Bielski Law Office, Ltd.

'The General' and the Widow

A former mob informant received a $100 million inheritance from a widow in New York. Questions abound about what happened.

Details about the life of Alben Sagan, known as "The General," are sketchy. There is a good reason for that. Alben Sagan is not the man's birth name. It is the name that federal authorities gave him when he entered the witness protection program.

It is known that Sagan was formerly a military officer in Eastern Europe who informed the government about many mob-related crimes and was put into witness protection and given a new life in Wisconsin as dna info reported in "How a Mob Informant Who Left Witness Protection Got $100M From a Widow."

Sagan was apparently not happy with his new life and at some point returned to New York City. In 2008 he showed up at the home of Lee Power, a wealthy widow, to ask about renting an apartment in one of her many properties. Soon after that Sagan became Power's driver.

However, their relationship grew from there and eventually Sagan controlled every aspect of Power's businesses.

When she passed away in 2014, it was discovered that her estate plan had been changed to leave almost everything to Sagan. Under the new estate plan he would receive approximately $100 million in assets.

Power's family has challenged the validity of the estate plan claiming undue influence. They appear to have good grounds for the claim.

Reference: dna info (Sept. 20, 2016) "How a Mob Informant Who Left Witness Protection Got $100M From a Widow."

Art Heir Accused of Fraud in France

Guy Wildenstein, the heir to a major art estate, has been accused of massive tax fraud by French authorities.

The Wildenstein family has been one of the largest collectors and dealers of valuable art for a long time. The internationally known French clan has property all over the world, much of it acquired after they fled France for the U.S. to escape the Nazis during World War II.

The Guardian reports that the heir to the family fortune is in trouble with French authorities in "Heir to art-dealing estate in court in major French fraud trial."

The trouble began in 2001, when family patriarch Daniel Wildenstein passed away. While the exact details of what happened are complex and contested, it is known that one member of the family accused the others of cheating her out of an inheritance.

During the court case it was discovered that the family may have hidden vast sums of money in offshore accounts in tax havens to hide it from French authorities who would have applied an estate tax to it.

Guy Wildenstein, the current heir to the family faces a tax bill of over 500 million Euros and up to 10 years in jail if convicted.

While this is a French case, it should be a reminder for Americans as well. It is not a good idea for estates to transfer money overseas to hide it from tax authorities and the estate tax. If discovered, the penalties are severe both in France and in the U.S.

Reference: Guardian (Sept. 22, 2016) "Heir to art-dealing estate in court in major French fraud trial."

Clinton Modifies Estate Tax Position

Democratic Presidential candidate Hillary Clinton has changed her position on the estate tax by proposing an even bigger increase to it than previously proposed.

In her campaign for the Presidency, Hillary Clinton has always been proposing an increase to the estate tax. Her previous plans were for a relatively modest increase.

However, as the Wills, Trusts & Estates Prof Blog reports in "Hillary Clinton's Proposed 65% Estate Tax Rate," Clinton now proposes that the top estate tax rate be 65%. The rate would be applied to amounts over $500 million for an individual. She also wishes to apply a rate of 50% to estates over $10 million and 55% to estates with total assets over $50 million. Finally, Clinton proposes to eliminate the step-up basis for capital gains. It is estimated that these proposals would raise a total of $260 billion in tax revenues.

If the proposals seem familiar, that is because they are very similar to what her primary opponent Bernie Sanders proposed during his campaign. That makes it likely that Clinton has adopted his proposals in an effort to win over some of his supporters who remain opposed to her.

Clinton's opponent, Donald Trump, has proposed that the estate tax be eliminated entirely.

As long as Congress remains divided it is unlikely either candidates' estate tax proposals will become law. However, those who are interested in the tax should pay close attention to what the next President proposes when in office anyway.

Reference: Wills, Trusts & Estates Prof Blog (Sept. 25, 2016) Hillary Clinton's Proposed 65% Estate Tax Rate."

Eliminating Will Contests

Many people are justifiably concerned that someone will challenge their last wills and be successful. There are some ways that the possibility can be made much less likely to actually happen.

Most people have probably known someone who has expressed dissatisfaction with an inheritance. It is not unusual for people to think that someone else received too much and that they received too little.

Sometimes, that dissatisfaction leads to people challenging the validity of the wills in probate court. These facts lead many people to seek out ways to make it less likely that their own wills might be challenged.

The USA Today recently offered some tips that can help in "5 ways to make a bulletproof will" including:

• No Contest Clause - These clauses are inserted into a will and declare that anyone who challenges the validity of the will forfeits anything he or she is supposed to receive under the will. Each state has its own rules about when these clauses can be enforced.
• Communication - Telling relatives the basic details of your will can make them less likely to challenge it.
• Doctor Verification - If there are going to be any questions later, it is a good idea to have a doctor verify that you are competent and in good mental health at the time you sign your will.
• Hire an Attorney - An attorney can help ensure that your will is legally sound and hiring one is a much better option than creating your own will or downloading a form will to fill out.
• Get a Trust Instead - By using a trust instead of a will to distribute your assets after you pass away, you make it much less likely that your estate plan can be successfully challenged.

Reference: USA Today (Sept. 24, 2016) "5 ways to make a bulletproof will."

Estate Sale Agent Concerns

Estates sales can be an excellent way to get rid of personal possessions either as part of the estate administration process or for an elderly person preparing to move into a nursing home. Be careful when picking an agent to handle the sale.

Estate sales are increasingly popular as older Americans seek to get rid of a lifetime's worth of personal possessions they no longer need. This is especially the case as they prepare to move into smaller residences or nursing homes.

They are also popular with estate administrators who need to dispose of a deceased person's personal property and who do not have time to sell it all themselves. However, as estate sales have grown in popularity, more problems with estate sales agents are being reported.

This issue was picked up by the New York Times in "It Pays to Be Wary When Hiring an Estate Sales Agent."

Some people have reported that the estate sales agents they have hired have paid much later than expected, paid them less than promised and even bounced checks. To avoid having these problems with the estate sales agent you hire it pays to do your homework on the agent.

Do not just pick the cheapest agent you talk to. Ask around and speak to other people who have had estate sales about their experiences with agents. You want to make sure that you hire someone with a track record of expertise and fair dealing.

It is also important that you have a signed contract with the agent and that you get a copy of the contract for yourself. You might also consider speaking to an estate attorney and asking if the attorney knows reputable agents in the area.

Reference: New York Times (Sept. 23, 2016) "It Pays to Be Wary When Hiring an Estate Sales Agent."