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Friday, August 26, 2011

Foreword by the Federal President

On 3 October 1990 Germany achieved national unity. By virtue of a sovereign, conscious decision of the people, the Basic Law became the constitution for the whole nation. The successful democratic revolution in the former German Democratic Republic had achieved its goals: human dignity, civil rights, fundamental freedoms and democracy for the entire German people in a society based on the rule of law tempered by social justice. 

We overcame the division of Germany within the wider framework of a radical transformation in Europe. The creation of the European Union entails new challenges and opportunities for us all. Both our country's increasing integration and the completion of its national unity were bound to have repercussions on our constitutional law. The fact that only adjustments were necessary attests to the Basic Law's excellent quality as the foundation of our polity from its inception. Its liberal, democratic, federal and welfare elements enabled our country to acquire economic prosperity and social security while maintaining internal stability. 

The constitution can only set the standards and provide a framework of law and order. It cannot solve specific problems directly. If it is not to be rendered insignificant it must remain committed to fundamental principles. 

The Basic Law has proved its worth. It is the most liberal constitution the Germans have ever had and has served as a model for many other democratic constitutions. We Germans have every reason to be proud of our Basic Law and to defend it to the best of our ability.
Bonn, November 1994
Roman Herzog

Tuesday, July 26, 2011

Long-Term Care Costs Raising Eyebrows

The rapid aging of the population is one of the most amazing demographic trends of our times, with the “oldest old,” those 85 and up, being the fastest growing group among us.
There are many positives that go along with increased longevity, but it must be carefully planned for in advance.

At any given time one out of every four individuals who have reached the age of 85 are residing in a nursing home, and the costs associated with nursing home care are considerable. Each year the Metlife Mature Market Institute puts the matter of long-term care costs under a microscope, and the 2010 findings were quite profound.

The average cost for a yearlong stay in a private room in a nursing home in 2010 was $83,500, and this represented a 4.6% increase over the previous year. When you consider the fact that the average nursing home stay is about two and a half years you may be looking at a very significant expense late in your life.

According to the United States Department of Health and Human Services 70% of people who reach the age of 65 will need some form of long-term care eventually. The same MetLife study revealed that the average annual cost for a year residing in an assisted living facility was nearly $40,000, and this represented a 5.2% increase over 2009. So these costs are very high now, but they are also trending upward.

The cost of long-term care is something that you may want to keep in mind when you are planning for the future. To devise a strategy that will enable you to address these costs, arrange for a consultation with an experienced elder law attorney. He or she will analyze your specific situation, take heed of your wishes, and give you expert, personalized advice.

Experienced estate planning attorneys of the Ryan Hicks Cumpton & Cumpton LLP offer estate planning and business planning resources to residents of Mobile AL.

Sunday, June 26, 2011

Amy Winehouse Left Inheritances to Immediate Family

It is always sad to see a person pass away at a young age under any circumstances and perhaps we really shouldn't place celebrities on such a pedestal.
Everyone's life is precious, and all people have something to contribute to society and there is no way of knowing what any given young person who dies an untimely death may have been able to achieve.

The above having been stated, many lovers of music were especially saddened to hear about the death of British singer Amy Winehouse. She was found dead in her London home on July 23rd at the tender age of 27. She joins what is called the “27 Club” along with a number of other musical artists who passed away when they were just 27, including Kurt Cobain, Jim Morrison, Jimi Hendrix and others.

Fortunately for the family that she left behind, Amy Winehouse had an ironclad estate plan in place. Winehouse had been formerly married to a fellow named Blake Fielder-Civil who is presently serving time in prison on burglary charges. They got divorced in 2009, but under British law he may been in line to receive an inheritance from the Winehouse estate had she not taken the appropriate steps to prevent it by executing the correct estate planning documents.

The case of Amy Winehouse underscores the reason why it is important for people of all ages to have a current estate plan in place. And once you do that, you must recognize the fact that updates to the plan are going to be necessary when certain life-changing events occur, and divorce is certainly one of these events. If you are convinced but don't know exactly where to begin, the wise course of action would be to get in touch with an experienced estate planning lawyer to arrange for a free consultation.

Experienced estate planning attorneys of the Augulis Law Firm offer estate planning and business planning resources to residents of Warren, NJ.

