I realize that this isn't a revolutionary idea, but I think too many young attorneys don't realize the importance of marketing yourself. What unique thing do YOU as a young attorney bring to the table? It can't just be intelligence and hard work -- most attorneys have those qualities.

So how do you find your niche? The easiest way is through your existing connections. If you're married to a doctor, and hang out with him and his other doctor friends, then consider areas of the law that would allow you to make medical professionals your client base.

Of course, not everyone has existing connections. In that case, you need to try to find something to level the playing field. In my experience, one thing that works well is becoming an expert with respect to some new development in the law. That's a big benefit because, with new developments, you are not at a disadvantage in terms of experience. When a new law passes or a new case comes down, you as a first year associate may know just as much about it as a partner who's been practicing for 30 years. Three examples:

1. Read and summarize the new Citizens United Supreme Court case, and write an article for your local paper about what it REALLY means.

2. Your state is legalizing marijuana for medicinal purposes. Totally familiarize yourself with all of the rules and regulations relating to setting up a marijuana dispensary, and advertise yourself as someone who can help clients "get legal."

3. Learn the ins and outs of the Trouble Asset Relief Program (TARP), so you can speak at seminars on the topic.

A better solution is to make a list of your property, including how it's titled (or who the beneficiaries are), and put that list with your original estate planning documents. And make sure to update it every year or so.

Calendar #2: Judge Budzinski (Chief Judge of the Probate Division), Room 1803
Calendar #8: Judge Coleman, Room 1804
Calendar #7: Judge Coghlan, Room 1802
Calendar #11: Judge Malak, Room 1801

I'm not an ethicist (insert attorney joke here), but I agree with Randy Cohen that there is no need to tell the friends about the switch. Especially when you are switching to family members (most people understand that blood is thicker than water). Maybe I feel this way because my wife and I did something similar. We named our friends as guardians of our daughter, but then switched to my sister and her husband once they got settled and had kids, and we saw that their parenting style matches ours.

A similar ethical issue (not discussed in "The Ethicist") involves telling people that they are named as guardians. I'm always surprised that people DON'T tell their friends/relatives that they have named them (or plan to name them) as guardians. I know this always makes for a heart-warming film ("lovable moppet(s) show up at the door of self-absorbed yuppie, who then discovers the value of family"), but it's significantly less heart-warming in real life. My advice: talk to those you plan to name, BEFORE you do so. (They may say no. That's what happened to the people my in-laws asked, when my wife was a kid.) And talk to those you have named, AFTER you do so, to fill them in on how things will work.

Due to an amendment to the Illinois Trusts and Trustees Act, there may be a new solution. Lyman Welch and Susan Bart describe the amendment in this Illinois Bar Journal article (it's from November of '09, but I just read it, so it's new to me!). The amendment adds section (d) to 760 ILCS 5/16.1. Some situations in which you may be able to use 16.1(d) to enter into a "nonjudicial settlement agreement":

-interpretation or construction of trust terms;
-resignation or appointment of a trustee; and
-exercise or nonexercise of a power by the trustee.

There are other situations outlined in the article, which I highly recommend.

#1: No action by Congress (no federal estate tax in 2010, but federal estate tax automatically comes back with a $1 million exemption in 2011 and thereafter);

#2: Prospective action by Congress (federal estate tax re-enacted for 2011 and thereafter -- and maybe for the rest of 2010 as well); and

#3: Retroactive action by Congress (so federal estate tax applies in all cases, even for 2010 -- obviously there's the retroactivity problem here).

If I had to guess, I'd say that #2 seems like the best possibility (maybe I should, but I'm not even including total repeal as a possibility). But even if that's the case, we have no idea what the re-enacted federal estate tax will look like. Will the exemption amount be $3.5 million? Or higher? Or lower?

The big question is, should any of this cause you to take action with respect to your documents right now? And my answer -- which I hate to give -- is, "I don't know." In a perfect world, you wait a month or so, we get some clarity on the estate tax, and then you have your documents updated. But what if that clarity doesn't come in a month or so (or ever)? Or what if you die during this period of uncertainty? Ultimately, I think everyone has to make the call on their own, depending on their situation and risk tolerance. The shameful part is that the very rich can afford to change their documents now, and then change them again and again. Can anyone else afford to do that?

