In Uncategorized on 09/22/2015 at 03:44

I had to take a nap before dealing with Tax Court’s opinions today, as there was a lot to mark, read and digest, but Estate of John D. DiMarco, Deceased, Laurence Agnes, Executor, 2015 T. C. Memo. 184, filed 9/21/15, troubled me.

I don’t like second-guessing. Everybody’s wise after the fact. But here goes, anyway.

This is a busted-charitable, Section 642 “so remote as to be negligible” case. If the foregoing sounds like gibberish, see my blogpost “Back From The Graev,”, 2/19/15, the sad story of the late but generous Eileen S. Belmont and her obstreperous brother.

In fact, Judge Laro cites Eileen’s case in torpedoing John D.’s charitable inclinations.

John D.’s will gets a going-over from a platoon of heirs-at-law and their high-priced counsel, with our State’s diligent Attorney General protecting the charity (and incidentally protecting the charity out of everything its owns).

I won’t go over the facts, as they’re pretty much the usual: no separate stash for the charitable cash, prospect of heavy-duty litigation (having high-test counsel seems to blow away remote negligibility), and the cash getting spent on settlements, with the balance going to IRS.

As for surcharging the executor, that might be looming over the horizon, but that’s not my point here.

John D.’s will was executed in 1983, and John D. didn’t leave this vale of tears until 2008. The Form 1041 for the year at issue was filed late, but I mention that just to let you know that one good way to get audited is to file late.

No, my point (and I can hear my readers saying, “Is there one?”) is why not a self-settled trust. True, it’s disregarded for income tax purposes, and it’s by no means a cure-all, but it does do what Norm Dacey’s 1960s best-seller suggested: avoid probate.

And the probate proceedings really sank John D.’s charitable intentions. Here, they took on a certain Jarndyce aspect.

Hint for trusts and estates practitioners–When it comes to income in respect of a decedent, mandate separate accounts for the charitables. Whether or not there’s a trust.


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