Estate Tax Planning in an Uncertain Environment

By: Laura Anderson Weiss and Katherine B. Miller, Esq

Donahue, Tucker & Ciandella, PLLC


Often, estate plans are all but set in stone. Someone sets up a will or a trust or a joint account and once the T's are crossed and the I's are dotted, it is forgotten. Why take the time and expense to constantly update the documents? The problem with this approach is that an estate plan made 20 years ago that will go into effect in another 20 years cannot account for changes in family, changes in estate taxation, or changes in financial situation. What if you could create a plan that allows for some of the decision-making to occur at your death or at your spouse's death? Disclaimer planning is one such technique that gives estates flexibility in the timing of the decision making process.

Disclaimer planning can be used to give your estate plan flexibility to married couples. Markets and taxes and assets all change over the years. Rather than organizing a new estate plan every time things change, an overall plan that includes disclaimer planning allows you to leave certain, limited decisions to your spouse at the time of your death. For couples with estates that are close to $10 million or higher, disclaimer planning is one of the only ways to avoid the federal estate and gift tax while maintaining some flexibility. The idea is to set up the estate plan in such a way that, when one spouse dies, the other can look at the assets and the federal estate tax exemption amount and decide at that time, rather than at the time the documents are executed, how to proceed. Here's how it works:

First, each spouse puts his or her half of the couple's assets into a revocable trust and creates a separate Disclaimer Trust. Each revocable trust gives the money to the surviving spouse first, then to a Disclaimer Trust (the Disclaimer Trust is the contingent beneficiary- the "person" who receives the assets if the spouse disclaims them). When the husband dies, everything in his revocable trust is set to pass to his wife (or vice versa). Now comes the flexibility- the wife has a choice. Either she keeps the assets because she has determined the estate is not worth enough to have to pay estate tax OR she disclaims all or some of the assets. Without disclaimer planning, this choice would have had to be made when the estate plan was created! Whatever she disclaims goes to the contingent beneficiary, the Disclaimer Trust. The Disclaimer Trust can be set up for the benefit of the wife for life and then for the couple's children.

If done properly, the result is that the wife receives the income from the Disclaimer Trust for her life. She also can use the trust money for her health, education, maintenance, and support. When the wife dies, any remaining trust principal goes to the kids as part of the trust rather than as part of her estate, so it is not counted in the surviving spouse's estate for estate tax purposes. Her estate has been strategically kept below the exemption amounts so no estate taxes are owed. This type of planning must be done correctly so always consult with your tax or estate planning attorney. DTC Lawyers, with offices in Meredith, Exeter and Portsmouth NH, has estate planning attorneys ready to assist clients with building flexibility into their estate plans.

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Gretchen Gandini - Are we there yet?

"The WOW Trail expansion will test our endurance."
It's been two years since I wrote that sentence in a community commentary printed in this very newspaper. Bright eyed and optimistic, I compared this project to running the Boston Marathon. Overly confident, I had no doubt in my mind that Phase 2 would be designed and approved within the year.
Oh how humbled I've been.
We started off strong. We introduced an annual fundraising appeal which was met with great support and over $20,000 in donations. We were awarded $125,000 in state business tax credits by the N.H. CDFA. And, the Laconia City Council voted to invest $400,000 of its Downtown Tax Increment Financing money into Phase 2 of the project. We were on pace to build in 2015 for sure.
But then reality set it. To borrow a marathon term, we'd hit the wall and we've been shuffling up Heart Break Hill ever since.
We'd been concentrating so much on the fundraising efforts, we failed to recognize the very real challenges that would need to be overcome. First, an unexpected objection from an abutter has necessitated further paperwork and legal advice. Second, the negotiation of an easement from a generous trail neighbor has taken longer than anticipated. Third, we have been trying to figure out how to move or build the trail around two structures located in the State of N.H.-owned railroad corridor without compromising their historic integrity.

Then, just as I was starting to lose hope that we'd make it to the finish line, we received the following news from the family of the late Lionel Labonte, founder of Stratham Tire, Inc.:
"Our family has agreed to donate the 2,850-square-feet of land needed by the WOW Trail committee to facilitate the continuation and development of the WOW Trail. The WOW Trail will be a treasure for the City of Laconia. It will help build community, provide a healthy opportunity for people to gather and exercise, and will also beautify an area near the tracks that would otherwise remain unkempt. We are proud to be a part of such a community-based effort."
And with that incredible gesture, we've got our second wind. In the coming weeks we will be working with city officials to accept this generous donation of property, and submitting our final design plans to the State of New Hampshire Bureau of Rail for review. We anticipate putting our project to bid at the close of 2015, and look forward to a Spring 2016 build.
The Phase 2 WOW Trail expansion has, indeed, tested our endurance. But there's no doubt in my mind that this effort is important. A completed WOW Trail will become a world class amenity, showcasing New Hampshire's Lakes Region in a unique way, bringing a significant new type of tourism to our beautiful state, and enhancing the quality of life for year-round and seasonal residents.
Thank you for your patience. This is a long-term project that will benefit the region for generations to come. It's not going to be easy. But it will be worth it.
The WOW Trail's Annual Meeting will be held on Wednesday, August 19 at 4:30 p.m. at the Lakes Region Chamber of Commerce. The public is welcome to attend.

