A Few Words About the NFL National Anthem Flap

I was bored on my flight back to Detroit, so I figured that it was time to blog.

I’ll start with the NFL and the National anthem flap. I deeply respect the players’ right to protest. However, I deeply disagree with the decision to disrespect our country by protesting during our national anthem, which is or should be one of the things that unify us. And protest on your own time and not at your game. It may surprise some to learn that there’s no free speech right in a business context.

This is all governed by the player’s contract and the collective bargaining agreement between the league and the players’ union. The league could have and should have stopped this foolishness, but they were scared of the players. However, I predict that when the owners calculate the cost of their cowardice,I bet that things change. I’m simply serving as a change agent as I discuss in the next paragraph.

To me,this transgression, which was a breach of trust, warranted serious punishment. After careful and prayerful consideration, I determined that the death penalty was appropriate. Therefore, I’m boycotting the NFL.

That’ll do it for now, but like our meely mouthed congressmen, I reserve the right to revise and extend my remarks, as well as the remainder of my time.

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A Few Words About… the Confederate Monuments Crisis

Like many of you, I’ve been deeply troubled by the vociferous and unprecedented onslaught of Antifa, in league with their surrogates in the liberal main stream media, against a sitting president of the United States. However, I was equally appalled and saddened by the senseless murderous act in Charlottesville VA.

I worry deeply about where we’re headed and pray that another civil war doesn’t break out. I also think it absolutely wrong to attempt to judge old historical figures by today’s mores because they never had a chance to live under those mores.

We’re all a product of our past experiences. I’m a product of the deep south and was born in 1960. My home state, Louisiana, was under Reconstruction for 12 long and difficult years, the longest of any Confederate state. Like it or not, Reconstruction was unnecessarily harsh (it decimated New Orleans) on the south and created a lot of ill will that I heard about as a child. The level of corruption and misappropriation by those in control during Reconstruction was breathtaking. We had some Confederate money when I was a child. I lived through desegregation and the civil rights struggle.

Despite my southern upbringing, my ancestors fought on both sides of the Civil War. One ascendant, who was in one of the Tennessee militias, spent three years in a Union prison camp. Another ascendant fought for one of the Michigan militias. Therefore, I’m torn between the two sides.

I’m glad that an extraordinary leader, Abraham Lincoln, took up the struggle and acted to save the Union. Slavery is wrong, no matter how you slice it, and I’m glad that it ended. However, as a constitutional conservative who believes in states rights and limited government, I don’t like at all how the U.S. Supreme Court has eroded the Tenth Amendment to something just short of a suggestion. I believe that this erosion has resulted in a considerable loss of personal liberty, which is anathema to me.

Which brings me to the Confederate monuments. It might interest you to know a few facts about Robert E. Lee. At the time that the Civil War broke out, Lee was the best general we had. Had Virginia not seceded, General Lee would have been in charge of the Union army. However, back then (remember, the country wasn’t even 100 years old, and most of the states hadn’t even been part of the country for 50 years), one’s loyalty was to one’s state, so when Virginia seceded, General Lee went with the commonwealth.

Did General Lee have any feelings about slavery? Yes, he did. General Lee opposed slavery and, in fact, had freed his slaves ten years before the Civil War began. However, because General Lee was such a good and fair man, not a single slave left his plantation until after the war ended. In fact, General Lee even provided for one former slave in his will.

After the war, General Lee assumed the presidency of Washington College (now Washington & Lee), but only lived for five years after the Civil War ended. Did General Lee have any feelings about erecting monuments to Confederate heroes or flying any of the several Confederate flags? Yes, he did. Importantly, General Lee was against them because he felt that they would retard the healing that was necessary.

This issue is a very complex one. My initial reaction to the proposal to remove the Confederate monuments in New Orleans was to summarily oppose it. This immediate visceral reaction was no doubt influenced by the fact that New Orleans’ mayor, the sorry Mitch Landrieu (who is spending all his time running for the 2020 Democrat presidential nomination instead of governing a deteriorating city), was proposing the removal.

My first question was why now? These monuments have been up for a long time, some since the 1870’s. I lived in the greater New Orleans area for about 20 years, and I don’t recall a single public complaint about these monuments until last year. Did the monuments suddenly become repugnant and offensive? If so, how did that happen?

However, if you get past the peculiar and very interesting timing issue, the question of whether the Confederate monuments should come down becomes a fair one. People are claiming that these monuments negatively affect them. However, I must first express a deep reservation about this issue.

