Senate Minority Leader Mitch McConnell (R-Ky) announced this afternoon on the Senate floor that he and Vice President Joe Biden have reached agreement on all the outstanding tax issues, although they were still negotiating how to modify the $109 billion in automatic spending cuts set to take effect tomorrow. He urged Congress to immediately clear the tax deal in order to prevent historic tax hikes get to go into effect tomorrow, stating “Let’s pass the tax relief portion now, let’s take what’s been agreed to and get moving.”
President Obama addressed the nation today regarding the status of negotiations on the fiscal cliff. According to Obama, a deal is “within sight but it’s not done”.
The current negotiations include:
Even if an agreement is reached, it is unclear whether both the House and the Senate will act before the midnight deadline tonight to pass a bill.
Overnight negotiations took place between Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden in a last-minute attempt to avoid toppling over the fiscal cliff. Reports state that they made “major progress” toward a deal, which would increase tax rates for families who earn more than $450,000 and individuals who make more than $400,000. The estate tax issue has not resolved by the two.
President Obama is scheduled to make a statement about the fiscal cliff at 1:30 EST.
On Thursday, with five days remaining before the January 1st “fiscal cliff,” President Obama and the Senate returned to Washington to broker a deal that avoids the fiscal cliff’s tax increases and spending cuts. On Wednesday, House Republican leaders released a joint statement which urged the Senate to either approve or amend House-passed bills to prevent the fiscal cliff and vowed to call the House back into session if the Senate passes legislation. However, prospects for a deal remained dim when the Senate convened at 10:00 am today and Majority Leader Harry Reid stated that going over the fiscal cliff “looks like that’s where we’re headed.” Reid said Republicans must come up with a plan that can win back-to-back House and Senate bipartisan congressional majorities. However, rumors continue to circulate that President Obama will soon introduce his own bill that both the House and Senate can pass that averts the fiscal cliff.
Boilerplate trust drafting, debts secured by non-trust assets, a second marriage with children by a first marriage, a bad economy, and a trust with different beneficiaries than the estate beneficiary, combined to spawn “over 7 years of litigation in three states – Florida, Illinois and Minnesota”, culminating in the recent Minnesota Supreme Court decision, In the Matter of the Pamela Andreas Stisser Grantor Trust, 818 N.W.2d 495 (MN, 8/1/2012).
In this case, Pamela Stisser (the “Decedent”) married Vernon Stisser in 1983. The Decedent provided in her Will that all of her property in her own name, consisting of her roughly $3 Million Schwab brokerage account, pass to Vernon on her death, and she provided in the Pamela Andreas Stisser Grantor Trust (the “Trust”), the Decedent’s revocable trust, that her trust property, valued at approximately $9.1 Million, would be distributed equally to her three children from her first marriage and Vernon’s four children from his first marriage. Vernon was designated to serve as her Personal Representative and Decedent’s brother was the Trustee. (more…)
With nine days left in the year, many people are still planning how to make 2012 gifts, whether by making “annual exclusion” gifts of $13,000 per beneficiary, or by taking advantage of the 2012 gift tax exemption amount of $5,120,000. Maybe they couldn’t make up their mind before now, maybe they were waiting for the election results, or maybe they wanted to see whether the Mayan calendar was accurate before making any gifts. Whatever the reason for the last minute gifting, as the end of the year approaches, people may be tempted to make a “quick and easy” gift to their beneficiaries by simply writing a check. As the year draws to a close, however, if your gift is dependent on utilizing 2012 tax law, beware of the potential trap of making a gift by check.
A gift is not complete for tax purposes until the gift is no longer revocable. However, if you write someone a check, until that check clears, you could always “revoke” the check by alerting your bank to stop payment, or by emptying your account of sufficient funds to pay on the check. Until the check clears the bank, your gift is still revocable. Therefore, if your beneficiary doesn’t deposit the check in time for the banking system to clear the check, your gift may not be considered irrevocable until 2013, and you have therefore made a gift in 2013 instead of 2012.
If you are planning to make 2012 gifts over the next 9 days by means of a check, be wary and let your beneficiaries know that they need to deposit that check as soon as possible. Better yet, make the gift by means of a cashier’s check, which is considered irrevocable as soon as you hand it over. That way, you don’t have to rely on the promptness of your beneficiaries’ next trip to the bank, and the promptness of the banks in processing the checks.
