If one advances confidently in the direction of his dreams, he will meet with a success unexpected in common hours.”
Henry David Thoreau
Quote for the Day
March 26, 2016 by Leave a Comment
A Stunning (Gun) Win for 2nd Amendment Rights
March 25, 2016 by Leave a Comment
The headline in the March 22, 2016, Washington Post article says it all: “Unanimous pro-Second-Amendment stun gun decision from the Supreme Court.” Unanimous as in every justice apparently agreed with the following sentiment expressed in the per curiam opinion by the nation’s highest court.
The Court has held that “the Second Amendment extends, prima facie, to all instruments that constitute bearable arms, even those that were not in existence at the time of the founding,” District of Columbia v. Heller, 554 U. S. 570, 582 (2008), and that this “Second Amendment right is fully applicable to the States,” McDonald v. Chicago, 561 U. S. 742, 750 (2010). In this case, the Supreme Judicial Court of Massachusetts upheld a Massachusetts law prohibiting the possession of stun guns after examining “whether a stun gun is the type of weapon contemplated by Congress in 1789 as being protected by the Second Amendment.” 470 Mass. 774, 777, 26 N. E. 3d 688, 691 (2015).
The court offered three explanations to support its holding that the Second Amendment does not extend to stun guns. First, the court explained that stun guns are not protected because they “were not in common use at the time of the Second Amendment’s enactment.” Id., at 781, 26 N. E. 3d, at 693. This is inconsistent with Heller’s clear statement that the Second Amendment “extends . . . to . . . arms . . . that were not in existence at the time of the founding.” 554 U. S., at 582.
The court next asked whether stun guns are “dangerous per se at common law and unusual,” 470 Mass., at 781, 26 N. E. 3d, at 694, in an attempt to apply one “important limitation on the right to keep and carry arms,” Heller, 554 U. S., at 627; see ibid. (referring to “the historical tradition of prohibiting the carrying of ‘dangerous and unusual weapons’”). In so doing, the court concluded that stun guns are “unusual” because they are “a thoroughly modern invention.” 470 Mass., at 781, 26 N. E. 3d, at 693–694. By equating “unusual” with “in common use at the time of the Second Amendment’s enactment,” the court’s second explanation is the same as the first; it is inconsistent with Heller for the same reason.
Finally, the court used “a contemporary lens” and found “nothing in the record to suggest that [stun guns] are readily adaptable to use in the military.” 470 Mass., at 781, 26 N. E. 3d, at 694. But Heller rejected the proposition “that only those weapons useful in warfare are protected.” 554 U. S., at 624–625.
For these three reasons, the explanation the Massachusetts court offered for upholding the law contradicts this Court’s precedent. Consequently, the petition for a writ of certiorari and the motion for leave to proceed in forma pauperis are granted. The judgment of the Supreme Judicial Court of Massachusetts is vacated, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered. (emphasis added)
I bolded some key words in the opinion because they are so emphatic about the meaning of the Heller decision. Who knows what the future holds–now that Justice Scalia has died–but this opinion should be comforting to those concerned about their 2nd Amendment rights. (By the way, do read the linked-to WashPo article. Eugene Voloch is an important voice on the Constitution.)
Conservation Easements: Go Big or Go Home
March 24, 2016 by Leave a Comment
Briefly, creating a conservation easement can allow you to receive good by doing good. Consider creating one on your property to protect
“natural, scenic, or open space values of [that] real property, assuring its availability for agricultural, forest, recreational or open space use, protecting natural resources, maintaining or enhancing air or water quality, or preserving the historical, architectural, archeological or cultural aspects of real property”
and you might receive a variety of tax benefits, including a reduction in property taxes and a charitable deduction that can be carried forward on future tax returns, among other things. For a farmer or rancher, the easement can have the added benefit of ensuring the farm or ranch stays in the family, because, according to G. Bruce Chilcott and Erin Johnson,
“with most or all of the development potential given away in the easement, the next generation doesn’t have the usual incentive to sell or develop [the property] in a residential or commercial manner.” (Long-Term Planning Issues for Farm and Ranch Owners, Wealth Counsel Quarterly)
The steps to create one are outlined in the Utah and Wyoming state codes and are not particularly hard to follow. But, Chilcott and Johnson caution, don’t go the cheap route. Get it done correctly. In particular, they say,
“In creating a conservation easement, the key to achieving the desired tax benefits is the appraisal. This is no place to skimp on costs or quality, and the appraiser must have special qualifications and significant experience in this arena.”
Make sure you choose an appraiser with a good track record regarding farm and ranch appraisals for conservation easement purposes because “the quality of the appraisal can be instrumental in getting the eventual approval of the department of revenue.”
Quote for the Day
March 23, 2016 by Leave a Comment
On the impact of the business structure of a farm on federal farm payment limitations:
The structuring question also influences eligibility for the federal farm program payment limitation. Under the Federal Agriculture Improvement and Reform (FAIR) Act, of 1996 and earlier legislation, each “person” under one or more production flexibility contracts is eligible for a maximum of $40,000 in federal farm program payments. The payment limitation was eased in 2000. Thus, a key issue any time the farm or ranch business is restructured is determining who will qualify as a separate “person,” and whether different types of entities qualify as their own separate “person.”
