I received an email last night from O’Connor Davies (http://www.odpkf.com), which provides an important update about possible changes to New York State law for the estate tax. The changes would add a gift tax and may be approved in this year’s NYS Budget (it could pass by April 1). Therefore, if you were thinking about making a gift this year, you may want to make it very soon. Please see the email below from O’Connor Davies.James Maisano, Esq. (914) 636-1621 Jim@JamesMaisanoEsq.com www.JamesMaisanoEsq.com
New York State Proposed Budget Bill for Estate and Gift Tax Reform
Time may be running out to take advantage of the lack of a gift tax in the State of New York. Governor Cuomo has proposed a change in New York State’s estate tax law in an attempt to bring New York’s estate taxes in line with Federal tax law. As part of the estate tax law changes, gifts made after March 31, 2014 will be subject to the New York estate tax.
In essence, the new budget bill proposes a comprehensive overhaul of the estate, gift, generation skipping transfer and trust income tax laws which includes:
- Increasing the New York State estate tax exclusion over the next five years to coincide with the applicable Federal exclusion—increasing the current amount ($1,000,000) to $2,065,500 on April 1, 2014, $3,125,000 in 2015, $4,187,500 in 2016 and $5,250,000 in 2017* and adjusted for inflation with the Consumer Price Index thereafter.
- Decreasing the top estate tax rate from 16% down to 10% by April 2017
- Adding back gifts made by New Yorkers after March 31, 2014 to their New York gross estate on their death.
- Repealing the New York State Generation Skipping Transfer Tax
- Taxing distributions of accumulated income to New York beneficiaries of non-resident trusts and exempt resident trusts
The net effect of the change in law means that assets gifted after March 31, 2014 would be subject to New York’s estate tax to the extent their inclusion exceeds the exclusion threshold. Essentially, this is a reinstatement of the gift tax on wealthier New Yorkers upon their demise.
Although the time period is brief and this proposed budget bill has yet to be finalized, if you are affected by the proposed new rules, you may wish to contact your tax advisor about making gifts prior to April 1, 2014. Any gifts made under the current New York law will not be included as part of a your New York gross estate and will pass without a payment of gift taxes to the extent you have not exceeded the Federal estate and gift tax exemption of $5,340,000.
For more information, the proposed budget bill can be found by going to Parts 1 and X of this document.
* Exemptions amounts are subject to change pending passage of 2014-2015 executive budget.
By Jim Maisano
With the ongoing debate about gun control legislation in Congress and New York State, it is important to take a closer look at the two recent U.S. Supreme Court decisions interpreting the 2nd Amendment, so that we can establish whether the legislation would be constitutional. This post is not seeking a debate on individual viewpoints on gun control. I only endeavor to remind all sides of this debate that the two recent U.S. Supreme Court decisions interpreting the 2nd Amendment are historically important, and no legislative body should pass any gun control laws prior to ensuring they will pass constitutional muster.
Let’s first be reminded of the text of the 2nd Amendment to the Constitution: “A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”
The first recent landmark case updating 2nd Amendment law was District of Columbia v. Heller, 554 U.S. 570 (2008). The plaintiffs challenged the DC City Council’s “Firearms Control Regulations Act of 1975,” which banned handgun possession by making it a crime to carry an unregistered firearm and prohibited the registration of handguns. No resident could own a handgun or automatic or semi-automatic weapon, except for police officers and guns registered before 1976. The law also required that guns be kept inside the home and “unloaded, disassembled, or bound by a trigger lock or similar device,” which made it difficult for home protection.
Here is a brief summary of Justice Scalia’s holding in Heller (5-4 decision):
1. The 2nd Amendment protects the individual right to possess a firearm unconnected with service in a militia, and to use that firearm for traditionally lawful purposes, such as self-defense within the home.
2. Like most rights, the 2nd Amendment right is not unlimited. It is not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose. Some laws restricting gun usage may be “presumptively lawful.”