I am deeply concerned by what seems to be a now public effort to rewrite our history. Students have been subjected to years of intentional rewrites of history in public schools, which are run by the teachers’ unions. Nevertheless, the rewrite effort is now public through the removal of historical monuments and the changing of names or streets, parks and buildings. I believe that history has much to teach us, that we’ll lose if we obliterate the truth and replace it with a liberal narrative.

If anyone could demonstrate to me that he or she is physically or psychologically affected by the Confederate monuments, then I’d be in favor of their removal. However, I’m not inclined to favor removal because this appears to be but a part of an overarching political plan to resist a sitting president. In my opinion, their resistance is bordering on treason, if it hasn’t already crossed that line. We all have choices. If a monument offends you, just don’t look at it. Problem solved.

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A Few Words About Gratitude

I’ve not blogged in a while, in part because I’ve been weighed down lately by a personal health issue that, thankfully, has turned out to be nothing of concern. However, during the nine long days between the biopsy and receiving the results, which were interminable to me, my brain conjured up quite a parade of horribles that caused me some loss of sleep and quite a bit of consternation.

Yesterday, I received the good news that the abnormal growth on my right ear was not malignant. Whew! All that worry for naught. Now what?

I must confess that I’ve not written a gratitude list in quite a while, even though I know well how therapeutic writing a list of things for which we are grateful can be because I’ve written many over the years to get through some rough patches. Given my good news, I thought that I’d share a partial list of that for which I am grateful.

I begin with a couple of quotes about gratitude:

Sometimes we need to remind ourselves that thankfulness is indeed a virtue. William John Bennett.

Gratitude is not only the greatest of virtues, but the parent of all others. Cicero

He is a man of sense who does not grieve for what he has not, but rejoices in what he has. Epictetus

You can’t be hateful if you’re grateful. Shorty

I’m grateful for:

Being alive today, during the greatest period in which to live.

My good health.

Living in the greatest country in the world, one where I am free to pursue my passions.

My faith in God, which, though occasionally tested, always carries me through.

My loving parents, Paul and Marilyn, who gave me a great life.

My brothers, Doug and Keith, who I love dearly, even though I don’t see them very often.

My loving wife, Carol, who came into my life at a low ebb and who patiently and gently loved me back to life.

My wonderful sons, Paul and Evan, who have made me a very proud papa.

My ex-wife, Lynn, for giving me two wonderful sons and for keeping me humble.

My wonderful job, and the people with whom I work.

All of my friends, of which God has blessed me with many.

My abilities and talents, of which God blessed me with many.

A warm and wonderful home in which we live.

Plenty of food to eat, in which I regularly overindulge (and it shows).

The wonderful game of baseball.

Hot running water.

Amazing technology, which permits me to do so many things, including writing this blog.

Our amazing cat, Callie-Cat, who I love dearly.

My family on both sides, including my aunts and cousins.

My in-laws, who accepted me into their family.

My love of music and my music collection.

My love of books, and my personal library.

I could go on and on, but, hopefully, you get the point. And, more importantly, that I understand that I’ve been extremely blessed. I truly am fortunate to have what I have, and I’m grateful for it. I really do try to focus on what I’ve got and not on what I don’t have.

It is therapeutic to go through a gratitude list exercise, and, if you’ve never done one, or it’s been a while since you have, you really should consider taking this path because it truly makes you feel good.

I choose to live in gratitude. It’s truly a great place to live.

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Baseball: It’s back!!! But It’s Different This Year

Those of you who know me at all know of my unquenchable love of all things about The Game: baseball. All of the teams are working out now either in the Grapefruit League (Florida) or the Cactus League (Arizona), and spring training games begin on Wednesday, February 22. I’m so excited!!! For me, the off-season is such a downer; I refer to it as The Void. The Hot Stove League (trades, rumors, free agent signings, etc.) heats up from time to time, but there isn’t that healthy daily dose of Vitamin B (baseball) that I crave and need.

I’ve been enthralled with The Game since I was first introduced to it as a small child. One of the greatest days of my life was when my parents gave me a small portable transistor radio at around age 9, which became my connection to My Team: the Houston Astros. I listened to every game, vicariously going through all of the ups and downs of a season with the team just as though I was a part of it.

