Elder Law Attorney Stephen J. Silverberg Named To 2022 Super Lawyers and Scott B. Silverberg Named Rising Star 2022

For the sixteenth consecutive year, Stephen J. Silverberg has been named to the New York Metro Super Lawyers list as one of the top New York metro area lawyers for 2022. Each year, the research team at Super Lawyers selects only five percent of the lawyers in the state to receive this honor. Super Lawyers has named Silverberg to its select list of attorneys for sixteen consecutive years, from 2007 to 2022.

Stephen J. Silverberg is recognized nationally as a leader in estate planning, estate administration, asset preservation planning, and Elder Law. He is a past President of the National Academy of Elder Law Attorneys (NAELA), an organization of almost five thousand Elder Law attorneys throughout the country. He was named a NAELA Fellow, the highest honor bestowed by NAELA to “attorneys… whose careers concentrate on Elder Law, and who have distinguished themselves both by making exceptional contributions to meeting the needs of older Americans and by demonstrating a commitment to the Academy.” Mr. Silverberg was a founding member of the New York State chapter of NAELA and served as President of the chapter.

He is a Certified Elder Law Attorney (CELA), designated by the National Elder Law Foundation under the auspices of the American Bar Association. To obtain this designation, an applicant must pass a full-day written examination and is subject to rigorous blind peer review. Since 1993, fewer than 525 Elder Law attorneys in the United States have earned the designation. Martindale-Hubbell has rated Mr. Silverberg AV Preeminent (5.0 out of 5.0), the highest possible designation.

Scott B. Silverberg, for the third consecutive year, was named to the 2022 New York Metro Rising Stars list. To qualify, New York Metro Rising Stars must be younger than 40 or have been practicing for less than ten years. Each year, the research team at Super Lawyers designates no more than 2.5 percent of the lawyers in the state to receive this honor.

He is a member of the National Board of Directors of the National Academy of Elder Law Attorneys (NAELA) and the Board of Directors and Treasurer of the New York State Chapter of NAELA. Scott is Vice-Chair of the Practice Management Committee of the Elder Law and Special Needs Section Executive Committee of the New York State Bar Association. In 2022, he became a member of the Estate Planning Council of Nassau County, a member chapter of the National Association of Estate Planners and Councils (NAEPC). He is also a member of the Nassau County Bar Association.

Scott has attained the LL.M. (Master of Laws) in Elder Law from Stetson University School of Law. This rigorous program is offered only to Elder Law practitioners who have provided legal services in Elder Law matters in complex areas of the law. Stetson’s L.L.M. Elder Law program faculty comprises many leading attorneys in Elder Law.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from over 70 practice areas who have attained substantial peer recognition and professional achievement. A patented multiphase process includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area to create the list. The result is a credible, comprehensive, and diverse listing of exceptional attorneys. The Super Lawyers lists are published nationwide in Super Lawyers Magazines and leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in the practice of law. For more information about Super Lawyers, visit SuperLawyers.com.

The Law Office of Stephen J. Silverberg, PC, represents clients in estate and tax planning, estate administration, asset preservation planning, and Elder Law and related issues. The Law Office of Stephen J. Silverberg, PC is at 185 Roslyn Road, Roslyn Heights, NY 11577, 516-307-1236, and online at www.sjslawpc.com.

Chadwick Boseman

Lack of Estate Planning Turns a Private Life into Public News: Chadwick Boseman

Chadwick Boseman, the actor known for performances in “Black Panther” and “Ma Rainey’s Black Bottom” was only 43 when he died. Despite knowing he was seriously ill from colon cancer, he did not have a will, so Boseman’s family was tasked with managing his estate in a public manner, the direct opposite of how he lived his life.

The estate had significant expenses and it wasn’t too hard for reporters to find the details because there was no will. Court documents obtained by several news sources reveal the estate was initially valued at $3.8 million before taxes, court fees and funeral expenses. The final amount to be divided between his widow and is parents is $2.5 million.

In October 2020, his widow Taylor Simone Ledward petitioned the court to make her an administrator with limited authority of his estate, and then filed a probate case in Los Angeles.

Chadwick did not have an estate plan with trusts that could have provided the family with privacy, reporters and others were able to access court papers to learn details like the exact amount and breakdown spent on his funeral, moneys used to purchase burial spaces for other family members and the court’s determination on several private matters.