The fact that there is currently no federal estate tax does NOT mean there are no estate taxes on the state level. The chart in this article is a must-see -- it lists all of the states with an estate or inheritance tax (or both), along with exemption amounts and rates.

A lot of married couples have what's known as an A-B plan. If one spouse dies, two trusts are created for the survivor:

(A) Family Trust: usually containing an amount equal to the federal estate tax exemption amount at the death of the first to die

(B) Marital Trust: containing everything else owned by the first to die

The goal is no federal estate tax at the death of the first to die. The Family Trust is by definition exempt from federal estate tax, and the Marital Trust qualifies for the marital deduction (so is not subject to federal estate tax). The surviving spouse is the only beneficiary of the Marital Trust; the Family Trust's beneficiaries might be just the surviving spouse, the surviving spouse and kids of first to die, or just the kids of the first to die.

But what happens if there's no estate tax whatsoever? If the above language is used, the Family Trust isn't created (no exemption = no federal estate tax = no Family Trust). So there's just a Marital Trust.

Alternatively, you could draft a trust whereby the Marital Trust contains the "smallest amount that will result in no federal estate tax," and the Family Trust contains everything else. Under that scenario, no Marital Trust is created (the "smallest amount" would be $0). So there's just a Family Trust.

So what's the problem? There may not be one, if we're talking about a traditional nuclear family where the spouse is also the sole beneficiary of the Family Trust. But what if both spouses have children from a prior marriage? In that case, we may have a Family Trust of which the surviving spouse isn't the sole beneficiary (or not a beneficiary at all). And we run the risk, under the above scenarios, of either shortchanging the surviving spouse (no Marital Trust created) or shortchanging the kids (no Family Trust created).

But this raises the question of what happens with individuals who die in 2010 before the new law, reinstating the estate tax, passes. Could such a law be made retroactive?

Probably. The Supreme Court previously stated (in Carlton v. United States, 512 U.S. 24 (1994)) that a retroactive law is valid under the Constitution if (1) the government shows that the statute has a rational legislative purpose and is not arbitrary and irrational; and (2) the period of retroactivity is "modest." (In Carlton, the "modest" period of retroactivity was 14 months.)

That being said, there is some caselaw indicating that the result might be different if the Supreme Court views this law (estate tax reboot? estate tax 2.0?) as a "wholly new" tax or as simply fixing something in an existing tax (the Carlton case mentioned above involved closing an estate tax loophole).

You may want to take a look at this article on Gideon Alpert's excellent Gay Couples Law Blog for a bit more information on this topic.

The good part was that, in exchange for potentially being subject to the estate tax, you got a "step-up" in basis. Essentially, when an individual died, his or her assets took as their basis for capital gains purposes their fair market value as of the date of death. So, to consider an example,...

Mom buys a bunch of stock in Company X, starting in 1950 and continuing to her death. The actual cost basis for her purchases was $15,000.

Mom dies, and her Company X stock is work $500,000.

Mom's three kids are left the Company X stock under Mom's Will.

What is the basis in the Company X stock? During a year in which there's an estate tax, that's easy: it's $500,000. So, if the kids sell the stock after Mom's death, they pay capital gains on the difference between the sale price and $500,000.

But how is this handled in 2010? There are three main rules:

1. Instead of a step-up in basis, we have a carryover basis regime. So the basis in Company X would be $15,000. But...

2. There is still a step-up in basis for $1.3 million of assets passing to beneficiaries who aren't the decedent's spouse. And...

3. There is a step-up in basis for $3 million of assets passing to the decedent's spouse.

The major problem with a carryover basis regime is that, in many cases, it is difficult or impossible to calculate the decedent's basis in his or her property. (From what I have read, this was the problem when carryover basis was briefly made the law, back in 1976.) And I worry that the biggest result of this change in the law will be full employment for America's forensic accountants.

I've put off writing about this because (1) I get angry just thinking about it and (2) I was hoping against hope that something would be changed by the end of 2009 (it wasn't, obviously). So here we are.

There's an idea being floated by some political commentators that Congress is "broken" because it can't pass health care reform. I don't buy that, but of course I, as a conservative, stand athwart history (and athwart expensive, invasive and probably unconstitutional legislation that can never be repealed) yelling "stop." Health care reform is a huge, (overly-)complicated deal, and it SHOULD be difficult to make huge changes to the way our nation works.

