Why Us?

Cynthia J. Crass, Shareholder, recently participated in a one week “Weed Warrior” service trip on the Yampa and Green Rivers in Dinosaur National Monument.  She helped remove invasive species, primarily tamarisk trees, from the river bank.  Power tools were prohibited.

Beginning July 1, 2010, all Utah employers with 15 or more employees must use the Department of Homeland Security’s E-Verify system to verify the work eligibility of their new hires.  As an incentive, the Private Employer Verification Act provides certain protections against liability from employee claims.  Additionally, the law creates a new database maintained by the Department of Commerce where employers can voluntarily register to certify that they are using E-Verify.

Clients with questions may call Michael D. Stanger at 801-530-7386.

Callister Nebeker & McCullough is pleased to announce that the following attorneys have been selected as Super Lawyers on the 2010 Mountain States Super Lawyers List:

• Brian W. Burnett, Energy & Natural Resources, Environmental, Utilities
• Cass C. Butler, Construction/Surety, Employment & Labor
• Mark L. Callister, Business Litigation, Intellectual Property Litigation, Antitrust Litigation
• T. Richard Davis, Real Estate
• James T. Gilson, Business Litigation, Criminal Defense: White Collar, General Litigation
• Laurie S. Hart, Communications, Estate Planning & Probate, Business/Corporate
• W. Waldan Lloyd, Employee Benefits/ERISA
• Leland S. McCullough, Jr., Estate Planning & Probate
• Jeffrey L. Shields, Bankruptcy & Creditor/Debtor Rights, Business Litigation

And the following attorneys have been selected as Rising Stars:

• Andrew L. Howell, Estate Planning & Probate, Business/Corporate
• Kamron A. Keele, Tax, Employee Benefits/ERISA, Employment & Labor
• Nathan A. Scharton, Business/Corporate, Real Estate, Mergers & Acquisitions
• Mike D. Stanger, Employment & Labor, Business Litigation
• David R. York, Estate Planning & Probate, Tax, Non-Profit

Leland S. McCullough was re-elected as Chairman of the Board of Directors of the Firm.  Mr. McCullough practices in the areas of tax, estate and asset protection planning and has been with the firm since 1983.

David R. York was re-elected to the Board of Directors of the firm.  Mr. York practices in the areas of tax and estate planning, business entities, asset protection, charitable organizations and charitable giving, and has been with the firm since 1997.

ESTATE TAX ALERT

You have undoubtedly heard about the Congressional failure to fix federal estate and gift tax law.  We want to alert you to the some of the problems and point out some of the opportunities this presents.  While no one can know what Congress will do, we think it likely that income and estate taxes will rise because of Congressional inaction letting changes enacted ten years ago become effective in 2011.  However, it is possible that Congress may enact changes affecting the estates of persons dying or gifts made this year, and such changes might have retroactive effect.  The following discussion addresses the law as it currently exists, and assumes no changes will be made.

First—the Problems.
1.  The estates of those dying in 2011 or later with even modest estates (over $1,000,000) will be hit with estate tax.  The law in 2009 provided for an exclusion that effectively exempted estates of $3,500,000 or less from estate tax.  Much planning has been done under the assumption that the $3,500,000 exemption would apply.  The lower exemption level means that strategies which may not have previously seemed necessary might now be beneficial, and some of these involve taking action this year.

2.  Many existing trusts provide for a Family Trust and a Marital Trust to be funded according to a formula which assumes there is a federal estate tax.  In 2010, because there is no federal estate tax, depending on the formula in the trust, trust assets could pass entirely to the Family Trust or entirely to the Marital Trust.  This could inadvertently disinherit a surviving spouse or other beneficiary.  Utah has enacted legislation to “fix” this problem, but many states have not.  However, even with a state law fix, your assets may not be distributed as you desire.

3.  The heirs of those dying in 2010 will have to use a carryover basis for assets passed at death instead of the step-up in basis allowed under pre-2010 law.  While there is still a $1,300,000 general step-up and a $3,000,000 marital step-up, proper structure is needed to get optimal basis step-up.  Basis affects the amount of income tax heirs will have to pay when inherited assets are sold.  The heirs of those dying in 2010 may face more income tax than necessary when estate assets are sold if action is not taken to maximize basis step-up.

Second—the Opportunities.
1.  The 2010 rate on lifetime taxable gifts is 35% which will increase to 55% in 2011.

2.  In 2010, there is no generation-skipping transfer tax.

2010 could be an advantageous year for gifting, particularly to grandchildren.  Gifting could lower future estate tax and increase wealth transfer.  However, special care must be taken to avoid unfavorable effects occurring in 2011 or later years arising from gifts made in 2010.  We had hoped Congress would act; however, prospects seem dim.  We urge you to seek our advice and counsel in reviewing and possibly adjusting your estate planning to avoid the problems and to take advantage of opportunities.  We look forward to hearing from you.

IRS CIRCULAR 230 DISCLOSURE:  To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication, unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any  tax-related matter(s) addressed herein.

SALT LAKE CITY, Utah (June 8, 2010).

The Utah Association of Legal Administrators elected Korey Lowder, Firm Administrator at Callister Nebeker & McCullough, as President.

Utah Association of Legal Administrators (UALA) received its charter from ALA in February 1977 and is one of 100 ALA chapters. Chapter members meet monthly in downtown Salt Lake City to network and receive legal management education.  The chapter also hosts a bi-annual vendor fair and participates in ALAs annual Community Challenge by providing service to a local charity.  www.alautah.org

Association of Legal Administrators (ALA) was formed in 1971 to provide support for managers of law firms, corporate legal departments and government legal agencies. Its mission is to improve the quality of management in legal services organizations and to enhance the professionalism of legal administrators and all members of the management team.  With 10,000 members representing 30 countries, ALA is the world’s largest association of legal management professionals.  Its headquarters are in the Chicago suburb of Lincolnshire, Illinois.  www.alanet.org

T. Richard Davis was recently elected as Chairman of the Board of Directors for the Utah-Idaho Chapter of the Cystic Fibrosis Foundation. This non-profit donor-supported organization is focused on financing the research and development of pharmaceuticals to cure cystic fibrosis and improve the quality of life for those with the disease. Mr. Davis is a Shareholder and President of the firm.