild or grandchildren and “skipping” his child or children) the exemption also is tied to the tax on estates and lifetime gifts; and thus has also been made permanent at $5.120 million, to be adjusted for inflation.

            Tax Rate Above the Exempt Amount

The Federal Estate Tax is the tax on the amount of an individual’s or married couple’s estate that is in excess of the exclusion amount. Under ATRA, the Federal Estate Tax rate has increased from 35% to 40%. This means that for all estates in excess of the exclusion amount referenced above, an estate over that limit will now be taxed at a rate of 40%.

           Annual Gift Tax Exemption

The Annual Gift Tax Exclusion amount increased from $13,000 to $14,000 under ATRA. This law provides that an individual may make annual gifts to an unlimited number of persons in an amount of up to $14,000 per year tax-free. Tax on these annual gifts will thus be avoided as long as a gift of no more than $14,000 is made from one individual to any other individual in one calendar year. For example, if a married couple has two children, and four grandchildren, the husband and wife have the right to each give $14,000 to each child and/or grandchild, tax-free.

           Marital Deduction

The “Marital Deduction” refers to marital assets that pass from one spouse to the other spouse tax-free following the death of the first spouse. For all United States citizens, the amount that can pass from one spouse to the other at death is unlimited. This tax law remains unchanged under the new legislation.

          Highest Marginal Income Tax Rate

The previous tax brackets of 10%, 15%, 25%, 28% and 33% are permanently extended through ATRA. The existing 35% bracket is limited to a minimum of $400,000 in income at or for single filers. ATRA provides for a new 39.6% bracket, which will apply to those with income at or in excess of the following amounts:

Married Filing Jointly:             $450,000 of taxable income

Qualifying Widow(er):            $450,000 of taxable income

Head of Household:                $425,000 of taxable income

Single:                                       $400,000 of taxable income

Married Filing Separately:     $225,000 of taxable income

Charitable Deductions

The charitable deduction rate is linked to an individual or married couple’s highest tax rate. For example, if an individual or married couple’s earnings are taxed at the rate of 33% , the deduction value of a charitable donation for that family is equal to the same rate of 33%. The deduction, however, has been capped at 35%, even for families who are taxed at the higher rate of 39.6%.

Itemized Deductions

As a result of the new legislation, individuals with income in excess of $250,000 and married couples with income in excess of $300,000, will see a reduction of 3% on the value of itemized deductions.

Tax on Dividends and Capital Gains

The tax on capital gains and qualified dividends will now increase from 15% to 20% for gains or receipts for those filers that fall in the new 39.6% tax bracket. ATRA permanently retains the 0% and 15% rates on qualified dividends and long term capital gains for other tax brackets.

IRA Charitable Rollovers

An IRA Charitable Rollover allows a donor to take an income tax deduction when s/he withdraws funds from a traditional IRA and donates those funds to a charity. Generally, when an individual makes a withdrawal from a traditional IRA, the withdrawal must be reported as ordinary income and taxed accordingly. However, when the withdrawn funds are donated to a charity, the individual may be entitled to an income tax deduction for the value of the donation.

This “IRA Charitable Rollover” allowance was set to expire in 2012. However, as a result of the new legislation, the charitable rollover has now been extended for 2 years, commencing with 2012. Additionally, charitable rollovers can still be made in January 2013 for the 2012 year.

For individuals who were required to take mandatory distributions for December 2012 as a result of the extension of the rollover, the distribution can still be donated to a qualified charity in January 2013 in order for the taxpayer making the distribution to avoid taxation.

Temporary Suspension of Payroll Tax not Extended

Prior legislation temporarily suspended a portion of the payroll tax and that suspension expired in 2012. The suspension was not extended under the new legislation and now, as a result, payroll taxes will rise 2% for most wage earners earning less than approximately $110,000.

No One is Falling Off the Fiscal Cliff!

There are still a number of spending issues to be ironed out between Congress and President Obama. In particular, they will be working to extend the debt ceiling so government can pay its bills on time and keep our standing in the world community intact. They are also looking for ways to cut spending in a fiscally, as well as socially responsible way. Much of the “fiscal cliff” panic created in part by certain lawmakers and in part by an over-zealous media was not necessary before and is certainly not necessary now. If you are in touch with your tax planning professional on a regular basis and keep your estate plan updated every three-five years, you should have no need to worry. If you would like to discuss how the new law will impact you, please contact either Frieda Gordon or Avery Cooper, who have over sixty years of combined experience in the areas of estate planning and estate and trust administration and litigation.

