Written by: Theodore M. David,
Chair Tax Law Committee

Current Items:

1) Inheritance Time Bombs
2) IRS Interest Rates
3) Everybody Gets One?

1. Boy, how things have changed. There was a time when I looked forward to getting the Journal of Taxation, Estate Planning and New Jersey and County Bar Journal magazines. I would read them cover to cover if for no reason other than to check to see whether or not a professional article of mine had been published. Some of them were kind enough to put your picture. Looking back at some of the esoteric topics I wonder if even tax lawyers ever got around to reading them. I made a habit of never rereading them myself. I would order reprints and send some to clients in another act of vanity. At least one of my earlier essays on the role of disclaimers in estate planning ended up being cited in New Jersey Statutes Annotated. I kept that particular volume in my office for years. My secretary kept track of all of those publications in folders that grew to overtake filing cabinets over my more than 40 years of practice. I can’t remember the last time I saw any of these magazines. I know the New Jersey Bar Journal still appears in my mailbox from time to time but the others seem to be long gone. All those professional magazines that I paid such attention to have been replaced by the AARP magazine. The latest addition has a fetching Brooke Shields on its cover with two articles of interest that I have in fact read. One is a lengthy discussion of how to live much longer. “Your Total Guide to Health Risks in your 70s.” If you are not quite there yet, it still has some pretty good advice: Eat well, exercise, have some decent relationships, lower your stress and visit a doctor from time to time. It reminded me of an article I did for the ALI – ABA Journal called “Can Lawyers Learn to be Happy.” The second got my attention immediately it was called “Inheritance Time Bombs, Six Ways to Avoid Family Feuds.” Now I didn’t write this nor am I cited so my picture is absent but it still may be the kind of thing you may want to consider sending to your clients or considering for yourself. So here they are: #1 The caregiver conundrum. Should you leave the house to the kid who moved home to be cook/chauffeur/ nurse’s aide/ therapist for the past decade? What about the other children? #2 False expectations. Your kids think you will be leaving them caviar and champagne but all they will be able to afford is barely pretzels and beer; #3 Trust issues. You want to leave money for all of your kids but are concerned about one of the youngest who has a fondness for blackjack tables and fast living; #4 The blended family problem. You want to leave your assets to your new spouse and children from a previous marriage not to your stepchildren. #5 A business problem. Only one child has been involved but you have two other kids. How can you create a plan to avoid the drama? #6 Skipping generations. Your kids seem capable and secure as adults so you decided to mostly bypass them and give to your grandkids instead. The author of the article is Laura Petrecca and she says older Americans hold nearly two thirds of the country’s wealth which is about $93 trillion in assets that could pass to younger generations. It’s time, she says, to work out your “battle plans” that can help you avert disaster. I’ll add that it may be time to hire an estate planning lawyer before the bombs start bursting in air. And to join AARP… it’s got some pretty good articles.

2. IRS has announced that interest rates will remain the same for the calendar quarter beginning July 1, 2024. For individuals the rate for overpayments and underpayments will remain at 8% per year, compounded daily.

3. My grandson loves to play soccer. I’ve watched him as a little boy run all over the field with boundless energy. Alex just turned 16 and is more serious about the game. But I remember fondly when he was perhaps five or six running in every direction at the same time. My son-in-law, God bless him, has been an organizer of teams, coach, assistant coach and a scout leader to boot. When the kids were done knocking themselves out one of the parents would bring muffins or cookies for all to share. When the season ended without any consideration to who had won how many games every player got a trophy. Russell made sure of that. Therapists these days say such affirmation is good for any kid’s ego. It helps them recognize that hard work pays off and can be rewarded. So coaches dig into their own pockets and use their imagination and Internet surfing ability to provide those prized trophies. The kids feel good, the parents are proud and the coaches enjoy every bit of it. I’ve been told over the years that once you work for IRS in any capacity you will always be treated as family. So it is with some dubious parental pride I am proud to report that the IRS has recently won a Certificate of Excellence and Accountability Award for the second year in a row. I don’t know whether they got a trophy but there was a ceremony held on May 16. The award is the highest form of recognition in the field of federal government financial management and performance reporting. I’m not sure exactly what that means but it sounds like it was trophy worthy to me.

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