Sidney takes a stroll

January 1, 2010

The rural Virginia countryside had its first snow, and it was several inches deep. School children were hoping for more, but that was all that fell. Folks were out and about going from house to house, to celebrate the New Year, watch bowl games, and generally work off the hangover from the night before. It was a surprise to see Sidney Frome out. After all he was sick. The whole county knew that he was near death’s door. But there he was shuffling through the snow toward town on the road with its picturesque rock walls. Some folks called his name and waved, but he just kept walking looking down at the snow covered ground in front of him.

That evening Sheriff Burnett received a call. It was Marilyn Frome, “Sheriff, Daddy went out and he hasn’t come home.” She sounded frantic. “He said he was feeling better and wanted to see the decorations in town. I tried to talk him out of it, but you know how stubborn he is. I shouldn’t have let him go.” “Calm down now Marilyn,” the Sheriff said. “We’ll see if we can find him”. But his thoughts were much different. “Damn that old fool. I was planning on seeing the Orange Bowl tonight between Oklahoma and SMU. But noooo, now I have to stomp around in the snow and look for his fool self.” “Marilyn, what was he wearing?”, he asked. “He was wearing a blue flannel shirt, one of those ski vests, one of those red checked hats with the ear flaps, and work boots”, she replied. “Any idea what kind of pants he was wearing?” “They were black, I think.” He picked up the radio. “All cars, this is Sheriff Burnett, If you see Sid Frome, get him home. His family’s worried about him. He’s wearing a red checked flannel hat with flaps, blue flannel shirts, ski vest, black pants and work boots.” His deputies combed the roadsides to see if they saw him. Then the snow started again. If he fell down in the snow and needed help, any chance of finding him would be useless now. Any footprints he might have left would be gone now. The countryside had that new snow beauty, like a Christmas card. It was a though God had changed the color scheme of the world. Sheriff Burnett wondered, “Will it be spring before we find that body, if we ever find it?”

A plan is hatched

After Fred left, Sidney told the kids not to leave the room there was something he wanted to discuss.

That night, Sidney told Esmerelda Gomez that he wanted to thank her for her many years of service and that he was giving her and her family an all expense paid vacation to Orlando, Florida with full pay. She at first objected, saying “Who will take care of you, you are so sick, senor.” He said, that he wanted to spend his final days on this earth alone with his loving children. “Are you sure, senor, I get the feeling that they will not want to soil their hands caring for you?”, she asked. He said, “Don’t worry, they’ll have plenty of reasons to take care of me. In fact Billions of reasons to take care of me. I’ll see you after the New Year. Please be on time that day.”

As Esmerelda left the room she couldn’t understand why this sick man would send her away for the Holidays, but then she thought, the children will love all of the amusement parks. She opened the envelope and saw airline tickets, hotel reservations, amusement park tickets for her and her family and smiled. She couldn’t pass this up and who knows, when he dies, she’ll probably be fired and won’t have this opportunity for years to come. She smiled, “I’m goin to Disney World”.

Marilyn had spent a life trying to find the love that Sidney had deprived her. Her parents divorced when she was quite young. Her father was aloof and tried to compensate by giving her everything she asked for. As a result she spent years buying things, toying with men, and living a life that would make the debauched look tame. She was a slender and attractive dark haired beauty with brown eyes and long brown hair with streaks in it to give her that mildly slutty quality – except for the fact that she was filthy rich. She clearly lived the life. There was one time, she went to Las Vegas for a weekend. She met this talk fat guy named Donny. What followed could only be certified as bizarre. As they walked down the strip they ran into an Elvis impersonator who admired her “assets”. He invited them all up to his suite. When they got up to his room there were a couple of scantily clad women. The room had a humongous hot tub in it and “Elvis” suggested that they all get in it. They all got naked and jumped in the tub. Donny immediately put the moves on Marilyn. After some heavy breathing for awhile, she told him to give it to her hard and he obliged. A wild orgy ensued and by the end of the evening she had been serviced by both men and had some wild moments with some of the women as well. This was but one example of many in Marilyn’s life. Needless to say, Marilyn lived a very free and easy lifestyle. She appeared in the various tabloids weekly announcing who her latest boy toy was. She was a party girl’s party girl.

