EFTA02602934.pdf

From: Noam Chomsky < Sent: Tuesday, July 10, 2018 8:01 PM To: jeffrey E.; Valeria Chomsky Subject: Fwd: Further re Marital Trusts - OK if I send this to Max, in response to his last letter This helps, but there i= still a good deal that is unclear. I will explain below, in boldfac=. ----=----- Forwarded message From: =ax Kohlenberg < <mailtc > Date: Tue, Jul 10, 2018 at 8:40 AM Subject: Further re=Marital Trusts - To: Noam Chomsky < g=; Cc: Richard Kahn < <mailto > >> Noam —<=u> Thank you for your additi=nal comments. Though I don't share your perspective as to se=eral important aspects of what has transpired since you and Carol did your original estate planning (with all that has followed since) I appreci=te how outrageous it has felt to you and I continue to deeply regret that.=C2 I very much agree that ad=itional litigation (I say "additional" because the proceed=ngs brought by Harry's attorney are already underway) would be the=last thing anyone would want, but as you reference it again, and as you refer t= the conduct of "the Trustees" (which of course includes m= as well as Harry) I have to proceed cautiously. Therefore, although=l continue to believe I have undertaken my trusteeship entirely in accordance with the terms of the trusts and applicable law (an= with nothing but goodwill towards you), I have to be mindful of what I pu= into our email exchanges. If there is litigation then it will be in=those proceedings that I should account in detail for my understanding of how your estate planning and the adminis=ration of Carol's estate and her trusts should have been, as was, =onducted. Accordingly, let me just make a few general statements for=now: =/u>1. Without going into a=ditional detail about how your estate plan and Carol's estate plan=were set up, let me clarify that when I refer to Carol's trust being "funded" with the Lexington home and the Cape house,=what I mean is that both properties were conveyed by you and Carol (as joi=t owners) to Carol alone, in July of 2008. EFTA_R1_01791720 EFTA02602934 When you say they were con=eyed to Carol alone, what exactly does this mean? Conveyed to what?=C2 We have been discussing the Marital Trust. Were they conveyed =o this? To a different Trust? Later you refer to a "non-e=empt Trust". Is that a different one? If so, I should kno= more about it: its balance, and in fact all the other questions I raised =bout the Marital Trust we have been discussing, repeated below in red. =AO Is the Trust we have been discussing an "Exempt Marital Trust"= as distinct from the non-Exempt Trust you refer to below. What is t=e distinction? Are there other Trusts that I participate in in some =ay? One of the questions I=raised in my letter had to do with decisions made in 2008. As I expl=ined, Carol was of course unable to participate in any decision. She=was wasting away, under 24 hour care at home. I was unable to partic=pate in any decision, or to give anything like informed consent, because I=was spending most of my time caring for Carol as she was dying. So I=do not understand how any decisions were made in 2008, and by whom. Copies of the deeds are on record. I ca='t attest to the signatures on them, but they can be viewed on the websites of the Middlesex County (South) Reg=stry of Deeds and the Barnstable County Registry of Deeds. The conve=ances were done so that at Carol's death the properties would (in =ccordance with the terms of her will) pass into her trust, which is what occurred. =/u>2. When the Lexington h=use was sold the proceeds were held by the Exempt Marital Trust (as it own=d the property). As you know, the trust also lent you about $500K to facilitate the purchase of the Cambridge property.</=> To make sure I unders=and, of the proceeds from the sale of the Lexington, roughly half went to = loan to me and the other half went to the Marital Trust -- though I am no= sure now which Marital Trust. Is that correct? 3. The Cape property was distributed to you=from the Non-Exempt Trust in 2010, after which you deeded it into the Gull=Haven Lane LLC and gifted the LLC membership units (shares) to your children. A mentioned=above, I'm confused about this Trust, its status and the other questio=s raised above =/u>4. With respect to the =istributions made from the trusts, I would again refer you to the reports =hat I sent to Deborah and Richard. That said, those reports only show the total amounts distributed to you or on your behalf f=om the trusts. From your gift tax returns and from Bainco's =ecords it would be possible to detail how much you gave to each of your ch=ldren and grandchildren (and how much you paid