Dentist Smeared in Spitzer Medicaid Fraud Witch-Hunt Wins $7.7 Million from Former Governor's Staff

A Brooklyn dentist whose career was ruined after the then-state Attorney General made him a poster boy for Medicaid fraud won a $7.7 million verdict Tuesday against two of Spitzer’s former investigators. That was $1.6 million more than Dr. Leonard Morse’s expert estimated the tooth doctor lost as a result of Spitzer’s probe — and, in terms of vindication, priceless. “It took a little more than 2,500 days, but we got to the truth,” said Morse, a 65-year-old father of six from Manhattan. “Now I feel totally vindicated.”

Morse, who accused former Spitzer deputy John Fusto and investigator Jose Castillo in the suit of fabricating evidence against him, also had some choice words for their old boss as well.

“He should be ashamed that this happened in his office, under his stewardship,” Morse said of Spitzer. “His finger prints are all over it.” Morse’s lawyer, Jon Norinsberg, also ripped Fusto as “a perfect storm of arrogance, laziness and incompetence.” Neither Fusto, nor Castillo, work for the AG’s office anymore.

The AG’s office had no official comment, but their lawyers in court told Federal Judge Carol Amon they will appeal the verdict. In his closing arguments, Deputy Attorney General Christopher Miller argued that just because someone is acquitted of a crime — as Morse was earlier — doesn't mean the prosecution had fabricated evidence. “He already had his day in court, he was found not guilty,” Miller said. But Miller looked ashen when the jury, which took just three hours to reach a decision, asked the judge for a calculator.

Spitzer, who resigned in 2008 after getting caught in a hooker scandal, could not be reached for comment.

Morse had a thriving Park Slope practice with 30,000 patients before Spitzer zeroed in on him because 95% of his patients were Medicaid eligible. Morse, in a $75 million suit filed in Brooklyn Federal Court, charged he was the victim of a Spitzer witch-hunt in 2006, when the hard-charging prosecutor was running for governor. After Spitzer's political opponents branded him soft on Medicaid fraud, he targeted Morse, who was one of the top billers in the state, the suit claimed.

Spitzer, who resigned as governor in 2008 after getting caught in a hooker scandal, said through a spokeswoman that he had nothing to do with Morse’s case. Morse was charged with stealing more than $1 million in false billings for dentures. And his arrest was trumpeted in a press release translated into several languages, including Russian and Korean. But the criminal case against Morse fell apart during a bench trial in Brooklyn Supreme Court after Fusto was forced to concede that billing records only showed a theft of $3,000.

Morse was found not guilty of all charges. But he lost his practice and other dentists treated him like a leper.

The delighted dentist said the AG’s office offered him a $100,000 settlement to get him to drop the lawsuit.

“I didn’t consider it for a nano-second,” Morse said. “There’s more to life than money, but I wanted my family to know I did nothing wrong.” Morse also won a new patient Tuesday. As he was leaving the courtroom, one of the jurors asked him to look at his tooth. Source: NYdailynews.com

Why you Need an Estate Plan Post 2013 Tax Act

Estate planning is the process of designating, during your life, the disposition of your assets upon your death in a manner that attempts to eliminate administrative uncertainties, reduce taxes, and maximize asset protection. The process of estate planning typically includes preparation of legal documents such as a Will, but it also includes restructuring of assets and beneficiary designations, all in the context of minimizing taxes and maximizing asset preservation. As part of this process, it even may be advisable to make lifetime gifts to family or charity.

Failure to have an estate plan results in your assets being distributed according to the probate laws in your state, which typically provide that if you are married and have children, your spouse and children each will receive a share of your assets. As a result, your spouse could receive only a portion of your estate, which may not provide sufficient support, and any inheritance passing to minor children will be managed by the court during the children’s minority and distributed to them outright at age 18.  If you and your spouse are both deceased, the court will appoint a guardian for your minor children without input from you.

