Cautionary Tale: Even Celebrities Don't Always Get What They Pay For

According to a recent Forbes article, it looks like Philip Seymour Hoffman left a little more drama post mortem by some problematic wording in his Will.  According to the report, Hoffman's Will left his estate (estimated to be roughly $35 million) entirely to his children's mother.  However, since she was not his spouse (only ever his girlfriend), she would face substantial federal estate taxes on about $30 million of the estate, as well as New York State estate taxes on almost all of the estate.  Evidently Mr. Hoffman did foresee this potential problem, and so the drafting attorney wrote a specific "disclaimer" clause into the Will, which would allow his girlfriend to "disclaim" her inheritance, which would then go into a Trust for their son (which would avoid having another estate tax applied to it when Hoffman's son's mother passes away).

The problem? Hoffman only named the son in the Will, but when the actor died earlier this year, he left 3 children.  Now the Surrogate's Court will have to grapple with how, and whether, the other two children can share in the Trust created by their father's Will and their mother's - expected - disclaimer of her share.

With the amount of money that Mr. Hoffman had, and the fact that he lived in a City with hundreds of top-notch attorneys, it is very surprising to me that his Will was so inartfully drafted, as to not anticipate any future children.  As quoted in the Forbes article, a New York Law School professor noted:

One extra sentence in the will could have avoided these issues ... for instance by saying, “Any reference to [Hoffman's son] includes children born to me after him.”

In my practice I run into this situation often.  There may be only one child then living when a parent writes their Will (which child I usually name in one clause in order to satisfy the Rule Against Perpetuities ... but that's an issue for another blog post).  But if there are any more children anticipated (and there usually are), my "standard" Trust clause reads to the effect that a Trust is to be created for "as many of my children then living".  So even if a person creates a Will with only one child in mind, all his or her children will be taken care of by a Trust if any more children are born after signing the Will (without any need to necessarily revise the Will).

I'm just a country lawyer in Upstate New York - and probably charge less than 1/3 what most attorneys in Mr. Hoffman's Manhattan neighborhood do - but I wouldn't have let this happen to his kids.  A cautionary tale then, for those impressed with white-shoe firms and fancy ZIP codes: caveat emptor.

Arizona: Discriminatus Deus

The past few weeks have been terribly cold and dreary here in New York, so my interest has turned, temporarily, to warmer climes.  According to reports, the Arizona state legislature has recently passed a law (H.B. 2153), which provides a defense to discrimination claims if the defendant’s actions were motivated by a “sincerely held religious belief” and the action complained of, or sought, by the plaintiff would “substantially burden” the defendant’s religious beliefs.  In essence, this statutory amendment would provide a license to discriminate by public businesses in that state.

I rarely make sweeping generalizations, but I am quite confident that, if the Governor of Arizona is mistaken enough to sign this bill into law, it will undoubtedly be overturned by the first federal court to hear a challenge.  That’s because, this law is apparently in direct conflict with the federal Civil Rights Act (codified at 42 U.S.C. §2000a, et seq.).  Under the Civil Rights Act, “[a]ll persons shall be entitled to the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation … without discrimination or segregation on the ground of race, color,  religion, or national origin.”  Under federal law “establishments of public accommodation” include all those “affecting interstate commerce or supported in their activities by State action”, such as hotels and motels (other than small bed & breakfasts); restaurants (including those contained in a mall or at a gas station); movie theaters, concert halls, sports stadiums, and other entertainment venues.  A business’ effect on interstate commerce is pretty liberally construed under the Civil Rights Act, but there is an explicit exclusion of coverage for certain “private club[s] or other establishment not in fact open to the public.”

To say – as a business under the Arizona statute might – that “I refuse to serve you because my religious beliefs conflict with your actions or beliefs, and serving you would make me feel bad” is legally indistinguishable from saying “I refuse to serve you because I disagree with your religion [or lack thereof].”  The latter is unequivocally prohibited by federal law, and the support of the former by the State of Arizona cannot be reconciled with the federal Civil Rights Act.

Beyond the obvious legal infirmities of this statutory scheme in Arizona, the practical effects could be a nightmare.  It appears from reports that the legislative purpose of this bill is to protect conservative Christian business owners who wish to turn away business from potential homosexual customers/clients.  However, even a place like Arizona is a religiously plural society, and the terms of this law could – and would – go far beyond “protecting” conservative Christians.  For example, Jews and Muslims are forbidden from consuming pork, so would a Jewish mechanic be justified in refusing to fix a pig farmer’s truck?  Ahimsa, or non-violence, is a core tenant of Buddhist faith, so could a Buddhist ice cream shop owner refuse to sell ice cream to the county animal-control officer?  An even more extreme example could be imagined from the fact that some white supremacist organizations in the United States have (most likely for tax avoidance purposes) putatively organized as “religious” groups.  Of course, I’m sure the core tenants of that “religion” is hatred of non-Caucasian groups, so the protection of a such a business owner's "sincerely held" religious conscience would involve a whole lot of discrimination.

