VOL. IV, NO. 1 WINTER, 2003

Welcome to the Winter 2003 Edition of "Report from Counsel," a Newsletter for the Firm's clients and other professionals who consult with the Firm, updating them on our practice as well as important new developments in the law.


We are pleased to announce that Elihu I. (Lee) Rose has become counsel to the Firm. Lee concentrates his practice in the areas of probate and estate administration, estate planning and taxation. Lee is a distinguished attorney and is admitted to practice before the United States Tax Court, the United States Court of Appeals for the Federal Circuit and the United States Supreme Court. In addition to his legal practice, Lee is also a Certified Public Accountant. Lee is a member of several well-recognized professional groups, and has served as the Chair of The New York State Bar Association¹s Seminar on drafting documents for the close corporation and lectured at the Nassau County Academy of Law. We look forward to Lee¹s ability to counsel the Firm¹s clients in the estate and trust areas of the law, and the contributions Lee will make to enhance our overall practice. We invite you to read the section of our Newsletter, New Developments In The Law, where Lee discusses an important issue regarding estate planning.

We are also proud to announce that our partner Daniel J. Baker has been appointed to the Board of Trustees of the Long Island Chapter of the Leukemia & Lymphoma Society. In announcing the appointment, Kerri Kaplan, Executive Director of the Long Island Chapter, noted that Dan has been actively involved with the group for many years, and has demonstrated a strong commitment to the goals of the Society.


Is Your Credit-Shelter Over-Sheltered?
By Lee Rose, Esq., C.P.A.

If your Last Will was written before the middle of 2001, it is highly probable that it contains provisions for the creation of a "credit-shelter" trust. "Credit-shelter" is the colloquial term given to that amount which can be left to persons other than your spouse totally free of federal and New York estate taxes. (Almost all bequests to a surviving spouse are totally tax free as well.)

When you drafted that Will, the credit-shelter amount was $675,000.00. It was scheduled to increase in several steps to a maximum of $1,000,000.00 for estates of persons dying in 2007 and thereafter.

The 2001 amendments to the Internal Revenue Code accelerated the $1,000,000.00 credit shelter amount for estates of persons dying on and after January 1, 2002. It's already here! In addition, further scheduled increases will bring the credit-shelter amount to $1,500,000.00 for persons dying in 2004, increasing to $3,500,000.00 for persons dying in 2009.

While these increases in the credit-shelter amount represent potential tax savings, they have a negative corollary. That is, how much will be left after the credit-shelter amount? Most testators envisioned that even after the credit-shelter amount was segregated (usually by funding a credit-shelter trust), there would be significant sums left over which, in many cases, would be left outright to the surviving spouse. As the credit-shelter amount grows, however, what will be left for the spouse will decline significantly and, depending upon the value of the estate, may disappear entirely.

Reconsidering these provisions of your Will may be warranted to ensure that a proper balance is struck between the credit-shelter and the remainder of your estate.


In a case briefed and argued by Jon A. Ward, the Appellate Division, Second Department, recently ruled in favor of the Firm¹s client in overturning a lower court¹s decision that upheld a Town zoning board¹s denial of variances to permit construction of a residence on a parcel of waterfront property. This was a significant decision for several reasons. First, the Appellate Division recognized that the zoning board should have taken into account restrictions on development that the New York State Department of Environmental Conservation (DEC) had placed on the property in order to protect wetlands. Those restrictions were in large measure responsible for the need for the variances. More importantly, the Appellate Division held that the zoning board should have granted the variances even though they were a substantial departure from the restrictions in the ordinance. The Court emphasized that whether the variances were substantial was only one factor for the board to consider. Many of our readers will recall our recent Legal Advisory in which we reported several recent decisions of the New York Court of Appeals where the Court had ruled that zoning boards had broad discretion to deny variances under the ³substantial evidence² rule. This case, decided after the Court of Appeals decisions, shows that there are still limits on the discretion of zoning boards, and even if a variance is substantial, it still must be granted when all relevant factors are properly considered and analyzed by the zoning board.

In the area of commercial real estate financing and development, the Firm completed a $2.9 million financing package on behalf of a client that will support the company¹s continuing growth and expansion. The Firm successfully coordinated the closing of a primary and secondary mortgage financing package with funding provided by a major market lender and a local development corporation, in conjunction with the Nassau County Industrial Development Agency. The Firm obtained all of the variances, zoning and site plan approval permits for the project, handled contracts with the construction company, and coordinated the project with local and state agencies as well as closing the financing package.

In the area of commercial zoning applications, the Firm is representing a major restaurant franchise company in obtaining zoning and building approvals for the nationwide chain to open its first restaurants throughout Long Island.

The Firm has successfully represented a local volunteer fire company in obtaining zoning approvals to expand its firehouse in order to better accommodate the needs of the fire fighters in their service to the community.


Michael H. Sahn served as an expert commentator for The New York Times Sunday Real Estate Section¹s Q&A column. The question concerned liability issues that could arise from granting an access easement over the property of a co-op apartment building for fire egress. A reprint of the article is enclosed for your review.

An article by Jon A. Ward on three significant Court of Appeals zoning decisions appeared in Real Estate Weekly examining the changing zoning approval climate throughout New York State.

In October, Michael H. Sahn co-presented an all-day CLE seminar on Basics of Administration and Enforcement of Land Use Controls co-sponsored by the Real Property Section, the Environmental Law Section and the Committee on Continuing Legal Education of the New York State Bar Association. This was the second time that Michael gave a CLE course on land use this year. The program was well attended by attorneys and real estate professionals.

Michael H. Sahn was interviewed by Long Island Business News on the increasing scrutiny facing builders and developers when constructing new projects or changing the use of existing facilities. Extra planning time and a more thorough understanding of the issues and concerns of municipal agencies are more important now than in previous years.

Karen L. Roth, while studying for her masters degree in building conservation at Rensselaer Polytechnic Institute, wrote a paper that was made part of an application to nominate a building located in downtown Troy, New York, to the National Register of Historic Places. The building, known as the Signal Building, was constructed in the 1920¹s and used to dispatch fire and police emergency calls. Due in part to Karen¹s fine work, the building has recently been placed on the National Register. The listing now makes Rensselaer County eligible for federal and state funding to repair and preserve the building.

SAHN WARD & BAKER, PLLC’s “Report from Counsel” is published with the intent to inform readers of recent developments at the Firm and in the law. It is not intended, nor should it be used, as a substitute for legal advice or opinion which can be rendered only when related to specific fact situations.

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