McEowen and Hart, “The Law of the Land: Fundamentals of Agricultural Law,” (2002)
Caution! Exponential Growth Ahead
March 23, 2016 by Leave a Comment
I’ve been attending a continuing education webinar on drafting trusts. Very interesting. There is so much you can do with trusts, so many avenues to make sure your wishes are carried out when you’re no longer with us or become incapacitated. Among other things, as with a will, you can make specific distributions to specified people or classes of people in your trust. So you can give your record collection to Bobby, “because he’ll appreciate your taste in music,” your old Colt revolver to Mary, “because she has always loved the West,” and so on.
And you can give cash, and this is where a problem can arise. Suppose the trust says that grantor–the maker of the trust–wants “to give $10,000 to each of my grandchildren on the day each turns 21.” See any problems with that? How about if at the time the trust was drafted the grantor had just five grandchildren. See any problems now? Sure, that’s a $50,000 bill, but the grantor probably knew that when he created the trust.
How about 20 years later? The grantor has just died, and his youngest child just gave birth to triplets, which brings the total number of grandchildren to 20. Now do you see a problem? That $50,000 bill has grown to $200,000. Do you think the grantor had that in mind when he signed his trust?
That’s the problem with specific distributions to a class of people rather than to specific people. If the class continues to grow, so does the gift. Thus, dear potential (or actual) grantor, if you have or are considering making a class gift, make sure you’ve thought well into the future and/or make sure your trust is drafted in such a way that your upside is capped. Otherwise, your gift could grow exponentially, and there may not be enough room at the inn to fulfill all of your promises.
Quote for the Day
March 22, 2016 by Leave a Comment
Let our advance worrying become advance thinking and planning.
Winston Churchill
Farmers 1, Insurer 0
March 22, 2016 by Leave a Comment
Insurer Must Provide Defense for Farms Accused of Spraying Pesticide on Neighbor.
Two key paragraphs:
Rejecting an insurer’s arguments that multiple exclusions operated to preclude coverage, a Florida federal court judge ruled that two farms are entitled to a defense for a lawsuit accusing them of spraying pesticide on a neighboring farm.
and
The order was not a total victory for the insureds, however, as the court said the duty to indemnify remains unresolved, leaving an award for attorneys’ fees and costs incurred in defense of the declaratory action premature. The judge denied the motion for those attorneys’ fees and costs without prejudice, allowing the sugar farms to renew their request later in the litigation.
Joint Trust or Individual?
March 21, 2016 by Leave a Comment
You and your spouse have decided you need to do some estate planning, and you’re finally sitting down with an attorney to do same. He or she starts talking about a will for you and a will for your spouse. A trust for you and a trust for your spouse. And a . . . .
“Wait a minute!” you almost shout. “Two trusts? What’s up with that?”
In brief, here’s what’s up with that.
First, if you live in a community property state and you’re married, the joint trust is almost certainly the way to go, both to preserve the community property character of property contributed to the trust and to take advantage of a 100% step-up in the basis of the property on the death of either spouse. That is, when a spouse dies, property in the hands of the surviving spouse has a basis for tax purposes of the market value of the property at the date of death. For example, suppose the couple bought the property for $100,000 ten years ago. On the day before the death of the first spouse, the property was worth $500,000. If they had sold the property on that day, they would have a capital gain of $400,000, a gain they would have to pay tax on.
Now suppose they didn’t sell and the first spouse died. On the day after that death, the surviving spouse could sell the property for $500,000 and pay no capital gains tax because the basis in the property had “stepped up” to the market value on the date of death–$500,000. Voila!
For separate property states, the question of joint trust vs. individual trust is not so clear. If a married couple has lots of jointly owned property, the joint trust may still be the best choice. May. But if the couple has little jointly held property or if one of them has asset protection concerns–a doctor maybe?–then individual trusts are probably the better choice.
Unmarried couples? Individual trusts all the way because of big gift tax issues caused by no unlimited marital deduction, a deduction available to only married couples.
Image courtesy of Wealth Counsel.
Quote for the Day
March 21, 2016 by Leave a Comment
“If you feel like your VC [venture capitalist] is a proctologist, run for the hills.”
Brad Feld and Jason Mendelson, Venture Deals: Be Smarter than Your Lawyer and Venture Capitalist, Wiley 2103
A “True” Story Retold
March 20, 2016 by Leave a Comment
As anyone who’s read my profile knows, I once wrote for Bloomberg–for three Bloomberg magazines, in fact. One of them was Bloomberg Wealth Manager, which was later sold and then sold again. I continued to write for the magazine in all its iterations. The other day, I stumbled upon a list of some of my articles for one of the later iterations. Since most of the articles are still (mostly) timely, I’m going to start posting them here. Here’s the first, called “A ‘True’ Story” about Casper, Wyoming’s Dave True and the family business. Enjoy, but with this one caveat: As I said, these stories are still (mostly) timely; the basic law underlying them is still (mostly) valid.
I’ll be posting a number of them. If one of them discusses a subject near and dear to your legal problems, don’t rely on the story as legal advice. Use it instead to prompt you to talk to an attorney about the problem to get more current insight on the subject.