During the games, I paced all around our neighborhood with the radio tucked up at my ear, listening to the wonderful calls of then Astros play-by-play announcers Gene Elston and Loell Passe. It was magical. I celebrated good things, was crushed when bad things happened, and I sometimes questioned a managerial move out loud. While I love watching games on television, there’s just something about baseball on the radio that I love. The current Astros radio broadcast team of Robert Ford and Steve Sparks are awesome at their craft.

I remember one night when the Astros were playing the Dodgers on the west coast, and the game started after my 8:00 p.m. bedtime. However, not to worry. I just got under the sheet, turned the radio down real low and listened anyway. One night I listened until 4:00 a.m. because the game went well into extra innings, which I love and view as free baseball.  I say a silent prayer that each game that I watch (that doesn’t involve my Astros) goes into extra innings! Of course, I want the Astros to win convincingly every game in  regulation nine innings!

My late mother, who honestly couldn’t care a less about baseball, and I had a ritual that we went through every spring from 1969 on until her death last October. Before the season started, Mom would ask me who would win the pennant, and my response was always the same: the Houston Astros. Never mind that I’ve only been right one time since 1969 (2005). It was a ritual, and it is one that I will sorely miss this season.

I miss Mom terribly. But I want to be clear about this: my Houston Astros will win the pennant this year! That’s for you, Mom!!!

Play ball!!!

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A Few Words on Jury Duty…

Recently, I was summoned for state jury duty. I always see jury duty for what it is: an important public service, a civic duty. Millions of good people have died for my right to a trial by jury, so I figure the least I can do is not to bitch about it or try to get out of it and just show up on the appointed day, which I did, armed with a book in hand, since the wheels of justice often are very slow to move (in which case was true).

As luck would have it, there was only one case that needed a jury that day, and it was a civil case, which, here in Ohio, only requires eight jurors and two alternates. I went through voir dire and admitted that I knew the lawyers, yet I wasn’t excused at that point. However, ultimately, I was not selected to be on the jury for that week-long trial, for which I was grateful since I had plenty of important things to do at work.

My history with jury duty goes back to my days as a judge’s law clerk back into the mid-1980’s. I have to confess that, prior to that job, I hadn’t given jury duty a second’s thought. Back then, as the judge’s law clerk, I was besieged with requests from people wanting me to help them get out of jury duty. I became somewhat callous and incredulous at these numerous requests, and I used to counter back with this question:” What if we let everyone out of jury duty who wanted to get out of it?”

I would then explain the whole civic duty thing and tell them that juries wouldn’t be either good or fair if the only people who served on juries were those who wanted to serve. Suppose that you or a loved one was facing a serious charge, and you really wanted a fair jury. Would you like your chances with only those who want to be on juries to exercise a little power, or would you want a cross-section of your community peers to be there?

I told them that I would want the latter, right about the time that I would tell them that their request to get out of jury duty was denied. I told them that the odds of getting picked to be on an actual jury were very small because most cases settle on the courthouse steps before trial, so that, at most, it would be a slight inconvenience. While I’m certain that I didn’t make any friends doing this, I hoped that the people would come around to my way of thinking.

As a practicing lawyer, I actually served on two criminal juries and was foreman on one of those juries. We reached a unanimous guilty verdict in an I-12 drug trafficking case. While the other jury was impaneled, the DA and the defendant reached a plea bargain agreement, thereby obviating the continued need for the jury, so we were excused. That one would have been an interesting trial because it involved a defendant who’d robbed a convenience store armed with a squirt gun, which the DA was trying to treat as a real gun for purposes of the aggravated robbery charge.

The jury that I was on that reached a verdict was a very educated jury for a cross-section of the public-at-large. I wasn’t the only lawyer on the jury of 12; there was a plaintiff personal injury lawyer also on that jury, as well as a Ph.D. and two others with master’s degrees. Nevertheless, I was astonished at what some of the jurors during deliberation thought was important during the trial. We had to hash through quite a bit of irrelevant nonsense, which wasted a lot of time, before we were able to discuss the facts actually adduced at trial. It really opened my eyes as an office lawyer who spent very little time in a courtroom.

However, I used to employ my jury experience often in my estate planning and tax practice. I used to tell my wealthy clients who were contemplating intra-family litigation about my jury service and experience, and that it was my opinion that they should redouble their efforts to avoid litigation at all costs. I explained that they had no true peers of equal or greater wealth down at the courthouse, and that there was a great likelihood that they’d be painted as spoiled rich kids who were complaining about nothing, wasting the court’s precious time.

