msba section of estate and trust

Richard F. Lindstom, Chair John P. Edgar, Chair-Elect Newsletter Mary Alice Smolarek, Editor Richard T. Wright, Secretary Aryeh Guttenberg, Editor

Spring 2008 Vol. 17 No. 2 Notes From The Chair Richard F. Lindstrom, Esq. Ober Kaler

Legislative Resistance to the Uniform Power of Attorney Act

embers of the Section of testimony outlining the problems UPOAA’s provisions or will discuss have long recognized presented by the current state of law amendments that those particular leg- that durable powers of concerning powers of attorney and islators feel are benefi cial. attorney are subject to the desirability of passing a legislative both non-recognition cure, certain members of the legisla- As Chair, I wish to express my grati- and abuse problems. The Uniform ture remain unpersuaded. tude to all members of the Section Power of Attorney Act (“UPOAA”), Council, each of whom played a role which was introduced into the state It has been the experience of the Sec- in attempting to pass this vital legisla- legislature in the past session, of- tion Council over the years that major tion. Many phone calls were made to fers a legislative fi x to both of those pieces of legislation frequently need key legislators and various constitu- problems. Regrettably, some mem- to be introduced in the Maryland leg- ency groups in order to seek passage bers of the state legislature were not islature more than once before success of this legislation. convinced that there was a problem in is ultimately obtained. The Section Maryland with durable powers of at- Council will reintroduce the Uniform torney and/or that the Uniform Power Power of Attorney Act next year. of Attorney Act provided a reasonable solution to those problems. Various members of the Section N HIS SSUE Council met frequently with key I T I Various members of the Section legislators during the course of the worked diligently to put together a last legislative session. In response coalition of groups that were inter- to those meetings, some amendments New Brand of Grave ested in resolving the diffi culties with to the UPOAA were inserted into the Robbery...... 2 powers of attorney in Maryland. The Maryland version in order to meet UPOAA received the endorsement of the concerns of various legislators. What’s In? What’s Out? What’s the Maryland Attorney General’s Of- Apparently not all of the concerns of All the Fuss About? ...... 3 fi ce, the Maryland Department of Ag- the legislators were met. Members ing, the National Offi ce of AARP, the of the Section will continue to meet Reality Bytes ...... 6 Maryland Offi ce of AARP, the Mary- with those legislators who have lin- land National Guard and the Con- gering doubts or diffi culties with the Advanced Tax Institute ...... 13 sumer Rights Federation. Notwith- UPOAA in an attempt to persuade standing the overwhelming amount them as to the appropriateness of the A NEW BRAND OF GRAVE ROBBERY: PRECAUTIONS TO TAKE UPON THE DEATH OF A CLIENT By Lauren D. Krauthamer, Esq. Pasternak & Fidis, P.C.

The Federal Trade Commission estimates that as many each bureau in order to prevent fraudulent credit applica- as 9 million Americans have their identities stolen each tions from being opened during the gap of time before SSA year. In what has become the latest form of grave rob- has contacted the credit bureaus. bery, identity thieves steal the identities of not only those who are living, but also those who have passed Notifying the credit bureaus does not, however, cancel the away. Once an identity thief has one’s personal infor- decedent’s credit cards. The credit card companies do not mation, he or she can use it in a variety of ways, in- receive notice of a cardholder’s death from the credit bu- cluding opening up credit card accounts and taking out reaus for some time. Therefore, all credit and charge ac- loans. It is exceedingly difficult to clear up all of the counts should be closed. To ensure that all accounts are problems that identity theft causes among the living, canceled, it is advisable to obtain the decedent’s credit re- but it can be even more challenging if the stolen identity port from each credit bureau, which will list all open ac- belongs to someone who has passed away. Therefore, counts. A credit report may also serve as a good starting when you learn that a client has passed away or that a point for investigation if there is any uncertainty about the client is terminally ill, you can advise their families and number or nature of the decedent’s accounts. friends of some precautions that they can take, or that you will assist them with taking, in order to protect the People also have online identities that need to be safe- deceased client’s identity. guarded. Online profi les or accounts store vast amounts of personal and fi nancial information. Account adminis- First, whoever takes on the responsibility of placing the trators should be instructed to close these accounts. For obituary should avoid including any unnecessary specif- example, the decedent may have a Facebook or eBay ac- ics that could provide leads for wrongdoers from identity count or other electronic profi le. If so, the profi les should thieves to old-fashioned burglars. For example, recommend be removed. Facebook, and perhaps other sites, will of- to the survivors that they not publish the decedent’s date of fer to put the profi le into a memorial or inactive state. A birth because this provides useful information to identity downside, however, is this could alert the wrong people thieves. A safer alternative would be simply to state the de- that there has been a death. cedent’s age. Publishing the decedent’s address and date of birth arms the identity thieves with all the information they The thought of the number of possible accounts (fi nancial need to purchase a social security number. A social security and electronic) a decedent may have is daunting. This sug- number enables the holder to do anything from opening a gests a new step in the estate planning process. Consider credit card account to obtaining a home loan. advising clients to create a list of all of their credit cards, bank accounts (including online banks such as PayPal), In addition, to minimize the chance for burglary, if you have electronic accounts (particularly those capable of debiting the opportunity, advise the survivors not to publish the date directly from a bank account), passwords, and the security and time of the funeral because this advertises that the de- codes to access the accounts. Of course, as with other im- cedent’s home and the homes of relatives are likely to be portant documents, the client should be advised to keep this vacant. If the family desires to provide this information in information in a safe place and tell someone trustworthy the obituary, you may want to advise them to have someone where this information can be found. watch the decedent’s home and possibly the family mem- bers’ homes, too. Options include asking an acquaintance Even if you assist your clients in taking appropriate steps, or hiring an off-duty police offi cer to watch the home. the survivors should still be on the lookout for fraud. Moni- toring the decedent’s mail, email, home phone and cell Second, the Social Security Administration (SSA) should phone messages, and credit reports should help to alert the be notifi ed of the death. While the SSA will eventually in- family or you to any post-death activity. Adopting these form each of the three credit bureaus (Equifax, TransUnion, simple practices will go a long way to protect an individu- and Experian) of the death, it would be prudent to contact al’s identity.

2 WHAT’S IN? WHAT’S OUT? WHAT’S ALL THE FUSS ABOUT? MARYLAND’S ELECTIVE SHARE IN LIGHT OF SCHOUKROUN V. KARSENTY,

177 MD. APP. 615 (2007), (CERT. GRANTED APRIL 9, 2008) By Angela Vallario, Esq. Associate Professor, University of Baltimore School of Law

When a Maryland decedent dies with a surviving spouse, the In so doing, the Court noted Mr. Knell retained control of surviving spouse is entitled by law to a minimum amount of the property during his lifetime by establishing a life estate the decedent’s estate. This amount is the surviving spouse’s in himself with unfettered power in him while living (ex- statutory elective share (herein “statutory share”) and is de- cept by will) to dispose of all interest in the property in fee fi ned by the Maryland statute as “one-third share of the net simple. He did not part with the absolute dominion of the estate if there is also a surviving issue or one-half of the net property during his life. His conveyance, through a straw estate if there is no surviving issue.” The “net estate” is spe- man, of the remainder of the property was not complete, ab- cifi cally defi ned to mean property of the decedent passing solute, and unconditional. The law pronounces this to be a by testate succession,…” Md. Est. & Trust §3-203. Mary- fraud on the marital rights of Mrs. Knell. His reluctance to land is one of 19 states adhering to a statutory share method relinquish control over the disposition of the property dur- that calculates spousal protection as a percentage of probate ing his lifetime defeated his intention. Knell at 512, quoted assets. The obvious problem with this method is that as- in Schoukroun, at 632. set ownership just isn’t that simple. Often, the bulk of an individual’s estate is in non-probate arrangements such as Knell engendered much uncertainty for practitioners. Mem- trusts, joint ownership, life insurance, and retirement ben- bers of the practicing bar disagreed as to the interpretation efi ts, which are not covered by Maryland’s statute. of Knell. The law pronounced the conveyance by Knell to his attorney with the retained powers “except by will” to be Even though Maryland’s statutory share provides spou- a fraud on Mrs. Knell’s marital rights. But, Knell presented sal protection with a percentage of the net probate estate, unique facts and some believed the holding was tied to that Maryland case law extends spousal protection beyond the case alone. See Schoukroun at 627. It was possible that the probate estate. See, Schoukroun v. Karsenty 177 Md. decision in Knell was based on Mr. Knell’s actions, which App. 615 (2007) cert. granted; Knell v. Price, 318 Md. 501 attempted to intentionally defraud Mrs. Knell. From the de- (1990). These cases modify Maryland’s statutory share cision, it was unclear as to whether or not Mr. Knell’s intent and reach non-probate assets to the extent the decedent to defraud his estranged spouse was of any relevance. retained dominion and control over the asset as of his date of death. Id. Seventeen years later, Schoukroun answered this question when it held that the decedent’s fraudulent intent was of no Knell involved a separated but never divorced couple: Mr. “dispositive consequence.” Schoukroun at 631. Schoukroun and Mrs. Knell, who had been separated for 22 years before involved a decedent and his second wife, Kathleen (herein Mr. Knell’s death. Twelve years after the parties separated “Surviving Spouse”) who were living together at the time Mr. Knell acquired real property. Two years later, Mr. Knell of the decedent’s death. The decedent, Gilles Schoukroun with the assistance of his attorney used as a straw man, (herein “Decedent”) and his fi rst wife, Bernadette (herein transferred the property to his attorney and then his attorney “Ex-wife”) were married for eight years and during their transferred a life estate with unfettered powers in the prop- marriage had a daughter, Lauren. The parties divorced in erty to Mr. Knell and a remainder interest to Mr. Knell’s 1995 and as part of their Separation and Property Settle- live-in girlfriend Annabelle Price. “But for” Mrs. Knell’s ment Agreement, which was incorporated into their fi nal statutory share claim, at Mr. Knell’s death the remainder judgment of divorce (herein “Agreement”), the Decedent interest in the real property would have passed to Ms. Price agreed to maintain a life insurance policy in the amount of outside of probate. After Mr. Knell died, Mrs. Knell fi led a $150,000 naming Lauren as the benefi ciary. statutory share claim to Mr. Knell’s estate and the estranged surviving spouse requested that the Court of Appeals reach In 2000, Decedent married his Surviving Spouse. Some- to the non-probate assets in satisfying her statutory share. time after his second marriage, Decedent took out a Ultimately, the Court of Appeals agreed with Mrs. Knell $200,000 life insurance policy naming Surviving Spouse and brought the real property into the estate for purposes of as the benefi ciary. At that time he no longer had any life satisfying Mrs. Knell’s statutory share. (continued on page 4)

