January 2025: News from LIAFPN members!

To be effective, a disclaimer must:

1. Be in writing.
2. Be filed within nine (9) months of the decedent’s death.
3. Describe where the property will go as a result of the disclaimer.

Practical Application

For example, there is an unlimited marital deduction. However, if the surviving spouse’s estate would become taxable because of the property received from their deceased spouse, they can use a disclaimer. If the decedent’s Last Will and Testament gives the entire residuary estate to their spouse, the spouse can disclaim some or all of that property. As a result, the property transfers as if the spouse had not been the survivor and may go to the children.

Many estate plans direct that if the spouse disclaims, instead of going to the children, the disclaimed property is retained in a trust for the spouse’s benefit. This allows the spouse to retain the benefit of their inheritance while reducing the tax impact of keeping their inheritance. The disclaimer can place some or all of those assets into a trust for the spouse’s benefit, potentially saving estate taxes.

Disclaimers can also correct poorly formed estate plans. Corrections can be made by one person or multiple people disclaiming unintended inheritance interests.

To properly file a disclaimer, remember two key points:

1. There is only a 9-month deadline.
2. You should consult with a trust and estate attorney familiar with the technique.

IRS Announces 2025 Updated Estate, Gift, and Generation-Skipping Tax Numbers

The IRS released Revenue Procedure 2024-40, announcing 2025 exclusion limitations for various tax provisions:

• The estate and gift tax basic exclusion amount and the generation-skipping transfer (GST) tax exemption will increase from $13,610,000 to $13,990,000. This is an increase of $380,000 per person or $760,000 for a married couple.
• The annual gift tax exclusion amount will increase from $18,000 to $19,000 per person in 2025. Married couples can “split” gifts, allowing one spouse to make gifts of up to $38,000 to each recipient.
• The annual exclusion for gifts to a spouse who is not a US citizen will increase from $185,000 to $190,000 in 2025.

Nassau County – Excessive Red Light Camera Fees to be Refunded… Maybe

On December 9, 2024, the Nassau County Legislature introduced legislation to repeal excessive and illegal red light camera fees and provide refunds for drivers.

A recent NYS appellate court unanimously ruled that additional fees on red light camera tickets were illegal. The penalty was capped at $50, but Nassau County added surcharges from $15 in 2011 to $100 in 2017.

The proposed legislation requires an inquiry into these illegal charges and a plan for refunding excessive charges. How the county will fund this refund program remains undisclosed.

My Take: If enacted, this would be a major step in correcting the non-tax taxes Nassau residents must bear. Now, if only Nassau County would address the extremely high deed recording fees ($770 compared to less than $30 in many parts of the country).

Boilerplate Language Upheld; Riders Can’t Sue Uber – So Read Online Agreements Carefully

On November 25, 2024, the New York State Court of Appeals ruled in Wu v. Uber Tech Inc. that riders injured in an Uber vehicle are bound by the mandatory arbitration clause in the click-to-accept online agreement.

The rider had filed a lawsuit, but Uber argued for dismissal based on the arbitration clause. The court ruled that by clicking to accept Uber’s terms, the plaintiff agreed to the binding arbitration clause and could not sue.

Texas Court Finds the Corporate Transparency Act Unconstitutional – Stop the Presses… or Maybe Not!

On December 3, 2024, the US District Court for the Eastern District of Texas blocked enforcement of the Corporate Transparency Act (CTA) nationwide, issuing an injunction less than 30 days before the 12-31-24 deadline.

The CTA required approximately 33.5 million small businesses to disclose beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network. The court ruled that the Treasury Department’s requirements exceeded Congressional authority.

The government is expected to appeal. If the ban is upheld, we anticipate minor revisions and a reintroduction of the CTA.

Recommendation: Complete any filings already begun, but hold off on initiating new filings until further guidance is provided.

At Year’s End, We Highlight Silly Laws That Remain on the Books

Here are a few notable examples:

New York

• It is illegal to sell baby chicks or rabbits dyed to another color. Violations can result in up to a year in jail.
• Importing cat or dog hair is illegal, with penalties up to $1,000 for individuals and $5,000 for entities. Repeat violations can result in fines up to $25,000.
• The “Tiger Selfie Law” prohibits taking photos with big cats. Violations carry penalties up to $1,000.

Texas

• It is illegal to buy or sell an eye from a living person.
• Putting ice cream in your back pocket is also illegal.

Alabama

• It is illegal for humans to wrestle bears.
• Putting salt on a railroad track is punishable by death.

New Hampshire

• It is illegal to collect seaweed at night, punishable by a “violation.”

South Dakota

• Explosives may be used to defend sunflower crops, provided they are not within 600 feet of occupied buildings.

North Carolina

• Bingo games cannot last more than 5 hours, nor can a second game occur within 48 hours. Prizes must not exceed $500.

In addition to being a co-founder of the LIAFPN, Larry Scherer has a strong background in Trust & Estates and Elder Law and serves as Managing Member of Scherer & Pudell, PLLC, a transactional law firm in Garden City, NY. He can be reached at (516) 747-7007. Connect on LinkedIn.