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Facebook Founder Renounces U.S. Citizenship, Saves Taxes

By Attorney David M. Grant It was announced on Bloomberg.com earlier this week that one of Facebook's founders, Eduardo Saverin, renounced his US citizenship last September.  The article is very good at explaining Mr. Saverin's savings as related to the capital gains tax, but fails altogether to point out his huge potential transfer tax savings as related to the Gift Tax, Generations Skipping Transfer (GST) Tax, and Estate Tax. While he undoubtedly paid the "exit" tax or the expatriation tax (see the Heroes Earnings Assistance and Relief Tax Act of 2008), all future growth and appreciation in Saverin's estate will no longer be subject to...

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3rd Annual Domestic Asset Protection Trust State Rankings Chart Released

The 3rd Annual Domestic Asset Protection Trust State Rankings Chart has been released!  The rankings and information is compiled by our colleague, Steve Oshins of the Law Firm of Oshins & Associates, and is herein used with his permission.  It can be accessed here on our website. Please know that for the first time since the chart was originally created, it now assigns numerical rankings to each DAPT state. Also, the approximate weights assigned to each variable are listed.  However, please note that in the interests of impartiality, since Nevada is the only state (of the top eight states per the rankings) that...

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Top Ten Common Estate Mistakes

By Bob Morris and David Grant “Poor Man’s” estate plan.  Do-it-yourself estate plans can create more problems than they solve.  Many well-intentioned people will title assets jointly with a spouse, friend, or child, not understanding the significant legal ramifications.  Others will name a “Pay on Death” (“POD” or “TOD,” as they are sometimes called) beneficiary and consider their estate planning complete, while not planning for very real risks and contingencies. Failure to plan for significant others.  Domestic partners and others who cohabitate and live together do not share the same legal rights as married couples with regard to inheritances, health...

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Probate Question: Am I responsible for my half sister’s debts after she passed away?

By: Mark L. Dodds, Esq., Partner at Grant Morris Doddsdebts

Question: Am I responsible for my half sister’s debts after she passed away?

Question Detail: My father is trying to get me to renounce my rights in favor of him regarding a half sister I have not seen in twenty years; he says I will be responsible for her debts if I do not sign the papers. Is this a fact? Am I responsible for someone else’s debts since she has passed away?

Answer: The fact that your father is  trying  to scare you into giving him an interest in your half-sister’s estate suggests to me that there must be some reason why he wants to get control of this estate, that reason most likely being that the value of her estate exceeds the debts of her estate. There is no reasonable scenario that I can think of where it may be possible that your father is trying to do you a favor; instead, it is likely he is trying to scare you into giving up a valuable inheritance.

In the first place, a person’s death cannot cause you to ever be liable for the debts of the one who died unless you were already a co-signer with the decedent on a debt. Furthermore, your act of accepting or rejecting your rights in the decedent’s estate will have absolutely no effect on your liability for any such debts. Since you have not seen your half-sister for 20 years, it is virtually certain that you are not a co-debtor on any of her debts, so you will incur no risk of liability in refusing to release your interest in her estate. And if it should be that the value of her estate is sufficient to cover any of your half-sister’s debts, then you will be entitled to your share of the estate after those debts are paid.

Back Door Tax Hike–Bad for Nevada Business

On Thursday of last week the interim Legislative Subcommittee on Regulations approved a rule that now requires limited liability companies (LLCs) to pay an annual $200 business license tax, which is assessed and collected by the Nevada Secretary of State. This new regulation prevents LLCs from claiming an exemption to the tax for home-based businesses that earn less than $27,000 per year. Nevada Secretary of State, Ross Miller, sought the rule because he says hundreds of LLCs wrongly claim the exemption. The new regulation will cost businesses an estimated $10 million per year, and that does not touch upon the significant loss of new...

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Obama’s New Tax Proposals

By David M. Grant, Esq., Partner at Grant Morris Dodds Recently President Obama released his 2013 budget proposal.  Following is a summary of his budget points as it relates to income tax, estate tax, gift tax, and Generation Skipping Transfer (GST) tax reform: Limitation on Itemized Deductions and Personal Exemption Phase-out. The proposal would reinstate the limitation on itemized deductions and the personal exemption phase-out for upper-income taxpayers. The Adjusted Gross Income (AGI) thresholds would return to the 2009 levels, and would be indexed for inflation thereafter.  The thresholds would be $250,000 for married taxpayers filing joint returns, $225,000 for head-of household taxpayers,...

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Achieving Asset Anonymity

anonymousBy: Mark L. Dodds, Esq., Partner at Grant Morris Dodds

We often receive inquiries from clients looking for asset protection services who wish to achieve greater anonymity regarding their assets, including real estate, investment accounts, business holdings, and so forth.

It is important to understand that “hiding” assets is not a valid principle in asset protection.  In the event a person is sued and has a judgment rendered against him, he may be put under oath in a debtor’s examination and, under penalty of perjury (a felony), he must disclose his assets to the questioning authority.

So merely holding assets in a name not readily traceable back to you should not be viewed as a good way to protect your assets.  Nevertheless, keeping a lower profile, maintaining privacy, and generally avoiding the spotlight are viable reasons for obtaining anonymity, at least for certain people.

Handicapping the Future Estate Tax Exemptions

Gift-Tax-RulesBy: Mark L. Dodds, Esq., Partner at Grant Morris Dodds

So here we are, more than one year after the change in the estate tax law which temporarily at least has repealed the 2010 repeal of the estate tax, replacing it with a $5 million exemption. But the $5 million exemption is not all bad, considering most estate tax pundits never would have predicted the repeal would have seen the light of day, even for the one year for which the repeal actually was effective.

There were several high profile deaths in 2010 where the heirs really hit the jackpot,  among the most notable being the heirs of George Steinbrenner who inherited the $1.5 billion New York Yankees franchise entirely free of estate tax. If Mr. Steinbrenner had died one year earlier, the heirs would have had the federal government as a 55% partner in the storied New York team; had Steinbrenner died a year later, in 2011, the federal government would have been only a 35% partner. Either way, Mr. Steinbrenner got it just right, assuming there can be a right time to die.

Upside-Down Property at Death

Mark Dodds, Esq. discusses your estate planning process and options when dealing with real property that is upside down:

upside down houseIf the property is upside-down, it is best to leave the property out of a trust. Then, when the person with the trust dies, the trustee has no obligation as to the mortgage because the mortgage is not a debt of the trust as long as the trust is not a guarantor on the mortgage (and it is rare that the trust is a guarantor, but if it were, then the trustee would have to follow the procedure described below.)

So where the trust does not own the real estate and has no obligation on the mortgage, the trustee can do his normal notice to creditors, which gives creditors of the trust 90 days to file their claim, and if no claims are filed, or after any claims are filed and paid, then the trustee can distribute the trust estate. It is unlikely that the mortgage holder will pick up on the notice to creditors, and since the estate, which holds the upside down property, is a separate legal entity from the trust, the trustee has no duties concerning the mortgage, and can proceed to distribute the trust estate even though the home is upside down.

Wealth Planning and Asset Protection Seminar

SECURE YOUR LEGACY You have worked long and hard to achieve success and build wealth for you and your family. Now, your focus is likely to start shifting to preserving your wealth for your family and philanthropic causes. This seminar is designed to provide you with the information and estate planning tools you need to help you preserve, protect and transfer your wealth to your family or other beneficiaries. Grant Morris Dodds along with wealth planning advisors Mitchell and Jessica Horst from Morgan Stanley Smith Barney invite you to attend this Wealth Planning and Asset Protection Seminar. Admission is free, however, seating is...

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