You Say Tomato, I Say Tomahto

The New York Times just published 15,000 words about the estate and gift tax strategies President Trump’s father, Fred Trump, used to transfer his billion dollar real estate empire to his children more than 20 years ago. NYT reporters accessed public records and had others provide them confidential documents such as estate and gift tax returns. The point of the NYT piece is to disprove President Trump’s claim that he is a self-made man by claiming he received $413 million from his dad. They do not note that represents only 1/7 of his current net worth as reported today by Forbes.

A few points:

1. Even though the NYT used the terms “tax dodger,” “sham,” "dubious schemes," and “improper,” to describe Fred Trump’s planning, the actual planning strategies he used were legitimate.

2. Fred Trump utilized valuation discounts and special trusts called GRATs to greatly reduce the gift and estate taxes owed on the transfer of his assets to his children.

3. Any impropriety on the transfers is due to the appraisal values for the real estate which seemed low in light of later sales.

4. Try as the NYT might to implicate President Trump in any impropriety, any wrong doing belongs to the person making gifts, i.e. Fred Trump, not the person receiving the gifts.

5. Am I the only one to notice that only confidential tax returns of Republicans are leaked to the press?

Photo Credit:  Trump Campaign via NY Times
License:  Fair Use/Education (in linked article)

Cincinnati Pride (Part 3)

The NYT reported about the revival of downtown Cincinnati real estate.  If you are from out of town, come visit us. If you are from Cincinnati, brag about us.  It is a great time to be a Cincinnatian.

The "Fun" in Funeral

Taking another break from newsworthy estate issues, the NYT reported about the beginning of a funeral trend primarily in New Orleans where the deceased is not in a coffin but is posed as if alive.  A 53 year old woman was recently posed at a table holding her cigarette with a can of Busch beer in front of her. In April, a socialite was posed sitting on a bench on a downtown theater greeting guests.

Several points:

1.  Although the Big Easy boasts of putting the fun in funeral, spectacles are not always fun but can be morbid.

2.  I suspect that the beer and cigarette depicted might have contributed to the woman's death at 53.

3. I know they were going for authenticity, but the woman was posed with a Busch beer instead of a nice microbrew as her final beer?

If You Have to Ask, . . . .

An individual who is  a beneficiary of his uncle's estate asked the Ethicist at the NYT if he should follow his uncle's instructions to donate several thousand dollars to various charities.  The instructions were made in a letter accompanying the will.  The beneficiary perceived the groups to be "extremely right wing" and was offended by some of them.   The Ethicist instructed the beneficiary to make the donations or not take any money.

Several points:

1. Leaving money to someone with the expectation that he will share it with someone else or a charity is not legally binding nor a good idea (see the comment about not legally binding). 

2.  Charitable bequests should be made in the will so they are carried out (and so charitable deductions are effective).

3.  Expecting anyone from California to donate money to a conservative cause is tilting at windmills.   

To Tell or Not to Tell?

Quick disclaimers.  I am late to the news that Chuck Klosterman was designated the Ethicist for the NYT in June.  Also, this post is only tangential to estate planning.  However, in the interest of posting every day during Estate Planning Awareness Week, and in showing some love for Klosterman (one of my favorite contemporary writers), I thought I would mention one of his columns.

The question he addressed is whether a family should tell their mom whose greatest fear is suffering from Alzheimer's that she has the disease.  Her doctor has only told her she has mild dementia but has told the family the true diagnosis.  Klosterman answered yes so that she can have final meaningful conversations with family members before the disease advances,  the same as she would if she were dying from cancer.  I concur with Klosterman.  

In a piece of irony, in a recent Grantland column, he wrote that he  certainly would not be comfortable in a world where his worldview dictated reality.  Now, with his current position, he has the opportunity to make his worldview reality (and presumably increase his level of discomfort).         

Who Controls End of Life Decisions?

Sad case that I intended to link last week.  A young woman was diagnosed with terminal brain cancer and eventually received a breathing tube. When she requested that the tube be removed so she could die, her parents sought guardianship of her.  A court found her competent to make her own decision and denied her parents' request. In an odd turn of events, she changed her mind and kept the tube in place to preserve peace with her parents.

A few points:

1.  The case was correctly decided.  The parents had no right to interfere in the decisions of their adult child.

2.  If she had not been found competent, she would have been best served by having a health care power of attorney which designated someone who shared her beliefs to make her decisions. 

3.  We all should have conversations with our family members so they know our wishes and how we wish they would respond to specific medical situations.  As tempting as it might be to get all potentially controversial topics on the table at once, save the conversation about differing views on religion, political candidates, and gay marriage for a different time