3 What’s In? What’s Out?. . . (continued from page 3) insurance policy in place for his daughter, Lauren, and further, that there is “nothing in Knell to indicate the Court was in breach of the Agreement. Instead, in June 2004, of Appeals intended that consequence” arguing that the just four months before his death, Decedent executed a Whittington v. Whittington, 205 Md. 1 (1954) factors were valid pour-over will and created the Gilles H. Schoukroun still applicable. Trust (herein “Revocable Trust”) for the benefi t of his daughter, Lauren. Decedent’s pour-over will specifi cally The Surviving Spouse claims that Knell applied to the bequeathed his tangible personal property to his Surviv- facts before the Court. Furthermore, that Knell estab- ing Spouse and the residuary estate poured-over to the lished a “bright line rule that removes the need for the trustee of the Revocable Trust. Upon Decedent’s death, court to determine the Decedent’s intention or balance the the Revocable Trust named Decedent’s sister, Maryse, Whittington equities when bringing assets in for purposes as the successor trustee, with his Surviving Spouse as of the elective share.” the alternate trustee. The Revocable Trust was funded with fi ve different brokerage accounts. Funds in three of The Court of Special Appeals held that “the Circuit the fi ve accounts were transferred directly into the Re- Court was not clearly erroneous in finding the [De- vocable Trust. The remaining two accounts were set up cedent] had not acted with the intent to defraud his as a Transfer on Death (TOD) account, designating the widow” and that the lack of fraudulent intent was “not Revocable Trust as the benefi ciary. of dispositive consequence.” Schoukroun at 631. The Court of Special Appeals held that the Decedent’s de- Four years after his marriage to Surviving Spouse, Dece- cision to retain the power to revoke the Trust requires dent died. Decedent’s estate consisted of net probate assets that the assets of the Trust be included in his estate for in the amount of $20,758, the assets of the Revocable Trust purposes of calculating the Surviving Spouse’s statu- of $422,000 and a $200,000 life insurance policy payable tory share. Schoukroun at 633-34. Furthermore the to Surviving Spouse. Decedent’s probate and non-probate Court of Special Appeals stated that Lauren would have estate totaled $642,758, or roughly $643,000. a claim against the Decedent’s estate. Schoukroun at 634. Finally, using an abuse of discretion standard, the After Decedent’s death, Ex-spouse on behalf of her daugh- Court of Special Appeals affirmed the Circuit Court’s ter, Lauren, fi led a claim against Decedent’s estate alleging decision to not impose a constructive trust on Surviving breach of the Agreement and alleging that the Court should Spouse’s life insurance proceeds. impose a constructive trust on the life insurance proceeds passing to Surviving Spouse to the extent of the breach. The As it currently stands, Schoukroun clarifi es that the de- Surviving Spouse fi led a complaint against the estate for cedent’s intent is of no consequence. If the Schoukroun fraud on her marital rights to her statutory share amount. decision is affi rmed we understand that the dominion and control test is what was intended by Knell. Even with such The Circuit Court found that Knell did not control and that clarifi cation as to the Decedent’s intent, Maryland has con- Decedent had no “intent to defraud” Surviving Spouse in tinued along the piecemeal approach to Maryland’s statu- the creation of the Revocable Trust. Schoukroun at 626. tory share and is desperately in need of statutory reform. The Circuit Court found that Decedent’s estate planning was done when he was ill and the fact that Surviving Spouse With a dominion and control test used for bringing assets was an alternate trustee “tells me he certainly wasn’t try- into the Decedent’s estate, under a fraud on marital rights ing to defraud” her. He was simply trying to “cover all the theory, the surviving spouse may be unjustly enriched. The bases” before he died. His only defi ciency was his failure to dominion and control test at this point appears to be a one- carry the insurance policy for Lauren. Id. at 627. Addition- way approach. In both Knell and Schoukroun, the Courts ally, the Circuit Court refused to impose a constructive trust used the dominion and control test to bring assets into the on Surviving Spouse’s insurance policy because she was an Decedent’s estate for purposes of calculating the surviving innocent party and had nothing to do with it one way or spouse’s statutory share. However, the Court did not pro- another. Id. at 628. Both sides appealed. vide any guidance as to whether or not non-probate assets could be used to offset the minimal amount the surviving In her brief, Ex-wife distinguishes Knell as involving a re- spouse should receive. mainder interest, a transfer to a third party, the decedent’s complete disinheritance of Mrs. Knell and that since “POD In Schoukroun, the Decedent had $643,000 of probate accounts are non-testamentary they cannot be included un- less the legislature acts to redefi ne the elective share.” And, (continued on page 5)

4 What’s In? What’s Out?. . . (continued from page 4)

and non-probate assets. The one-third percentage of that subject to the statutory share, but suffi cient probate assets amount is $214,333. Shouldn’t the non-probate assets over to satisfy the surviving spouse’s statutory share? Can the which Decedent retained dominion and control benefi ting surviving spouse collect from the personal representa- the Surviving Spouse be brought back into the estate and tive or is the surviving spouse required to seek contribu- used to as an offset? If that were the case then, in addition tion from the non-probate assets increasing the statutory to the tangible personal property (after a reduction for Lau- share amount? Many collection issues such as whether the ren’s claim), the Surviving Spouse would be entitled to the surviving spouse needs to fi le suit against all benefi ciaries life insurance policy in the amount of $200,000 and only an seeking recovery or only those suffi cient to satisfy her share additional $14,333. remain unresolved with Maryland’s piecemeal approach to the statutory share. Does the dominion and control test only work in one direc- tion? Shouldn’t the non-probate assets to the extent they Patching a statute, which on its face provides a surviving become reachable by the surviving spouse also count as spouse with a percentage of probate assets, with common an offset? Furthermore, Maryland’s piecemeal approach law modifi cations bringing the non-probates assets into the does not resolve the uncertainties as to other cases with decedent’s estate is no resolution to the broken, outdated different facts. Maryland’s statutory share law requires Maryland statutory share. The camel’s back is fi nally bro- the surviving spouse to seek protection from the Circuit ken. Maryland statutory reform is needed to clarify Mary- Courts and to bear the fi nancial burdens and risks associ- land law. ated with litigation. Please join the Estates and Trusts Section at the annual Is there a satisfaction priority? In both Schoukroun and convention as Judge Murphy and members of the Estates Knell, there was one asset in question, which was brought and Trust Section, Family Law Section and Elder Law into the estate and then used to satisfy the statutory share. Section address a reform proposal to fi x Maryland’s bro- What if there are numerous non-probate assets potentially ken statute.

MEMBER NEWS

Please send your professional news or announcements to one of the Editors at:

Aryeh Guttenberg Mary Alice Smolarek Law Offi ces of Aryeh Guttenberg Wright, Constable & Skeen, LLP 2835 Smith Avenue One Charles Center 16th Floor Suite 201 100 North Charles Street Baltimore, MD 21209 Baltimore, Maryland 21201-3812 (410) 484-7711 phone (410) 659-1318 phone (410) 484-3533 fax (410) 659-1350 fax [email protected] [email protected]

5 Reality Bytes No. 5.0 A Personal View on Technology Robert C. Young, Esq. Stewart, Plant & Blumenthal, LLC

One of the constant problems with writing a column on wall to operate the laptop. I was able to load most of the technology in a publication that comes out twice a year is WebPages that I wanted to show in multiple Internet Ex- trying to fi nd topics that will not be hopelessly outdated by plorer windows. So, things actually went pretty well. So, the time the column actually reaches readers. Some times with technology, stuff happens, but if you keep going, it you just give up and concede that you cannot win and just may all work out. The Dude abides. write about something, whether it is “timely” or not. So begins this column . . . . ACTEC Public Website - Estate & Trust Tool Box