The estate tax, on the other hand? I got nothing. In June of 2001, major changes were enacted to the way in which the federal estate tax operates. Because of a so-called "sunset provision," these changes make no sense:

2002-2009: estate tax exemption increases, estate tax rates fall

2010: no estate tax

2011: estate tax exemption and rates back to what they would have been in 2001

What in the world? I know -- it's ridiculous. But here's the thing: we've KNOWN about this ridiculous result ever since June of 2001. And nobody in Congress has done anything to fix it. So here we are, with a ridiculous, unworkable estate tax law and rampant uncertainty about whether it will ever be fixed.

OK, that's enough ranting -- in this series of posts I'll be discussing things like:

-How carry-over basis works

-Could Congress impose an estate tax for 2010 retroactively?

-How estate tax repeal affects Family Trust and Marital Trust planning

-The state estate tax problem

-Planning for 2011 and on

The film opens with the mother (75-year-old Hélène) surrounded by her children and grandchildren. She begins to tell her oldest son, Frédéric, how to dispose of her summer home and priceless art collection after her death. Once that death occurs, Frédéric and his siblings (Jérémie and Adrienne, who is played by Ms. Binoche) have to work through what to do in light of what is practical. Can the home be kept in the family? What about the art work? What about the French estate tax?

This isn't a film about huge family disputes -- the children all act like adults, and try to work things out. It IS, however, a beautiful movie about memory, art vs. commerce, and what it means to be a family. Highly recommended.

"Before modern medical technology, people had a difficult time determining when someone was really dead. You might think that death would be pretty blatant, but there were a number of famous cases in which a dead body sat up and went on living, and many Victorians got the jim-jams just thinking about the possibility of being buried alive.

Being a practical people, they attempted to find solutions to the problem. The Victorians invented a system of bells with strings attached that went through the ground and into the coffin, so if you woke up underground you could pull on your bell till someone came to dig you up. There's no record of anyone being saved by one of these devices. People made all sorts of odd stipulations in their wills, such as asking to be decapitated as insurance against an undesired revival."

A Will with a decapitation provision? Excellent!

Right now I'm working on Ms. Niffenegger's newest, entitled Her Fearful Symmetry. I've just started it, but the novel appears to be a riff on the old idea of "stay in a haunted house overnight to get an inheritance." Two American twenty-somethings (twins) get the following letter (which I have edited) from the attorney for their English aunt, who has passed away:

Dear Julia and Valentina Poole,

I regret to inform you of the death of your aunt, Elspeth Alice Noblin.... Last September, knowing that her illness would soon result in her death, she made a new will. I am enclosing a copy of this document. You are her residuary legatees; that is, she has bequeathed you her entire estate, with the exception of a few minor bequests to friends and charities. You will receive this inheritance when you reach the age of twenty-one.

The bequest is given to you with the following conditions:

1) Ms. Noblin owned an apartment in London.... She bequeathed this apartment to you on the condition that you both live in it for one year before you may sell it.

2) The entire bequest is given on the condition that no part of it shall be used to benefit Ms. Noblin's [twin] sister, Edwina, or Edwina's husband, Jack (your parents). Also, Edwina and Jack Poole are forbidden to set foot in the flat or inspect its contents.

The trial of Mrs. Astor's son, Anthony Marshall, is coming to a conclusion (barring appeals). Mr. Marshall was found guilty of "looting his mother's fortune" (another lawyer, Francis X. Morrissey Jr., was also found guilty) -- here is the story. I can't understand why the maximum sentence is only 3 years -- why is that? Because Mr. Marshall is rich? Ugh.

I'm also a little troubled by this line in the article:

The judge noted Marshall's World War II service and the possibility that the late Astor herself would have been aghast to see her son imprisoned, but he added that the law left him no choice but to impose a prison term.

1. Would Mrs. Astor REALLY have been aghast, in light of what her son did to her?

2. I realize that many people want to give members of The Greatest Generation a free pass (and unlimited free health care, free prescriptions, etc.) as a result of their actions in World War II, but I can't figure out why Mr. Marshall's heroics 60+ years ago have any bearing on this case.