in tuitions) since 2009. What=l requested in my letter in this regard was different. Instead of re=eating, I'll simply lift them from the letter, and I still would like =larification about these: I would like to know more about this. Richard Kahn d=d forward reports to me, but all that I see is from the last few years, af=er I requested information. I don't have any records for the yea=s since 2009, when I appointed Harry trustee, neither about the income tha= was supposed to be paid to me or about distributions from the Trust or an= accounting of those years. So could you send them to both of us, along wi=h documentation about any distributions that were made. In particula=, I would like to know the reason why there is virtually no income from th= trust -- whether it was paid to me from 2009 or not. And about the =nstructions for any distributions that may have been made from the Trust. =/b> 2 EFTA_R1_01791721 EFTA02602935 =/u>5. Lastly, in consideri=g (a) your estate planning before Carol's death, (b) the pattern o= withdrawals from the IRA and from the trusts, and (c) the gifting undertaken by you to family members, there is a clear demarcation =etween the period before your relationship with Valeria commenced (during =hich time your planning focused on providing for yourself, your children a=d grandchildren) and the years since your marriage. That demarcation is fully understandable,=of course. I only ask that you bear it in mind as you consider why y=ur advisors guided you as they did in the period before planning for Valer=a's future needs became a concern. Respectfully yours, Max<=p> A. Max Kohlenberg<=> Howland Evangelista Kohle=berg Burnett, LLP One Financial Plaza =80 Suite 1600 Providence, Rhode Island =2903 Direct: Main: <=> Fax: <mailto www.hekblaw.com <http://www.hek=law.com/> This email and any attach=ents thereto are intended only for use by the addressee(s) named herein an= may contain legally privileged and/or confidential information. If you are not the intended recipient of this email, you are hereby notifi=d that any dissemination, distribution or copying of this email, and any a=tachments thereto, is strictly prohibited. If you have received this=email in error, please immediately notify me by return email and permanently delete the original and any copy of thi= message or attachment. Thank you. 3 EFTA_R1_01791722 EFTA02602936 From: Noam Cho=sky (mailto <mailto >J Sent: Monday, July 09, 2018 6:26 PM To: Max Kohlenberg Cc: Richard Kahn Subject: Fwd: Marital Trusts - Thanks for the comments. A few more of my o=n, for clarification. In red. I should add that Harry's recent behavior, in=luding this utterly outrageous document, might make it necessary to go to =itigation. The last thing I want, but he may force me to it. 1= necessary, I may have to make public the way the Trustees have handled the Trust since 2009, when I appointed Harry as trus=ee to replace me. Many serious questions. It is the last =hing I want to be driven to, but there are some very ugly things in this p=oposal, not least the very clear implication that Valeria somehow wanted to marry an older man for the money and that she ca=sed the increase of expenses -- easily refuted, it's easily documented=that the cause was diversion of IRA funds for the benefit of the children =nd the exorbitant tax bills resulting. All so disgraceful I'm not going to let it stand.</=> Forwarded message From: Max Kohlenberg < <mailto >> Date: Sun, Jul 8, 2018 at 5:02 AM Subject: RE: Marital =rusts To: Noam Chomsky < <mailtol >> Cc: Richard Kahn < <mailto >> Noam —<=u> </=> I'm not sure if y=u wanted further comments from me before responding to my message in great=r detail, but I have added a couple of comments below in black text, where it seemed that a reply to your com=ents was appropriate. </=> I will look forward to yo=r fuller response in due course, if you are so inclined, but again noting that while providing me with the financial information that I've a=ked for would be helpful, you may instead want to focus on the subject of =electing my successor, and then to establishing with him or her a better u=derstanding about distributions from the trusts. </=> Max<=p> 4 EFTA_R1_01791723 EFTA02602937  </=> </=> A. Max Kohlenberg<=> Howland Evangelista Kohle=berg Burnett, LLP One Financial Plaza =80 Suite 1600 Providence, Rhode Island =2903 Direct: Main: <=span> Fax: c/=pan> <mailto www.hekblaw.com <http://www.hek=law.com/> </=> </=> This email and any attach=ents thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. =f you are not the intended recipient of this email, you are hereby notifie= that any