When Technology Doesn’t Work, Wing It. The ACTEC recently launched a new version of its public website. In recent years, ACTEC has developed a highly In January, I gave a short presentation on technology devel- useful private website, fi lled with almost everything ACTEC opments to a meeting of Maryland Fellows of the American has to offer, including online version of the ACTEC Jour- College of Trust & Estate Counsel (“ACTEC”). I had planned nal, seminar outlines from national and regional meetings, to present much of my material visually by projecting online forms developed by Fellows, and an Estate & Trust Toolbox WebPages on a projection screen. From experience, this kind of links to other resources online. This private site is avail- of presentation rarely works, because it depends on the facil- able only to Fellows. ity hosting the event to provide computers and projectors and network connections that all work with whatever the present- Now the ACTEC public website has started offering more er happens bring with them. Something nearly always goes resources to the general public and non-ACTEC lawyers. wrong. I had an ACTEC presentation work reasonably well Go to www.actec.org and click on the link to “Public Re- with Andy DeMaio a few years ago, for which I would give sources,” and you will reach the “Toolbox Topical Index” credit to Andy, who set up the connections. and from there links to a wide variety of resources. Of par- ticular interest to estate and trust lawyers may be the link for The ACTEC meeting, held at a local bank, proved true to “Estate & Trust Blogs,” which will take you to a listing of my experience. Things started well. The connection to the informative online blogs. I recommend Prof. Gerry Beyer’s Internet was good, the projector worked and, with a little Wills, Trusts & Estate Professor’s Blog, http://lawprofes- help from the bank’s IT people, we even connected my iPod sors.typepad.com/trusts_estates_prof/. There is also the to the conference room speaker system. But, from there the State Specifi c list, from which I would suggest checking plans fell apart. out Neil Hendershot’s PA Elder, Estate & Fiduciary Law Blog, http://paelderestatefi duciary.blogspot.com/. Under The bank’s IT policy prohibited connecting non-bank com- the link on the ACTEC public homepage, you can fi nd use- puters to their network. So, I used a bank laptop instead of ful ACTEC publications, including the ACTEC Journal, the mine. Unfortunately, the bank’s laptop was typically con- ACTEC Commentaries and ACTEC Engagement Letters. nected to a regular computer monitor and its screen went black after about ten minutes and could not be revived. I What’s in Your Password? also had planned to connect to my own desktop through the Remote Access feature built into Microsoft Windows Passwords (and Personal Identifi cation Numbers or “PINs”) (a Windows feature that is extremely useful and easy to have become a part of our modern life. So much so that use). This would have allowed me to demonstrate certain estate planners should take note of several aspects of pass- things set up on my desktop, but not on my laptop. Unfor- words and PINs. With respect to your clients, consider tunately, the bank’s network blocked such remote access. what happens when the client becomes disabled or dies and (I hasten to say that these are very good security proce- the family cannot fi nd the password or PIN to access vari- dures for the bank.) ous online accounts, including e-mail communications and bank accounts. Language in a power of attorney authoriz- It would seem that this was an utter disaster. With a good ing the attorney-in-fact to gain access to passwords or PINs Internet connection, however, I worked around the blank screen on the laptop by using the projected image of the (continued on page 7)

6 Reality Bytes. . . (continued from page 6) or similar forms of identifi cation may be advisable. Powers bankcard commercial when it cautioned “if you recognize of personal representatives under a will or a trustee under yours, you may as well hand over your wallet or purse to the a revocable trust may also include specifi c language with fi rst person you see on the street.” Here is the list: respect to such identifi ers. 1. password 6. monkey With respect to the practice of law, lawyers should consider 2. 123456 7. myspace1 the passwords and other security methods used to protect 3. qwerty 8. password1 client information stored on their computers. Maintaining 4. abc123 9. link182 the confi dentiality of such information is an ethical obliga- 5. letmein 10. (yourname) tion. Efforts to do so are only as good as the passwords be- ing used and how such passwords themselves are protected. We all want to have passwords that are easy to remem- Consider a policy of changing passwords on some periodic ber, but something that is too easy may defeat the whole basis and discouraging staff from keeping notes or lists of purpose of having a password. Here is a suggestion that passwords in some easily accessed location. Network secu- I heard somewhere that may help you: Pick a word or a rity also needs attention, to see that your connection to the favorite phrase that you will remember and then modify Internet, which lets clients reach you and may let you reach it by adding a number or symbol or capital letters some- your offi ce by remote access, are not also letting hackers where (sand1@Wich) or using just the fi rst letter of each into your computers. word in the phrase (but perhaps avoid common uses of this technique, like “EGBDF”). Finally, we also should consider the passwords and PINs that we use personally. PCMag.com published a list in April of the “10 Most Common Passwords,” echoing the (continued on page 8)

JOIN THE ESTATE AND TRUST LAW LISTSERV

The Section of Estate and Trust Law has a listserv open to members of the Section. The focus of the MSBAETL list is a discussion of issues relevant to Maryland estate and trust lawyers. The MSBAETL list also is intended as a means for mem- bers of the Section to communicate among themselves on issues of importance to the Section.

To subscribe to the MSBAETL list, go to the home page of the Section’s website and use the link on the right-hand side marked: “Listserve.” The link will take you to a page where you can enter you name and e-mail address. The person signing up will then receive an e-mail that they must reply to in order to confi rm their address. They will then be a member of the list and receive a welcome message.

Questions or comments about the list may be directed to the MSBA care of John An- derson at [email protected] or to the Estate & Trust Law Section care of Cristin C. Lambros at [email protected].

7 Reality Bytes. . . (continued from page 7)

Gerry Le Van country. But then you listen to these albums and what you hear transcends everything else. Many of us may have crossed paths with Gerry Le Van. Ger- ry’s website (www.levanco.com ) describes him as follows: What unite these two collections are a sense of dedication to the music presented and the production quality to match the Le Van is a trust and estates lawyer and former law professor. dedication. Radiohead did it their way so that they could make the album that the wanted to make, crafting the sound He is a Fellow of the Family Firm Institute, a Fellow to their own unique vision. Radiohead succeed in every of the American College of Trust and Estate Counsel, a way in presenting a nearly seamless, wide-ranging work. member of the International Academy of Estate and Trust Radiohead are now letting fans have it their way, offering Law, and former Trustee of the Presbyterian Church a download of a song that can be remixed to the listener’s (USA) Foundation. taste. Radiohead will play the Nissan Pavilion on May 11.

Lately, Gerry has been involved in what he has dubbed Even more astounding is the ensemble work on Raising “Family Wealth Mediation,” helping wealthy families pass Sand. Producer T-Bone Burnett brought Plant and Krauss their values and wealth to succeeding generations. His web- together, picked a band that included himself, Norman Blake site contains a number of his commentaries on modern life. and the idiosyncratic guitarist Marc Ribot, and picked most One worth reading is found under the Newspaper Columns of the songs. The result is unbelievable chemistry. Plant link: BlackBerry ADD, Parts I & II. and Krauss sing together with a skill that would seem to have required years to achieve. Plant rises to the challenge What’s in Your Playlist? of being placed in a genre so seemingly alien to his back- ground and he clearly meets that challenge. Krauss too ex- I started my ACTEC presentation in January by going to hibits unexpected and brilliant moments. The selections are Radiohead’s website ( www.radiohead.com/deadairspace ) startling when one listens to the lyrics and fi nds that Krauss and playing some of In Rainbows from my iPod. Some- and Plant occasionally swap the traditional gender roles of where along the way, past Section Chair, A. Shepherdson the song narratives. As with In Rainbows, the production (Shep) Abell, commented that he would like to know what quality stands out, with voices and instruments beautifully was on my playlist. matched and proportioned. Plant & Krauss stop at Merri- weather Post Pavilion June 13. I have written before about my iPod, a now ancient iPod Mini that I inherited from my daughter when she moved up to a new model several years ago. Old as it is, it still works 2. Once Soundtrack - Glen Hansard and Marketa Irglova. and, when I printed off a list recently, it had 1,429 songs on Yes, the Academy Award winning song is here, and much, it, four days worth of music and podcasts. much more. Unlike most movie soundtracks, these songs are integral part of the movie and its story line. Hansard, I cannot write about all of this music, so I decide to make a the lead singer of the Irish band, The Frames, and Irglova pick my favorite music from last year and a few things that play the main characters in the movie and the movie is seem to be permanent favorites. When this reaches you, it as much about their songs and their musical chemistry will be nearly mid-2008, so I apologize that the whole “Best as it is about their personal chemistry. With exception of of 2007" thing is a bit dated. Sweeney Todd (which, of course, was a musical), I cannot remember a movie last year (or any year recently) that so 1. (Tie) In Rainbows - Radiohead. Raising Sand - Rob- integrated the music into the drama and in which the music ert Plant & Alison Krauss. In Rainbows and Raising Sand was so stunning. seem to be radically different. In Rainbows became famous as much for the fact that the iconoclastic British band mar- 3. Sky Blue Sky - Wilco. Wilco produced another wonder- keted their collection of songs online, allowing buyers to ful album last year. A gentler, more accessible work when decided how much, if anything, they would pay. Some say compared to the jarringly brilliant Yankee Hotel Foxtrot they gave it away. (The download ended in 2007 and In (Wilco’s In Rainbows from several years back) and 2004's Rainbows now is available a conventional CD package.) A Ghost is Born. Sky Blue Sky grows with each listening. Raising Sand seems to be its own unique marketing gim- Gone is the frustratingly uneven production of A Ghost is mick, pairing the lead singer of Led Zeppelin with one of the premier singer/musicians in modern bluegrass and (continued on page 9)

8 Reality Bytes. . . (continued from page 8)

Born, which made it madding diffi cult to listen to the al- his guitar and piano. It captures some of Neil’s fi nest songs bum’s brilliant songs. Here, the songs are crystal clear and around the time of their creation. bright. And, Jeff Tweedy seems content with his band and life is indeed good. Catch Wilco live and all of the recent 6. Armchair Apocrypha - Andrew Bird. One of our as- work and older material comes alive in new and exciting sociates loaned me this CD and I love it. I had never really ways. (If you are too old to stay up late at night to the sweet heard anything of Andrew Bird before and I really do not end of a Wilco show, you can catch live feeds or podcasts of know much about him now, but this is a wonderful, surpris- Wilco performances from time to time, through the band’s ing work, fi lled with interesting arrangements and orches- website or other sources, like NPR’s All Songs Considered trations. My favorite tracks are “Fiery Crash” and “Scythian website. Wilco will play the Virgin Music Festival in Bal- Empires”. Bird recently came to my attention again as one timore August 9. of the contributors to a new blog from the New York Times about songwriting, Measure for Measure (measureformea- 4. Songbird - Emmylou Harris (Box Set). OK, this is a box sure.blogs.nytimes.com ) and contributing his thoughts on set (4 CDs and 1 DVD) and it will cost you about a tank and songs are written. Here is his squib from that site: a half of gas at today’s prices, but it is one of the best works from 2007. Spanning her career, Harris handpicked a wide Andrew Bird is a Chicago based singer, songwriter, vio- range of songs to showcase here, not greatest hits (of which linist, guitarist and whistler. He has released 10 albums, there are many), but beautiful gems. There will always be including "Weather Systems" (2003), "The Mysterious something by Emmylou on my iPod, current selections be- Production of Eggs" (2005) and most recently, "Arm- ing At the Ryman and Western Wall: Tucson Sessions with chair Apocrypha" (2007). In March, he won the Plug In- Linda Ronstadt and All the Roadrunning with Mark Knop- dependent Music Award for Male Artist of the Year and fl er of Dire Straits fame. is currently at work on his next album. His Web site is andrewbird.net. 5. Live at Massey Hall 1971 - Neil Young. Cheating again here, as this music should have been released in 1971 or 7. Come Back Home; October 29th - Caleb Stine (with the 1972. This is one of the most moving Neil Young albums in a long time. I think it is mostly because it is just Neil, (continued on page 10)

ESTATE AND GIFT TAX STUDY GROUP

The fi nal meeting of the Estate and Gift Tax Study Group will be held at the Center Club on June 19, 2008 at noon. The co-chairs of the study group are

Brian A. Balenson L. Content McLaughlin 410-752-9737 410-752-9755 partners at Tydings & Rosenberg LLP.