3. The handgun ban and the trigger-lock requirement (as applied to self-defense) violate the 2nd Amendment. The District’s total ban on handgun possession in the home amounts to a prohibition on an entire class of “arms” that Americans overwhelmingly choose for the lawful purpose of self-defense. Under any of the standards of scrutiny the Court has applied to enumerated constitutional rights, this prohibition—in the place where the importance of the lawful defense of self, family, and property is most acute—would fail constitutional muster. Similarly, the requirement that any lawful firearm in the home be disassembled or bound by a trigger lock makes it impossible for citizens to use arms for the core lawful purpose of self-defense and is hence unconstitutional. Because Heller conceded at oral argument that the D.C. licensing law is permissible if it is not enforced arbitrarily and capriciously, the Court assumes that a license will satisfy his prayer for relief and does not address the licensing requirement. Assuming he is not disqualified from exercising 2nd Amendment rights, the District must permit Heller to register his handgun and must issue him a license to carry it in the home.
The Court relied on the “in common use at the time” language from U.S. v. Miller, 307 U.S. 174 (1939) which stated:
“The significance attributed to the term Militia appears from the debates in the Convention, the history and legislation of Colonies and States, and the writings of approved commentators. These show plainly enough that the Militia comprised all males physically capable of acting in concert for the common defense. ‘A body of citizens enrolled for military discipline.’ And further, that ordinarily when called for service these men were expected to appear bearing arms supplied by themselves and of the kind in common use at the time.”
It is important to note that Heller made clear that the 2nd Amendment was not absolute and some gun control legislation is “presumptively lawful,” including longstanding prohibitions already upheld by courts:
- prohibiting carrying concealed weapons and gun possession by felons or the mentally ill,
- bringing firearms into sensitive places such as schools and government buildings,
- use of “dangerous and unusual weapons,”
- regulating “conditions and qualifications on the commercial sale of arms,” and
- regulating firearm storage to prevent accidents.
Prior court holdings show that the sorts of weapons that are protected under the 2nd Amendment are those “in common use at the time,” yet this does not extend to the prohibiting of the use of “dangerous and unusual weapons.”
The question remained after Heller whether it extended beyond federal legislation, and it was answered in McDonald v. Chicago, 561 U.S. 3025 (2010), which posed a challenge to a Chicago ordinance that essentially banned private handgun ownership. McDonald held that the 2nd Amendment was binding on states and that the right of an individual to “keep and bear arms” protected by the 2nd Amendment is incorporated by the Due Process Clause of the 14th Amendment.
So here is the key question: besides the legislative restrictions that Heller approves as not violating the 2nd Amendment, what other restrictions would be constitutional? Let’s turn to the recently passed NY SAFE Act (from Gov. Cuomo’s website) for a review of its restrictions:
- Bans possession of any high-capacity magazines regardless of when they were made or sold. The maximum capacity for a detachable magazine is reduced from ten rounds to seven. Magazines owned before passage of the SAFE Act able to hold seven to ten rounds can be possessed, but cannot be loaded with more than seven rounds. .22 caliber tubular magazines are exempt from this limit. Previously legal “pre-1994-ban” magazines with a capacity of 30 rounds are not exempt, and must be sold within one year to an out-of-state resident or turned into local authorities. The magazine limit takes effect April 15, 2013.
- Ammunition dealers are required to do background checks, similar to those for gun buyers. Dealers are required to report all sales, including amounts, to the state. Internet sales of ammunition are allowed, but the ammunition will have to be shipped to a licensed dealer in New York state for pickup. Ammunition background checks will begin January 15, 2014.
- Requires creation of a registry of assault weapons. Those New Yorkers who already own such weapons would be required to register their guns with the state.
- Requires any therapist who believes a mental health patient made a credible threat of harming others to report the threat to a mental health director, who would then have to report serious threats to the state Department of Criminal Justice Services. A patient’s gun could be taken from him or her.
- Stolen guns are required be reported within 24 hours. Failure to report can result in a misdemeanor.
- Reduces definition of “assault weapon” from two identified features to one. The sale and/or transfer of newly defined assault weapons is banned within the state, although sales out of state are permitted. Possession of the newly-defined assault weapons is allowed only if they were possessed at the time that the law was passed, and must be registered with the state within one year.
- Requires background checks for all gun sales, including by private sellers – except for sales to members of the seller’s immediate family. Private sale background checks will begin March 15, 2013.
- Guns must be “safely stored” from any household member who has been convicted of a felony or domestic violence crime, has been involuntarily committed, or is currently under an order of protection. Unsafe storage of assault weapons is a misdemeanor.
- Bans the Internet sale of assault weapons.
- Increases sentences for gun crimes, including upgrading the offense for taking a gun on school property from a misdemeanor to a felony.