A typical estate plan provides for the disposition of your assets upon death through a Will and Revocable Trust. The Will designates the executor of your estate, a guardian for any minor children, and directs your probate assets into your Revocable Trust. Your Revocable Trust then provides for the ultimate disposition of your assets. Revocable Trusts avoid the publicity and fees of probate if assets are placed in them during your lifetime or are payable to them at your death by beneficiary designation.  A Revocable Trust can be drafted to take advantage of death tax credits and asset protection upon your death by establishing trusts for your spouse and children that will not be subject to death tax or claims of their creditors. Making provisions for managing your affairs upon your incapacity should also be part of your estate planning. A durable financial power of attorney will allow a designated individual or corporate fiduciary to manage your financial affairs should you become incapacitated without going through the process of having you declared incompetent and a guardian appointed for you by the court. A health care power of attorney allows a designated individual to make health care decisions for you if you are incapacitated. A “living will” can provide that you do not want to be put on life support or receive food or hydration if you are terminal, in a persistent vegetative state, or in the final stages of Alzheimer’s or other dementia.

Do you need tax and asset protection planning as part of your estate plan? Most assuredly you do.  Under current law, there is a credit against estate tax of $5,250,000 per person, so a married couple has a combined credit of $10,500,000. That credit will be indexed for inflation. While this seems like a large figure, if you combine the equity in your home(s) and the value of retirement accounts, other liquid assets, business interests, and life insurance proceeds, are you close? Do you anticipate an inheritance or the sale or your business? Even if currently you do not need extensive estate tax planning, you should consider the income tax implications of your assets upon death, such as what is the most tax-efficient designation for your retirement accounts. Most clients are interested in ensuring that the assets they have worked hard to accumulate are protected from creditors, including claimants, subsequent spouses, spendthrifts, and former spouses of children. By establishing trusts and carefully selecting the trusts’ terms and fiduciaries, clients can protect their estates from these exposures.

Another component of the estate planning process is evaluating your assets and considering whether they should be restructured. If you have an interest in a closely-held business, what happens to that interest upon your death and should a buy-out agreement be considered? Should you be investing in exempt assets such as retirement accounts, tenants by the entireties property, and life insurance? Under the North Carolina constitution, life insurance payable to a spouse and/or children (or a trust for their benefit) is exempt from the claims of creditors of the insured or his estate. If you own liability-generating assets such as rental property, you might consider moving that property into a limited liability entity such as a limited liability company or at least procuring a large liability policy. Are the methods of distribution for your retirement accounts formulated in such a way to maximize asset protection and minimize income and estate taxes? If you have a taxable estate, it might be prudent to make lifetime gifts of your property to others or to charities to reduce your estate by the value of that asset as well as all of its appreciation and future income. Source: NatLawReview.com

New York Top Medicaid Fraud Attorney Inna Fershteyn

New York Top Asset Protection Attorney Inna Fershteyn

New Hazards for Family Estate Plans

You thought your estate plans were finally set? Not so fast. It turns out the "permanent" $5 million estate-tax exemption enacted earlier this year could change after all, sending families back to the drawing board to sort out their strategy. A provision in President Barack Obama's fiscal year 2014 budget calls for lowering in 2018 the estate-, gift- and generation-skipping-transfer-tax exemption limits.

Those limits were just made "permanent" in January at $5 million and indexed for inflation. (This year's exemption is $5.25 million.) The Obama administration proposed lowering the exclusion to $3.5 million for estate and GST taxes, and to $1 million for gift tax. Those amounts—a return to 2009 levels—would no longer be indexed for inflation. All three tax rates would go up, too, with the top rate rising to 45% from the current 40%. But wasn't the $5-million-plus exemption made permanent just four months ago?

"Permanent doesn't mean Congress will never revisit it. It just means there's no expiration date built into it," says Bruce Steiner, an estate-planning lawyer at Kleinberg Kaplan Wolff & Cohen in New York. If the proposal gathers steam and is enacted, he predicts "the same thing as last December, with another big flood of people giving away assets because they can," he says. If you feel like the estate-tax exemption limit has bounced around a lot, you're right. It has been changing every few years since 2001. Even some lawyers who get to charge by the hour are frustrated.