9 Reality Bytes. . . (continued from page 9)

Brakeman on October 29th). I guess I am cheating again. are integrated into the movie, more so than some of other October 29th was actually made in 2006, but I did not “dis- music on the soundtrack. They also stand on the their own. cover” this wonderful Baltimore-based artist until Septem- I recommend both the movie and the soundtrack. ber of 2007, when he played a set at a local community event. Caleb is a wonderful singer, songwriter in folk and Emotionalism - Avett Brothers. I have not listened to this old-time country/bluegrass mode. He is a mainstay in the entire album, but I saw the Avett Brothers at Artscape last local arts community in Baltimore, performing regularly at year, and they were passionate performers with a vision. the Creative Alliance in Baltimore and many other venues. Check out the band’s MySpace page: http://www.myspace. Icky Thump - The White Stripes. Jack White and his various com/calebstineandthebrakemen, where you can hear songs, musical incarnations have intrigued me since he produced including Come Back Home. Their next album, I’ll Head and performed on Loretta Lynn’s Grammy winning record West Again, came out May 17th. Caleb’s website is http:// Van Lear Rose several years ago. Here, with “sister” Meg, www.calebstine.com/. Caleb also does shape-note singing Jack struts some of his best Detroit infl ected Led Zeppelin (see http://en.wikipedia.org/wiki/Shape_note) on the side. funk rock. If Robert Plant had not fi gured out how to out- maneuver him by going toward the country spectrum him- 8. Magic - Bruce Springsteen. This is not as powerful a self, the Stripes may have made it higher in my rankings. collection as Bruce’s last outing with the E-Street Band, The Rising, or his last solo effort, Devils & Dust, but I think Modern Times -Bob Dylan. Speaking of the hardest work- it might be hard to fi nd an album of his that is less than ing man in show business, take a look at Mr. Zimmerman. excellent. Bruce may be trying to take over the title of the Love him or hate him, he is still going (“Not Dark Yet”). hardest working man in show business. In the last several He has morphed yet again, into some wizened southern years, he has turned out the three albums listed above, plus countrifi ed blues man, with his pencil-thin mustache and his Seeger Sessions tribute to Pete Seeger and the Live in cowboy hats. He tours endlessly, putting on shows that Dublin release with the Seeger Session Band. My iPod cur- showcase other artists on the bill, and re-arranging some rently holds Magic, Live in Dublin and the 30th anniversary of his greatest hits into nearly unrecognizable new incarna- release of Born to Run. There are few artists at this stage tions. And, he puts out albums, a solid string of which now in their career who continue to push the envelope the way form this latest era of his career Time Out of Mind, Love & Springsteen does and Magic is more proof of that. Theft and last year’s Modern Times. Not to mention that Amy Winehouse’s producer, Mark Ronson turned out one Honorable Mention: of the year’s funkiest remakes, when he produced his “re- version” of Dylan’s “Most Likely You Go Your Way (and Into the Wild Soundtrack. Apart from a few folks like John I’ll Go Mine)”. Also check out the all-star soundtrack of Williams and Randy Newman, modern soundtracks are dif- the movie I’m Not There (a soundtrack that is probably bet- fi cult works to assess critically. First, they are rarely works ter than the movie (which I have not seen), but the movie of a single artist, but merely a collection of songs or pieces may be worth seeing just to watch Kate Blanchet do her from various artists, often previously recorded. Second, take on the late 1960's version of Bob). Mr. Dylan will stop when such collections have any independent artistic impact, by the Virgin Musical Festival in Baltimore on August 10. it usually derives from the power of association with the fi lm itself. There are soundtracks of this modern genre that Washington Square Serenade - Steve Earle. Steve Earle I love (American Graffi ti, Forest Gump, and, more eclecti- seems to have had nearly as many career turns as Bob Dy- cally, Rushmore). lan, going from country bad boy, to post-incarceration reb- el, to rocker, to bluegrass and Irish music, to activist, and The soundtrack to Once stands on its own because it is the now to Greenwich Village maven (with new wife Alison work primarily crafted by two artists, but undeniably it Moorer). Through it all, there really has not been a bad gains greater power and force if you actually see the movie. recording, with many being exceptional (El Corazon, The The soundtrack to Sean Penn’s powerful fi lm adaptation of Mountain (with the Del McCoury Band), Transcendental the book Into the Wild is a similar effort. While it contains Blues). This one from last year is another fi ne effort. music from a number of artists, the core of the soundtrack is made up of songs from Pearl Jam’s Eddie Vedder. Ved- Some favorites that probably will not leave my iPod for a der is a dynamic and emotional component of Pearl Jam. long time: For Penn’s fi lm, he has crafted a set of personal lyrics, set (continued on page 11) in quieter, more direct arrangements. The Vedder’s songs

10 Reality Bytes. . . (continued from page 10)

Bach: Long installed favorites: Glenn Gould - Goldberg Jack Johnson: Brushfi re Fairytales, In Between Dreams, Variations; Yo-Yo Mama- Cello Suites. and On & On.

Brian Eno: All from the ‘60's and ‘70's: Another Green John Prine: Fair & Square. World, Here Come the Warm Jets and Taking Tiger Moun- tain by Strategy. Los Lobos: Just Another Bank from East L.A.

Bob Dylan: See albums mentioned above, plus Bootleg Richard Thompson: Action Packed. Series Volumes #6 (Live - Philharmonic Hall) and #7 (No Direction Home soundtrack/collection) Tom Waits: Beautiful Maladies, Mule Variations, Real Gone and Used Songs (1973-1980). Bruce Springsteen: See above. And surprisingly, there is much, much more on my iPod, Cassandra Wilson Belly of the Sun and New Moon Daughter. which is the real wonder for 5.5GB of space.

Earl Hines: Earl Hines Plays Duke Ellington.

Emmylou Harris: At the Ryman. (continued on page 12)

Editor’s Note

Our goal is for the Estate and Trust Law Section Newsletter to provide current, useful information on areas of interest to Section members. The Newsletter can be better tailored to suit members’ needs with input from you. If you would like to suggest a future topic, change of format, or submit an article, please contact the Editors at:

Aryeh Guttenberg Mary Alice Smolarek Law Offi ces of Aryeh Guttenberg Wright, Constable & 2835 Smith Avenue Skeen, LLP Suite 201 One Charles Center 16th Floor Baltimore, MD 21209 100 North Charles Street (410) 484-7711 phone Baltimore, Maryland 21201-3812 (410) 484-3533 fax (410) 659-1318 phone [email protected] (410) 659-1350 fax [email protected]

11 Reality Bytes. . . (continued from page 11) FLASH BYTES Dvorak Uncensored (Rated for Mature Audiences) (http://www.dvorak.org/blog/ ). From the PCMag site, Google If we did not have Google, we would have to invent sample the “Vista’s 11 Pillars of Failure” and “What is it – not the search engine, but another corporate technology Net Neutrality, Anyway.” giant whose every move is a source of news and commen- tary, particularly in a world where Microsoft has reached Speaking of Net Neutrality . . . As the political campaigns middle age and Chairman Gates is riding off into the sunset. (at least the Democratic ones) stagger toward November So here is a short Google round-up to fi ll the yawning void and the media (at least at Disney owned ABC) have de- for those who have not heard: cided that issues such as former pastors and mis-remem- bering hostile fi re are now the most burning things about Google Bends Time (and Pulls Our Leg): Google an- which inquiring minds wish to know, we can forget about nounced “Gmail Custom TimeTM”, by which you can back those nasty distractions such as Iraq, Iran, global warming, date your e-mail so that you are never late in responding raising gasoline prices, raising food prices, falling stock again. Announcement date: April 1, 2008. See: http:// markets, mortgage foreclosures, and Internet neutrality. mail.google.com/mail/help/customtime/index.html. Also Internet neutrality? Yes, Internet neutrality should be a see: http://en.wikipedia.org/wiki/Google's_hoaxes. concern, as major corporations controlling access to the Internet (Comcast, et al.) want to create a separate, but not Pirates of Google? In April several video indexing sites equal, system for profi ting their bandwidth. If the popu- that track the location of pirated copies of movies dis- lar wisdom has it that we, the people, are being robbed at closed that Google’s servers apparently contain numer- the gas pumps for the profi t of big oil, and robbed at the ous such illegal videos, despite assurances given in early grocery market for the profi t of big agriculture, then it 2007 to the National Association of Broadcasters by CEO seems only fair that we should be robbed at our computer Eric Schmidt that Google was fi nalizing a fi ltering service connections for the profi t of big technology pipelines. would eliminate such copyrighted content. Google repeat- The problem here is that the Internet is a major com- ed its pledge in a statement saying: “While no system is munication and information pipeline, not just a market bullet-proof, we cooperate with copyright holders to iden- commodity. Its importance in our lives is growing larger tify and promptly remove anything infringing.” Happily, every day. Picking and choosing who gets to connect at least in April of 2008, Jack Sparrow was not in captivity and at what speed should be a public policy decision. So at Google, as none of the popular Pirates of the Caribbean do you know where McCain, Obama or Clinton stand on movies was harbored on Google. You could obtain Wag Internet neutrality? Do you think anyone will ask them the Dog, however. about their position before the election? Is there any rea- sonable expectation that the next President of the United A Day without Google? Also in April, PCMag.com ran a States will have any intelligent ideas on the issues in this piece identifying 11 search sites you could use if you were debate? (Quick investigation reveals that all three of our just plain tired of using Google. Included in the list were remaining choices have blogs. One candidate has a posi- more well known Google alternatives as Ask.com and Tech- tion page on “Technology” that leads you to positions such norati along side such upstart sites as Stumbleon, Search as “Ensuring on Open Internet” and “Create a Transparent With Kevin and Ms. Dewey and Connected Democracy.”)