History teaches us that, when a national monarch was given supreme control over the religious beliefs of his or her subjects, war and strife inevitably followed.  This fact was one of the primary inspirations for our First Amendment.  However, it is no less pernicious and destructive to the cohesiveness of our society, to appoint every citizen their own mini-Pope, empowered to decide who does and doesn’t “deserve” their entirely secular business services.

#FirstAmendment #Arizona #ACLU

Why Every Couple Needs Estate Planning (Not Just Traditional Ones)

A recent New York Times article describes as “alarming” a January 6^th ruling by the Brooklyn Surrogate’s Court, which prohibited the non-biological parent of a child in a same-sex marriage from legally adopting that child.  Under New York law, a child born into a marriage is presumed to be the legal child of both parties to that marriage (married mother and father, or, in this case, the married mother and mother).  Thus, the Court reasoned, there was no legal need (nor ability) for the non-biological mother to “adopt” the child whom is already legally her child.

There was no animus against the same-sex married couple in the Court’s decision; in fact the judge noted that “her decision flowed from her strong belief that all married couples, gay or straight, should be treated equally.”  Nevertheless, this ruling has created some consternation amongst married same-sex parents, who fear that the non-biological parent’s rights will not be protected if they move to another state that doesn’t recognize same-sex marriage or “worst-case situations in which [the biological parent] is killed or incapacitated.”

Sooner or later, the Fifth Amendment equal protection analysis that overturned the federal Defense of Marriage Act (DOMA) in Windsor v. U.S. last year, will bear its weight upon the mini-DOMAs still existent in certain states.  This development, while slow, will eventually address these parents' first concern.  Of course, same-sex couples could also choose to avoid altogether states inhospitable to their legal union, but that's a different matter.

Their second concern - that once the (only) biological parent is incapacitated or dies, the non-biological same-sex parent will not have legal guardianship of the child absent the formal adoption process - can already be protected against with existing New York State law.  For all couples - straight and gay, married or not - the single biological parent of a child can direct that a specifically-named guardian be appointed for that child in a Will.

But what about the legal twilight where the biological parent is living, but incapacitated in some way where they cannot care for their child, or give consent to another guardian?  Luckily, the New York State legislature has thought of that too.  Under New York Surrogate's Court Procedure Act section 1726, in a signed and witnessed writing, a parent may appoint a "standby guardian" in case of their death or incapacity.  Again, whether or not your relationship is same-sex, if there is no other biological parent of your child alive (or legally entitled to custody / guardianship), it may be wise to create the kind of directive outlined in NY SCPA 1726.

The Supreme Court's ruling in Windsor v. U.S., and the New York State Legislature have done a lot to equalize same-sex marriages with more traditional heterosexual marriages in New York.  However, that doesn't mean that any couples should ignore planning ahead for the inevitable death or possible incapacity of their loved ones.

A Goodfella’s Comeuppance

As most people are probably now aware, authorities recently indicted and arrested an alleged Mafioso in connection with the 1978 Lufthansa Robbery (which took place at Kennedy International Airport, and was made famous in the Scorsese film “Goodfellas”).  But if you’re anything like me, you might be wondering, “how can someone be arrested for a 35-year-old robbery; hasn’t the statute of limitations run out?”  Under New York Criminal Procedure Law Section 30.10, the statute of limitations for a felony (other than an A-level felony and some sexual assault crimes), is only five years.  Penal Law Section 160.15 clearly states that first-degree robbery is classified as a B-felony, so, in theory, the Lufthansa robbers could not be indicted or tried for this famous robbery after 1983.

However, despite the sensational headlines to the contrary, the arrest that was made this week was not actually about the 1978 Lufthansa heist.  Instead, it is an arrest pursuant to a federal indictment alleging a racketeering conspiracy that lasted from 1968 to 2013.  A federal racketeering (often called “RICO”) charge similarly has only a five-year statute of limitations.  But, the statute of limitations for a racketeering conspiracy charged under 18 U.S.C. 1962(d) doesn’t begin until the completion of the conspiracy.  In this case, the government alleges that the conspiracy did not end until 2013, so bringing the case in 2014 (even against individuals whose participation in the conspiracy might have been decades ago) is allowable.

I have no doubt that the statute of limitations will be one of the issues the defense attorneys will assert in pre-trial motions and argument, and it will be interesting to see how the federal court in the Southern District of New York handles it.

Is a $1,500 Divorce Possible?

I recently came across an interesting opinion piece in Reuters News this week: "How I got divorced for less than $1,500 in legal fees".  The author recounts his experience obtaining a divorce from his wife in Massachusetts for about $1,500 in legal fees.  But is this a realistic expectation for couples contemplating divorce in New York?   In my experience, I would offer a cautious maybe. 

