Legally Speaking - Legal Recruiter Blog

                                                                                                                                                                       On January 27, 2009, the Center on Budget and Policy Proposals posted an article entitled “Congress Should Not Weaken Estate Tax Beyond 2009 Parameters“, by Chye-Ching Huang, who reported:

Senate Finance Committee Chairman Max Baucus reportedly plans to unveil a proposal in coming weeks to make permanent key features of the estate tax that are in place in 2009.

This will launch a major congressional debate. * * *

Reform of the federal estate, gift, and generation-skipping tax system have been debated routinely since the last enactment in 2001. In October, 2007, CBPP prepared its “Issues Surrounding the Federal Estate Tax” slide show presentation (11 slides), which summarized its concerns long-term.

The current article notes that, “[i]n his campaign, President Obama called for addressing this matter by making the 2009 estate-tax parameters permanent.”

Consistent with its prior presentations, CCPP argues forcefully — using updated data and projections, and considering six legislative scenarios — against reducing rates and thresholds below those now applicable in 2009.

These are the summarized reasons advocated by CCPP:

• Making the 2009 parameters permanent would be very expensive, costing $609 billion over the first decade in which its effects would be fully felt (2012-2021). Going further would not be fiscally responsible.

• Under the 2009 parameters, the estates of fewer than three of every 1,000 people who die will owe any estate tax whatsoever; there is no need to shrink this tiny fraction further.

• While going beyond the 2009 rules would benefit only a very small number of wealthy individuals, millions of middle- and low-income Americans likely would eventually bear a significant share of the costs, in the form of higher taxes and lower government benefits. Millions of ordinary Americans could end up with a lower standard of living so that some of the nation’s wealthiest individuals could escape much or all of the estate tax.

• The few estates that are taxable under the 2009 rules would be taxed much more lightly than is commonly understood. In 2011, taxable estates would owe less than one-fifth of their value in tax, on average.

• Under the 2009 estate tax parameters, almost no small business and farm estates would owe any estate tax — just 140 such estates in the entire nation would be taxable in 2011, for example. Moreover, it is extremely unlikely that any taxable estates would have to be liquidated to pay the tax under the 2009 estate tax parameters.

• A meaningful estate tax is an important incentive for charitable giving. Shrinking the tax beyond its 2009 level would weaken this incentive, likely producing a drop in donations.

Read the article for the detailed analysis under each scenario.

The article’s conclusion recognizes that maintenance of the 2009 status quo into the future would represent a compromise already:

Estate-tax legislation is necessary and is likely to be considered in 2009.

Repeal of the estate tax would be fiscally irresponsible, costing $1.3 trillion over the decade from 2012 through 2021.

Making the 2009 estate tax parameters permanent would be very costly itself but would be a much more responsible approach. Under it, the estates of 997 of every 1,000 Americans who die would be entirely tax free in 2011; for 99.7 percent of Americans who die, there would be no estate tax at all.

Going farther than this, especially in the face of the grave long-term fiscal problems the nation faces and the array of significant unmet needs, would be exceedingly difficult to justify.

Congressional debate and some enactment is crucial to avoid the “mayhem” anticipated by The Tax Foundation in its posting on December 31, 2008, entitled “365 Days until Estate Tax Mayhem Begins” by Gerald Prante:

Beginning [January 1, 2009], the federal estate tax will have a rate of 45 percent combined with a generous exemption level of $3.5 million. That’s until Dec. 31, 2009.

On Jan. 1, 2010, the federal estate tax rate is scheduled to be zero. That’s until Dec. 31, 2010.

On Jan. 1, 2011, the federal estate tax rate is scheduled to be 55 percent with an exemption level of only $1 million. * * *

The Tax Foundation views the FET system far less favorably, stating: “Studies routinely find that estate taxes discourage entrepreneurship and lead to large tax compliance costs.” Its prior postings under the heading Estate and Gift Taxes stretch back to 1969.Four Pending Federal Estate Tax Bills” (01/16/09) posted by Greg Herman-Giddens on the North Carolina Estate Planning Blog. For background regarding prior proposals, read past postings on this PA EE&F Law Blog under the heading “Federal Estate Tax.”