Now for Something Completely UnGoogle

Acrobat 2008. The ABA has just issued a “Lawyer’s Guide to Adobe Acrobat” by David L. Masters. You can find it at: http://www.abanet.org/media/youraba/200804/ article01.html

John C. Dvorak. The word “curmudgeon” comes to mind when thinking about John C. Dvorak, a com- mentator on the digital universe. He is kind of a fired up version of Andy Rodney for the Internet world. Check him out at PCMag.com (http://www.pcmag.com/ category2/0,1738,3574,00.asp ) or at his own website,

12 2007 ADVANCED TAX INSTITUTE DAY 3 ESTATE PLANNING ISSUES By Jeannette Owen Roegge, Esq. Furey, Doolan & Abell, LLP

On November 7, 2007, MICPEL and but recognizes that many clients may be hesitant to make MACPA presented a full day of estate these gifts. planning topics at the 2007 Advanced Tax Institute. The day included presen- The general power of appointment strategy (“letter ruling tations by four nationally recognized strategy”) as outlined in four recent IRS private letter rul- estate planning attorneys from across ings reveals an alternative technique for taking advantage of the country. John F. Bergner detailed the poorer spouse’s full exemption from estate and GST tax. a potential solution to the problem of the wasted unifi ed In all of these private letter rulings, the taxpayer proposed credit when a poorer spouse dies fi rst in “Waste Not Want to grant the poorer spouse a general power of appointment Not — Creative Use of General Powers of Appointment to over assets in the wealthier spouse’s estate. Fund Tax Advantage Trusts.” Stephanie Loomis-Price then shared her experiences from numerous IRS audits of family The strategy works as follows. The wealthier spouse grants limited partnerships in “Wanted: Family Limited Partner- the poorer spouse a general power of appointment over that ships (Dead or Alive?).” Turney P. Berry gave a whirlwind amount of the wealthier spouse’s assets equal to the poorer ride through the “Notable Developments of Interest to Es- spouse’s otherwise unused applicable exclusion amount. tate Planners 2005-2007.” Finally, Barbara A. Sloan and T. The general power of appointment is granted in a revocable Randolph Harris explored the unique planning opportunities trust so that the wealthier spouse can revoke the trust at any that should be considered when planning for a terminally ill time. If the wealthier spouse dies fi rst, the general power client in “Planning at Death’s Door: Estate Planning for the of appointment over the wealthier spouse’s assets is never Terminally Ill Client.” triggered. However, if the poorer spouse dies fi rst, his or her estate will be augmented by the value of the wealthier Creative Use of General Powers of Appointment. John spouse’s assets that are subject to the poorer spouse’s gen- Bergner presented a possible solution to a problem that eral power of appointment. The assets subject to the power comes across an estate planner’s desk quite frequently: of appointment are then directed, either through the exer- How to make the most of the federal estate tax exemptions cise of the general power by the poorer spouse in his or her of a married couple in which the wealth is concentrated in will or by default, to a bypass trust for the benefi t of the one spouse? The situation does not present a problem if the wealthier spouse. The key aspect of this strategy is that the wealthy client dies fi rst since that spouse has the assets to wealthier spouse never has to make an irrevocable gift of his fully fund a credit trust. However, such an opportunity is assets to the poorer spouse in order to take full advantage of lost if the poorer spouse (the spouse whose assets are less the poorer spouse’s exemption from estate and GST tax. than the applicable exclusion) dies fi rst. In that case, there can be a waste of estate tax and GST tax exemption. There John reviewed the specifi cs of each private letter ruling. In is a big difference in what the IRS takes in estate taxes based PLR 200101021, husband and wife proposed to create a on the order of death for a married couple with inequitable joint revocable trust which would be funded with tenants by distribution of wealth. the entirety property. During their joint lives, either spouse could terminate or amend the trust. Upon termination the To remedy this problem, planners have traditionally advised trustee would distribute the property to husband and wife the wealthy spouse to make a lifetime gift of the shortfall as tenants in common. The fi rst spouse to die would, un- (the difference between the value of the poorer spouse’s es- der the terms of the joint trust, have a testamentary general tate and the applicable exclusion) to the poorer spouse ei- power of appointment over all assets of the trust. This pow- ther through an outright lifetime gift or a lifetime QTIP trust er was exercisable by the fi rst spouse to die “alone and in under §2523. While this solution ensures that the poorer all events.” If the power were not exercised, trust property spouse’s full exemption will be used if he or she dies fi rst, equal to the largest amount that could pass free of federal it also requires the wealthier spouse to give up enjoyment estate tax would be transferred to a credit shelter trust. The of the assets that have been gifted. In many situations, the balance would be distributed to the surviving spouse free wealthy spouse might not be willing to irrevocably part with those assets. John prefers an outright gift in most situations, (continued on page 14)

13 Advanced Tax Institute. . . (continued from page 13) of trust. The credit shelter trust provided for distributions The wife proposed to execute a will exercising the power for the benefi t of the surviving spouse and the spouse’s de- of appointment in favor of her estate. Her will provided that scendants subject to an ascertainable standard. The credit the optimum marital deduction would to pass to the hus- shelter trust would terminate upon the death of the surviv- band outright and the remainder would pass to a credit trust. ing spouse. (John usually follows the strategy outlined in this private letter ruling.) The IRS made the following rulings. First, the initial con- tribution of the assets to the joint revocable trust was not Consistent with the earlier rulings, the IRS ruled that the a completed gift because of each spouse’s right to revoke husband’s initial contribution of assets to his revocable trust or amend the trust. Second, the fi rst spouse to die had a would not be a completed gift because of his right to revoke testamentary general power of appointment over all assets or amend the trust. If the wife predeceased the husband, the of the trust. This meant that all of the trust property was assets subject to the general power of appointment would included in the gross estate of the fi rst to die: the property be includible in her estate. At wife’s death, the husband the deceased spouse transferred to the revocable trust was would make a completed gift under §2501 which would included under §2038 while the property that the surviving then qualify under §2523 for the gift tax marital deduction. spouse transferred to the revocable trust was included under The wife is would be treated as making a gift to the credit §2041. Third, at the moment of death of the fi rst to die, trust of the assets over which she had the general power the surviving spouse made a completed gift of the surviv- of appointment. Finally, any assets that passed from the ing spouse’s interest in the revocable trust to the deceased husband’s revocable trust to the credit trust pursuant to the spouse which qualifi ed for the marital deduction. Fourth, general power of appointment would not be includible in any assets included in the deceased spouse’s gross estate the husband’s gross estate. that were contributed by the surviving spouse and then re- acquired by the surviving spouse through either the credit In PLR 200604028, the husband and wife created separate shelter trust or outright were not entitled to a step-up in ba- revocable trusts. Under the wife’s trust, she gave her hus- sis pursuant to §1014(e). Finally, the property passing into band a general testamentary power of appointment over that the credit shelter trust would be treated as having passed amount of her trust equal to the husband’s remaining exclu- from the deceased spouse’s estate. As a result, distributions sion amount less the assets in his own estate. The husband from the credit shelter trust to the benefi ciaries other than proposed to execute a will that would exercise that power of the surviving spouse were not treated as gifts by the surviv- appointment in favor of his revocable trust. His revocable ing spouse and the credit trust would not be includible in the trust provided that all assets in trust would be distributed surviving spouse’s estate. to the wife except to the extent that she disclaimed any as- sets. Those assets would be distributed to a credit trust. PLR 200210051 involved similar facts. Husband and wife The fi ndings in the previous PLRs were upheld under these again created a joint revocable trust and funded it with T/E, somewhat different facts. joint, or individual assets. During their joint lives, either spouse could amend the trust with the consent of the trustee The four private letter rulings involved the same essential or either spouse could revoke the trust. Upon the death of elements. First, the poorer spouse has insuffi cient assets to the fi rst spouse, the trust would become irrevocable and the fully use up his or her applicable exclusion amount. John property would be divided. An amount equal to the maxi- Bergner refers to this as the “shortfall.” Second, the wealth- mum marital deduction would be transferred to a marital ier spouse grants the poorer spouse a general power of ap- trust. The balance would be transferred to a credit trust pointment over all or a portion of the richer spouse’s assets for the benefi t of surviving spouse and the couple’s issue. exercisable either during lifetime or at death. The general Again, the IRS made the same fi ve fi ndings detailed above. power of appointment can be over all the richer spouse’s as- In PLR 200403094, the husband proposed to create a re- sets in which case the balance above the amount necessary vocable trust and fund it with his own assets. He would to fully use the poorer spouse’s exclusion is returned to the retain the right to amend or revoke the trust. The trust would wealthier spouse either in a marital trust or an outright gift. provide that if the wife died before the husband, she had The general power of appointment can also be limited to a testamentary general power of appointment exercisable that amount necessary to fully use the poorer spouse’s ex- “alone and in all events” over a portion of the assets defi ned clusion amount. In that situation, the shortfall is distributed by a formula. The formula was the amount of the wife’s to a credit trust. available exclusion minus her own assets. The trustee could select assets to satisfy the general power of appointment. (continued on page 15)