You don’t have to be a celebrity for details of your life to be made public. All probate and administration proceedings are public records, and copies of these documents can be obtained by anyone who shows up at the court. Creditors, family members and anyone who wants to pry into the details of your life can obtain these documents. Having an estate plan with the methods and tools best suited for your estate can keep your life private and minimize estate expenses.

But another lesson from the passing of Chadwick Boseman is that families do have the ability—even celebrity families—to treat each other with kindness and respect. His widow asked the court to divide his estate evenly between herself and Boseman’s parents. Most families facing an estate without a will end up in court, battling for an inheritance. Sadly, this is the exception and not the rule with estates. Having an estate plan can prevent the likelihood of your family facing this situation.

 

Football’s Hall of Fame and Estate Law Changes Both Moving to the End Zone

The Pro Football Hall of Fame recently announced the finalists for the Class of 2022, and it occurred to me that estate law legislation is a lot like the Pro Football HOF. The list is announced, some fall by the wayside, but eventually, fifteen names make it and the number of bronze statues in Canton, Ohio increase.

Federal lawmakers work in the same way. We have a long history of laws being delayed, revised, failing to get passed on the first and even the second go-round. For example, the carry-over basis laws put into place in 1976 were repealed, then added back. The child-care credit took four times to make it into law.

Just because the changes regarding the carry-over basis and other laws that will impact estate and tax planning didn’t make it through in 2021, don’t count them out just yet.

I’m advising clients to act now, because when these laws do eventually pass (and I believe many of them will), it will be too late to take advantage of the current laws.

That includes the mega-Roth IRA, which was created as a means of encouraging regular Americans to save for retirement and bloomed into a way for wealthy Americans to tuck away millions, or billions, in accounts with no requirements for withdrawals and no taxes due on withdrawals (taxes are paid when the money is contributed to the account).

We were concerned in December 2020 that Congress would enact retroactive changes, which may happen for taxes, but not for estate and gift taxes, which are rarely retroactive. Logistics make it near impossible. When the law changes regarding estate and gift taxes, the IRS has to get forms and tables to millions of practitioners. Even when everything is online, it does not happen fast enough. Taxpayers and executors would run into countless complexities, like filing a final tax return within in the nine-month period allotted and then having to file an amended return—possibly more than once.

If you really want something to worry about, some legislation contains the phrase “effective on enactment,” which means the minute President Biden’s pen is lifted, the law is in effect and must be complied with. But estate planning matters are pretty complex, and lawmakers know it takes time to prepare for changes.

Greek philosopher Heraclitus said change is the only constant in life. This applies to Congress as well.

Here’s How Wrong the IRS Can Be: Michael Jackson’s Estate Big Tax Court Win

Seven years after it began, the estate of Michael Jackson has won big in U. S Tax Court. Following a ruling that found the singer’s name and likeness was worth far less at his time of death than what the IRS had claimed, the estate will pay far less than the $700 million initially deemed to be the tax bill.

After Jackson’s death, the executors of his estate went to work to rebuild the business of Michael Jackson. They re-built his brand, settled debts, and made new and profitable deals. Post-mortem Michael was a success, even if his reputation had been soured.

When he died in 2009, Jackson was at the nadir of his career. Lawsuits, including charges of child molestation (he was acquitted) and an eccentric lifestyle had taken a toll on the “King of Pop.” In 2020, his estate earned $48 million, estimates Forbes.

The case came down to three key assets and their value: Mr. Jackson’s name and likeness at the time of his death and two entities tied to the music business.

The tax judge wisely focused on the value of his public image at the time of death. At the time, he had no endorsements or merchandise deals that weren’t directly related to a musical tour or album.

The estate initially claimed the estate was worth $2,105. The judge called that “…at the price of a heavily used 20-year-old Honda Civic.”

Two other assets were highly valued: Jackson’s share of Sony/ATV Music Publishing, a company that controls millions of song copyrights, including most of the Beatles’ catalog, and Mijac Music, a catalog that owned Jackson’s songs and others he had purchased.

The judge ruled that the total assets at the time of his death was $111.5 million.