dissemination, distribution or copying of this email, and any at=achments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by =eturn email and permanently delete the original and any copy of this messa=e or attachment. Thank you. </=> From: Noam Cho=sky [mailto <mailto > Sent: Sunday, =uly 08, 2018 1:34 AM To: Max Kohlenberg Cc: Richard Kahn Subject: Fwd: Marital Trusts Before responding to your letter in full, I would li=e to clarify a few matters. Interspersed below. Noam 5 EFTA_R1_01791724 EFTA02602938  Forwarded =essage From: Max Kohlenberg < <mailto >> Date: Sat, Jul 7, 2018 at 4:43 AM Subject: Marital Trusts To: Noam Chomsky < <mailtol >> > Cc: Richard Kahn < <mailto >> Noam —<=u> </a Thank you for your reply.=C2 As you indicate that you are not being represented by counsel I will=reply directly to you, with a copy to Rich (as you suggest). Please consid=r: </=> 1. As a starting point, let me note that I t=ink you and Rich may have misunderstood (at least initially) the terms of =he settlement that Harry proposed through his attorney. Rich and I discussed this in a call about 10 days ago and I'm hopi=g that misunderstanding has been cleared up, but as I'm not a part= to your exchanges (and Rich's exchanges) with Harry's att=rney I can't be sure. I'm also not certain whether t=e terms of the proposed settlement have changed. All I can say for sure is that=characterizing the offer as one in which distributions to you cannot excee= $100K per year is not consistent with my understanding of what has been orfered. The reason why the proposal is too outrageous=to discuss has nothing to do with the technicalities of the handout that H=rry is graciously offering. I'll review the background, once again. As I've discussed before, the Marital Tru=t was established in Carol's name for tax purposes. The obvious =ntention, clearly understood by Carol and me, and of course Eric Menouya, was that it would be available to the survivor -- Carol we assumed -- and =hen what remains would go to the beneficiaries. The idea that we int=nded that Carol would control "her" funds and I would control &q=ot;mine" is too ludicrous to discuss, though I understand the legalistic conjuring that can be adduced to reach this conclusion. =AO As you note, I was not working with you at the =ime you and Carol drew up your wills and trusts, but what you describe is not consistent with Eric's notes (which I have), nor w=th the facts as I understand them. You are right that tax savings we=e a major driver to the planning (and the plan did in fact result in substantial savings of both estate and income =axes) but it was not drafted with the expectation that Carol would survive=you. The question of who would be the survivor is irrele=ant. Carol and I assumed that she would be the survivor, but there w=s no reason to tell anyone, and it has no bearing at all on the fact that our intention was that the principal would be available to t=e survivor, then going to the children The decision to fund Carol's trust with both financial=assets and your Cape and Lexington homes was made when Carol was already i=l and (as far as the notes indicate) with the expectation that she would predecease you. This is quite surprising, and I would like som= clarification. Most important, I don't see how any significant =ecisions could have been made during those years, who could have made them= or why it was done. Obviously Carol could not have done so. She had to undergo massive brain radiation as soon=as the biopsy was taken, and serious cognitive and physical decline was im=ediate. Nor could I have been involved. I very much wanted to =eep her at home, rather than the only alternative -- a nursing home. I managed to do so for two years, until the end, =ut it required 24- 6 EFTA_R1_01791725 EFTA02602939 hour care, and I was in no position to think about such =atters. If I had been informed -- I don't recall anything of the=sort -- I couldn't have paid any attention or granted truly informed consent. So I would like to learn more about =hese decisions. Secondly, I don't understand them. H=w could the Cape and Lexington homes fund the Trust? Did the funds f=om selling the Lexington house go to the Trust? How was it funded be=ore. Would appreciate clarification on this. Of course we knew by then that she would prede=ease me. It was a medical miracle that she was able to survive that =ong, on experimental drugs, as a last resort. The records that I have seen do not indicate what your expectations (or Carol's) were as to =ow the Marital Trusts were to be made available to you after Carol was gon= — for that the independent trustee of the trusts (whether