14 Advanced Tax Institute. . . (continued from page 14)

Third, a credit trust receives the shortfall, either through an amount while an older family member has substantially less affi rmative exercise of the power of appointment or through than his or her applicable exclusion amount (the individuals the default provisions of the wealthier spouse’s revocable do not have to be related but that is often the case). In this trust. The credit trust is structured in such a way that the situation, the younger, wealthier person creates a revocable wealthier spouse is the benefi ciary and the assets in the by- trust transferring substantial assets to the trust. The younger pass trust are not included in the wealthier spouse’s estate at person then grants the older person a general power of ap- the time of his or her death. pointment over the assets of that amount necessary to make up the “shortfall.” The older person then executes a will No gift occurs while both spouses are living. At the poorer exercising the general power of appointment in favor of a spouse’s death, the wealthier spouse makes a completed gift trust for the benefi t of the younger person. There are some to the poorer spouse of the assets subject to the power of ap- additional considerations with this type of arrangement, and pointment. That gift qualifi es for the marital deduction un- John recognizes that it is not often that it will be appropri- der the gift tax laws. The property of the wealthier spouse ate. A fair amount of trust must exist between the younger subject to the general power of appointment is included person and the older person since the older person could in the poorer spouse’s gross estate. The poorer spouse is intentionally or unintentionally exercise the power in a way treated as the transferor of all property that funds the credit that does not follow the plan. trust. As long as the wealthier spouse does not have a gen- eral power of appointment over the property in the credit Because this strategy has been outlined in private letter rul- trust, the assets in the credit trust will not be included in the ings, a practitioner must be careful in presenting it as an wealthier spouse’s estate at his or her death. option. Although the IRS consistently came to the same tax conclusions in these specifi c fact scenarios, it is not bound From the tax perspective, the only downside to this planning to follow those conclusions and the client should be aware opportunity is that the wealthier spouse will not receive a that there is a risk that the IRS will challenge the anticipated step-up in basis for the assets that were placed in the credit consequences. John also reviewed the state law concerns. trust as a result of the general power of appointment. For example, would the assets subject to the general power John illustrated three additional situations in which the pri- of appointment also be subject to the claims of the poorer vate letter ruling strategy may be helpful. For example, one spouse’s creditors even if the power is not exercised? And spouse, although technically not poor, may have most of if it is exercised in favor of a credit trust (not in favor of the their assets concentrated in retirement benefi ts. John re- poorer spouse’s estate), would it also be subject to claims fers to this as the “excess retirement benefi t situation.” In of the poorer spouse’s creditors? Since states differ in their this situation, the spouse who does not have the excess re- approach to this issue, it is important for the planner to look tirement benefi ts (the “non-participant spouse”) grants the specifi cally to the law of the controlling state. spouse who has the excess retirement benefi ts (the “partici- pant spouse”) a general power of appointment over the non- In addition to these tax and non-tax legal issues, there are participant spouse’s assets equal in value to the participant also practical concerns in setting up such a strategy. John spouse’s otherwise unused applicable exclusion amount. points out that the poorer spouse could intentionally or un- This situation would work in the same way as the wealthier/ intentionally exercise the power of appointment in a way poorer spouse example outlined in the PLRs. that does not follow the plan to which the wealthier spouse agreed. And there is always the possibility as well that the It can also be used where there is a particular asset that one poorer spouse’s personal representative could disclaim the spouse wants to pass free of trust to the other spouse, and power of appointment. there are insuffi cient other assets in that spouse’s estate to fully fund a credit trust. In that situation, the non-owner John explained that the ABA and ACTEC have asked the of the special asset would grant the owner of the special IRS to issue a revenue ruling endorsing the estate and gift asset a general power of appointment over the non-owner tax positions taken in these private letter rulings. Notably spouse’s assets so that full use will be made of the owner the ABA and ACTEC did not ask the IRS to address the in- spouse’s available applicable exclusion amount in case he come tax basis issue. John points out that it is important for or she dies fi rst. practitioners to remember that this strategy is endorsed only in the private letter rulings. These rulings cannot be relied The letter ruling strategy can also be used in a non-marital situation. For example, a younger family member may have (continued on page 16) substantial assets in excess of his or her applicable exclusion

15 Advanced Tax Institute. . . (continued from page 15) on by other taxpayers, and there is always the risk that the situation, it would appear to the IRS that there is an im- IRS will not follow the tax positions taken in these private plied or explicit agreement that the grantor could use the letter rulings. It is also important to advise the client not just personal use asset after the transfer. If such personal assets of the uncertainty of the tax positions, but also the non-tax do have to be contributed, rent must be paid. complications described above. John provided a number of useful sample forms for the various general powers of ap- It is also important for the grantor to retain suffi cient assets pointment and trusts outlined in his materials. outside of the partnership to maintain his or her lifestyle. If that is not done, the IRS will have a much better argument Family Limited Partnerships. Stephanie Loomis-Price that the partnership has no business purpose. Appraisals shared with the attendees the list that she has been compiling must be secured for hard to value assets and the transfer through her involvement in numerous IRS audits of family restrictions on such assets must be reviewed. There also limited partnerships (FLPs). She began by commenting that has to be a consideration of income tax issues related to the IRS has been successful in arguing that the existence of contributions of assets that are subject to debt. Such con- the partnership should be judicially ignored on two specifi c tributions would be an indication of §2036 inclusion for grounds: First, that the retention of certain rights (in the form the IRS. of control over the partnership) upon transfer of the assets to an FLP by the grantor resulted in inclusion of those assets The identity of the potential partners must also be evalu- in the grantor’s estate under §2036. Second, the IRS has ated and their health considered. Stephanie asks clients to also been successful in arguing that the grantor has made consider what they have to lose from a deathbed transfer. an indirect gift on formation of the FLP (Senda and Shep- The client should be advised of the time and expense of herd). If the court disregards the partnership, the IRS is able setting it up and also the potential of facing an IRS audit. to include the fair market value of the assets transferred to the partnership in the grantor’s estate rather than the interest Bear in mind from the very beginning that any written in the partnership--which would be entitled to a discount for communications with clients will be reviewed by the IRS. lack of marketability. Stephanie points out, however, that It is therefore extremely important therefore to document the IRS’s success on these grounds has typically involved all of the non-tax reasons that make a partnership appro- “bad facts” where the formalities of the FLP structure were priate for the particular situation. Such communications not followed. As such facts are almost always within the should involve very specifi c details about the client’s situ- parties’ control, such challenges can be avoided through ation. Stephanie warns attorneys to avoid using a template careful planning and good judgment. To that end, Stephanie containing a generic laundry list of reasons why a partner- shared with us her list for setting up and defending an FLP ship would work. She has found that paper is very impor- to minimize the success of an IRS challenge. tant to the IRS.

Setting Up the FLP. Stephanie cautions attorneys to con- In the process of setting up and considering the FLP, sider whether a partnership is appropriate for the client in Stephanie strongly recommends that the client engage and the fi rst place. Not only do the clients have to be willing consult with advisors who have experience in this specifi c to follow all of the requirements, but their accountants also area. Separate counsel should also be considered for some have to be willing. The sophistication of the clients has to be or all of the participants. These advisors and all counsel such that they are ready to treat the FLP as a separate entity must be involved as soon as possible in the process in order and comply with fi ling all of the partnership returns as well to avoid problems down the road. It is very important to as payment of the associated fees. avoid using a “one size” fi ts all partnership model. Steph- anie specifi cally cautions against using form partnership The specifi c assets that are going to be contributed to the documents. In the end, the creation and consideration of limited partnership must also be considered. Risky invest- the partnership must appear as authentic and unique to the ments should be segregated from the FLP. Retirement plans, particular set of facts as possible. IRAs and stock in S corporations should not be contributed to the FLP. If a closely-held business interest is being con- A discussion should be had of the specifi c partnership tributed this requires a § 2036 analysis to ensure that control terms that will be included in the agreement. What type of issues will not create grounds for inclusion. Stephanie also management structure should govern, will there be com- explained that the client needs to refrain from contributing personal use assets such as a house to the FLP. In such a (continued on page 17)