(Gretchen Gandini is the executive director of the WOW Trail. She welcomes your comments, questions and ideas at This email address is being protected from spambots. You need JavaScript enabled to view it..)

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Michael Barone - Not a clown show

August 6 was the biggest night of the political year so far, for what happened on the stage at Cleveland's Quicken Loans Arena and for what happened offstage as well.

The stage was the scene of the first two Republican presidential debates, hosted by Fox News, which together lasted some 200 minutes between 5 and 11 p.m. EDT. What happened there did not go unnoticed. According to overnight Nielsen ratings, the two-hour prime-time debate got a rating as high as the national basketball finals — almost triple the highest rating of a Republican debate in the 2012 cycle and more than half that of the first Obama-Romney debate that fall. It was apparently the most watched primary debate in history.

That may have helped Trump, the candidate whom many presumably tuned in to watch. He has a history of getting good TV ratings and has been leading most recent national and state polls. But it's not clear that he gained (or lost) ground in this debate. He had some unhelpful testy interchanges but did nothing to disenchant those who already liked him.

The debate may also have helped, to varying degrees, the other nine candidates on the stage, each of whom had one or more memorable moments and showed he could handle penetrating, even hostile questions with aplomb. Even as Trump held up his hand and refused to abandon the threat of running as an independent — his "leverage" — the debate may have helped the Republican Party, whose national image has suffered.

That image may have been helped even more for those who tuned in for the 5 o'clock "happy hour" debate and saw the assured, aggressive performance of Carly Fiorina, footage of which the Fox moderators aired during the 9 p.m. main event.

Viewers hoping to see attacks on, or by, Trump were mostly (though not entirely) disappointed. What they saw instead was Trump acting more like a standard politician and his more conventional rivals expanding on some of his themes.

Trump had some basis, though he exaggerated, when he said that his (unsavory) comments on immigration got other candidates talking about the issue. His candidacy has also prompted rivals to acknowledge the frustrations of many voters with political gridlock and economic sluggishness today.

Some frustration is inevitable, thanks to James Madison and the other delegates who wrote a Constitution full of checks and balances — and to an electorate tilting usually to Democrats in presidential elections and Republicans in congressional contests. But Trump's campaign has prodded other candidates to expand on how they can overcome it.
Not all performed equally well. A man from Mars tuning in might wonder why Jeb Bush and Scott Walker, though competent, had been leading in pre-Trump polling. They didn't match Mike Huckabee's one-liners, Rand Paul's feistiness, Chris Christie's specifics, Ben Carson's charm, Ted Cruz's clarity, John Kasich's ingenuousness or Marco Rubio's capacity to ad lib seamlessly from his relationship to God to the conduct of the Veterans Administration.

And none could respond to an event offstage that may have more immediate impact than the debate. That was the announcement that Senator Charles Schumer, Senate Democrats' leader-in-waiting, is voting to disapprove Barack Obama's deal with Iran. This was apparently leaked by the White House to the Huffington Post during the debate — an even better time to bury news than a pre-holiday-weekend Friday afternoon.

This came just one day after Obama's disgraceful speech where he likened Republican opponents of the deal to Iran regime supporters who chant "death to America!" A White House reporter might ask whether Schumer fits into that category at the next presidential press conference.

Administration strategists hoped that Schumer would support the deal or delay a "no" vote until it was too late to influence others. Instead he announced his position, in a thoughtful and serious statement, as members of Congress fan out to face constituents. Polls show voters are increasingly skeptical for the reason Schumer found pivotal — skepticism about the deal will make Iran's leaders less hostile to America.

The "no" votes of Schumer and Eliot Engel, House Democrat and ranking member of the Foreign Affairs Committee (who also announced his stance on Thursday), mean there will be a large bipartisan majority against the deal. Maybe even the two-thirds required for disapproval.

That casts a cloud on what Obama regards as his signal foreign policy achievement, even as the Cleveland debates showed the Republican race is not a clown show. It was a tough Thursday for the president and his party.

(Syndicated columnist Michael Barone is senior political analyst for The Washington Examiner, is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor and co-author of The Almanac of American Politics.)


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Froma Harrop - Sticking up for Coca-Cola, sort of

Champions of righteous eating have been saying terrible things of late about Coke. They're now focusing their wrath on a corporate campaign to place Coca-Cola in the context of a healthy diet.

A New York Times editorial accuses Coke and other beverage-makers of forming "innocent-sounding front groups to spread the message that sugary sodas have no deleterious effect on health." Actually, their paid consultants have said no such thing.

They did say that dieters working on portion control might favor the 7.5-ounce mini-Coke over the traditional 12-ounce size. Also, they said those seeking to lose weight should consider exercising more.

