A new Scam has appeared.  A local elderly widow was contacted by phone and informed that she had won a prize in the “Mega Millions” lottery, although she had not  purchased a ticket.  The smooth talking caller informed her that such was not necessary and that he had $250,000 to be delivered to her, once she paid a relatively small amount of Federal taxes; more than $10,000.  She exhausted her retirement funds and had funds wired to the caller.  Of course, no money was ever received and the widow is not only out the several thousands of dollars she sent the caller but also is now the object of many other calls from persons with substantial foreign accents, again informing her that  she “had won” substantial sums.   She is both extremely embarrassed by her naivete and her willingness to trust an unseen person  who she thought of  “as a friend,” and distressed that she will likely never be able to recover the money that she sent to her “friend.”

Unfortunately I am afraid that she is not alone.  With all of the media praise for the Mega Millions program, as well as other “jackpots,”  it is not unexpected that criminal elements have found the opportunity to prey upon  unsophisticated and vulnerable elderly . using both the telephone and the internet to snare their victims and doing so from untraceable locations.

Now that the we no longer need to follow the histrionics of Congress in its discussion of the Debt Ceiling, it is time to attempt to plan for the “sunset” provision in the current Estate and Gift tax.   More than 10 years ago the Estate and Gift Tax exemptions and rates were adjusted, so that in 2009 the exemption increased to $3.5 million and the minimum rate was reduced to 45% and for persons dying in 2010, the taxes were reduced to zero.  In late 2010, to avoid the “sunset ” provision that would have reduced the exemption from $3.5 million to $1 million and increased the tax rate from 45% to 55%, the Congress “kicked the can down the road” increasing the exemption to$5 million and the minimum tax rate to 35% , effective only until 2013.  Then, unless Congress does something, and based upon recent history, such may be doubtful, the exemptions will be reduced to$1 million and the minimum tax rate increased to 45%.

Now is the time to think about making plans to minimize the impact of future gift and estate taxes using the few vehicles available: present large gifts, a credit shelter trust or other approach that may be appropriate to specific individuals.  Only through the use of imaginative legal and accounting techniques can one hope to minimize the impact of anticipated tax changes.

Many of us, down through the years have served as volunteer coaches for sports teams, often with only rudimentary knowledge of the sport – such as rugby, soccer or cheerleading – perhaps because we were signed up by a spouse or because we were asked by our children or another equally ignorant parent. Michigan’s Supreme Court has recently ruled that in the event of an injury to a child – participant – a coach may be held liable for damages to the child if, as a coach, he was simply “negligent.”  The negligent standard is whether he or she acted as a person with ordinary knowledge would have done under the circumstances. With that low a standard, the potential for substantial liability – for which insurance may not be available – should be of great concern for each of us ready volunteers. We suggest that a careful review of the potential for liability is called for before agreeing to accept responsibility for the safety of the children of others.

With Lansing’s mandate that “renewable energy” be an ever important component of the electrical generation industry, several entities are in line to construct “Wind Farms” that will have an impact on large areas of currently non-residential lands for perhaps one hundred years or more. To call the projects “Wind Farms” may be a misnomer. Indeed, the proposed projects are more akin to large industrial facilities that overlay agricultural lands. Although currently there appear to be little State or local regulation of the growing industry, the probable impact on both property values and the future potential for residential development as well as the “quality of life” of those in the areas affected may spur efforts to apply some regulatory parameters that will protect those persons not necessarily agreeable with what may be happening in their backyard.

The recent extension of the Federal Estate Tax that raises the exemption to $5 million until 2012, with a maximum rate of 45%, does little to aid in planning an estate. With the acrimony in Congress surrounding the extension, there is little doubt that such will be repeated in the final months of 2012, the outcome largely dependent upon the success of the current Congress to effectively address the economic picture facing the country and the world. Unless the extension continues, the exemption would be reduced to $1 million with a maximum rate of 55%.

Citizens whose estates may be impacted by the Estate Tax should not simply through up their hands. Rather, it may make sense to plan with alternative outcomes designed to go into effect, depending upon what the Congress may do. Such plans will require the cooperative effort of both attorneys and tax accountants and will, likely,  not be available “off the shelf.”  Each plan should be drafted and crafted to meet the the specific intentions of the client and the perceived needs of his or her family. Such plan should also reflect the current increase in the gift tax exemption, from $1 million to $5 million, exemptions that, like the estate tax, may only continue until 2012.