me or m= successor) has to rely on the terms of the trusts themselves, the information that's given by the trust beneficiarie=, and the law surrounding such trusts. I'd be interested, of course, in knowing abou= the records you have seen, but it would hardly be surprising if there is =o explicit record of what is obvious simply to common sense. We were a married couple who cared for each other and for our children, pu=ting a Trust in Carol's name for tax purposes. What sort of luna=y would it to set up a Trust for one of us to have access to but not the o=her? So of course you are unlikely to find notes about it. If Harry forces this to litigation, all of this will=have to come up, either in court or in public in some other manner.=/b> When I appointed Harry to replace me as trust=e, I took for granted that he would handle the trust as I had. His b=havior since, and this latest proposal, make it very clear how wrong that assumption was. This proposal calls for him to be in =omplete charge, which means, as he has shown, that I can only plead for so=e funds by accepting conditions that he knows I will not accept. You=recall, I presume, that this was true even when I faced an enormous tax bill because my IRA was being depleted for th= benefit of the family. To refresh your memory, let me repeat again w=at was happening with my IRA until I learned about it. There is a ma=datory withdrawal. Half was being distributed to family. The other half was being used for taxes and management fees for the entire=estate. In order to pay Alex's medical expenses, and to pay $50,=00 a year for rent and upkeep on the house in Wellfleet that we had given =o the children and that I was barely using, I had to withdraw extra funds from the IRA, with the onerous tax burden.=C2 The same when I withdrew something to live on. Under these cir=umstances, Harry refused to release funds from the Trust for tax relief wi=hout onerous and humiliating conditions that he knew I would not accept. Easy to predict what might happen under =ess extreme conditions. It was not until 2017 that I was able to ove=come the accumulated burden of these actions. In the previous paragraph you offer to "refresh my mem=ry" and in the prior paragraph you say "You recall, I pres=me ". Without going into detail, I have to note th=t my recollection of the events you describe is not consistent with yours (though it may not be ent=rely consistent with Harry's either — I am not sure). =A0 In my case it is not recollections. When I =egan to understand what was happening, I looked into the matter, and have =he documents at hand, including the mail interchanges about Harry's refusal. The rest is straightforward and unambiguous doc=ments. Since my own recollections may be the subject of testimo=y in the legal proceeding that Harry has initiated, or in one that you may=commence, I think it better that I not recite my own recollections here. Note that Harry's exhibit B, beginning wi=h section 9, is utterly false, and consciously so. All of the above has be=n explained to him over and over. It is not only consciously false, but is framed as a vicious and ugly attack on Valeria, implicitly a=cusing her of responsibility for the escalation of expenses which, as Harr= knows, was caused by the actions just described once again. c=span> 7 EFTA_R1_01791726 EFTA02602940  For such reasons, Harry's proposal is, as=l said, too outrageous to discuss. 2. As you know, Harry's attorney has=commenced a legal action that is intended to facilitate my resignation and=the appointment of a successor trustee to take my place. Since you've wanted me removed for some time and since I've said.(from the first time you and I met) that I only wanted to serve as trustee=if all the family members wanted me to serve, I'm looking forward =o resigning as soon as the court determines how I am to do so and how my successor is to be selected. =/u> 3. Given that my replacement is impending, i= might be worth waiting until my successor is in place before responding t= my requests for financial disclosure, as it's possible that my successor won't share my views as to what the trustee of t=e trusts needs to know before making decisions about distributions. =ikewise, if my successor will be identified soon it might make sense for m= to hold off on any distributions and leave it to the new trustee to work with you on figuring all of this out. =n this regard I'm kind of a "lame duck" trustee, w=uldn't you say? 4. To the extent that you want to push forwa=d while I remain the trustee, let me again state the basis for financial d=sclosure by you. It is that, as trustee, I owe a duty to you and I owe a duty to your children (as the remainder beneficiaries o= the trusts). For the present my primary duty is to you and it is to=distribute to you all income earned by the trusts, net of expenses,=u> Until=l asked about the matter recently, I am aware of no income distributed to me earned from the trusts. I cannot be sure, because I have no re=ord of having received any accounting of what is happening to the trusts, =ncluding distributions to others (or as required, to me►. Could you =hen please send me the records on these matters since 2009, when I appointed Harry to replace me as trustee.