These two organizations are among perhaps thousands that have taken a position on reform of the FET system. This is the year when those divergent viewpoints will be resolved in Congress in the political process and then enacted long-term.

To examine proposals pending before Congress, see: ”

“Let’s get ready to rumble!“

– Trademarked catchphrase owned & used by
American boxing & Professional Wrestling announcer Michael Buffer.

AUTHOR

Neil E. Hendershot, Harrisburg, Pennsylvania, is a practicing & teaching lawyer, who works daily in the legal areas covered by the PA EE&F Law Blog.  

Posted on Wednesday, January 28, 2009  

By:    Nancy C. Grimes

        President, Managing Partner

        Grimes Legal, Inc.

Nancy Grimes has over twenty years’ experience serving the legal industry.  Clients include international, national, regional, local and independent law firms and attorneys.  “Counsel to Counsel” is updated bi-weekly.  Have a question you’d like answered?  Email it to ncgrimes@grimeslegal.com. 

The Question:  It seems that every time I turn on the news or open my email, I hear about another law firm that’s laying off associates.  I haven’t heard anything in the rumor mill regarding my firm, but I don’t want to get caught with my proverbial pants down.  What signs of an impending layoff should I look for?

Signed,

Better Safe than Sorry

Better Safe than Sorry, it’s always better to be proactive than reactive.  Take the initiative – this will allow you the opportunity to take a thorough but leisurely look at the market and determine what’s in your best interest.  There are various layoff signals you should be on the lookout for.  You may notice one or more of the following:

• Attorneys in your practice area are being reassigned to other practices within the firm.
• The firm is cutting back expenses in all areas.
• If other people are getting work in your department and you’re not, this might be a sign that you’re about to be laid off. 
• If other departments are busy and yours aren’t, this can also be a sign of impending layoffs.
• Observe the morale of partners in your practice area.  If you notice differences in their demeanor, it may be a sign things are not looking good.

Nancy C. Grimes,

President, Managing Partner

GLI/Grimes Legal, Inc.

On January 11, 2009, the Lancaster Sunday News published an extensive article entitled “Contested will is one for books” by Gil Smart, Associate Editor regarding a high-profile will contest underway in Lancaster County, PA.Lancaster Public Library under a Last Will executed approximately five years before his death in July, 2008.

He reported that a retired Lancaster County judge is challenging his late son’s bequest of potentially $500,000-$900,000 made to the

Thomas Bucher was found in his Columbia apartment July 20, [2008], dead of a gunshot wound. His death, ruled a suicide, was a family tragedy.

Now, nearly six months later, his father, a retired Lancaster County senior judge, is in the midst of a tug-of-war over Thomas Bucher’s estate, which could total $900,000 and was bequeathed not to Bucher family members — but to the Lancaster Public Library.

Wilson Bucher — a former district attorney who later served on the Lancaster County bench as judge for more than 30 years — has challenged his son’s will in orphan’s court, saying that Thomas Bucher was under an “insane delusion” when he revised his will in 2003 to disinherit members of his family, and give everything to the library. * * *

The obituary regarding Thomas W. Bucher (still available on Lancaster Online) did not give any indication about the manner of death at the age of 59, which occurred “unexpectedly.” It noted that he was employed as “a Supervisor with the Impaired Driver’s Unit of the Probation and Parole Office, Court of Common Pleas of Lancaster County” and was scheduled to retire soon. It listed his father and two sisters as closest survivors. Memorial contributions in Tom’s memory were designated to Hospice of Lancaster County.Minutes of a regular meeting held August 26, 2008, of the Board of Directors of the Lancaster Public Library(PDF, 2 pages) noted the potential interest created by the probated Last Will of Thomas W. Bucher, deceased:

On August 26, 2008,

Bucher Estate– Mrs. [Karen Haley] Field reported that the will of Thomas W. Bucher names LPL as executor and sole beneficiary of his estate.

LPL’s attorney, Appel & Yost, advised that the Library is ineligible to serve as Executor, therefore Board members signed a Resolution appointing Mrs. Field as administrator.

The Bucher family has filed an appeal. The value of this estate is not yet known. * * *

On January 4, 2009, the NewsLanc Blog reported about that appeal to probate in an entry entitled “Former Judge accuses deceased son of “insane delusion”; contests bequest to Lancaster Public Library.”