I told these desirous wanna-be litigants that these courthouse people, including judges, may well dislike them so much that they could go out of their way to make sure that they lost their case. I told them that the chances were far better if they just continued trying to work things out.

This tack didn’t usually endear me to these often self-righteous souls who wanted to spend lots o’ principal over principle. However, my sworn duty as a counselor at law, which I took very seriously, required that I impart that advice. Thankfully, in just about all of those situations, cooler heads prevailed, and they avoided litigation.

Jury service is an important civic duty that we all must take seriously and agree to serve when asked. There aren’t many places on this planet where a trial by jury is a right. It’s a precious right that must be buttressed by a public willing to serve as jurors.

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Attempted Reformation Shot Down: A Bridge Too Far?

Executive Summary: In this New York Surrogate’s Court opinion, the surrogate denied a petition to reform an income tax inefficient estate plan to leave an IRA to charity instead of to the surviving spouse, as the plan provided, with an offsetting legacy of other assets left to charity to the surviving spouse.
Facts: Charles died on August 17, 2013. Under his will, executed on November 4, 2004, Charlest left his tangible personal property and cooperative apartment to his surviving spouse, Vivian, and left his residuary estate to The Charles and Vivian Sukenik Philanthropic Fund, Inc. (the “Foundation”). Under Charles’ revocable trust, established on August 21, 1996, and amended and restated the same day as the will’s execution, he provided that, upon his death, Vivian would receive certain real property in Columbia County, New York, with the balance of the trust remainder to be distributed to the Foundation.
Charles left Vivian an IRA, apparently valued at approximately $3,200,000. Charles signed the IRA beneficiary designation form on July 29, 2009, almost five years after the will and trust, and it named Vivian as the recipient of his IRA.
The Problem: Vivian quickly realized that Charles’ estate plan was inefficient from an income tax standpoint in that Charles should have left his IRA, which was pregnant with income tax liability, to the Foundation, while transferring other assets from the estate to her.
Vivian asked the Surrogate’s Court for New York County to reform the trust to add a pecuniary bequest to her in a sum equal to the value of the IRA and to reform the IRA beneficiary designation form to name the Foundation the beneficiary instead of her. Vivian asserted that if such relief were granted, she would avoid receipt of an asset (the IRA) on which approximately $1,600,000 of income tax would be due. According to Vivian, while Charles intended to benefit the Foundation and herself, his estate plan “could have been structured in a more tax efficient manner, By “swap[ping]” assets, i.e., giving the taxable IRA to the Foundation while leaving after-tax assets to her. Vivian further noted that Charles’ intent to benefit her and the Foundation, would be carried out in a reformation of the trust and beneficiary designation “more tax efficiently.” Neither the Foundation nor the Attorney General of the State of New York opposed the application, apparently because the Foundation would be receiving equivalent value in the swap.
The Surrogate didn’t buy Vivian’s arguments, noting:
the reformation requested here is prompted by neither a drafting error nor a subsequent change in law. Several years after executing his will and trust, decedent himself thwarted the tax efficiency of his own estate plan by making [Vivian] the beneficiary of the IRA. There is nothing in the record indicating why, after executing these estate planning instruments, [Charles] chose to leave additional assets to his wife in this manner or why, in the four years before his death, he did not take steps to cure the unfavorable tax consequences of his choice of IRA beneficiary.

The Surrogate went on:

[Vivian] has offered no authority to support the reformation of a clear and unambiguous instrument in order to remedy the adverse tax consequences of poor estate planning. Although the court is sympathetic to [Vivian’s] regret that [Charles’] decision to leave her additional assets left her with an additional tax burden as well, nothing in the trust or the will indicates that [Charles] intended to minimize the income tax consequences of distributions to any beneficiary. Indeed, in both instruments, decedent indicated that he was neutral as to the tax consequences of distributions by giving his fiduciaries the power to distribute assets without regard to “income tax basis.” The IRA beneficiary designation is, of course, silent on this issue.

The Surrogate then denied the petition.
Comment: I guess that this was a good try to rescue a tax-inefficient estate plan from the bowels of the tax collector, but it seemed to have been a bridge too far. The Surrogate even acknowledged as such, noting:
[Granting the petition] would expand the reformation doctrine beyond recognition and would open the flood gates to reformation proceedings aimed at curing any and all kinds of inefficient tax planning.