Thursday, May 26, 2011

Gift Giving Can Provide Estate Tax Efficiency

When you are planning for the future with the well being of your loved ones in mind one of the things that you must address is the massive bite of the estate tax
One of the reasons why many people think that this tax is unjust is because not everyone has to pay it.

At the present time, the estate tax exclusion is $5 million so only the portion of your estate that exceeds this amount is subject to the tax. But, when the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 sunsets at the end of 2012 the exclusion is scheduled to be reduced to $1 million.

Over 8.4 million American households have assets that exceed $1 million, and this excludes the value of their primary places of residence. So if there are no changes to the existing laws in the meantime, a lot of estates are going to be subject to the estate tax in 2013. And to make matters worse, at that time the top rate is scheduled to increase from 35% to 55%.

One way that you can reduce the value of your estate for estate tax purposes while transferring assets to those who would be inheriting them is through the giving of gifts. There is a gift tax in place, but there are exemptions. One of them allows each person to give gifts of up to $13,000 each year to an unlimited number of recipients equaling any amount of money in total.

Since this is a per-person exemption if you are married you and your spouse could give gifts of up to $26,000 each to as many people as you want to. To take it a step further, you could give this $26,000 to a child and his or her spouse, making it possible to provide this husband and wife with $52,000 annually in a tax-free manner.

Experienced estate planning attorneys of the Ryan Hicks Cumpton & Cumpton LLP offer estate planning and business planning resources to residents of Mobile AL.

Tuesday, April 26, 2011

What “Unification” of Gift & Estate Tax Means to You

When you hear that the estate tax is poised to take 35% of the taxable portion of your estate you may get to thinking about giving gifts to your loved ones while you are still alive.
This is a very logical approach, but the powers that be are well aware of the fact that people may be thinking along these lines. So as a response, there is a gift tax in place that carries the same 35% rate to discourage people from going this route.

Now you may have heard people say that there is a $5 million lifetime gift tax exemption that allows you to give gifts totaling up to this amount without incurring any tax liability. It is true that there is a $5 million gift tax exemption at this time as a result of the passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (it used to be just $1 million for individuals). So you can indeed give gifts equaling as much as $5 million over your lifetime free of the gift tax.

However, the gift tax and the estate tax exemptions are unified. You don't get a $5 million estate tax exclusion in addition to the $5 million gift tax exemption for a total of $10 million. There is a $5 million combined estate/gift tax exemption. So, if you were to give gifts worth a total of $5 million over the course of your life using the gift tax exemption, all of your estate would be subject to the estate tax.

Of course this is a per-person exemption of $5 million. One of the provisions contained in this tax act that was passed at the end of last year allows for the portability of the combined estate/gift tax exemption. So now, when you pass away your surviving spouse may use your exemption as well as his or her own. Given this fact, married couples do have a $10 million cushion to utilize at the present time.

Experienced estate planning attorneys of the Augulis Law Firm offer estate planning and business planning resources to residents of Warren, NJ.

Saturday, March 26, 2011

Exchange of Tax Information between the Czech Republic and Bermuda

Law Firm in Limassol: Andreas Neocleous & Co LLC

The Czech Republic has concluded another agreement on exchange of information on tax matters (TIEA). Following the signing of similar agreements with the British Virgin Islands on 13 June 2011 and the Isle of Man on 18 July 2011, the Czech Republic concluded and signed a TIEA with Bermuda on 15 August 2011.
The TIEA with Bermuda will enter into force after both parties have completed all required ratification procedures and exchanged corresponding notifications. For criminal tax matters the treaty provisions will take effect immediately on that date.

The TIEA meets the OECD international standard on tax cooperation and transparency. A protocol concerning the interpretation and application is an integral part of the agreement.

Information Exchange

The taxes which are the subject of the TIEA are:

• the tax on income of individuals and legal persons, the tax on immovable property, the VAT and the excise tax imposed by the Czech Republic; and
• direct taxes of every kind and description imposed by Bermuda.

The competent authorities of the two parties are obliged to provide each other with tax information upon request. The party demanding information must demonstrate the foreseeable relevance of the information to the request and provide the other party with certain identification details and confirmations specified in Article 5 of the TIEA.

Information can be exchanged only for the purpose of the administration and enforcement of the domestic laws concerning the taxes covered by the TIEA. This (according to Article 1 of the TIEA) includes information relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters. The state making the request must declare that the request is in compliance with its law and normal administrative practices. The other state is then obliged to provide the information, irrespective of whether the conduct under investigation would constitute a crime under its domestic laws, and irrespective of whether the tax claim giving rise to the request is disputed.