=/u> I provided reports on income, expenses =nd distributions to Deborah Pechet Quinan last October and I copied those reports to Richard (and updated them) in the last 60 days. I think i= might be easiest if Richard forwarded those reports to you, but if he can=E2 t for some reason then I will do so when I am back in my office.c/=pan> I would like to know more =bout this. Richard Kahn did forward reports to me, but all that I see is from the last few years, after I requested information. I don't =ave any records for the years since 2009, when I appointed Harry trustee, =either about the income that was supposed to be paid to me or about distri=utions from the Trust or any accounting of those years. So could you send them to both of=us, along with documentation about any distributions that were made. =In particular, I would like to know the reason why there is virtually no income from the trust •• whether it was paid to me from 2009 or not. =AO And about the instructions for any distributions that may have been mad= from the Trust. and to distribute to you =or pay on your behalf) additional monies as reasonably needed to the extent that your income from other sources is not sufficient to s=pport your reasonable expenses. 8 EFTA_R1_01791727 EFTA02602941  Notwithstanding your stat=ment that "As for the claim about concern for my later years, that has been thoroughly r=futed" it has not been refuted in th= context of my trusteeship and it remains my duty to consider distribution= in light of the possibility that you will have a reasonable need for distributions from the trust for many more year=, and perhaps in increasing amounts, depending on your circumstances in th= future. I didn't respond be=ore but perhaps I should have. I will be 90 years old in a few month=. I'm not going to live forever. You know how much is in t=e Trust. You also know my spending habits. Harry would not have millions of dollars if I hadn't been working all my life and =aving money for him and his sisters. Despite the ugly implications a=out Valeria in Harry's letter, nothing material changed after our marr=age beyond what I described and can readily document, with one exception. In Lexington, I was living rent-free, =he mortgage having been paid years earlier. Valeria and I decided that tak=ng care of a big house with steps everywhere and everything else that owni=g a house in Lexington entails -- snow removal, etc., and a difficult drive to work through New England winter we=ther -- made no sense at my age, and that we should move to an apart=ent close to work with no steps or other problems. Not your business, but =ne thing that shocked me about Harry's letter was his complaint that I=moved from a house to a "new home" -- insinuation obvious -- in =act an apartment with no winter driving to my office and convenient for someone my age. 5. As for the specifics of disclosure, what = need to consider is (a) what your income was in 2017, since that was the =asis for the tax payments you seek to have reimbursed, (b) what your income is likely to be this year and going forward, (c) what=your expenses were in 2017 and are likely to be in 2018, and (d) whether a=y of your income (or other resources) are being used for purposes that the=trust cannot support (such as gifts to third parties). So far, Rich has provided me with some rough=information about your 2017 expenses. There are some gaps in that in=ormation, but nothing that can't be cleared up pretty easily (I th=nk). Rich has also assured me that you have not made any gifts that have diminished your resources and I assume you would confi=m that to me. What I don't have at this point is enough information about your in=ome, so that I can consider what the gap is between your expenses and your=income, which is the gap the trusts might help to close up. With res=ect to your income in 2017, all I can see is that your income tax obligations seem to be much higher than they were pre=iously. I'm assuming that reflects a jump in income from (i)=the profit made on the sale of