But yes, Coke is guilty — guilty — of saying nice things about its products. "In a particularly brazen move," the Times fulminates, a dietitian suggested that "a mini-can of Coke would make a good snack food."

"Refreshing beverage option" was the dietitian's exact quote.

The standard-bearers of chaste eating habits have themselves lost control in apportioning blame for the "obesity epidemic" on sugared drinks. Why is soda taking so much of the rap?

There's a habitual suspicion of the profit motive as it applies to other people's businesses. In a similar vein, many harbor an intense disapproval of others' unhealthy food choices.

Hence the drumbeat demand for a tax on soda. That would be a neat way to extract more money from low-income people, not unlike the stiff sin tax on beer.

But if we're going in this direction, why not tax the extra-fat "European style" butter you find at Whole Foods? A 1-ounce pat has more calories than a mini-Coke.

How about a fat tax on French Brie — and triple the tax for triple-creme?
This is not to dismiss the genuine concern about the huge amount of sugar many Americans ingest. But the remedy should be education. Help citizens understand their sugar intake and, if need be, reduce it. Do note that American consumption of full-calorie soda has plunged 25 percent since the late 1990s, and obesity rates are starting to come down.

The enduring soft drink hysteria comes from places like the recent documentary "Fed Up". Produced by Katie Couric and Laurie David, the movie strongly argues that dieting and exercise can't really help obese kids as long as sugar exerts its evil power.

One of its star "experts" is Dr. Mark Hyman, who asserts: "Your brain lights up with sugar just like it does with heroin or cocaine. In fact, sugar is eight times more addictive than cocaine."

Hyman is known for spreading the crank theory that vaccines cause autism. And his work has earned a place on Quackwatch's list of crackpot books.

Anyhow, scientists at the University of Edinburgh decided to investigate the claim that sugar is addictive like a drug and found little evidence for it. "People try to find rational explanations for being overweight, and it is easy to blame food," researcher John Menzies told BBC News.

In sum, those who believe themselves addicted to sugar need a shrink more than they do a nutritionist.

One last point. Coca-Cola had been on grocery shelves for about a century before there was any "obesity epidemic." You have to ask, How did we all survive that long?

(A member of the Providence Journal editorial board, Froma Harrop writes a nationally syndicated column from that city. She has written for such diverse publications as The New York Times, Harper's Bazaar and Institutional Investor.)

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Sanborn — More Affordable Homes

As of August 1 there were 1,307 residential homes on the market in the twelve communities covered by this Lakes Region real estate market report. The median asking price came in at $275,000 and there were over 400 homes under $200,000 available. This inventory level represents almost 16 months worth of inventory on the market.

Another new month and many more affordable homes have come on the market. Here are my picks for some properties you could check out if you are in the market. A new offering at 129 Belknap Mountain Road in Gilford should be a winner. This 1,200 square foot ranch built in 1968 has three bedrooms, one bath, two fireplaces, a partially finished basement, and a two car garage under. The masonry construction of this home means it is low maintenance. It sits on a 1 acre lot with great mountain views and is close to the Gilford Village. Great house, great location and a great price at $199,900.

Over in Belmont at 169 Durrell Mountain Road there's another three bedroom ranch that has been updated. You'll find a new kitchen with stainless steel appliances and lots of granite, a large walk in pantry, refinished oak floors, living room, master, and three quarter bath on the main level. In the lower level there's a family room, two bedrooms, and full bath. Out front is a great patio and a white picket fence while two driveways lead back to a 40' x 30' heated garage with overhead crane for the gear head in the family. It sits on a .46 acre level lot. This home is priced at $185,000 and is already getting lots of activity.

If beach rights are what you are looking for, the house at 6 Anthony Drive in Laconia will get you onto a nice one on Opechee. This 1978 vintage raised ranch has 1,660 square feet of living space with three bedrooms, one and a half baths, living room with a wood fireplace, laminate and tile floors, and a large finished space in the lower level perfect for an exercise room, game room, or a place for those unexpected guests that come to use the beach. Out back is a large deck for barbecuing and there's a two car garage to hold the floats and water toys. The house sits on a third acre lot and offers some seasonal lake views. This property is priced at $215,000.

If you venture up to 19 Jennifers Path in Moultonborough, you'll find a 1,386 square foot saltbox built in 1998 on a 3.5 acre lot complete with fire pit and a place to park that camper you've always wanted. This house has three bedrooms, two baths, a nice open floor plan with vaulted ceilings, a large living room with a woodstove, and a first floor master. Upstairs you'll find two guest rooms along with a full bath. There's a full walkout basement waiting for a man cave project and there are two decks for grilling and entertaining. This home is offered at $214,900 and the low taxes in Moultonborough make it pretty appealing

P​ease feel free to visit to learn more about the Lakes Region real estate market and comment on this article and others.

​Data compiled using the NNEREN MLS system as of 8/15/15. ​
Roy Sanborn is a sales associate at Four Seasons Sotheby's International Realty and can be reached at 603-677-7012.

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