According to a Petition No. 36-2008-1522, recorded in the Lancaster Court of Common Pleas on August 21, former County Judge Wilson Bucher is contesting the estate of his deceased son, Thomas W. Bucher, who died in July, 2008.

Five years prior to his demise, Thomas Bucher signed a Will that states “I give the residue of my estate, real and personal, to the Lancaster County Library, Lancaster, Pennsylvania.”

The library has subsequently changed its name to the Lancaster Public Library. It is located at 125 N. Duke Street in the City.

The estate is anticipated to be in the amount of $500,000.

Judge Bucher contends his son Thomas “was suffering from an insane delusion caused by a mental condition that was initially diagnosed in 1975 and from which he suffered for the remainder of his life… The aforementioned insane delusion was that his immediate family was conspiring to divert his legacy under a will by a related aunt by marriage that was being probated at the time decedent’s probated will was executed…. Moreover, the scrivener of decedent’s will, Attorney Theodore Brubaker, confirmed to the undersigned counsel that the decedent initially approached him the insane delusion that his family was stealing from him.” * * *

That same local opinion and commentary blog reported further, on January 12, 2009, in an entry entitled “Despite $500,000 bequest, Library Trustees canceled project” that:

When in November the Board of Trustees of the Lancaster Public Library (125 N. Duke Street) abandoned $1.6 in grants and expenditures and canceled plans to upgrade and renovate, they were aware that they had recently received a windfall bequest of over $500,000 from the Thomas Bucher Estate that could have been applied to the $1.1 to $1.3 million to complete the project. * * *

The January 11th Lancaster Sunday News article noted another twist — participation by the Pennsylvania Attorney General’s Office, Charitable Trusts & Organizations Section, on behalf of the Library as a charitable residuary beneficiary.

Meanwhile, the Pennsylvania Attorney General’s Office has gotten involved, filing a motion to have Steven R. Blair disqualified as Wilson Bucher’s attorney because Blair may wind up being called as a witness.

Blair * * * has fought the attempt to remove him. In court documents, he notes that his father-in-law is 88 years old, with significant health problems, and that forcing him to get another attorney “would work a substantial hardship” upon the retired judge.

Reached last week, Blair declined to comment on the record, except to note that the Perry Countyjudge, Joseph Rehkamp, must first rule on whether he can continue to represent Wilson Bucher before the challenge to the will can proceed. * * *

That last reference raises another quirk in the case — the self-recusal of Lancaster County Orphans’ Court Division Judge Jay Hoberg from hearing the matter.

Because of Wilson Bucher’s history on the Lancaster County bench, county JudgeJay Hoberg recused himself.

A judge from Perry County will be brought in to decide the case. * * * 

This unusual case, and the headline article reporting it, were summarized by Attorney Patti Spencer on her Pennsylvania Fiduciary Litigation blog in an entry entitled “Insane Delusion in Lancaster County” posted on January 11, 2009, where she also quoted sources on applicable principles of law.

Due to the setting of a death, a subsequent demand to alter a dispositive scheme, and the need for a vigorous defense, will contests are never pleasant or easy. Such Orphans’ Court pugilism naturally results in pain for participants, win or lose.

Neil E. Hendershot, Harrisburg, Pennsylvania, is a practicing & teaching lawyer, who works daily in the legal areas covered by the PA EE&F Law Blog.  

By:    Nancy C. Grimes

        President, Managing Partner

        Grimes Legal, Inc.

Nancy Grimes has over twenty years’ experience serving the legal industry.  Clients include international, national, regional, local and independent law firms and attorneys.  “Counsel to Counsel” is updated bi-weekly.

 The Question:  I am a finance associate and my firm’s administrative partner has informed us that we are beginning to feel the “financial market strain” and firm management is contemplating possible solutions.  One possible solution is a layoff in the slower practice areas.  With finance being one of those areas, how do I prepare myself for a potential layoff?

 Signed,

Dreading the Inevitable

The Answer:  Dreading the Inevitable, you are not alone.  As their corporate clients show the financial strain resulting from the nation’s sagging economy, many of the major law firms are beginning to respond with cut backs of staff.  How can you prepare yourself for what may indeed be inevitable?  There are several things you can do to make the layoff and your subsequent job search go more smoothly. Being laid off is never completely stress-free, but if you start preparing before it happens it’ll be much easier to deal with.

