Estate Planning, Probate & Elder Law Attorneys

» 5 Things You Need to Know About the Estate Tax in 2010: #1 (Capital Gains)

Up through 2009 (and starting again in 2011, assuming the law isn't changed), there was a federal estate tax. That was and will be the bad part, at least for people who owed or will owe tax.

The good part was that, in exchange for potentially being subject to the estate tax, you got a "step-up" in basis. Essentially, when an individual died, his or her assets took as their basis for capital gains purposes their fair market value as of the date of death. So, to consider an example,...

Mom buys a bunch of stock in Company X, starting in 1950 and continuing to her death. The actual cost basis for her purchases was $15,000.

Mom dies, and her Company X stock is work $500,000.

Mom's three kids are left the Company X stock under Mom's Will.

What is the basis in the Company X stock? During a year in which there's an estate tax, that's easy: it's $500,000. So, if the kids sell the stock after Mom's death, they pay capital gains on the difference between the sale price and $500,000.

But how is this handled in 2010? There are three main rules:

1. Instead of a step-up in basis, we have a carryover basis regime. So the basis in Company X would be $15,000. But...

2. There is still a step-up in basis for $1.3 million of assets passing to beneficiaries who aren't the decedent's spouse. And...

3. There is a step-up in basis for $3 million of assets passing to the decedent's spouse.

The major problem with a carryover basis regime is that, in many cases, it is difficult or impossible to calculate the decedent's basis in his or her property. (From what I have read, this was the problem when carryover basis was briefly made the law, back in 1976.) And I worry that the biggest result of this change in the law will be full employment for America's forensic accountants.

» The Teepee Shaped Recovery
Investors expecting a steady recovery should look out below.

» 7 Ways to Get Great Referrals
Word of mouth is the best form of advertising. Here's how to take advantage of it.

» A Little Advice For Young Attorneys

I was recently asked by a 3rd year law student for some advice on how to succeed upon graduation. Basically, what I told her can be summed up in three words: "find your niche."

I realize that this isn't a revolutionary idea, but I think too many young attorneys don't realize the importance of marketing yourself. What unique thing do YOU as a young attorney bring to the table? It can't just be intelligence and hard work -- most attorneys have those qualities.

So how do you find your niche? The easiest way is through your existing connections. If you're married to a doctor, and hang out with him and his other doctor friends, then consider areas of the law that would allow you to make medical professionals your client base.

Of course, not everyone has existing connections. In that case, you need to try to find something to level the playing field. In my experience, one thing that works well is becoming an expert with respect to some new development in the law. That's a big benefit because, with new developments, you are not at a disadvantage in terms of experience. When a new law passes or a new case comes down, you as a first year associate may know just as much about it as a partner who's been practicing for 30 years. Three examples:

1. Read and summarize the new Citizens United Supreme Court case, and write an article for your local paper about what it REALLY means.

2. Your state is legalizing marijuana for medicinal purposes. Totally familiarize yourself with all of the rules and regulations relating to setting up a marijuana dispensary, and advertise yourself as someone who can help clients "get legal."

3. Learn the ins and outs of the Trouble Asset Relief Program (TARP), so you can speak at seminars on the topic.

» Offshore Accounts: Too Late To Fess Up?
Despite Swiss court ruling and end of amnesty, voluntary disclosure still has advantages