Daniel was more tame. He enjoyed the fine things in life, golf, tennis, private clubs, fine dinners, and of course willing women interested in being seen with a billionaire’s son. But he still worked in the Company business and put in 50 hours per week behind the desk trying to keep the business going as his dad wasted away. He was not unattractive, but did not have time or interest in working out at the gym every day and had a swarthy dough boy quality to him. He did not have the time to put into playing the field and hitting the party circuit. Marilyn seemed to have that market cornered, anyway. No need for him to be in the tabloids to. Just keep his nose to the grindstone and keep the family business solvent. He had learned from the master and slowly took over the reins of the business. That was the key, to keep the business in the family. It was worth everything to him.

Sidney learns about death taxes

Yesterday, Laura Holden in August, 2010, Laura Holden began her autopsy of Sidney Frome.  Let’s meet Sidney

December 15, 2009.
Sidney Frome lived like many billionaires, in a federal style house in rural Virginia.   It had the usual long blue stone drive, with a circular asphalt driveway near the house.   Off to the side of the house was a garage housing several late model imported cars for himself and his children, not to mention the Duzenberg convertible that was his pride and joy.
Sidney Frome looked haggard.  The chemotherapy had not worked.   His billions could not stop the inevitable. His two children, Daniel and Marilyn entered the room along with his lawyer, Fred Smith. There were some tax issues that Fred wanted to discuss.  Marilyn wondered why she needed to sit in on such a boring topic as taxes. “Fred, what’s on your mind?”,  Sidney rasped.
“In 2001, a new Tax Act was passed.  It states that if you die in 2009, you can pass $3.5 Million to your heirs tax free.  What I am about to say may sound macabre, but if you die in the year 2010 your entire estate will pass to your children tax free. ”   Fred continued, “Man, there is no easy way to say this, but Sidney you really need to consider revoking your living will.”  A living will is a document where a person states their wishes that they do not wish to be kept alive artificially.  Sidney winced.  He could not imagine even one more day of pain, much less sixteen more days, a near eternity.   However, Fred had a point.   He had worked hard for his fortune.   Why should the government get it instead of his kids?  His children were the most important things in his life, now.   He regretted the things that he had done to sever his relationship with their mother.   He reflected on the long hours, the affairs and the lack of respect that he had shown her.   Now, she was happily married to some other man.   He thought about the day that each of his children were born.   He thought about the way he felt in the delivery room each time.   He remembered holding them in his arms after they were born, the nighttime feedings, the diapers, and the smell of baby powder.   He recalled their birthday parties, the baptisms, the prom nights, and all their many dates.  He remembered when Marilyn’s date came to pick her up,  she was wearing a resplendent pink dress,  and Sidney made sure he was out trimming the hedges with his massive garden shears, even though the gardeners had that chore covered.  He recalled playing catch in the backyard with Danny.   He recalled several visits to the principal’s office after Danny’s many fights in school.  Yes, he could try and hold on for sixteen days, and revoke the document.  “I guess its true that your life passes before your eyes in your final days”, he thought.
“I hope the old goat dies next year”, thought daughter Marilyn.   “It’s the least he can do. I’ll never forgive the bastard for what he did to mom. I hope the jerk suffers, too.  If anyone deserves to suffer, its him.  After all, he’s kept us on an allowance our whole lives, and now its ours.”  She thought of yachts, young men, trips to the Riviera, chauffeurs, and homes in all the trendy spots, Cannes, Martha’s Vineyard, Palm Springs, South Beach, Paris, and La Jolla. What a life. All that she said out loud, though, was, “Dad, it’s a lot of money!”
Daniel, too, had thoughts about his childhood. His thoughts were more balanced. Going to ballgames with his father, playing golf with his father and his business associates, spending time together at the office were some things that they did together and gave Daniel some fond memories to go with the less fond ones.  He would take over the family business which he had been running for the last few years.   He respected his dad and loved him.   He would miss the times they rode into the office together.   But he also knew reality.   He knew that if they had to pay 50% estate taxes, there would be no way to retain the business in the family.  Dad would not want it sold to strangers, or tied up in charitable trusts with a bunch of priests, university presidents, and lawyers making all the decisions.   His dad had resisted such overtures in the past.   He said, “Dad we could keep the business in the family, forever.”  “That’s right” Fred added,  “and with those dynasty trusts we created last year, your family could own the business for two generations without any death taxes.   But that’s only if you live past December 31.   You see back in 2001, President George W. Bush promised to repeal the Estate Tax.  Congress kept that pledge,  but because of the Budget Act passed by Congress in the 80’s,  the Senate cannot pass a tax bill which creates a budget deficit without sixty votes.  Since there were only 55 senators in favor of repeal,  they had to pass only a partial repeal.  Thus, the Estate tax is reduced to zero for one year, the year 2010.   The catch is that you have to actually die in 2010, not 2009 or 2011.  Thus, if the scion of a wealthy family dies in that one year, his estate avoids estate and generation skipping taxes.  Then the wars hit, the economy tanked, and suddenly the year 2009 is upon us with no change in the law.”  Sidney signed the document revoking his living will without reading it.  He thanked Fred for coming out this close to Christmas, and Fred left.