"We just need stability," says Christine Finn, a lawyer at Marcum LLP, a New York accounting and advisory firm. "With the $5 million limit now [for estate and gift taxes], it's going to be hard to get people back to thinking about the planning they'd need to do if the gift-tax rates go back down to $1 million." Still, ratcheting down the three exemptions and closing other "estate-tax loopholes" would raise $79 billion over 10 years, according to the budget proposal. The budget includes other ways to cut the deficit that could affect family inheritance planning as well. Here's what to watch.

• Discounts could disappear. Now, if you give a family member a minority share in your business, an appraiser legally can discount its value. The reasoning: A minority owner lacks control of the asset, can't liquidate it, can't get income from it unless the business makes a distribution and can't sell it easily. Mr. Obama's annual budget proposals have called for limiting, or getting rid of, such discounts to family members—until now. Gordon Schaller, an estate-planning lawyer in Irvine, Calif., contends that the provision's absence from this year's proposed budget could mean that "they're getting ready to issue regulations to do it, so they don't need to talk about legislation anymore." If that happens, families wouldn't be able to transfer as much wealth effectively tax-free, Mr. Schaller says. So families who have been considering such transfers should make them now.

• GRATs could get watered down. So-called grantor-retained annuity trusts, or GRATs, let people give a portion of an asset's future profits to heirs tax-free. The trusts have been popular tools for passing along battered stocks, especially because GRATs work best when interest rates are low. But GRATs also have been a target in Mr. Obama's budget proposals for several years. The person who sets up the trust gets annual payments adding up to the asset's original value, plus a return based on a fixed interest rate set by the Internal Revenue Service. That rate currently is only 1.4%.

When you give an asset to a GRAT, you retain the right to regular payments for a set time period. What you actually are giving away is any future appreciation on the asset—free of taxes. When the GRAT's term ends, the asset goes to the beneficiaries free of gift or estate tax on the appreciation, even though it has been transferred. The biggest risk is that the owner will die before the trust expires, generally subjecting its entire value to estate tax. Because of that risk, GRATs typically are set up with shorter terms, such as two years. But the proposed budget would require GRATs to have a minimum term of 10 years. The change is expected to generate $3.9 billion in 10 years. "If you're thinking about setting up a GRAT, do it now while you know you can, because you may not be able to do it as favorably tomorrow," Mr. Steiner says.

• Thousand-year trusts could get shortened. In the 1980s, many states adopted a statute that limited family trusts to a 90-year span. But since then, about half the states have repealed that rule or lengthened the "permissible perpetuities period," in some cases to as long as 1,000 years, Mr. Steiner says. Such lengthy trusts can keep large chunks of wealth out of the tax man's reach for decades, or maybe even forever, he adds. But Mr. Obama's budget proposal, echoing provisions called for in previous years, would have the generation-skipping-transfer exemption expire after 90 years, making the assets subject to taxes at that point. Since the proposal would apply only to new trusts created after its enactment, you might want to set up your trust now, Mr. Steiner says.

• Individual retirement accounts could get emptied faster. People who inherit IRAs and other tax-deferred retirement accounts are allowed under current law to "stretch" their withdrawals across their life expectancy, paying income tax only on distributions. The budget proposal would require most heirs, other than widows or widowers, to empty retirement accounts within five years. The measure would raise almost $5 billion in 10 years, the budget proposal claims. The move already has prompted some older adults whose wealth is concentrated in IRAs to consider moving them into trusts to help their families keep up with, and follow, the rules correctly. And people who had planned to convert IRA holdings to Roth IRAs are starting to reconsider. IRA owners have to pay income tax on any tax-deferred assets being converted, but future withdrawals are income-tax-free, even for heirs, as long as they meet holding requirements. If stretching the withdrawals past five years is no longer possible, there could be less advantage to paying the upfront tax bill. Source: www.wsj.com