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Sophisticated Planning


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After working in the New York and Paris offices of a large international firm, attorney Joseph Donohue opened his own firm in 2007. In 2010, he acquired his first practice from a retiring solo practitioner, doubling the firm’s revenue. In 2017, he acquired the office of O’Connell & Riley with his business partner, Kristin A. Canty.


In the decade since, ten more practices have joined his fleet, expanding the firm from a single town in the Hudson Valley to seven offices across five states in the Northeast — with no signs of slowing down.

Today, Donohue, O’Connell & Riley, PLLC boasts experienced attorneys dedicated to providing a high level of legal services for the most complex estate and tax planning issues involving assets around the globe. Whether establishing a domestic trust to avoid taxes on a villa in Europe or executing an estate plan to conserve 500 acres of land to be used as a nature preserve in Nova Scotia, the firm employs creativity and know-how to help clients reach their goals.

“Clients have different objectives depending on their assets and where they are in life,” says Donohue. “It is fulfilling to find ways to accomplish their estate planning goals in an intelligent and tax-efficient fashion.”

Closer to home, the firm advises clients on how to take advantage of trust laws and low taxes in New Hampshire when they reside in highly taxed states. “We set up trusts in New Hampshire, a state that has no state income or estate taxes,” explains Donohue. “Once assets are placed in trust, they grow free of federal and state estate taxes without requiring clients to live in New Hampshire — it can be a win-win.” 

TRUSTED ADVISORS 
Establishing long-term, trusting relationships with clients is key to Donohue, O’Connell & Riley’s success. Clients need to feel comfortable in confiding sensitive financial information as well as private family dynamics to their lawyers to create a smooth and amicable transition of assets to beneficiaries during the administration of a trust or estate.

“We certainly navigate the financial piece to create value, but 80% of the job is understanding the emotional issues that are involved when assets pass from one generation to the next,” says Donohue. Having prepared over 10,000 estate plans, the firm’s attorneys have developed a sixth sense for how to navigate delicate family and business dynamics to avoid conflicts and eliminate unanticipated surprises.

That commitment to client service continues when it comes to legal fees. All estate plans are prepared on a flat fee basis, with clients advised of the tax savings attributable to the firm’s legal services. “We provide clients with the return on their investment up front,” says Donohue. “When planning for the future of your family, we believe fees should never get between a client and their lawyer. We want clients to be able to pick up the phone and call without feeling they will get another bill in the mail.”

Donohue, O’Connell & Riley strives to always have its clients’ best interests in mind and values being a part of their lives. “My relationships with my clients are very important to me,” says Donohue. “It is an honor to set up an estate plan for a client, giving them peace of mind that they have made a positive impact on future generations.”

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June 20, 2023

News

Investing in our Warwick Office

Warwick Bldg Jan 2023

 

After over 165 years, the firm’s Warwick office has recently undergone a major renovation. 11 Oakland Avenue was originally owned by the first mayor of the village of Warwick, William Ogden, and the last major update was in 1895. The current facelift includes an installation of a new roof, insulation and siding.

Our investment underscores our commitment to the firm’s first location and our hopes that it will continue to serve the community well into its third century as a fixture on Oakland Avenue.

February 9, 2023

News

Michael Jackson’s Estate and the IRS in Tax Court: A game of ‘Beat It’

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Michael Jackson, often referred to as “the King of Pop”, left us in June 2009. As expected, the Executors of his Estate filed an estate tax return reporting the value of various assets. The IRS audited the Estate’s return, and later issued a notice of deficiency that adjusted the reported values in May of 2013. Although the Estate and the IRS settled most of the valuation disputes, there was a disagreement as to the value of three assets: (1) Jackson’s right to publicity (“Image and Likeness”); (2) The New Horizon Trust II, which held his 50% ownership interest in Sony/ATV (which owned a large catalog of copyrights, among which were some 175 songs by The Beatles); and, (3) the New Horizon Trust III, which held copyrights to compositions written or co-written by Michael Jackson, as well as other songwriters.

The Tax Court was then left with the task of determining the fair market value of these assets at Jackson’s date of death. The fair market value for estate tax purposes is defined as the price at which the property would exchange hands between a willing buyer and a willing seller. Given the unique nature of Jackson’s assets, however, the challenged assets lacked a readily ascertainable fair market value. Ultimately, the Court concluded that the value of these three assets totaled $111,467,473. This was a dramatic decrease from the $481,866,964 valuation of the IRS’s expert at trial.

As we can see from the outcome of this opinion, valuation of assets is key to estate tax planning. In some cases, it is best to gift high-growth, hard to value assets earlier, and let them grow outside of your estate, rather than holding onto them. This strategy may allow you to moonwalk past the tax headache and enjoy the benefits of today’s unprecedentedly high gift tax exemptions.

Carefully implemented, this gift tax strategy can allow you to benefit from the current gift tax exemption, without losing control of assets, and may allow you to reduce your estate tax burden significantly.

Contact us to see if this simple but effective strategy could be right for you.

Click here for the the in-depth source article.

 

 

June 9, 2021

News

How to Avoid Probate Potholes

Potholes

Most people do not realize the incredible complexity and time invested in a typical probate proceeding. Often, clients come to us thinking that the process of honoring the decedent’s will is about getting assets to appropriate beneficiaries as quickly as possible, when in reality probate is about ensuring that taxes, creditors and other interested parties are paid prior to the beneficiaries receiving any money. A statutory waiting period for 5-9 months (depending on the state) usually applies to all payments to beneficiaries, once the probate petition has been drafted and filed and approved, which can take several months.