The feasibility of an “inexpensive” divorce lies almost entirely within the control of the spouses getting divorced.  That is, if the spouses are generally amicable, and go first to a skilled mediator to negotiate and finalize a Separation / Settlement Agreement, the ensuing divorce process is normally very simple and routine.  There are several documents that your attorney will have to draw up – and minimum court filing fees of at least $335 -- but as long as there is no opposition from the other spouse/spouse’s attorney, the attorney fees for processing a “no fault” divorce case should be relatively low.  Similarly, if you and your spouse did not first go to a mediator, but did come to a general agreement on the main principles of a divorce settlement before you each obtained attorneys, the legal fees involved in putting that settlement in writing, reviewing what is proposed by the other spouse’s attorney, finalizing a settlement and processing a subsequent divorce, should be in the low 4-figures.

Then what makes contested divorce proceedings so expensive (generally $5,000 and up)?  The following list are my observations of just some of the things that add to a divorce’s legal (attorney) costs:

• Spouses disagreeing vehemently on the value and/or ownership of certain property (often requiring appraisers or other financial experts to be hired).
• Spouses disagreeing vehemently on the custody and/or visitation schedule for a child (this can arise once the non-custodial spouse sees the level of his or her child support burden).
• Shared ownership of a white elephant (an unsellable house; a rare and expensive heirloom neither wishes to part with; a family business).
• Spouses letting their (understandably) hurt feelings get in the way of rational negotiation (i.e. demanding possession of some minuscule piece of property merely out of spite). 

Of course, nobody gets divorced because they agree about everything and are best of friends with their spouse; but mutual respect, reciprocal empathy, and shared purpose in expeditiously dissolving the marriage will go a long way toward keeping your legal costs down.

Godfather Just Isn’t What It’s Cracked Up to Be

Recently, many of my friends and family have started getting married and having children, which is great.  And most of them have secured a man and woman to act in the traditional role of “godparents” to those children.  Although I’d imagine many people are aware of this, it’s nevertheless important to point out the fact that the appointment of a “godparent” is entirely a religious (or if you’re not particularly religious, a traditional) convention.  Most parents will seek out a godparent or two who they feel would be a good guardian for that child, should anything happen to the natural parents.  But this verbal appointment / acceptance of the role of “godparent” is not legally binding.  If you really, truly wish a trusted friend, or close relative, to be the legal guardian of your child if both you and your spouse pass away, you must put that in a Will (or other specific appointment document, but that’s another story).

In addition to appointing a trusted person or couple to look after the physical and/or financial well-being of your children, with a Will you can also set limits on how much of your property your children can access at a given age (a Trust), specify particularly sentimental property to go to one child of many, and/or set certain conditions on a child’s (even adult child’s) receipt of your property.

With all the hustle-and-bustle of being a new parent, it is easy to overlook estate planning (and even easier to ignore the potential of an unimaginable tragedy occurring).  But every parent should make a Will if they want to ensure that their children are looked after by trusted friends or relatives.

New York's Latest Gun Control Law Upheld by Federal Court

Federal Judge William Skretny (of the Western District of New York) upheld the vast majority of new state gun regulations passed as part of the 2013 SAFE Act against a constitutional challenge brought by the New York State Rifle & Pistol Association, in a decision filed earlier this week.  Although courts in Upstate New York (federal as well as state) are generally considered more conservative than their downstate counterparts, this ruling shouldn't come as a surprise to anyone familiar with Justice Scalia's majority holding in D.C. v. Heller.  In a case concerning the District of Columbia's complete banning of possession of handguns within a home, the Supreme Court squarely recognized that the Second Amendment confers an individual right to "keep and bear arms".  However, "[l]ike most rights, the right secured by the Second Amendment is not unlimited. ... nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms."  D.C. v. Heller, 128 S. Ct. 2783, 2816-17 (2008).  Later, in McDonald v. City of Chicago, Justice Alito and the Supreme Court majority applied the reasoning of Heller - and established incorporation doctrine - to strike down municipal (City / State) prohibitions on common handgun ownership.  But again, the Court made sure to point out that "[i]t is important to keep in mind that Heller, while striking down a law that prohibited the possession of handguns in the home, recognized that the right to keep and bear arms is not 'a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose.'" McDonald v. City of Chicago, Ill., 130 S. Ct. 3020, 3047 (2010) (quoting in part Heller).

So with what are we left?  The Second Amendment prohibits the local, state and federal governments from outright banning of all - especially common - firearms that might be useful for protection of one's home.  However, state and federal governments maintain the power to impose reasonable regulations on firearm ownership in order to preserve order and public safety.  In the federal district court's opinion in New York State Rifle and Pistol Association Inc. v. Cuomo, New York State struck the right balance with the SAFE Act.