Estate planners who aren’t abreast of basic income tax aspects of estate planning will no doubt lament this decision because it could have given erring practitioners an out on the malpractice exposure of poor income tax planning advice via reformations.

However, is the income tax on an IRA equal to the face value of the projected income tax liability, as Vivian claimed? The opinion does not set forth the terms of the IRA. However, if that IRA is like most, Vivian does not have to take the income tax hit all at once, but, rather, only as distributions are received, which could greatly reduce the present value of the alleged $1,600,000 income tax liability. And there also is the possibility that little income tax will ever be paid on the IRA, especially if Vivian does what Charles did not do and leaves it to charity at her death and only takes out the annual minimum required distributions.

Of course, Charles could have better planned for income taxes, since there is a significant difference between leaving an IRA to a charity, which is income tax-exempt, and to a surviving spouse. This is the lesson of this case. Why did Charles not do so? He clearly should have had plenty of time. There is a footnote in the opinion that seems to say that while his lawyer suggested leaving the IRA to the Foundation (and, thereby sidestepping a potential malpractice claim), Charles was too sick to make any changes.

It would not have surprised me one iota if the Surrogate had gone along with the proposed reformation. After all, there was no apparent opposition (although we don’t know whether the IRS was noticed in the matter). In uncontested matters such as these, it was my experience that the courts will bless just about any reformation, particularly one that saves the estate and its beneficiaries (who often are constituents of the judge) taxes!
The bottom line is that there are limits to what a court can be expected to do after the fact as a rescuer. It is incumbent upon estate planners to properly advise as to the income tax ramifications of an estate plan.
Cites: Matter of Sukenik, 2016 N.Y. Slip Op. 31217U (New York County Surrogate’s Court June 28, 2016).

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At the Intersection of Portability and Blended Families!

Executive Summary: In this case, out of the Oklahoma Supreme Court, the Oklahoma Supreme Court affirmed a trial court’s order forcing the executor of a deceased spouse to file a federal estate tax return and make a portability election.

Facts: Anne died intestate on January 22, 2016, survived by her husband, C.A., and two children from a prior marriage. Anne and C.A. had married in 2006 and had signed a prenuptial agreement whereby each waived all interests in the other’s estates. There was no mention of portability in the prenuptial agreement, probably since portability wasn’t added to the law until 2010.

At first, Anne’s son, Robert, probated a 1995 will and was named executor. C.A. moved to be named administrator, alleging that since Anne died intestate, having revoked the 1995 will, and C.A. was then named administrator, until they provided the court with the prenuptial agreement, wherein C.A.’s waiver of the right to serve as administrator came to light, after which Robert was named administrator.

On August 10, 2016, C.A. filed an Application to Compel Administrator to Timely Prepare and File a Federal Estate Tax Return for Purposes of Irrevocably Electing Portability of Decedent’s Deceased Spousal Unused Exclusion Amount (Application).

On November 8, 2016, the district court entered its order effectively granting C.A.’s Application. The district court, non-exhaustively: 1) denied C.A.’s request for appointment of a special administrator for purposes of filing an estate tax return for Anne; 2) ordered Robert to provide C.A. with a list of the records necessary to prepare the estate tax return and ordered C.A. to provide the records; 3) ordered C.A. to produce to Robert a detailed inventory of the personal property of Anne in his possession and make it available for pickup; 4) ordered, if a DSUE Amount is available, that Robert shall timely file an estate tax return electing portability of the DSUE Amount and allow C.A. 60 days to review the return and documentation prior to filing; and 5) ordered C.A. to pay for the filing of the return if a DSUE Amount is available.

Robert filed a fast track appeal to the Oklahoma Supreme Court, which granted that motion on December 16, 2016. Robert raised several points of error on appeal, including: 1) the district court lacked subject matter jurisdiction; 2) its order concerning the DSUE is preempted by federal law; 3) the trial court failed to properly consider the antenuptial agreement and therefore erroneously determined C.A. had standing; 4) the district court’s order violates the terms of the antenuptial agreement.

On appeal Robert asserted that he is the appointed executor within the meaning of the relevant federal law. Accordingly, he argued on appeal that, pursuant to IRC Sec. 2010 and the applicable regulations, the decision to elect portability of the DSUE Amount is discretionary and entirely his to make. Robert further argued that the district court therefore had no subject matter jurisdiction over the matter, and that its order compelling him to make the election is directly contrary to federal law and any state law grounds on which it might be based are defeated by the preemption doctrine.