The scope of information exchange under the TIEA with Bermuda is widely drawn, as is also the case with the agreements with the BVI and the Isle of Man mentioned above. It covers information held by banks and other financial institutions, persons acting as agents or fiduciaries including nominees and trustees, and information regarding the ownership of companies, trusts, partnerships, foundations and other persons and their ownership chain. With regard to trusts, information on settlors, trustees and beneficiaries can be required, and in the case of foundations information on founders, members of council and foundation beneficiaries.

Information received under the TIEA must be treated as confidential and may be disclosed only to relevant tax bodies of the requesting state. They in turn may disclose the information in public court proceedings or in judicial decisions. However, disclosure to any other person or any other jurisdiction can proceed only with the express written consent of the competent authority of the requested party (Article 8 TIEA).


There is no obligation under the TIEA to comply with a request for information if:

• it concerns ownership information regarding publicly traded companies or public collective investment funds or schemes unless such information can be obtained without giving rise to disproportionate difficulties (Article 5(4)(b) TIEA); or
• the requested information would disclose any trade, business, industrial, commercial or professional secret or trade process (Article 7(2) TIEA); or
• the party requesting the information would not be able to obtain the relevant information under its own laws for the purposes of the administration and enforcement of its own tax laws (Article 7(1) TIEA); or
• the request is not made in accordance with the TIEA (Article 7(1)) or the disclose of the information would be contrary to public policy or fundamental social principles (Article 7(4) TIEA); or
• the requested information would reveal confidential communications between a client and an attorney where such communications are produced for the purposes of seeking or providing legal advice, or for use in legal proceedings, whether existing or contemplated (Article 7(3) TIEA); or
• the information is requested in connection with enforcement of tax law discriminatory against a national of the requested party as compared with a national of the requesting party in the same circumstances (Article 7(6) TIEA).

Examinations abroad

The treaty also provides for the possibility of examinations and interviews being carried out by officials of one state in the territory of the other. Thus, one state may allow representatives of the competent authority of the other to enter its territory in order to interview individuals and examine records with the prior written consent of the persons concerned.

Similarly, a party can request permission to attend a tax examination taking place in the territory of the other.

The parties are obliged to notify each other of the time and place of the tax examination or the interview, as applicable.

ABOUT THE AUTHOR: Kateřina Brandýsová
Katerina obtained a Master's degree in Law and Legal Science from the Faculty of Law in Masaryk University, Brno, Czech Republic in 2001. In 2009 she obtained her Master&s degree in the field of European Union Law (Commercial) from the University of Leicester, United Kingdom. Katerina speaks Czech (native), English, Greek and German. She was admitted to the Cyprus Bar in 2010.

Her main areas of practice are Corporate and Commercial Law, specialising in Banking and Finance, in particular, advising on wide range of finance transactions. These include single lender and syndicated loans, secured and unsecured loans, cross-border finance; project finance; acquisition finance; asset finance; aviation finance; securitisations and restructuring.

Wednesday, January 26, 2011

Poll Indicates Many Baby Boomers Not Ready for Retirement

You will usually find that those who are in fact enjoying retirement to the utmost with no financial worries are those who had the foresight to plan in advance.
The sooner you get started planning the better because it can take some time to accumulate the resources that you need.

To underscore the perils that can go along with a lack of planning let's take a look at the results of a recent poll. The objective was to gain an understanding of how prepared the baby boomer generation is for their retirement years since so many of these folks will be reaching retirement age over the next decade or so.

44% of those who responded to the poll indicated that they have little or no confidence that they will have the financial resources that they need to enjoy a comfortable retirement. As amazing at it may sound, some 24% of the people polled had no retirement savings at all to fall back on. Two out of three said that the would continue working after they retire, and 25% stated that they would never retire.

Another interesting fact involves Social Security. 64% of the baby boomers who were polled said that they were expecting Social Security to comprise the lion's share of their retirement income. When you look into it you find that the average Social Security payout in 2010 was $1,072 per month. There are not too many of us who can live comfortably on this amount, and cuts to the program may be imminent.

If you do not want to join the ranks of the unprepared, you may want to take action.

Experienced estate planning attorneys of the Augulis Law Firm offer estate planning and business planning resources to residents of Warren, NJ.