Other celebrities still pending include those of Prince and Aretha Franklin. Attorneys who represent celebrities are taking note. This was not a small mistake for the IRS, both in the valuation of the estate and its estimation of how skillful the estate’s tax attorneys would be in pushing back.

You don’t have to be the King of Pop to have a dispute with the IRS. But you do need a good estate and tax attorney to protect your loved ones.

Proposed Legislation “For the 99.5% Act” Takes Direct Aim at Estate Taxes

Last week, Senator Bernie Sanders (I, VT) and Senator Shelton Whitehouse (D, RI) introduced the “For the 99.5% Act,” which includes a reduction in the estate tax exemption to $3.5 million per individual and $7 million per couple.  Sanders also introduced a bill to raise the corporate tax to 35% and reduce a corporation’s ability to shelter offshore profits.

We have known for a while there will be changes coming to estate and corporate taxes. Many estate planning attorneys expect this act to become a foundation for the estate, gift, and GST provisions of the 2021 tax bill President Biden presented during his campaign. We do not know which changes Congress will pass, but we know that changes in whatever bill eventually passes will require estate plans to be adjusted.

The changes expected include larger estates being subject to higher tax rates. The proposal calls for the increase of the 40% estate tax rate to 45% for taxable estates less than $10 million, 50% for taxable estates over $10 million, and 65% for taxable estates greater than $1 billion.

The “95.9% Act” calls for eliminating many of the estate planning tools used for the last twenty years. This includes GRATS (Grantor Retained Annuity Trusts), step-up in basis, the grantor trust rules, and eliminating most minority interest discounts and many marketability discounts for passive assets.

The proposed legislation reduces the lifetime gift tax exemption and changes to the Generation Skipping Tax (GST) exemption and rules. It is also possible that Irrevocable life insurance trusts, which own the life insurance policy and shelters the proceeds from estate taxation, may be eliminated.

The expected changes to the estate tax laws may be finding more popular support following the release of a report showing that the top 1% of Americans are managing to not pay far more in income taxes than the IRS’s methods had assumed.

The report from researchers from the IRS, the London School of Economics, Carnegie Mellon University, and the University of California, Berkeley, shows the wealthiest 1% of households fail to report 21% of their actual income, and 6% of that stems from “sophisticated evasion” strategies missed by federal audits. The unreported income might be as much as twice as large as the IRS thought.

With declining enforcement staff, the IRA’s rates of audits have declined in the last ten years, when the top 1% of wealthy Americans have become even more skilled at underreporting income. This costs the federal government about $175 billion a year. For a government now seeking revenues to recoup the pandemic’s enormous costs, there is a call for re-investing in the IRS’s ability to go after tax avoiders.

According to The Wall Street Journal’s article, “High-Income Tax Avoidance Far Larger Than Thought, New Paper Estimates,” pass-through businesses and partnerships, offshore tax avoidance, and other sophisticated entities have made it harder for the IRS to uncover income.

An op-ed in The New York Times’ Sunday Review, “How to Collect Unpaid Taxes,” references an IRS report from 2019  that estimated “Billions of dollars in business profits, rent and royalties are hidden from the government each year. By contrast, more than 95 percent of wage income is reported.”

The government’s inability to enforce tax laws is a function of how the IRS has been shrinking over time, with fewer workers. But former IRS commissioner Charles Rossotti says that Congress needs to change the law and create a third-party verification for business income, just as there is a third-party verification for wages. Rossotti proposes that information be collected from banks, requiring them to produce annual account statements totaling income and outflow, similar to the 1099 forms that investment firms must provide to clients. The Times thinks this would increase the taxes paid by those not reporting income by scaring people into compliance. Expect the banking and securities lobbyists to push back against any new requirements.

As someone who has worked in complex tax law for several decades, I have seen how often the IRS and academics have engaged in hand-wringing over how unfair the tax laws are, depending on the times, to the wealthy or American wage earners. But for now, tax law permits these strategies, and it appears any plan in place before a new tax law is signed will be grandfathered in.

We are keeping a close watch on the pending legislation as it winds its way through various committees and will continue to keep you informed on how it may affect your estate plan.

References:

The Wall Street Journal (March 22, 2021) “High-Income Tax Avoidance Far Larger Than Thought, New Paper Estimates”

The New York Times (March 20, 2022) “How to Collect $1.4 Trillion in Unpaid Taxes”