The Oklahoma Supreme Court didn’t agree with Robert. The Oklahoma Supreme Court concluded that the district court had subject matter jurisdiction and that Robert’s claim was for complete preemption, which the Court noted was rarely granted. The Oklahoma Supreme Court observed:

[C.A.’s] claims concerning the DSUE are rooted in Oklahoma law concerning the fiduciary obligations owed by estate administrators to potential beneficiaries of the estate. There is no indication in the federal law provisions concerning the DSUE that the Congress intended to leave no room for state law claims relating to the duties of the estate administrator, even if those duties involve a federal matter such as the election of the DSUE. Indeed, the IRS itself acknowledged that the question of what state law actions might bring a surviving spouse within the definition of executor pursuant to 26 U.S.C.A. § 2203 are outside the scope of its regulations, implicitly acknowledging the interplay between state laws concerning probate and estate distribution and the federal estate tax provisions. The complete preemption doctrine is inapplicable here and does not deprive the district court of subject matter jurisdiction in this cause.


 It is the conclusion of this Court that the district court’s order compelling Lee to file an estate tax return and elect portability is within the district court’s subject matter jurisdiction and is not preempted by federal law.

 The Oklahoma Supreme Court continued:

[C.A.] has an obvious interest in the portability of the DSUE. The determinative question, then, is not whether the antenuptial agreement between [C.A.] and [Anne] bars him from being a legal heir, but whether the agreement bars him from claiming any interest in the portability of the DSUE.

 [C.A.’s] interest in the DSUE is not barred by the antenuptial agreement he entered into with Decedent.

Given the above principles, the antenuptial agreement does not bar [C.A.’s] interest in the DSUE. The portable DSUE is not simple property acquired by one party over the course of the marriage according to existing laws in effect when the agreement was made. Itis an interest created by the federal tax code that was an impossibility at the time the antenuptial agreement between [C.A.] and [Anne] was created. The antenuptial agreement was entered into on May 24, 2006, and portability of the DSUE became an option under the federal tax code for the first time with the passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111-312, § 303, 124 Stat. 3296 (2010). [C.A.] and [Anne] clearly intended a comprehensive waiver of their marital rights under the law as it existed at the time, and included reference to specific statutory provisions where necessary. However, the agreement is silent as to portability because the change in law was unforeseeable to the parties when the contract was made. Accordingly, the district court was correct in implicitly determining that the antenuptial agreement did not bar [C.A.] from asserting an interest in portability of the DSUE.

The Oklahoma Supreme Court affirmed the trial court, noting:

[Robert] argues that since the DSUE is valuable only to [C.A.], while at the same time being an estate asset under Lee’s complete control, he should be allowed to demand consideration from [C.A.] in exchange for making the election. [Robert] further argues that pursuant to 26 U.S.C.A. § 201o(c)(5), electing portability of the DSUE will extend the audit window for Decedent’s estate considerably. While 26 U.S.C.A. § 2010 requires the administrator to make the election to allow portability of the DSUE, the only person with an interest in and ability to use the DSUE, if it exists, is the surviving spouse. If the election is not made through the timely filing of an estate tax return, then it is lost.

U.S.C.A. § 201o(c)(5)(A). [C.A.] has also agreed to pay any costs associated with preparing the necessary return.

 The district court, after hearing expert testimony and considering the evidence, evidently determined that any risk to the estate was outweighed by [Robert’s] fiduciary obligation to preserve the assets of the estate and safeguard [C.A.’s] interest in the DSUE. We agree, and determine the district court did not err by requiring [Robert] to file a federal estate tax return and elect portability of the DSUE. The district court’s order was not contrary to the clear weight of the evidence or applicable governing law, and is therefore affirmed.

 Comments: The Oklahoma Supreme Court docketed and decided this case in about 39 days, which is very fast for such a court to move. It’s uncorrected (as of yet) opinion reflects that speed, at several points getting the parties’ arguments wrongly associated with a party, i.e., reversing the arguments that each party made. Given that Anne died on January 22, 2016, the Oklahoma Supreme Court’s January 24, 2017 ruling gives Robert, as administrator, about three months to file the Form 706, assuming that Robert timely filed for the six month extension.

There apparently were some conflicts of interest allegations in this case that the trial court deferred, but the Oklahoma Supreme Court’s opinion didn’t shed any light on them. Inquiring minds want to know!