16 Advanced Tax Institute. . . (continued from page 16) pensation for the managers or a right not to take compen- made after the partnership has been formed to avoid appli- sation, who will be the managers (this could be a §2036 cation of the step transaction doctrine. Stephanie has seen issue), and will there be an investment policy? many cases in which there is a rush at the end of the year to make such gifts and the formalities are not followed--the Once the essential partnership terms have been discussed schedule is not amended and the appraisal is not completed and agreed upon, the attorney needs to make sure that the diligently. Stephanie cautions attorneys against using the partnership agreements are complete as well as the sched- same appraisal for several years. This gives the IRS a lot ules referenced in the agreement. Stephanie advises the at- of ammunition in challenging those gifts. Attorneys should torney to prepare the transfer documents in advance so they also remember the return preparer penalty for partnership can be signed at the same time as the partnership agree- interest. An attorney really needs to spend the time to obtain ment. She also reminds the attorneys to remember to fol- a good appraisal. Make sure that the appraiser is appraising low through and fi le the relevant corporate documents with the correct interest and has the partnership documents and the state authorities. She has seen a number of cases in all necessary information. An attorney should review care- which the failure to follow these formalities has bolstered fully the draft appraisal before it is fi nalized and provide the IRS’s argument that the partnership structure should be the appraiser with access to the client. (Nothing catches the ignored. You need to make sure to get a tax payer identifi - IRS’s eyes more than rounded numbers on appraisals!) cation number for the FLP and immediately set up the nec- essary bank accounts to receive the assets. A partnership How to Handle an Audit. If an attorney is unlucky enough accountant must also be hired to address the accounting is- to face an IRS audit of an FLP, Stephanie has several help- sues. Retention of such an accountant can make or break ful tips. An attorney should consider bringing in litigation the success of an FLP on audit. The partners’ contributions counsel immediately. An attorney should be prepared to should also be refl ected in their capital accounts at the fair produce correspondence with the client. Technically, such market value at the time of contribution. communications are covered by the attorney-client privi- lege. Stephanie has found, however, that there is a negative An attorney must further consider whether the partnership inference if you do not produce the documents. will pay the startup expenses and if there is no money with- in the partnership at that time to pay them that there are If a document destruction policy is in effect, make sure it specifi c provisions for the reimbursement of a partner who is suspended once the audit has started. Stephanie advises covers those expenses. This schedule should be amended attorneys to keep careful track of every document that is promptly whenever transfers are made. produced to the IRS in the same way a litigator would with bates label stamping. Informal interviews should be treat- After Formation, the FLP Must be Maintained. The work ed like depositions. An attorney also needs to understand is far from over after the FLP has been formed. It is crucial the IRS’ broad subpoena power. In dealing with the IRS, to exercise the same attention to detail in the maintenance Stephanie has these words of wisdom: “go easy on the pro- of the FLP. Partnership tax returns should be fi led even if cess and tough on the substance.” Protective claims should there is no income tax due in the beginning years. This also be fi led when necessary and the partnership should be will minimize an IRS attack and document the partners’ maintained and continued throughout the audit. And fi nally, capital accounts on a yearly basis. The partnership also keep track of all the expenses during the time of the audit if has to be maintained in good standing with the appropriate you are going to take them as a deduction. The IRS looks state authorities. very carefully at these deductions and what was actually paid by the estate. The partners must in their dealings comply with the terms of the agreement whether that is regular meetings or a sched- The Terminally Ill Client. Barbara Sloan and Randy Harris ule of distributions. If loans are made to the partners, the reviewed the estate planning opportunities that may be ap- terms of those loans must be respected. The distributions propriate when a client is terminally ill. Randy and Barbara from the partnership must be pro-rata according to the part- focus on the client who is technically terminally ill but not ners’ ownership percentages. Partnership assets should not so near death as to preclude the use of the mortality tables be used for the partner’s personal obligations. under the applicable regulations such as §7520. In such a situation, there is the potential to save the client’s family a In making any transfers of partnership interests, make sure to follow the terms of the partnership agreement closely and (continued on page 18) amend any schedules. Make sure that any such gifts are

17 Advanced Tax Institute. . . (continued from page 17 lot of money through actuarial techniques (private annuity, received under the annuity). There should also be no gift SCIN, CLAT, sale of remainder interest) and non-actuarial tax consequences if the property transferred equals the pres- techniques (large death bed gifts, such as annual exclusion ent value of the annuity. gifts, tuition for private school, large pre-mortem gifts, frac- tional interest in real estate and charitable gifts). Since tim- However, the income tax consequences are not so favorable. ing is everything when the client is terminally ill, the plan- Under the proposed regulations, there is an immediate gain ner needs to gently focus the client in his or her family on recognition under §1001 to the extent that the present value the available opportunities at time when their priorities are of the annuity exceeds the annuitant’s basis in the property understandably elsewhere. transferred. This makes use of the private annuity far less attractive (when the assets transferred in exchange for the The fi rst step is to make sure that all the proper estate plan- annuity are highly appreciated). But Barbara and Randy ning and incapacity documents are in place so that an agent explained that you can get around the adverse income tax can step in if the client becomes incapacitated. The power consequences if the taxpayer purchases an annuity from of attorney should have very broad powers that would allow an intentionally defective grantor trust (IDGT). Of course, any of the possible gifting opportunities. the taxpayer needs to make sure that there is a gift of seed money to the IDGT to lend substance to the transaction and Actuarial Techniques. Many estate planning techniques avoid the risk of estate tax inclusion under §2036. Randy that involve gifts or other transfers are dependent on actu- and Barbara pointed out that one way to get around that arial factors — specifi cally, the taxpayer’s life expectancy would be to obtain guarantees from the ultimate benefi cia- as set forth in §7520. If the value of the gift for transfer tax ries of the IDGT. In such a situation, you could also struc- purposes is based on the client’s assumed life expectancy, ture the annuity so as to backload the annuity payments. and the client dies much earlier than that life expectancy, the actual value of a gift or transfer can increase substan- SCIN (Self-Cancelling Installment Note). Barbara and tially without any additional transfer tax consequences. Randy also discussed the use of a SCIN as an alternative to The actuarial tables of §7520 cannot be used, however, if a private annuity. This technique also involves a transfer in the taxpayer is terminally ill (which is defi ned as an incur- exchange for an installment note for a fi xed term but under able illness or deteriorating physical condition where there this technique, the balance is forgiven if the taxpayer dies must be at least a 50% probability that the individual will during the term. Because of the possibility that the contract die within one year). If the taxpayer dies 18 months after will be cancelled at the premature date of the seller, you the transfer in question, he or she will be presumed not to have to factor in a risk premium in determining the terms of have been terminally ill. If, however, the taxpayer dies prior the sale (through an increase in the purchase price or higher to 18 months from the date of the transfer, it will be up to the interest rate). Barbara and Randy feel that this is a very ag- taxpayer’s estate to prove that the client was not terminally gressive technique and particularly risky because there is no ill. Such proof is obtained by means of a doctor’s opinion. clear guidance on how to determine the risk premium. They If the attorney is considering making such actuarially based believe that there is always the possibility that the IRS could gifts, it is important to obtain a doctor’s opinion in writing challenge the transaction under § 2036 or § 2702. that presents the client’s prognosis based on the statistical probability that he or she has more than 50% probability of Charitable Lead Trust. This type of trust provides for either surviving a year. It is very important for the attorney to talk an annuity or unitrust payable to a charity for the grantor’s to the doctor before having him or her reduce the opinion life with the remainder passing to the children or a non- to writing. charitable benefi ciary. For a client who is terminally ill and has charitable intentions, it can be powerful planning tech- Private Annuities. Under this technique, an individual trans- nique. Because of the grantor’s shortened life expectancy, fers cash or other property to another member of the family the charity receives less than actuarially computed, and the (typically an individual at a lower generation) in exchange non-charitable benefi ciary receives more with less transfer for an unsecured contractual obligation to pay the individu- tax costs. It is impossible to zero-out such CLATs since al a fi xed periodic sum for the remainder of the individual’s Treas. Reg. §25.7520-3(b)(2)(i) provides that if a transfer to life. This technique is attractive since the value of the re- a trust requires annuity payments for the life expectancy of mainder gift will be greater than reported if the client dies the transferor , the valuation of the annuity must take into well before the assumed life expectancy under §7520. It is account that the individual will live beyond age 110. also attractive because generally there will be no estate tax inclusion (except for the payments that have already been (continued on page 19)

18 Advanced Tax Institute. . . (continued from page 18)

Randy and Barbara caution planners from using a CLAT Techniques to Obtain a Step-Up in Basis. § 1014(e) provides Per Autre Vie in which an otherwise healthy taxpayer mea- that the basis of property acquired by a decedent through a sures the length of the annuity with another terminally ill gift within a year prior to his or her death that passes back individual’s life expectancy. Randy and Barbara point out to the original donor will not be entitled to a step-up in ba- that the preamble of the applicable regulations effectively sis at the death of the decedent. The rule does not apply, prohibits the use of this technique. (“It falls somewhere however, if the decedent survives for more than one year. between ghoulish and grotesque.”) This prevents the gifting of low basis assets to a decedent who can then pass them with a step-up in basis back to the Sale of Remainder Interest. Another opportunity would original owner. This section does not apply if the asset that be for a taxpayer to sell a remainder interest in assets (or the decedent receives within a year of his death passes to an asset) to children or other individuals for its actuarially someone other than the original owner. Barbara and Randy computed value without causing a taxable gift or estate tax point out that this is really a no lose situation. It is not clear inclusion. There is some disagreement among the Circuits whether the section applies if the gifted low basis asset is on the estate tax effect of such a sale. It is not known which transferred at the decedent’s death to a bypass trust under way the IRS will stand on this issue. However, a terminally which the original transferor is a permissible benefi ciary. ill client might consider such a sale if the benefi ciaries or (As we learned from John Bergner, the IRS has found in purchasers are not closer than nieces or nephews (so as to avoid Code §2702). (continued on page 20)

