Wills, Trusts & Estates Prof Blog

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

Friday, May 25, 2018

CLE on Real Estate Contracts From Start to Finish

CLEThe National Business Institute is holding a conference entitled, Real Estate Contracts From Start to Finish, on Wednesday, May 30, 2018, at the Hilton Waikiki Beach in Honolulu, Hawaii. A description of the event is provided below:

Program Description

Ensure an Enforceable Contract!

Do you have the knowledge you need to draft, negotiate, review and/or enforce a well-constructed real estate contract? Knowing the basics of real estate contract law and drafting an enforceable contract can be two completely different issues. Savvy real estate professionals have learned how they can best use the language and structure of real estate contracts to create a positive outcome for all parties involved. Let us give you practical tools to start and keep you on the road to success. Don't miss out on this full-day, "how-to" course that is jam packed with essential tools to help you tackle leases, purchase and sale agreements, mortgages and so much more - register today!

  • Effectively draft letters of intent to ensure your party's best interest.
  • Assertively negotiate, draft and enforce leases, including joint and several liability, subleasing, severability and indemnification clauses.
  • Discover how to effectively evaluate different types of loan documents, including mortgages.
  • Take a look at the key terms and clauses that need to be included in an easement agreement.
  • Uncover potential problems before an acquisition using proven contract review techniques.
  • Find out about common buyer's and seller's concerns, key clauses and duties with purchase and sale agreements.

Who Should Attend

This basic-to-intermediate level program is designed for:

  • Attorneys
  • Lenders
  • Real Estate Agents
  • Real Estate Brokers
  • Paralegals

Course Content

  1. Drafting the Letter of Intent and Purchase and Sale Agreement (w/Real-World Examples)
  2. Leases: Negotiating, Drafting, Amending, Enforcing and Reviewing (w/Real-World Examples)
  3. Reviewing Mortgage Documents and Escrow/Earnest Agreements (w/Real-World Examples)
  4. Drafting Easement Agreements (w/Real-World Examples)
  5. Legal Ethics for Lawyers Engaged in Real Estate Transactions

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 6.00 -  CA*
CLE 6.00 -  HI*
CLE 6.00 -  WA*

International Association for Continuing Education Training – IACET: 0.60

Limited Practice Officer – Limited Practice Officer: 6.00 *

* denotes specialty credits

May 25, 2018 in Conferences & CLE, Estate Planning - Generally | Permalink | Comments (0)

GST Tax Exemptions in Jeopardy

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-25/02fc22e7-9cd4-49d7-a482-7452b3182461.pngChapter 13 of the Internal Revenue Code specifically deals with the generation-skipping transfer (GST) tax, the tax which deals with transfers to individuals more than one generation below the donor. The belief of Congress is that property should be transferred once at every generation, so assets left to grandchildren should not avoid a taxation.

This tax generally applies to transfers made after October 22, 1986, but Congress grandfathered in transfers from irrevocable trusts that were in existence on September 25, 1985, but only if the transfer wasn’t made out of trust property that was added to the trust after that date or to income attributable to such later-contributed property. Altering these types of trusts can be tricky so that they do not lose their GST exemption. Modifications may generate irreversible damage to the trust and its beneficiaries. Any alterations, even simple ones, must be examined with a careful eye to ensure there are no unintended gift tax consequences and no accidental estate tax inclusion and that any exclusion from the GST taxing regime is retained. 

See Andrew M. Nernery and Brianna L. Guerrea, GST Tax Exemptions in Jeopardy, Wealth Management, May 18, 2018.

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

May 25, 2018 in Current Affairs, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, Trusts | Permalink | Comments (0)

Resolving California Trust and Estate Disputes – A Mediator’s Perspective

EpsteinMany trust and estate disputes are settled through mediation rather than a final adjudication or actual trial. This lowers the overall stress and expenses of the ordeal.

Bette Epstein, who mediates for ADR Services, says that the right time to meet for mediation is "when the parties are prepared to make binding decisions on the day of the mediation and to sign an enforceable agreement reflecting those decisions." The most important ingredient in feeling confident enough to make binding resolutions is having all the available information as it pertains to the agreed upon decision.

"As the mediator, my goal is to end the mediation session with a written agreement reflecting the understanding of the parties," Epstein concludes. The terms may vary depending on the parties needs.

See Jeffrey S. Galvin, Resolving California Trust and Estate Disputes – A Mediator’s Perspective, Trust on Trial, May 21, 2018.

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

May 25, 2018 in Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Thursday, May 24, 2018

Use of Transfer on Death (TOD) Deeds Broadened Under New Statute [Wisconsin]

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-24/b61f5fa9-f7d4-43ef-b25b-82e8a4ffaab5.pngWisconsin recently passed a statute that alters the use of Transfer on Death (TOD) deeds as it pertains to certain types of interests in real property. Previously, the only types of interests that could be passed through a TOD deed were those in property solely owned, owned by spouses as survivorship marital property, or owned by two or more persons as joint tenants. Under section 705.15(1)(m) of the Wisconsin Statutes, a person may use any document to name a TOD beneficiary, not just in a deed. Also, now the interests in real property owned as tenants-in-common and an interest in real property owned by a spouse as marital property without a right of survivorship may be transferred at death. The new law stipulates that a TOD document and all recording fees must be submitted to the register of deeds in the county where the property is located prior to the death of the owner.

See Jacqueline L. Messler, Use of Transfer on Death (TOD) Deeds Broadened Under New Statute, National Law Review, May 18, 2018.