On Thursday night, House Republican leaders pulled their “Fiscal Cliff” bill from the floor because it lacked enough votes to pass. The bill known as “Plan B” would have permanently extended all tax rates for income under $1 million including dividends and capital gains. The legislation would also have made permanent the AMT patch and estate tax rates as well as replaced the sequester cuts for one year through a mix of cuts to non-defense domestic programs. With the bill’s failure to even receive a vote, Speaker John Boehner is now unlikely to get any deficit plan through his chamber without relying on Democratic votes. At a press conference Friday morning, Boehner announced the House has recessed until January, and he will not resume talks with the President. However, a deal is still possible before year’s end if the Senate passes a bill that Boehner could muscle through the House with a small number of Republicans and a large majority of Democrats similar to last year’s debt ceiling extension legislation.
Denver Counsel Norv Brasch was quoted, with photo, Dec. 10 in Law Week Colorado regarding end-of-life planning. With an aging nation, those involved in end-of-life legal issues say clients, attorneys and health providers are not communicating on critical issues. “I really think we have fallen down on the job,” said Brasch, who recently headed a seminar in our Denver office for nearly 80 legal, medical and health industry professionals concerning end-of-life issues. The interdisciplinary forum, which included two physicians, a state senator, an expert on end-of-life policy and Colorado’s former first lady, will be repeated next year at the invitation of the University of Denver.
The House of Representatives will likely pass legislation today to extend all rates, including capital gain and dividends, for income under $1 million. The bill also includes a permanent extension of the 35% estate tax rate with an exemption of $5 million.
It is unlikely the bill would pass in the Senate, and the President has indicated that he would veto the bill.
Litigation over powers of attorney is pretty popular right now. And a lot of the dispute is whether an attorney-in-fact is authorized to perform some act under the authority granted in the power of attorney.
In Harris v. Peterson, the Georgia Court of Appeals is one of the latest courts to weigh in on these issues. It tackled the question of whether an attorney-in-fact can perform an act that the principal refused to perform.
The background facts can be distilled to this:
Dennison Williams and Darius Peterson are brothers who jointly owned some real property. Williams executed a financial power of attorney appointing his sister-in-law, Anita Peterson, as his agent. Anita was Darius’ wife. Among other things, Williams authorized Anita to sell real property.
Williams wanted to sell his interest in some of the jointly owned property to Eugene Harris and entered into some sale contracts with Harris. When Anita learned of those contracts, she presented Williams with a quitclaim deed transferring his interest in the property to her husband, Darius. Williams said he didn’t want to transfer his property and refused to sign the quitclaim deed.
So, Anita signed the quitclaim deed as Williams’ attorney-in-fact and filed both the power of attorney and the quitclaim deed in the superior court. A couple of months later Williams filed a quitclaim deed transferring his interest in the property to Harris.
Darius filed a complaint against Harris claiming trespass and damage to property. Harris filed a third-party complaint against Anita and Williams claiming fraud. Darius and Anita moved for summary judgment claiming that she acted under the authority of the power of attorney. The trial court agreed and granted summary judgment to Anita.
The appellate court, however, disagreed. It found that there was an issue of fact whether Anita exceeded the scope of her authority in executing the deed conveying Williams’ interest in the property after he refused to sign the quitclaim deed himself.
The appellate court relied on two rules of Georgia law in sending this case back to the trial court. First, while a power of attorney authorizes an agent to do what the grantor principal could do with respect to the recited subject matter, the grantor still retains the right to act in his own name. Here, not only had Williams retained the right to act in his own name with respect to real estate transactions, he entered into a contract to sell his interest in the real property to Harris and filed a quitclaim deed transferring his interest to Harris. Thus, there was a fact issue whether Anita’s actions were authorized in light of their apparent direct contravention of Williams’ actions and intent.
Second, Georgia law prohibits those acting under a power of attorney from benefiting from their position to their principal’s detriment. Here, Anita transferred all of Williams’ property rights to her husband without any apparent benefit flowing to Williams, even though she did have the legal right under the power of attorney to make the transfer.