- Increases penalties for shooting first responders to life in prison without parole.
- Limits the state records law to protect handgun owners from being identified publicly.
- Requires pistol permit holders or owners of registered assault weapons to have them renewed at least every five years.
While much of the NY SAFE Act restrictions are similar to ones cited in Heller as acceptable, two do present possible constitutional concerns: the ban on assault weapons and ban of high capacity magazines. Since these restrictions impact guns and magazines “in common use at the time,” they could run into problems under Heller’s reliance on Miller.
There issue with legislation directed at banning assault weapons is that terms like “assault weapons” or “military-style assault weapons” are not defining an objectively agreed upon group of weapons. There is tremendous debate on exactly which guns fall into this classification. For example, the federal bill proposed by Senator Feinstein allegedly bans 157 specific guns and exempts 2,248 guns she claims are commonly used for hunting and sports shooting, although many of the 157 guns to be banned may be deemed as “in common use at this time” and are semi-automatic guns, which many experts believe are not “assault weapons.” There is widespread agreement that automatic rifles are properly labeled as assault weapons. It appears the NY SAFE Act does not provide the requisite detail in its ban on assault weapons. However, Heller does state that restrictions on “dangerous and unusual weapons” would pass constitutional muster, and this may include semiautomatic types of “assault weapons.” It would be helpful if those drafting legislation banning assault weapons better demonstrate that the guns being banned are truly “dangerous or unusual” and not simply guns “in common use at the time,” since Heller indicates that restrictions on the 2nd Amendment must pass some level of heightened scrutiny under either strict scrutiny or intermediate review. This requires proof that the legislation is genuinely seeking to achieve reasonable and important societal goals, while minimizing unnecessary impacts on lawful gun owners.
The Congress is currently considering bans on both assault weapons and high capacity magazines, and since I believe these restrictions may raise red flags under the 2nd Amendment post Heller, if such legislation is passed, it would need to be narrowly tailored to avoid vagueness and overbreadth. The NY SAFE Act has already been challenged in court, and you can expect any law passed by Congress to be challenged under Heller And of course, the U.S. Supreme Court will certainly revisit the 2nd Amendment in coming years to provide us with more guidance.James Maisano, Esq. (914) 636-1621 Jim@JamesMaisanoEsq.com www.JamesMaisanoEsq.com
By Jim Maisano
Since I entered public service in 1997, one of the troubling injustices I’ve witnessed is eminent domain abuse, where governments sanction the taking (or de facto stealing) of private property for private use, usually for shopping malls and commercial developments, while hiding behind the fraudulent label of “public use.” It is my view that using eminent domain in this manner is a perversion of the Fifth Amendment’s Takings Clause: “nor shall private property be taken for public use, without just compensation.” Please note that James Madison, the author of the Fifth Amendment, purposely chose the words “public use” instead of “public purpose”, “public interest” or “public benefit.” Unfortunately, in a 5-4 decision, the US Supreme Court did not agree with my view in Kelo v. New London (see http://goo.gl/8n8Ex), where it held that the transfer of land from one private owner to another to further economic development was a permissible “public use” under the Takings Clause in light of the general benefit to the community.
Here we go again – below are links to articles from the Institute for Justice (IJ) about the latest episodes of eminent domain abuse. IJ is a strong opponent of eminent domain abuse and true champion in protecting private property rights (see http://goo.gl/V7vUh). You can be sure, as a legislator and attorney, I will always oppose eminent domain abuse, and if you truly believe in liberty and freedom, you need to oppose it too.
Read here how a Greek-American immigrant could soon lose his pizza shop and seven properties in Philadelphia because of eminent domain abuse: http://goo.gl/0v1QZ.
And here is another example of governmental abuse of property owners through eminent domain, this time in Tennessee where 100 properties are being taken for a PRIVATE industrial manufacturing megasite: http://goo.gl/lOQ03.
After the Kelo decision, 44 states reformed their eminent domain laws to limit abuses of property owners, but not surprisingly, New York (my state) continues to allow wealthy, powerful and politically connected developers to conspire with local governments to use eminent domain to take the property of homeowners and small businesses through eminent domain for the construction of exclusively private developments. You can check out IJ’s review of your state’s eminent domain laws at this link: http://goo.gl/vUknd.