1. Be Proactive - If the rumors of layoffs persist it might be time to request a meeting with head of your group.  Tell them you’re concerned about the possibility, and if it seems likely layoffs might occur in your department, ask if you can interview for new jobs while still employed (explaining that you’ll make up the time by arriving early or working late).
2. Update your Resume - This is a good time to take a look at your resume and make sure it’s up-to-date. If you’ve been in your current position for several years without updating, your resume probably needs an overhaul.  Make a list of your most significant accomplishments in your current job, as well as any new skills you’ve learned or responsibilities you’ve had.
3. Start Networking - If you haven’t been keeping in contact with your business associates, now is the time to get in touch. Reestablishing contact before a layoff occurs will be more effective than calling out of the blue to ask about job leads after it happens.
4. Do your Research - This is also a good time to do research and find out what types of severance packages other firms are offering. If you do end up being laid off, you’ll be better equipped to negotiate a more beneficial package for yourself.  Here is a list of other benefits that might be included in a severance package:

• Long-term disability Temporary disability
• Life insurance conversion privileges Long-term care
• Accidental death and dismemberment 401K plan conversion
• Employee loan Employee Assistance Plan (EAP)
• Tuition refund plan Relocation

Well, invitations have been sent out for the inauguration of Barack Obama as the 56th president of the United States. But if California lawyer Michael Newdow gets his way, the oath will read a little differently this time.  Newdow is lead plaintiff in a lawsuit filed this week by atheists and atheist groups. As Tony Mauro reports at The BLT: The Blog of Legal Times, the complaint seeks an injunction to prevent Chief Justice John Roberts Jr., who will administer the oath of office to Obama, from inserting the words “so help me God.”

As it turns out, that phrase is an editorial enhancement to the oath as set out in the Constitution. Mauro explains:

The oath of office that presidents take on Inauguration Day is right there in the U.S. Constitution — at the end of Article II, Section 1. Take a look, and you will see that the oath does not include the words “so help me God” at the end, though presidents and the chief justices who swear them in have apparently added the words in every inauguration since 1933. Some historians say George Washington used the same words in the first inaugural, but others dispute that, and in any case the practice did not become common until the inaugurations of Franklin Roosevelt.

Newdow is known for his lawsuit against a California school district which sought to remove the words “under God” from the Pledge of Allegiance. Although he won in the 9th Circuit (which found the words constituted an endorsement of religion), the Supreme Court later dismissed his suit for lack of standing.

In the complaint, Newdow and the other plaintiffs say they “have no objection at this time” if Obama chooses to add the words himself. “The president, like all other individuals, has Free Exercise rights, which might permit such an alteration.” They do feel, however, that Chief Justice Roberts, in administering the oath, has no such rights.

The full text of the complaint is here.

No, I’m not talking about the candy we loved as children.  I’m talking about money – something we could all use more of these days.  As the legal arena wraps its head around this recession, a number of national firms have frozen salaries for 2009.  It doesn’t take a Rhodes scholar to see the reasoning behind that action.  One firm reasoned that freezing salaries would put them in a better position to offer bonuses at year end.  Hence the question “Now or Later?”  In today’s economy, would an associate rather get a $10,000 increase in salary over the course of the year (to better pay for ever-rising household expenses such as medical care, heating/cooling and food) or take a chance on still being with the firm at the end of the year for a possible bonus that could be significantly more than that amount?

In light of the “tighten your belts” counsel which has graced the lips of a myriad of popular economists, most of us are now quite risk averse, so I’m not certain a bonus a whole year from now would make associates feel warm and fuzzy inside.  In most cases, bonuses are usually discretionary, so it’s hard to pinpoint the exact benefit in this situation. Having said that, maybe it is a wise move to defer salary increases and reward those associates who go the extra mile in 2009.  After all, if the news on the economy continues to get worse before it gets better, the number of associates on the firm payroll at year’s end may be significantly fewer than current numbers.  If you were a betting man/woman, which would you give up?

On December 8, 2008, the new Uniform Municipal Deed Registration Act took effect in Pennsylvania, providing a more timely process for recording deeds in counties and also for registering deeds in local municipalities.

