Califf & Harper, P.C. August 2010 Newsletter

Meet Califf & Harper, P.C.

Califf & Harper, P.C. has been meeting the legal needs of the Quad Cities area in Illinois and Iowa for over one hundred and thirty years. We provide personal service to our individual clients and families and business assistance to our corporate clients, including public entities, closely held corporations, businesses, manufacturers and financial services industries located in and around the eastern Iowa and western Illinois Quad Cities region, as well as Chicago and its suburbs. We also act as local counsel for various national corporations. Additionally we frequently practice before the State and Federal Courts in Illinois and Iowa, the National Labor Relations Board, the Internal Revenue Service, the immigration courts, and other governmental agencies.

Our firm provides legal services for our clients by using the skills of various attorneys who practice in the following areas of law:
  • Arbitration & Mediation
  • Banking & Financial Institutions
  • Business Counseling & Commercial Transactions
  • Commercial & Civil Litigation
  • Construction Industry Practice
  • E-Business 
  • Elder Law
  • Employee Benefits
  • Employment (Management Only)
  • Estate Planning & Wealth Preservation
  • Immigration Law
  • Labor (Management Only)
  • Public Sector, Municipalities, School Law
  • Real Estate, Development, Zoning
  • Taxation
  • Trust & Estate Administration
For more information, please contact

Planning Your Estate In Uncertain Times

As Seen in the June 2010 Quad City Times Business Journal

Submitted By: John A. Slover Jr., Attorney Califf & Harper, P.C.

In 2009, Congress did a disservice to the Nation by failing to deal with the federal estate tax in a way which gives taxpayers and their advisors a clear path to knowing the "rules of the game."
In 2001 when President Bush signed the Economic Growth and Tax Relief Act into law, it contained, among other things, provisions to gradually increase the exemption amount to avoid federal estate taxes ending with the repeal of the federal estate tax in 2010. Then in 2011, the federal estate tax would be reinstated with an exemption amount of $1,000,000.00.
This is important because in many instances, estate planning documents are written with certain tax law concepts in mind. With the repeal of the federal estate tax law in 2010, taxpayers and their advisors needed to review estate planning documents to determine whether changes in the status of the law required a change in the estate planning documents to insure that the goals and objectives of the client would be achieved if that person died in 2010. The repeal also applied to some federal estate and generation-skipping transfer taxes.
While many taxpayers wanted the federal estate tax and generation-skipping tax to be repealed, the consequences of that action had not always been fully thought through or appreciated by taxpayers or their advisors.
Without the federal estate tax in place, inherited assets would be valued at the original cost of the assets. This concept is known as the "carry-over" basis. It differs from the 2009 approach and the 2011 approach under current law, where the assets were re-valued on the date of death of the deceased, called the "step-up" basis. The difference in the "carry-over" and the "step-up" basis relates to whether, or to what extent, capital gains would be recognized when inherited assets are sold. For example, if someone died in 2009 owning a stock worth $10.00 per share originally purchased for $1.00 per share, the estate, under the rules in effect in 2009, would revalue the stock so that the new cost basis was $10.00 per share. If the beneficiary then sold the stock for $11.00 per share, the capital gain was $1.00 per share ($11.00 less the basis of $10.00). However, under the carry-over basis rules, someone who died in 2010 would be subject to capital gain of $10.00 per share ($11.00 less cost of $1.00).
Congress diluted the carry over basis by allowing the executor of an estate to allocate assets up to their fair market value at the date of death in an amount equal to $1.3 million. So, for someone who died in 2010, the executor could allocate part of the basis adjustment to the inherited stock to reduce the potential for gain. For many clients, the effect of carry over basis is mitigated, but the costs associated with administering an estate, i.e., the executor's commissions and attorneys' fees, will likely increase because of these new and somewhat more complicated rules.
So now what? For taxpayers who have family assets (husband and wife) of over $2,000,000.00, there is uncertainty as to how to deal with the planning and administration of estates. Should we assume that in 2011 the exemption amount per person will be $3,500,000.00 or $1,000,000.00? Decisions need to be made in structuring estate plans and it is likely that more modifications of those plans will be required as Congress changes the law. Thus, both taxpayers and their advisors will need to be more vigilant in updating the estate plans.
While no one has a constitutional right to expect that rules will always be the same, there is nonetheless good policy reasons for some predictability in rules so that taxpayers are reasonably certain about the "rules of the game." We do not have this today. We should demand it of our representatives. Ultimately, we get what the government thinks we deserve. For those who expect better performance by government, let your representatives know!

4th Annual Bettendorf Rotary LobsterFest Presenting Sponsors

This year Califf & Harper P.C., was the proud Presenting Sponsor of the 4th Annual Bettendorf Rotary LobsterFest. The fund raising event took place Saturday, June 12, 2010, at Rivermont Collegiate in Bettendorf. The money raised at the event benefited the Bettendorf Rotary Charities Fund.

Announcing Our NEW Chicago Office

To better meet the needs of our Chicagoland clients, Califf and Harper P.C. is collaborating with Broida and Associates, Ltd, a prestigious firm located in Naperville, Illinois. The move allows us to accommodate clients who have a presence or business in Chicago and northeast Illinois. The office is located in suite 108 at the Naperville Corporate Center, 1250 East Diehl Road. For more information, call 800.764.4999.

Califf & Harper Newsletter

To be added to our newsletter mailing list, or for more information, contact us at or call us at 309.764.8300.