By Jim Maisano
I had to read the following article twice, which ran in The New York Times on September 15, 2012, because it was so troubling:
In a nutshell, debt collection attorneys are sending out letters – utilizing a prosecutor’s letterhead – to people who have written bad checks. These letters threaten the consumers with jail time if they do not pay the amount of the bounced check, plus other large fees. Here is a link to an example of this kind of collection letter:
This is an abusive process. It is certainly possible the shopper lacked any intent to pass a bad check and merely made a mistake. Could you imagine writing a check that bounced by accident and a few weeks later receiving a letter that appears to be from a prosecutor telling you to pay up or face jail time? It is most disturbing the article reports that one consumer’s “bad check was sent directly from the merchant to the debt-collection company, without any prosecutor determining whether she had actually committed a crime.” Normally, before being charged with a crime, a person’s actions are fully reviewed by the police and/or prosecutors to ensure the alleged behavior rises to the level of crime. I realize the recipient of the letter has not been formally charged with a crime here, but the letter is misleading and certainly causes confusion, and I am sure many of the recipients believe they are being charged with a crime.
This is a deceitful scam by debt collection lawyers. They seek to scare the heck out of people, and then turn a quick profit, and unfortunately, it is probably successful as consumers are paying quickly to avoid the threat of jail. Moreover, it is my understanding that it is not a high priority for law enforcement to target check bouncers, so it is doubtful whether many of these actions would ever be prosecuted. And who sets the fees that must be paid beyond the amount of the check…the collection attorneys? Is that fair and just? Where is the due process or governmental oversight? How could the State of California actually sanction such abusive treatment of consumers? Isn’t it unethical for attorneys to engage in misleading communications with the public? Shouldn’t the state bar associations be cracking down on these abuses.
The article did not mention whether these troubling debt collection letters have been mailed to New Yorkers, although I want to believe that the New York State Bar would proscribe such unethical actions under the New York Rules for Professional Conduct. If anyone becomes aware of such letters arriving here in New York, please contact me as I would like to see if I can be helpful to the affected consumer.James Maisano, Esq. Jim@JamesMaisanoEsq.com http://www.JamesMaisanoEsq.com (914) 636-1621
By Jim Maisano
Outside of a few vacation days for family trips and events, it was a very busy summer at my law firm, but Labor Day has come and gone, and it is time for a new legal blog post.
Before starting this firm, I worked at two large law firms in Manhattan for about eight years, and while I did have my own clients, I also worked for clients of the firm. Being a solo practitioner is different in that you must not only provide quality and affordable legal services to your clients, you must also attract clients through advertising and promotion of the firm. I have utilized social media, Facebook, Twitter, LinkedIn, Google+ and Tumblr – along with this blog and my website (www.JamesMaisanoEsq.com), as integral parts of promoting the firm, and I am pleased to report it has been successful to the point that the firm is doing well in its second year, which is why it has been so busy.
So what kinds of legal work have clients brought to my firm recently – here is a brief summary:
- Since I began practicing law in 1992, the majority of my practice has involved commercial litigation. This includes helping businesses address contract disputes and collecting money owed by debtors. I am currently working on about ten such civil actions, which have been brought either in lower courts or the Supreme Court of the State of New York, and I have been successful for several clients thus far in recovering funds.
- I was a solo practitioner from 1996 to 2002 and during that time I developed a significant real estate closing practice. The housing market was strong in those years and I represented hundreds of clients for closings. With the struggling economy and lack of home sales, it is much harder for attorneys to attract this work, but I am happy to report that I worked on three closings this summer.
- The fastest growing part of my practice is wills, estates and probate actions in Surrogate’s Court. This summer I helped about fifteen clients by drafting wills or guiding executors through the probate process.
- Lastly, solo practitioners must be resourceful, and I also helped clients this summer with other legal matters such as setting up a LLC or corporation, legal name change, trademark protection, and traffic violations.
Thanks for following my efforts to build this law firm, and I am very thankful for the kind support and nice comments I have received on social media or by email. If I can ever be helpful to you in the types of legal matters discussed above, or for any other legal matter, please do not hesitate to contact me.
PS: I am now associated with an immigration attorney, and am available to help you with these matters too.James Maisano, Esq. Jim@JamesMaisanoEsq.com http://www.JamesMaisanoEsq.com (914) 636-1621