WHY COLLABORATIVE LAW MIGHT BE RIGHT FOR YOU

Lawyers feel fulfilled when they are successful in a case and when they have met a client’s expectations.  These moments are becoming less and less frequent as well as less and less satisfying.  In part, this is due to the lack of court services caused by extreme budgeting problems in Los Angeles County as well as other counties around the state of California.  Mostly it is caused by the ever-increasing difficulties resulting from the stress, lack of control and anxiety of the opposing attorneys and clients, which cause even relatively normal people to behave badly, and by the lack of funds to pursue the correct course of action(s) in any given case. Practicing collaborative law can give attorneys a better sense of fulfillment and confidence. Rather than contending with delays, judicial cuts, difficult temperaments, a hostile court environment and a variety of unpleasant, unhappy people, a family law litigant can be treated during negotiations to the comparative creature comforts of a law office and the pleasure of being listened to - uninterrupted.

In the standard litigation model, the minor children are subject to hostility and complaints from each parent toward the other.  For example, the 13-year-old son is having behavioral issues at school and his report cards show a decline in grades. Dad believes his son needs stricter boundaries and seeks to have Johnnie live with him so he can control his environment. Both mom and dad are afraid that if they are strict, their child may want to live with the other parent. Minor children over a certain age now have the right to testify as to their preference. The client may feel like he or she is losing the right to parent as he or she sees fit.  All the things that matter most to the client, including the health and welfare of the minor children, family finances and peace of mind - are becoming compromised. The feeling of lack of control becomes overwhelming. The client begins to realize that s/he may have to pay an unpredictable amount of money, and may have to wait an unpredictable amount of time, to receive an unpredictable and uncontrollable outcome.

In comparison to the litigation model, in the collaborative process, the parties meet with both of their collaborative attorneys. They come together in a small conference room. Each client’s attorney has a communication specialist sitting with the client. The attorneys’ attention is with their clients. They are offered fruits, sweets, tea and coffee. The attorneys make sure all parties are comfortable. Everyone is respected. One party is asked by the other party’s attorney to speak about her concerns, needs and wants. When she says all the things she needs to say, all the people in the room listen to her and validate her. The other party does not interrupt, because both of them were taught how to listen and not interrupt. He also knows that he will have his turn and he does. If one of them interrupts the other, the communication coach is right there redirecting him or her to listen. When one of them speaks about his or her concerns, needs and wants, the other has the peace of mind that they don’t have to defend themselves. This is not an adversarial system. Both clients know the process will not end in an outcome unless the outcome is acceptable to both of them. They have control over the outcome. Your client learns to listen. She finally can hear him, maybe for the first time after many years, because the communication specialists and the collaborative attorneys reiterate what each client’s commitment and interests are with what they are saying. The client realizes and learns what has been the real experience of the other party.  Weight is lifted off of each of them as they each realize that so much unnecessary stress can now be released. The clients practice open communication with each other with the help of the team in the collaborative divorce process, which they can hopefully carry over into their future interactions concerning the children. The clients work together to plan for the children, which is their common interest. They learn to respect each other in the process, and take home this valuable lesson to their kids.

The collaborative process is not always pleasant. In fact, many times, collaborative attorneys deal with anger, rage, hostility, suspicion and feelings of betrayal and abandonment, just like those involved in trying to get a judge to hear their story and rule in their favor.  The great value of the process is that each attorney is not alone dealing with all of it; the attorneys support each other and are supported by the communication specialists. The collaborative team provides a safe space for all that needs to transpire. The collaborative process has a unique psychological aspect to it. There is at least one mental health professional in a collaborative team (communication specialist). The collaborative team consists of collaborative lawyers, mental health professionals and an impartial financial expert (where necessary).  They provide all that the clients need to resolve their issues collaboratively. Working with the team in creating options that meet both clients’ needs is very fulfilling. A lasting relationship is built between all parties and professionals involved. The attorney’s caring and respect for the other party goes a long way. The parties learn to build a new relationship with the other parent or spouse through respectful and responsible communication. They also learn to have a new respect for the other party by the way the professionals relate to them.

