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Top 10 Developments, Lessons and Reminders of 2013

Sharon L. Klein, managing director of family office services and wealth strategies at Wilmington Trust, N.A., writes: From landmark legislation, to important regulatory guidance to instructive case law, 2013 saw many significant New York developments, lessons and reminders.

Standing to Enforce Restrictions on Use of Charitable Gifts

Kramer Levin Naftalis & Frankel’s John C. Novogrod and Annie L. Mehlman write: As donors become more charitably minded and make larger, more significant contributions, they desire greater control over the administration of their gifts. Unfortunately, both common law and New York statutory law impede donor enforcement of the terms of their charitable gifts, traditionally providing standing only to the state attorney general.

Making Disclaimer Work for Minors

Darcy M. Katris and Emelia G. Short of Hodgson Russ write: Both New York’s EPTL §2-1.11 and Internal Revenue Code §2518 permit an individual to disclaim an interest in property transferred to him or her if certain conditions are met. Although the conditions in the EPTL and IRC are similar in many respects, there are some differences. For example, the treatment of minors as disclaimants is more liberal under the IRC than under the EPTL.

Revocable Inter-Vivos Trusts

William Schwartz, Counsel to Cadwalader, Wickersham & Taft, writes: The revocable inter-vivos trust is the cornerstone of modern estate planning. Given the extensive control retained by the settlor to revoke and/or amend the trust, the question arises as to whether this “will substitute” should be subject to the substantive rules relating to wills, even though there are different formalities incident to the execution of a revocable inter-vivos trust than a will.

Automatic Allocation of GST Exemption: Traps for the Unwary

Jay D. Waxenberg, Andrew M. Katzenstein and Maggie Mouradian of Proskauer Rose write: Dynasty trusts for the benefit of succeeding generations are standard tools in every estate planner’s toolkit. Some practitioners and their clients rely on automatic allocation of generation-skipping transfer tax exemption to these trusts to keep them exempt from GST tax. Without careful planning, however, the automatic allocation may not take place, making the intergenerational tax savings unavailable.

‘Brewer’ Raises New Issues Regarding Estate Distribution

Terence E. Smolev and Christina Jonathan of the Law Offices of Terence E. Smolev, P.C. write: ‘Brewer’, which started off with the complex issue of a mother’s ability to collect from her children’s estate, lead to the interesting question pending before the Nassau County Surrogate’s Court, of where the money now goes.