Its purpose is to counteract land fraud by requiring prompt public recording of land transfer documents and by allowing municipalities to set additional local requirements in a uniform manner.

The PA UMDRA was signed into law on October 9, 2008 as Act 110 of 2008 (formerly H.B. 1634, P.N. 4003). It establishes uniform procedures for a local municipality to provide a registry for deeds or conveyances in addition to the recording of documents with a county recorder of deeds. A municipality cannot require a county to effect a parallel municipal registration of such documents, but a municipality and a county’s recorder of deeds may enter into an agreement whereby the county will share information regarding conveyances of property.

The Intelligencer (Philadelphia, PA) published an article on December 24, 2008, entitled “New law helps limit deed fraud” by Amanda Cregan, who quoted the Montgomery County Recorder of Deeds as to the new law’s effect:

Montgomery County Recorder of Deeds Nancy J. Becker says the new law not only streamlines the process among municipalities and counties, but also protects the new homeowner.

“We’re really delighted because, if for any reason, if there is a delay in recording a deed, the possibility of fraud being committed against that property increases,” said Becker, in her fifth year in office. “If people aren’t paying attention and deeds aren’t being recorded in a timely fashion, then things can happen.”

In the gap between when a homeowner purchases a home and when the deed is recorded, a thief can obtain a copy of that deed and have it transferred fraudulently. * * *

Land fraud, based on bogus conveyancing documents, can occur. See: “Scam Alert: Bad Deeds” by Sid Kirchheimer, published in the AARP Bulletin (Dec., 2008), as reposted online by the Montgomery County Recorder of Deeds Office.

Retransfer of The Empire State Building, in New York City, took only ninety minutes, as reported by The New York Daily News in “It took 90 minutes for Daily News to ’steal’ the Empire State Building” (12/02/08) by William Sherman.

In one of the biggest heists in American history, the Daily News “stole” the $2 billion Empire State Building.

And it wasn’t that hard.

The News swiped the 102-story Art Deco skyscraper by drawing up a batch of bogus documents, making a fake notary stamp and filing paperwork with the city to transfer the deed to the property. * * *

The massive ripoff illustrates a gaping loophole in the city’s system for recording deeds, mortgages and other transactions.

The loophole: The system — run by the office of the city register — doesn’t require clerks to verify the information. * * *

“Crooks go where the money is. That’s why Willie Sutton robbed banks, and this is the new bank robbery,” said Brooklyn Assistant District Attorney Richard Farrell, who is prosecuting several deed fraud cases. * * *

One Pennsylvania city, Philadelphia, experienced so many land fraud cases, its Council and Mayor acted to curb abuse. According to “Philadelphia City Council Amends Deed Recording Standards ” (08/08/08) posted by the PA Notary Blog, hosted by the Pennsylvania Association of Notaries, “as of April 2008, Philadelphia had received 454 reports of suspected land fraud since 2000.”

Philadelphia City Council unanimously passed a bill that amends Title 2 of the Philadelphia Code.

The amendment adds a new chapter providing that prior to the recording of any deed, a check of record ownership must be conducted by the Department of Records.

Appropriate documentation must be submitted to the Department with certain deeds for the delivery of deeds to the Department of Records must meet certain requirements. Finally, the record owner must be notified prior to the recording of any deed. * * *

Mayor Michael Nutter signed the bill on Aug. 14, and the ordinance will go into effect on Nov. 3 [, 2008]. * * *

See also: “Philadelphia Changes Deed Recording Requirements” (11/04/08) posted on the notaries’ blog.

PA’s new Act was noted by The Home Equity Theft Reporter in a posting on December 28, 2008, entitled “New Pennsylvania Law To Make It Tougher For Deed Theft Scammers To Heist Homes.”

For consumers or fiduciaries, however, the new law should be transparent in effect, according to The Intelligencer’s article:

Homeowners shouldn’t worry about the new changes, said Bucks County Recorder of Deeds Edward R. Gudknecht.

“Most of the time your title companies and the attorneys that deal in real estate will make sure this is followed through,” he said.

Neil E. Hendershot, Harrisburg, Pennsylvania, is a practicing & teaching lawyer, who works daily in the legal areas covered by the PA EE&F Law