Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, February 22, 2018

Trusts in the Age of Trump: Time to Re-Engineer Your Estate Plan

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-22/02c53198-0d17-4fcf-b733-503cd0185703.pngThe Tax Cuts and Jobs Act makes some exciting alterations to various parts of the tax code. For estate and tax planners, raking among the most notable changes are the increase to the estate tax exemption thresholds and tax breaks for qualified business income. As might be expected, clever lawyers have started pushing the limits of these new rules to mitigate taxes for themselves and for their clients. A ploy concocted for a client by Steven Oshins, an estate lawyer in Las Vegas, involves taking his client’s $1.6 million in yearly earnings and placing portions into eight separate non-grantor trusts for his 3 children and 8 grandchildren. Since each trust can shield up to 20% of the transferred profits, maxed out at $150,000, this maneuver saves the owner nearly $90,000 in taxes. A delighted Oshins commented on the situation: “Congress can't contemplate what creative estate planners will come up with.”

See Ashlea Ebeling, Trusts in the Age of Trump: Time to Re-Engineer Your Estate Plan, Forbes, February 13, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

February 22, 2018 in Current Events, Estate Planning - Generally, Estate Tax, Income Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Article on Fiduciary Principles in Family Law

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-22/9803dfcd-6f46-4796-8e55-8500f91e71c0.pngElizabeth S. Scott & Ben Chen recently posted an Article entitled, Fiduciary Principles in Family Law, Family Law eJournal (2018). Provided below is an abstract of the Article:

Family members bear primary responsibility for the care of dependent and vulnerable individuals in our society, and therefore family relationships are infused with fiduciary obligation. Most importantly, the legal relationship between parents and their minor children is best understood as one that is regulated by fiduciary principles. Husbands and wives relate to one another as equals under contemporary law, but this relationship as well is subject to duties of care and loyalty when either spouse is in a condition of dependency. Finally, if an adult is severely intellectually disabled or becomes incapacitated and in need of a guardian, a family member is often preferred to serve in this role. 

This chapter examines the application of fiduciary principles and doctrine to close family relationships. The chapter explains that while the parent-child and spousal relationships are governed by fiduciary principles and duties, enforcement of these duties [at least when family relationships are intact] is largely accomplished through informal bonding and monitoring mechanisms. In contrast, when family members become guardians of adult relatives, including elderly parents and disabled adult children, obligations are formally enforced under fiduciary law with minimal recognition of the family bond. The chapter examines the rationales for these contrasting approaches and questions whether adjustments are indicated. It concludes that modest relaxation of formal fiduciary obligations in the context of close family relationships might sometimes serve the interests of the incapacitated adult by supporting her relationship with the family guardian.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

February 22, 2018 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Justin Bieber is Getting a New Baby Sister

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-21/f7143d2a-e5d9-43d4-803a-48f9aa935907.pngA new Bieber will be making her way into this world in the next few months. Justin Bieber's father, Jeremy Bieber, recently revealed the news that his new bride, Chelsey Rebelo, is pregnant.  Rebelo is approximately four to five months along. The couple's pink-themed Jamaican wedding this week was an homage to their expected daughter. This is the pair's first child together, though Jeremy already has three of his own.

See Justin Bieber is Getting a New Baby Sister, TMZ, February 21, 2018.


February 22, 2018 in Current Events, Estate Planning - Generally, Music | Permalink | Comments (0)

Wednesday, February 21, 2018

Book on McGovern & Hirsch California Probate Code Annotated, 2018 ed. (California Desktop Codes)

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-21/6da01281-507e-479b-8f29-6411a8a8a3fb.pngAdam J Hirsch & William M. McGovern, Jr. recently published a book entitled, McGovern & Hirsch California Probate Code Annotated, 2018 ed. (California Desktop Codes) (2018). Provided below is some information about the book:

Your comprehensive resource for probate law and estate planning in California, McGovern & Hirsch California Probate Code Annotated provides the complete text of the California Probate Code, related state and federal statutes, and rules of court regarding estate planning and probate.