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Estimated Savings With a Trust = $17,850
The data on the left assumes things run smoothly. Factors leading to additional costs include:
• Multiple Accounts
• Large Number of Beneficiaries
• Disputes over Bequests and Litigation
• Environmental Problems
• Missing Beneficiaries/Genealogical Research
• Extensive Creditor Claims
• Delinquent Income Tax Compliance
• Real Estate Title Issues
• Judicial Accounting, if required
• Charitable Bequests and Attorney General Intervention

Opportunity Cost:
While this money is tied up in an estate, you cannot use it to:
• Pay down mortgage loans
• Pay down car loans
• Pay down student loans
• Pay down credit cards
• Invest

The opportunity cost on a $1M estate might be close to $5,000 per month while it is open. Larger estates would likely be proportionally greater. A typical probate proceeding lasts 1-2 years and sometimes longer, whereas a well-drafted trust can largely be distributed in a matter of months. What do you want your legacy to be? Headaches and bureaucracy or speed and efficiency? Let us help you design an estate plan that steers clear of probate potholes. Please also refer to our Will vs. Trust Worksheet at: www.docrlaw.com/how-trusts-save-you-time-and-money

DID YOU KNOW? Right now, only 1 out of 11 calls are getting through to the IRS. As a result, administering estates can be even more costly and time-consuming. A trust can help you avoid taxes and the necessity of paying someone to keep you on hold for hours. For more information, follow: www.politico.com/news/2021/02/16/irs-tax-season-469182



May 26, 2021

News

A Guide to Widowhood

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This is a guide for what to do now when you are 1) happily married and 2) hear about someone losing their spouse, and 3) it causes you to worry about what you would do if the unimaginable happened.

First and foremost, I hope it never happens to you. Your spouses’ death is going to throw your life into chaos no matter what. Whether you have been expecting it or it comes as a complete shock, you will likely be an emotional wreck. Even if you were hoping for his or her death as a release from suffering, you would have a lot to deal with from yourself and others like children, family, and friends. So, take some stuff off your future plate by thinking a little about it right now.

Note: this is also good to do if both you and your spouse happen to perish together and leave behind children, pets, or a company full of employees. If you have lived the kind of life where someone cares about your passing, you will need to give it some thought and put a few easy-to-execute plans in place.

Long before my husband died, I thought about his death, but I never imagined it would happen, nor were my imaginings of what it would be like anywhere close to accurate. I always assumed he would also pass before me, but I figured I would have him well into his 70s, if not 80s at least. So it came as a huge shock that he was one of the first 16,000 Americans to die of COVID-19. I never saw that one coming. How does anyone see that coming? I barely knew it existed before I lost my husband, best friend, soul mate to it.

In the aftermath, I was prepared, and that helped tremendously. Even though it was a huge shock, I had been through an untimely death before with his father. I had done the majority of paperwork and coordination for him so that he had to do nothing but grieve his father’s tragic passing. Because of that, I knew that I had to claim his body by going through a local funeral home. I had learned how important it was to get the death certificates right and to get several copies.

Because I had been in charge of the family finances, I knew all of the bank accounts as well as any investment and retirement accounts he had himself, and we had jointly. Because I had thought about his death long before he died, and because his mother had been a bank branch manager and seen many helpless little old ladies have no idea about the family finances, we had set up the accounts to pass through to me without needing any probate. Because we had been in the military where a will was required, not suggested, we had one in place.

Shortly before he died, he told me whom he wanted me to call about his valuable collections should anything happen to him. He also told me how much I should try to sell his motorcycle for if he should die. That was another opportunity for me to tell him that he was worth more to me alive than dead. I had no idea that I would actually need to know that information.

What we never talked about was anything regarding a memorial or funeral planning. Because we had gone through his father’s passing, I assumed he would want a cremation just like his dad and to scatter his ashes together with his dad’s. I don’t worry too much about what he wanted because I feel like those things are more for the living left behind than for the person who has passed. But if you or your spouse don’t feel the same, then you should definitely talk about that while he is above ground.

While you are at it, make sure that you are also listed on all the utilities so that you don’t have to work too hard to act on your own behalf to keep your lights on and your cell phone going. If everything is in his or her name, that is one extra step you have to go through.

One of the most important things I could say is to get term life insurance. It doesn’t cost that much because most people do not die before it expires. Usually, you get it while you have children at home and building your nest egg. Because he had term life insurance, it allowed me to do nothing aside from grieving his loss. I could stay in the house where we lived, and I didn’t have to pack everything up or go through his stuff. Life and all the comforts of our home stayed intact. That allowed me and our daughters just to exist until we could breathe again, eat again, sleep again. I can’t imagine how much more heartache there would have been for us had we had to vacate our home in a hurry.

The biggest reason I am sharing this is I wish to minimize the number of people whose lives are thrown into such a crisis from the loss of their mate. Parents, do this for your children. Think through these things so they don’t suffer more than they already will at your passing. Designate who their guardian will be if both you and your spouse pass. Get that life insurance so those you leave behind will be okay and able to grieve your loss.

Please don’t spend a lot of time imagining what it would be like to lose your spouse. Please go on enjoying your lives together and not being able to imagine spending it with anyone else. But do take a bit to make sure that you have some things in place in case the worst thing ever happens to you.

May 18, 2021