the condominium, and (ii) large withdrawals=from your IRA. If you want to provide me with more information (bearing in mind what I noted in item #3, above) then inf=rmation about your 2017 income and what your income is likely to be this y=ar is what I most need. There is a very simple reason for the income =ax obligations. The depletion of the IRA that I reviewed again above=imposed a huge tax burden, which we were still attempting to deal with in 2017. After Harry's refusal to release some fund= from the trust to pay the exorbitant taxes resulting from what was happen=ng, I of course had to withdraw funds from the IRA to pay taxes on the who=e estate, incurring a new exorbitant tax burden. Despite some small relief later from the trust after I had r=peatedly pointed this out, it carried over through the 2017 tax bill. =AO So for that reason, taxes were extremely high. That curious episo=e is at last finally over, leaving many questions unresolved about what was happening while I was paying little attention, r=lying on advisers to ensure that matters were proceeding appropriately I hope this is helpful an= will wait to hear more from you and/or Rich. </=> Max<=p> </=> 9 EFTA_R1_01791728 EFTA02602942  </=> A. Max Kohlenberg<=> Howland Evangelista Kohle=berg Burnett, LLP One Financial Plaza =80 Suite 1600 Providence, Rhode Island =2903 Direct: Main: <=span> Fax: c/=pan> <mailto > </=> www.hekblaw.com <http://www.hek=law.com/> </=> </=> This email and any attachrents thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. =f you are not the intended recipient of this email, you are hereby notifies that any dissemination, distribution or copying of this email, and any at=achments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by =eturn email and permanently delete the original and any copy of this messa=e or attachment. Thank you. </a < => </=> From: Noam Cho=sky [mailto <mailto >] Sent: Friday, July 06, 2018 8:53 PM To: Max Kohlenberg Subject: Re: Marital Trust I am not represented=on this issue, so you can send the information to me directly, copying Ric=ard Kahn. Noam 10 EFTA_R1_01791729 EFTA02602943  On Fri, Jul 6, 2018 at 4:24 AM, Max Kohlenberg «= href="mailto target="_blank" > wrote: Noam —<=u> </=> Thanks for your message a=d your inquiry. I would like to reply in some detail, but before I d= so please tell me whether you are now represented by legal counsel. =f you are then I believe I'm obliged to copy your counsel on our e=changes. I would also plan on copying Rich Kahn, since my last commu=ications about distributions to you from the trusts have been with him. </=> Please also bear in mind =hat since (according to Rich) you are preparing to bring a legal action against me, I have been in contact with my firm's malpractice insu=ance carrier. As my exchanges with you may also need to be reviewed =ith our carrier that may delay (and/or limit) my responses.<=> </=> Max<=p> </=> </=> A. Max Kohlenberga> Howland Evangelista Kohle=berg Burnett, LLP One Financial Plaza =80 Suite 1600 Providence, Rhode Island =2903 Direct: Main: <=span> Fax: c/=pan> <mailto www.hekblaw.com <http://www.hek=law.com/> </=> </=> This email and any attach=ents thereto are intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. =f you are not the intended recipient of this email, you are 11 EFTA_R1_01791730 EFTA02602944 hereby notifie= that any dissemination, distribution or copying of this email, and any at=achments thereto, is strictly prohibited. If you have received this email in error, please immediately notify me by =eturn email and permanently delete the original and any copy of this messa=e or attachment. Thank you. <1=> <1=> From: Noam Cho=sky (mailto <mailto >1 Sent: Thursday, July 05, 2018 7:53 PM To: Max Kohlenberg Subject: Marital Trust Max,=u> I presume it is clear that the rec=nt proposal transmitted by Harry's lawyer that I should be satisfi=d with a handout of 100k a year from the Marital Trust is too disgraceful for comment. I would like to know what further info=mation you require for reimbursement for tax payment. We have previously t=ansmitted a great deal of financial information in order for you to reimbu=se our taxes, including proof of payment and more. Exactly what more do you require, and with what justi=ication? We see little reason that you cannot act on the information=already provided. As for the claim about concern for my later =ears, that has been thoroughly refuted. Noam please no=e The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected] <mailto:[email protected]> , and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved 12 EFTA_R1_01791731 EFTA02602945