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19 Advanced Tax Institute. . . (continued from page 19) several PLRs, § 1014(e) would apply to the general use of technique, it is important to remember that the gift tax return a power of appointment that a decedent has over assets in a must be fi led and if the pre-mortem gift is large enough as revocable trust gifted by the surviving spouse that pass to a to exceed the client’s lifetime applicable exclusion amount credit trust). that federal gift tax must be made on the gift. If the terminally ill client is the grantor of an existing grant- or trust which is not includible in the grantor’s estate for Another possibility would be to make gifts of small frac- estate tax purposes, and such trust contains appreciated as- tional or minority interests in limited partnerships or similar sets, the terminally ill client should also consider purchas- entities or real estate to obtain the minority and lack of mar- ing the assets from the trust for their fair market value. This ketability discounts on the assets held in the client’s estate. should not be taxable transaction for income tax purposes. The attorney should remember that while such fractional The appreciated assets are then part of the client’s estate and interests represent gifting planning opportunities, this can receive a step-up in basis to the fair market value as of the be cumbersome if it is done as a death-bed transfer given date of the client’s death. Randy and Barbara note that it is the valuation and recording requirements. preferable that the purchase be for cash, or that the client borrow necessary funds from a third party. They caution If the client’s will contains a sizeable charitable bequest, the the attorney from having the client purchase the assets for a attorney should propose a lifetime charitable contribution in note which would result in taxable income to the estate. order to obtain the § 170 income tax deduction. Of course, it is important to review the client’s income tax situation Non Actuarial Techniques. If the client and his or her family prior to making such a gift to see whether or not there will do not have the inclination or the client is precluded from be any advantage of such deduction. using the actuarial techniques, other planning opportunities exist. The planner should always consider the use of annual If the client’s benefi ciaries as named under an IRA have exclusion gifts under § 2503(b) or tuition payments under made it known that they plan to cash out the retirement plan § 2503(e). Everyone has heard of, and possibly been in- immediately after the client’s death, there are income tax volved in, situations where literally hundreds or thousands benefi ts in having the client cash in the plan prior to death. of dollars have been moved out of an estate in a very short This results from the income tax that will be owed by the time through the effective use of annual exclusions. If the client’s estate and which will constitute a deduction for es- client’s will contains bequests to individuals, the planner tate tax purposes. might suggest that those gifts are made or at least made in part through annual exclusion gifts. If the terminally ill client has large unrealized capital losses, the client should consider realizing such losses to avoid hav- Another opportunity, given the high cost of tuition for pri- ing the basis adjusted downward at death. The same reason- vate schools from nursery schools on up, is the prepayment ing would apply to high basis property held in a QTIP or of a grandchild’s tuition to move considerable wealth out other marital trust. of the client’s estate. There may be some hesitation on the part of the client to do this because of the inability to get It is important to remember that the gift is only complete that money back if the grandchild does not complete the when the check has cleared the client’s bank account. anticipated education at that school. The client or the plan- Where there is a rush at the end of a client’s life, one should ner should negotiate with the school because there may be consider having the bank issue the check drawn against the different arrangements. For example, there could be an client’s account so that it has been irrevocably debited from agreement that the remaining tuition will be paid to the the client’s account prior to death. subsequent school if the child leaves. It is clear, however, that under no circumstances should any of that money come Notable Developments. Turney Berry provided attendees back to the client. with his characteristically comprehensive “Notable Devel- opments of Interest.” It was not possible for Turney to If the terminally ill client is a resident of a state that is de- summarize all of the developments detailed in his materi- coupled from the federal estate tax system, a large amount als (all 266 pages), so he focused on several that were of of state estate tax can be avoided through the use of large particular note. pre-mortem gifts. These gifts can be made to the expected benefi ciaries of the will. While there are large savings in state estate taxes, this technique of gifting has no effect on the federal estate tax that would be due. When using this (continued on page 21)

20 Advanced Tax Institute. . . (continued from page 20)

Private Annuities. The proposed regulations change dra- animal species. Glass v. Commissioner, 98 AFTR 2d 2006- matically the taxation of private amenities (the proposed 8309. It is not enough to agree not to develop the land. regulations do not affect charitable gift annuities or annuity transactions with a grantor trust). Under the regulations, CLAT and Trust Forms. Rev. Proc. 2007-45 contains inter all of the gain is taxed at the time of the sale to the annuity vivos CLAT forms and Rev. Proc. 2007-46 contains testa- instead of allowing gain to be taxed as a part of the separate mentary CLAT forms. annuity payments. REG 141901-05 (10/17/06). The effec- tive date for the proposed regulations, if enacted, will be Non-Grantor, Non-Gift Trust. PLR 20014808 detailed an October 16, 2006. inter vivos trust created by a grantor which was incomplete. The grantor had a special testamentary power of appoint- Investment Management Fees. The Circuits are divided ment which prevented the gift from being complete until on whether investment management fees are subject to the such time as distributions were made to someone other 2% fl oor for miscellaneous itemized deductions under §67. than the grantor. A distribution committee (comprised of The Second Circuit affi rmed the Tax Court in holding that the grantor’s children) determined distributions. The impor- the 2% limitation does apply to investment advisory fees. tance of this trust was that the grantor was able to avoid state Rudkin Testamentary Trust v. Commissioner, 467 F.3d 149 capital gains on the sale of assets. See also PLR 200247013, (2006). The case has been accepted for review by the Su- PLR 200502014, and PLR 200612002. preme Court as Michael J. Knight v. Commissioner. The IRS has issued proposed regulations which adopt the strin- Standard Company Appraisal. In Huber v. Commissioner, gent rule from the Second Circuit. REG. §1.67-4. T.C. Memo 2006-96, the Tax Court reviewed the valuation of gifts of closely-held stock made by family members. The [Ed: On Jan. 16, 2008, the Supreme Court unanimously family had relied on a standard company appraisal. This ruled in Knight that investment advisory fees of nongrant- valuation was used for all purposes. The Tax Court accept- or trusts and estates generally are subject to the 2% fl oor, ed the valuation. unless they are not commonly or customarily incurred by individuals. (Knight v. Commissioner, S. Ct. Dkt. 06-1286 Restricted Stock. In Estate of Georgian Gimbel, 92 TCM (U.S. 1/16/08)).] 504 (2006), the Tax Court valued 13% of a publicly-traded company that restricted. The Tax Court reviewed various Material Participation for Passive Activity Loss Purposes. discount methodologies and ultimately settled on a method- In TAM 200733023, “special trustees” were engaged by a ology that considered the specifi c restrictions on the stock trust to deal with a business. The IRS found the special and settled on a 14% discount. trustees were not fi duciaries because they could not legally bind the trust. Such trustees did not materially participate Undervaluation Penalty. In Joseph L. Thompson, et. Al v. for purposes of §469. Commissioner, T.C. Memo 2004-174, the Tax Court con- sidered whether the exception to the imposition of penalties Termination of Charitable Remainder Trust. The IRS has under §6662 applied (where the estate shows reasonable continued to be lenient in approving early termination of cause and that it acted in good faith in relying on a valua- CRUTS. PLR 200441024. For details on early terminations, tion). The Tax Court found it was inappropriate to impose see PLR 200614032, PLR 200616035, PLR 200725044 and the 40% penalty. The Second Circuit vacated and remanded, PLR 200733014. Estate of Joseph Thompson, 2007 WL 2404434 questioning the Second Circuit’s fi nding that the estate was reasonable Conservation Easements. If land in which a conservation and acting in good faith when it relied on an inexperienced easement is desired is held in trust, the taxpayer will be de- and accommodating expert for the valuation. nied an income tax deduction. T.C. Memo 2006-274. In this case, the taxpayer could not prove the charitable con- tribution from the trust was made from the income portion over which the taxpayer had the power to revest.

In order to obtain an income tax deduction for a conserva- tion easement, you must show you are protecting a plant or

21 MSBA ESTATE & TRUST LAW SECTION NOMINATION COMMITTEE REPORT April 24, 2008

On behalf of the Nomination Committee, we wish to report the following Section Council nominations:

John Persons Edgar Chair (Without election)

Richard T. Wright Chair Elect

Cristin Carnell Lambros Secretary

RENOMINATED FOR TWO YEAR TERMS (2008-2010)

Frank S. Baldino Deborah A. Cohn Jonathan David Eisner Aryeh Guttenberg Matthew Alan Mace Sharon Jean Ritter

NEWLY NOMINATED FOR TWO YEAR TERM (2008-2010)

Natalie B. Sherman

Respectfully submitted, Nomination Committee,

Robert C. Young Nancy Gruenberg Fax Edwin George Fee, Jr.

22 Don’t Forget about the Section’s Website at www.MSBA.org

23 SECTION COUNCIL COMMITTEES

Listed below are some of the Section Council Committees for which Section members may wish to volunteer their time. Please feel free to contact the individuals listed below if you have suggestions or are interested in helping out.

Committee Contact

Legislation John P. Edgar Website Cristin C. Lambros Publications Aryeh Guttenberg Mary Alice Smolarek Educational Programs Frank S. Baldino Probate Rules/Reform Allan J. Gibber Alternative Dispute Resolution Robert C. Young Technology Committee Richard T. Wright Membership John M. Burdette Section Meetings Eileen O’Brien Orphans’ Court/ Register of Wills Sharon J. Ritter

Telephonic Appearances in Wicomico County Orphan’s Court n Wicomico County Orphan’s Court, you may now appear in all non-evidentiary proceedings via telephone Ithrough the use of “CourtCall.” This would include Pre-trial Conferences, Status Conferences, and Motions.

Please advise the Court of your wish to appear using this system and receive the Court’s approval on a case-by- case basis. Approval must be obtained no later than the Tuesday two weeks before your scheduled hearing.

Counsel may make a CourtCall Appearance by serving and fi ling with CourtCall (not the Court) NOT LESS THAN FIVE (5) COURT DAYS PRIOR TO THE HEARING DATE, a Request for Telephonic Appearance Form and paying a fee of $55.00 for each CourtCall Appearance. There are no subscription fees.

A CourtCall Appearance is made as part of a Court’s regular calendar and all counsel who have timely fi led the request form and paid the fee may appear by dialing the Courtroom’s dedicated toll free teleconference number, and access code (if any) which will be provided by CourtCall, LLC on the confi rmation faxed to your of- fi ce. A pre-hearing check in will occur fi ve minutes prior to the scheduled hearing time. A CourtCall Appearance is voluntary and may be made with out consent of the other party, and the Court continues to reserve the right to reject any request. In matters where only one party elects to make a CourtCall Appearance, the matter will be heard on the Court’s speakerphone.

This same service is available in the Circuit Courts for Caroline, Cecil, Kent, Queen Anne’s, and Talbot Counties.

You may obtain additional information by calling CourtCall at (310) 342-0888 or (888) 882-6878. Do not call the Courtroom.

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