This volume contains:

  • Authoritative commentary, annotations, and analysis of leading cases
  • Law Revision Commission editorial notes that provide additional guidance in the construction and application of particular sections
  • References to Witkin's Summary of California Law, 10th which direct you toward further research
  • A table of Judicial Council forms to help you identify forms to be used in conjunction with the statutes and rules
  • A table of cases illustrating the cases discussed in the author's commentary
  • A table of affected sections indicating recent modifications
  • Underlining to indicate additions or changes in statutes
  • Asterisks to indicate deletions

February 21, 2018 in Books, Books - For Practitioners, Books - For the Classroom, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Michael King: The Generous Business

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-21/effeb84f-7352-4c96-ba10-16d70dc5bb98.pngGiving up an interest in a business may provide owners with an opportunity to increase their current charitable giving while concurrently reducing tax liability. Most business owners are not cognizant of the fact that they can donate a portion of their business to a charitable cause. Generally, giving up such an interest has little to no impact on the owner’s lifestyle, business capitalization, or cash flows. For business owners interested in giving back to their communities, implementing a business-interest strategy can greatly increase charitable support and transform a business into “a powerful engine for greater impact and generosity.”

See Michael L. King, J.D., Michael King: The Generous Business, Wealth Strategies Journal, January 29, 2018.

February 21, 2018 in Estate Planning - Generally | Permalink | Comments (0)

Article on Implicaciones Fiscales De La Legítima Catalana (Tax Implications of the Catalan Forced Heirship Institution)

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-20/c41b7e8a-36ef-4210-8f8c-b660d7b7a456.pngAlberto Artamendi Gutiérrez recently posted an Article entitled, Implicaciones Fiscales De La Legítima Catalana (Tax Implications of the Catalan Forced Heirship Institution), Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article:

Spanish Abstract: Tal como establece el artículo 451-1 del Código Civil de Cataluña, "La legítima confiere a determinadas personas el derecho a obtener en la sucesión del causante un valor patrimonial que este puede atribuir a título de institución hereditaria, legado, atribución particular o donación, o de cualquier otra manera". Así pues, la legítima catalana se configura como un derecho de crédito de ciertos parientes contra los herederos del causante, lo que contrasta con la regulación del resto de España, donde el Código Civil, en su artículo 806, establece que la legítima es un derecho sobre los bienes de la herencia: "Legítima es la porción de bien de que el testador no puede disponía miedo haberla reservado la ley a determinados herederos, llamados por esto herederos forzosos".

Esta diferente aproximación al concepto puede parecer banal en un primer análisis, pero lo cierto es que las consecuencias del diferente tratamiento son amplias y profundas, y hay que decir que, tal vez por el reducido ámbito personal y territorial de aplicación - los ciudadanos españoles con vecindad civil catalán - o por la relativa novedad y desconocimiento de esta institución (el libro cuarto del Código civil de Cataluña entró en vigor el 1 enero 2009, si bien esta institución ya existía antes con diferente configuración e implicaciones jurídicas) éstas no han sido previstas en absoluto por la normativa tributaria, dando lugar a situaciones difíciles de resolver.

Por este motivo, el presente artículo analizará esta institución desde el punto de vista tributario, intentando ordenar las escasas guías normativas, doctrinales y jurisprudenciales que existen y proponiendo soluciones para las lagunas legales que todavía hay.

English Abstract: Article 451-1 of the Catalan civil code establishes a right of certain relatives to receive certain economic value from the succession of a person. This right, called “legítima” is therefore a credit right of certain relatives against the heir of a deceased person. In the rest of Spain, there is also a “legítima”, but as a direct right against the assets of the deceased person, as another heir (article 806 of the Spanish civil code).

This different configuration of the right can look trivial at first glance, but the legal consequences of these two “legítimas” differ widely and one could argue that these different consequences have not been covered whatsoever in the Spanish tax law, giving rise to situations that are very difficult to solve. This lack of regulation might be due to its small personal and territorial sphere of application (the Spanish citizens with civil residence in Catalonia) or the fact that this is a relatively new and unknown institution (the catalan “legítima” was introduced on 1 January 2009, although the institution already existed prior to this date with a different configuration and legal consequences.

This article analyzes the catalan “legítima” from a Spanish tax point of view, trying to put together the scarce existing regulation and case law and proposing legal solutions for the loopholes that still surround this particular institution.

February 21, 2018 in Articles, Estate Administration, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Talk to Your Doctor About Your Bucket List

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-20/d84f523b-e873-46f9-b237-45b7e4043ee2.pngIn his experience as a geriatrics, palliative care doctor, and internist, VJ Periyakoil has recognized that most people have a list of goals, or a bucket list, they wish to accomplish before they pass way. Some patients give these lists considerable thought, while others have a more ambiguous notion of a few things they would like to do at some point in the future. Dr. Periyakoil regularly asks his patients about their bucket lists. In one instance, a patient told Periyakoil that she wanted to skydive on her 80th birthday. While such an adventure was not recommended given her history of diabetes, hypertension, and osteoarthritis, she casually shrugged off the concerns saying, “Don’t worry, Doc. If I die sky diving, I’ll be sure to take my diseases with me. Besides, the instructors are very handsome, so not a bad way to go at all.”

