Practicing law in Easton since 1984, I have focused on estate and business planning and probate administration. I also have prepared many tax returns as a CPA, primarily fiduciary and estate returns. I have litigated cases in the Circuit and District Courts for Talbot County, Caroline County, Queen Anne’s County and Dorchester County, and represented clients before state and federal agencies, mostly the IRS, and in the U.S. Tax Court. I have appeared before the Orphans’ Court and worked with the Register of Wills of each county throughout the Eastern Shore. My work also includes representing corporate clients in the area, which involves significant document drafting and review.
The local Circuit Court judge appointed me the Talbot County Auditor in 2006; I assist the Court in auditing trust cases, and I regularly prepare audits for all foreclosure cases in Talbot County as well as all final guardianships.
I am past president of the Talbot County Bar Association and a member of the Maryland State Bar Association and the Maryland Association of Certified Public Accountants.
Graduating from the University of Delaware in 1978, Phi Beta Kappa, with a B.A. in English literature, I graduated from the University of Maryland School of Law in 1981, and hold a degree in accounting from the University of Baltimore. I was admitted to the Court of Appeals in 1981 and became a certified public accountant in Maryland in 1984, and have remained active as a CPA ever since.
My community involvement includes working as past president of the Talbot Lacrosse Association, 15 years as a youth lacrosse coach, board member for the YMCA, and as a church elder. My wife, Julie, and I have two grown children, John and Peter, and 3 dogs.
Plan estates and prepare the documents necessary to ensure the time and tax efficient transfer of your wealth to your beneficiaries, whether your pride is your home and some bank accounts or assets in eight figures. I am committed to explaining the documents in understandable terms. As I personally prepare the documents, unlike some lawyers, I know exactly what you are signing and how all the documents fit together.
Giving you the benefit of 30 years of legal, tax and accounting experience, I aim to keep you out of court and provide a roadmap for avoiding business disputes, always providing value according to your needs. Liability issues are best understood by experienced lawyers who have tried business law cases, as I have. Although a lawyer is only part of the team that protects your business, a seasoned lawyer who is also a CPA is your best bet to lead that team.
Practicing tax law requires good research, writing and analytical skills which I have honed over the years; but the tax law is administered by people. Good outcomes rarely occur without skilled working relationships with agents and auditors. My CPA license requires 80 hours of continuing education each year so I remain familiar with the latest tax laws and legal techniques. For tax preparation, I concentrate on U.S. and Maryland estate tax returns and trust and estate income tax returns, but I also prepare a number of individual returns.
You may need a gun trust if you want to ensure that more and more restrictive laws do not require your executor to give your gun to the State police. A gun trust also lets you own a silencer, for example, to enhance your shooting experience without obtaining the permission of the sheriff and being fingerprinted. I have drafted a gun trust which has been approved by the ATF. As all trusts, the trust document must be customized to your needs. I can prepare your gun trust for your needs and to best keep the government out of your life.
New Net Investment Income Tax Requires Planning
Trusts are particularly hit hard by the new Medicare surtax, enacted to help fund Obamacare. This is an entirely new tax, additional to all other taxes. It taxes Net Investment Income (“NII”) or income such as dividends and interest, passive business income and capital gains—the theory is to impose the 3.8% Medicare tax on earnings not now subject to the Medicare tax. Trusts suffer because the tax kicks in at dramatically lower income levels than for individuals. For 2014, a trust pays the 3.8% Medicare surtax on the lesser of its: a) undistributed NII; or b) adjusted gross income in excess of $12,150. The key word is “undistributed” as discussed below. Individuals do not pay the 3.8% tax until the individual’s income exceeds $200,000 for single filers and $250,000 for a joint return.
Since the tax applies only to “undistributed NII”, the obvious way to avoid the tax is to distribute your income to the trust beneficiaries during the tax year (or 65 days thereafter) to eliminate the Medicare surtax at the trust level. Trust beneficiaries have to report the NII but the tax treatment is generally much more friendly. Trust beneficiaries further typically enjoy more favorable tax rates on income and capital gains. Thus a strong premium is placed on making annual distributions to beneficiaries.
A problem arises with the tax dumping of capital gains by a trust. Most state laws provide that capital gains stay in the trust and are not distributable except on the termination of the trust. Consequently annual distributions do not typically remove the capital gains from the trust for tax purposes.
Although there are a number of exceptions to this rule, which should always be explored by your tax advisor, the best solution is for your attorney to draft your trust to explicitly distribute capital gains. Practitioners predict that attorneys will change language in trusts that have not yet become irrevocable (and possibly when irrevocable trusts are changed by permitted methods). You should ensure that your attorney has this covered. Also, we may see states change their laws to liberalize the distribution of capital gains to beneficiaries.
A further restriction on tax dumping of income by a trust is the common limitation on distributions for “health, education, maintenance and support.” (“HEMS”). Limiting distributions for HEMS keeps the trust property out of the beneficiary’s estate for federal estate tax purposes, even if the beneficiary is the trustee. As less and less estates are subject to the federal estate tax, your advisor may not restrict distributions to HEMS, thus opening the spigot for distribution of all income to the beneficiaries, enabling the more favorable tax treatment of trust income at the beneficiary level.* Suffice it to say, if you are having a long-term trust document prepared, you should question your attorney regarding the efforts he has made to minimize income and the Medicare surtax in the trust document—his or her old forms may not do the trick.
* According to IRS statistics, the number of estate tax returns filed decreased from more than 108,000 in 2001 to just over 15,000 in 2010.