Evidence of Hanukah and Christmas in Published Decisions

I recently found some evidence of Christmas and Hanuka in a few published decisions. For example, in the 1890's, an employer had always given his employee a $2,500 Christmas gift. Then he raised the employee’s salary. At Christmas the annual gift was given again. The employee said thanks and the boss said he was glad the employee was pleased. Later, the boss told a bookkeeper to charge the check back to the employee. The employee questioned the deduction and the boss said he had forgotten the new salary and had not intended a $2,500 gift on top of the raise. The employee sued. New York’s highest court called this case peculiar, saying it was clear the employer intended to give a Christmas gift and clear the boss later realized his mistake. But when the boss handed over an envelope with $2,500 and expressed good wishes, all the elements of a gift were present: intent to give, and delivery of the gift. The court ruled for the employee in Pickslay v. Starr, (1896) 44 N.E.163. In another Christmas case, the Illinois Supreme Court in Dow & Hurd v. Phillips (1860) 24 Ill. 249 reprints telegrams between partners. This case is a good read for whoever thinks only the internet created long back-and-forth message strings. The last of the series, a Christmas Day message, directs the partner to send a third party $300, followed by “Merry Christmas.” It is the first “Merry Christmas” in reported American decisions. But not so merry for the defendant who sent the message and tried to avoid liability. The court found them obligated to pay. The 150 year-old communications read like today’s email strings. Hanukkah dates back 2,100 years, but it was not in a published decision until 1962. Mr. Oxenhandler suggested that a bank create a Hanukah Savings Plan, like Christmas Clubs already available to the public. The bank did so. Oxenhandler thought he should be paid for the good idea but the evidence showed five other banks had Hanukah savings plans. Because the idea was not novel, the claim was denied. Oxenhandler v. Dime Savings Bank (1962) 227 N.Y.S.2d 642. If you know of any other interesting decisions revolving around these holidays, please post.

HAPPY HOLIDAYS!

Whose inheritance is it, anyway?

Is there a point where a Testator's unfettered right to do what he or she wants with his or her property can be limited by public policy?

A gay man and his longtime partner decide to become parents using a surrogate mother. Shortly after their son is born, the couple gets married. But there's a catch for this modern family: A will left by the man's wealthy father decrees that he must marry the mother for the child to collect an inheritance.

What do you think?

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The Family Law Community in California, the United States and even the world, mourns the loss and reflects upon the life of Judith Wallerstein at the age of 90.  As my esteemed colleague and long-time friend Leslie Shear, CFLS, another custody attorney such as myself, stated today to our Association of Certified Family Law Specialists list serve, Judy was a pioneer in child custody research. She was the author of the influential amicus briefs filed in Burgess and other moveaway cases in the U.S. and Canada that made it easier for "primary" parents to move. We learned a lot from her work. She founded the Center for Families in Transition in Marin (also known as the Wallerstein Center)  that produced a lot of the very important research shaping our understanding of the psychology of divorce. 

Some of Wallerstein's important works include:

Surviving the Breakup: How Children and Parents Cope with Divorce by Judith S. Wallerstein and John Berlin Kelly (Sep 15, 1980)

Second Chances : Men, Women and Children a Decade after Divorce by Judith S. Wallerstein and Sandra Blakeslee (1989)

The Good Marriage: How and Why Love Lasts by Sandra Blakeslee and Judith  S. Wallerstein (1995)

The Unexpected Legacy of Divorce: The 25 Year Landmark Study by Judith  S. Wallerstein, Julia M. Lewis and Sandra Blakeslee (2000) 

What About the Kids?: Raising Your Children Before, During, and After Divorce by Judith  S. Wallerstein and Sandra Blakeslee (2003)

In 1976, Judith Wallerstein and Joan Berlin Kelly published the initial findings of their study of divorcing families in scholarly journals. The families studied were the last of the mid-century traditional family structure, who were upper middle class families from Marin County who agreed to be study in exchange for some divorce and custody counseling. 

"Joint custody was brand new as an idea in the late 1970's. Roman and Haddad published The Disposable Parent in 1978, and Miriam Galper also published Co-Parenting: Sharing Your Child Equally : a Source Book for the Separated or Divorced Family  in 1978. No-fault divorce began in 1970 here in California, and the maternal presumption was repealed shortly thereafter but survived in practice. 

http://latimesblogs.latimes.com/showtracker/harrys-law/.  Cannot believe that Harry's Law, one of the finest ensemble shows on television, was canceled because its audience was too old.  What next?