Other cases are not so light-hearted. Periyakoil recalls an instance when a patient wanted to travel to Maui but had been diagnosed with a very nasty form of gallbladder cancer. He had already been scheduled for radiation and chemotherapy treatments. Knowing the likely outcome for this individual, Periyakoil told him the stark truth: “You could go to Maui, while you still can. Start the cancer treatments as soon as you return.” Two weeks later, the patient returned, beaming and with a to-do item crossed off his bucket list. In many cases, physicians prescribe treatments in a vacuum. They may not be aware of their patients desires and will not factor those concerns into a treatment plan. The next time you visit with your primary care provider, let him know of your wishes and ask them what the side effects of their proposed treatment will have on your goals.

See VJ Periyakoil, M.D., Talk to Your Doctor About Your Bucket List, The New York Times, February 8, 2018.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

February 21, 2018 in Estate Planning - Generally | Permalink | Comments (0)

Tuesday, February 20, 2018

Could You Live Forever? Humans Will Achieve IMMORTALITY Using AI and Genetic Engineering by 2050, Expert Claims

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-20/6826a66f-caa0-4460-84a8-2f46d7b8a51c.pngThe great bane of the human condition has always been the ever-increasing disparity between the mind’s continuing evolution paired with the body’s painful degradation and decay. What could we have done at age 20 with the experience and wisdom we now possess? According to Dr. Ian Pearson, this age-old problem may not be an issue in the future. No longer will the old and weary, those who’s tongues forked no lighting, need to rage against the dying of the light. Pearson predicts that by 2050, improvements in genetic engineering may grant humans near-immortality by reversing or reducing the ageing of cells. Pearson commented on these possible advances: “There are quite a lot of people interested in living forever. There always has been, but the difference now is tech is improving so quickly, lots of people believe they can actually do it.”

See Joe Pinkstone, Could You Live Forever? Humans Will Achieve IMMORTALITY Using AI and Genetic Engineering by 2050, Expert Claims, DailyMail.com, February 19, 2018.

February 20, 2018 in Estate Planning - Generally, Science, Technology | Permalink | Comments (0)

Before There Was #MeToo, There Was Mary Cunningham

Merlin_133384214_67ca0c08-73f9-467c-ad90-3c6f4d9b5a77-blog427Mary Cunningham Agee is lovingly known as the “Tomato Lady” in her tightknit community of St. Helena, California. She patiently grows heirlooms and graciously hands these out to neighbors along with an assortment of cabbage, cauliflower, and basil. Each side of her picturesque 4,000-square-foot home is lined with vineyards that are cultivated each season to produce twenty-five cases of a delightful pinot noir.

This sunshine-and-roses scene, while pretty on the surface, offers a pleasant, but shallow façade for Agee’s current troubles. Ms. Agee’s husband of 35 years, Richard Agee, a former CEO of Bendix and once considered to be a rising corporate star, died this past December. In the last few, mentally troubled weeks of his life, he revised his will to include his previously estranged children and initiated divorce proceeds against Ms. Agee. Due to these last-minute changes, her days are now filled with a contentious legal battle involving Mr. Agee’s children and a will that was arguably written while Mr. Agee was not of sound mind. This recent twist is but a single piece of a turbulent epic that stretches back nearly four decades, to what is arguably the first widely-followed sex scandal in corporate America.

See Amy Chozick, Before There Was #MeToo, There Was Mary Cunningham, The New York Times, February 10, 2018.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

February 20, 2018 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Living in a Tiny House…with a Newborn Baby! The Parents Who Swapped Their Apartment for a 204-Square-Foot, $29,000 Home

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-20/586ce307-eb7c-4794-81a9-8d89605c65d1.pngSamantha and Robert Garlow, both 31, had grown sick of throwing their money away on rent. In order to cut down on their debts and increasing savings, the pair decided to build their own $29,000, 204-square-foot home sitting atop a trailer. The couple recently celebrated two years living in the space, now with a baby girl, and have loved the experience. Robert said in the “short two years our tiny house has been the best space possible to become first time parents while allowing us to create a financial safety net and refinance our student loans to an aggressive five-year eradication plan, all while allowing us to work less, travel more and spend more time together as a family.”

See Pheobe Southworth, Living in a Tiny House…with a Newborn Baby! The Parents Who Swapped Their Apartment for a 204-Square-Foot, $29,000 Home, DailyMail.com, February 19, 2018.

February 20, 2018 in Estate Planning - Generally | Permalink | Comments (0)