About 2010

As we have passed the half way point of 2009 and head into 2010 without an estate tax bill, its time for a macabre look at “what if nothing happens in Congress this year”.  As you may or may not know, there is a one year tax holiday for estates of people dying in 2010. That means if you die in 2010 your estate owes no estate taxes no matter how rich you are.  The key is that you have to die in 2010 and only that year.  No dying at 11:59 p.m. on December 31 2009, and no dying at 12:00:01 a.m. on January 1, 2011.  No gift giving, no cheating.  If you’re worth over $1 Million it means a lot if nothing changes in the tax law because in the year 2011, as the law is currently written the Government will tax 45% of everything you own when you die that is over $1 Million (including homes, farms, small businesses, etc.).  So with that in mind enjoy the mayhem of 2010.  This will be a serial blog in the perils of Pauline style.  We will leave you hanging from day to day as stories develop.

NOW YOU SEE HIM, NOW YOU DON’T.

August 2010.

Laura Holden was the Medical Examiner for Northern Virginia.  She was a comely blonde with an IQ in the stratosphere.  She got her medical degree from Georgetown and did her pathology residency in the medical examiner=s office in Cook County, Illinois.  She had clearly earned her stripes.  She still remembers the day when the freezers gave out during a record July heat spell when bodies were piling up in the morgue in Chicago.  It was a tough week on the old nostrils.

Laura walked into the morgue.  She pulled on her non-latex surgical gloves over her finely manicured hands.    She had several autopsies ahead of her, but this one was a real stumper.  The body was badly decomposed.  Identifying the body was not hard.  It was industrialist Sidney Frome who had disappeared from his home last winter.  His children had called in a missing person report.  His family willingly provided dental records to her.  Their primary concern was unusual, that she fix a time of death.  Bodies told a lot.  But after 8 months or so, in the woods, with vermin, bugs, birds, and the elements it was a difficult if not impossible task.  She turned on her tape recorder.  “Body found, legal time of death, August 9, 2010 at 8:48 a.m..”

Welcome

This is my first blog and my first day of blogging so be gentle.

As a way of introduction, I am a member of the Alexandria, Virginia law firm of Redmon, Peyton and Braswell, L.L.P. I graduated from the Marshall-Wythe School of Law at William and Mary and have a bachelors degree in Business Administration from the Cox School of Business at Southern Methodist University (amazing how long these names have gotten). I somehow have survived in the practice of law for 30 years.

What this site will be dedicated to is using fictional stories to either poke fun at tax laws and/or policy, or to tell parables about bad things that can happen to good people who don’t do what they should do in their tax lives. These stories will be wholly fictional. They will not be based on the private matters of any person living. In all these years of practice I have seen what can happen and have somehow kept a sense of humor through it all.

Every now and then, I’ll deviate from the normal storytelling and drift to some factual information and thoughts when new tax laws get passed by Congress. But mostly this will be a fun site about taxes if there can be such a thing.

We’ll start with a whimsical tax tale about some strange estate planning strategies revolving around the year 2010.