This decision seems to be a correct affirmation of what apparently was a well-reasoned trial court decision. I wish that I had seen the trial court’s opinion, because it appears from the description of the trial court’s order in the Oklahoma Supreme Court’s opinion that the case was well pled and well-lawyered in that all of the issues seem to have been addressed. The trial court’s order also seems to have been very even-handed. For example, the trial court required C.A., as surviving spouse, to pay for the preparation and filing of the federal estate tax return.

One could quibble with the courts’ conclusions that the prenuptial agreement’s waiver of estate rights, which obviously predated portability as a possibility, didn’t cover portability, as well as the conclusion that the surviving spouse after the prenuptial agreement waiver had standing in the probate court. However, in light of this decision, it is imperative that estate planners revisit all pre-portability (2010) marriage contracts to permit the spouses to now consider portability. However, caution is in order on several scores. Firstly, one may be opening Pandora’s Box to revisit the entire agreement, which one spouse often doesn’t want to do. Secondly, one must consider applicable state law. Some states, e.g., Ohio, simply don’t permit amendment of marriage contracts.

An executor who is a child of a prior marriage, as was the case here, may choose not to incur the expense of filing an estate tax return and the risk of audit of the DSUE Amount solely to make the portability election for the sole benefit of surviving step-parent spouse, with some risk to the first estate. In this case, Anne died intestate, and, because of the prenuptial agreement, C.A. had no interest in her estate, including service as administrator, which he waived in the prenuptial agreement. However, it isn’t inconceivable that some of Anne’s interest in property nevertheless passed to C.A. via survivorship or beneficiary designation, all of which would have to be listed on the federal estate tax return. However, given the prenuptial agreement and that Anne died intestate, it is doubtful that there is any QTIPable property in her estate.

The use of portability with QTIP trust planning, which the IRS now acknowledges in Rev. Proc. 2016-49 can happen (essentially modifying Rev. Proc. 2001-38), in subsequent marriages where the QTIP trust property is going to pass to the descendants of the first spouse to die could visit hardship and federal estate tax exposure to those descendants where the surviving spouse used some or all of the deceased spouse’s DSUE Amount during his or her overlife and didn’t waive reimbursement of the federal estate tax on the QTIP trust, which few spouses in multiple marriage situations ordinarily do. The spouses could agree during lifetime to permit the surviving spouse to have the use of any DSUE Amount of the first spouse to die via a QTIP election in return for an agreement that the surviving spouse would waive the right of reimbursement for tax due as a result of the inclusion of the QTIP trust in the surviving spouse’s estate (or at least for that portion of the QTIP trust equal to the DSUE Amount).

I predicted some time back that there’d be boatloads of state court litigation over this issue, primarily out of blended families. The Congress and the IRS could have saved us a lot of time and trouble by giving the surviving spouse a right to make the portability election, but they didn’t, and I’m glad that they didn’t because that election can have adverse effects on the estate of the first spouse to die. Given the potential value of the DSUE Amount to whichever of the spouses survive, couples should provide relative to portability. In blended families, it is important that the couple have a frank and honest discussion about portability. The couple should provide instructions relative to it in their estate planning documents and prenuptial agreements. What should that agreement look like?

The first of the couple to die would require his or her executor to timely prepare and file a federal estate tax return and make the portability election. The surviving spouse would agree to pay all of the costs of preparing and filing the return to the satisfaction of the executor, who would agree to cooperate and provide all information concerning the deceased spouse’s assets and liabilities.

The surviving spouse would agree to indemnify, defend and hold the executor of the estate of the first spouse to die harmless from and against any and all taxes, penalties and interest arising out of making the portability election. If a QTIP election is made on the estate tax return of the first spouse to die, the surviving spouse would agree to waive reimbursement of the federal estate tax attributable to inclusion of the DSUE Amount in the surviving spouse’s estate in his or her estate planning documents and agree to pay that federal estate tax, together with penalties and interest, if the waiver is ineffective for any reason.

It’s doubtful that we’ve seen the last of these cases; as I predicted, I think that they’re just beginning. I predict that there will be different conclusions in different courts on this issue. About the best we can all do is properly advise our clients to try to avoid this mess by proactively planning for it, and stay tuned for more!

Cites: In The Matter Of The Estate Of Vose, 2017 0K 3, Case Number: 115424 (Okla. January 24, 2017); IRC Sec. 2010.

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