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

May 24, 2018 in Current Affairs, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Article on Excluding the Income of State and Local Governments: The Need for Congressional Action

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-24/a90813b2-dd16-40f0-88b5-ddeead012453.pngEllen P. Aprill published an Article entitled, Excluding the Income of State and Local Governments: The Need for Congressional Action, Tax Law: Tax Law & Policy (2018). Provided below is an abstract of the Article:

This article, although more than 25 years old, has renewed importance in light of the 2017 tax legislation. The 2017 legislation introduced limits on the deductibility of state and local taxes as well as an excise tax applicable to various exempt organizations, including some governmental affiliates, on certain kinds of excess compensation. These legislative changes have focused attention on how the federal government categorizes state governmental entities and their affiliates. The many potential categories include states, their political subdivisions, integral parts of states or political subdivisions, governmental instrumentalities, entities with income derived from an essential governmental function, and governmental affiliates exempt under section 501(c)(3).

The article describes the criteria for and the implications of each of these categories, including their eligibility for deductible contributions. It examines the legislative history of these various statutory provisions as well as administrative and judicial interpretations of them. It explains that, in exempting the income of states and political subdivisions, the Internal Revenue Service relies on an implied statutory immunity rather than on the now discredited doctrine of a constitutional intergovernmental immunity. The contrast between this implied statutory immunity and the history of section 115(1), the provision that excludes “income derived from . . . the exercise of any essential governmental function and accruing to a State or any political subdivision thereof,” demonstrates how the understanding of the federal taxing power over states, their political subdivisions, and their affiliates has changed dramatically since the early 20th century.

The constitutional, statutory, administrative, and judicial issues raised by this piece can usefully inform current debates, such as proposals to allow credits against state taxes for contributions to charitable programs established by state governments.

May 24, 2018 in Articles, Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax, New Legislation | Permalink | Comments (0)

Here’s How Much Money You Need for Bankers to Think You’re Rich

Timage from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-24/cfc34e32-5ac5-4e37-9e00-3bc3e275b814.pnghere is an obvious wealth gap between the poor and the rich, but there is also a large gap between the rich and the really rich. So what is considered rich in this day and age among the very wealthy? $25 million. To the majority of citizens this type of money is unfathomable, but to the extremely wealthy this is just "basic" rich though.

Bankers see wealth different, because no private banker would say that a person worth a couple million is "poor." Wealth managers like to frame the type of client they target in terms of needs instead of rich or poor. With the new tax law of 2017 and the increase in the estate tax exemption, a couple worth $22 million would need different documents and services than a couple worth just a million more.

See Suzanne Woolley, Here’s How Much Money You Need for Bankers to Think You’re Rich, Bloomberg, May 23, 2018.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

May 24, 2018 in Estate Administration, Estate Planning - Generally, Estate Tax, New Legislation, Trusts, Wills | Permalink | Comments (0)

Nearly Half of Americans Still Don’t Understand Social Security

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-24/5a1ce38f-68a0-4109-a65a-c45092e8de4e.pngMassMututal recently put forth a survey of 1,007 Americans nearing the age of retirement asking them to answer questions pertaining to Social Security. 47% of those that participated failed the exam. This may be alarming but the statistic has increased from 3 years ago when 62% Americans aged 50 years or older failed the same exam.

Fortunately, this lack of knowledge can be cured through speaking with a financial advisor. “The most concerning issue I see is that clients believe they get both their own and their spouse’s Social Security benefits when a spouse dies,” said T. Eric Reich, president of Reich Asset Management. “It’s actually the higher of yours or your spouse’s,” Reich said.

See Tracey Longo, Nearly Half Of Americans Still Don’t Understand Social Security, Financial Advisor, May 18, 2018.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

May 24, 2018 in Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, May 23, 2018

CLE on Trusts From A to Z

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-23/f2cbd463-9e52-49fd-9a35-544b05e5b59b.pngThe National Business Institute is holding a conference entitled, Trusts From A to Z, on Monday, June 04, 2018, at the Best Western Plus North Haven Hotel in North Haven, Connecticut. Provided below is a description of the event:

Program Description

Understand All the Wealth Planning Options Available to Your Clients

Planning your clients' financial future and legacy is diverse and complex, with a unique tool for every unique client situation. In this fast-paced comprehensive program, our faculty will guide you through the plethora of trust options and give you a straightforward, incisive analysis of when and how each can be used for maximum effect. Explore the goals, functions, administration hurdles, and tax implications of the top trusts in the practice. Choose the best tool for the job every time - register today!

  • Weigh all the pros and cons to select the best trust options for specific client situations.
  • Anticipate tax consequences of various trusts.
  • Use sample trust language our faculty provide to save drafting time and avoid mistakes.
  • Clarify the powers and duties of trustees in different trusts.
  • Compare living and testamentary trusts for straightforward estate planning.
  • Distinguish between accounting and taxable income and learn how trust income tax is reported.
  • Understand how ATRA has changed the practice of marital trusts and learn when they are still useful.
  • Review common ethical missteps that can cost you your license - and how to avoid them.

Who Should Attend

This basic level seminar is designed for the professionals involved in creating and administering trusts:

  • Attorneys
  • Accountants and CPAs
  • Trust Officers
  • Tax Managers
  • Wealth Managers

Course Content

  1. What are Trusts? Main Trust Principles
  2. Simple Testamentary Trusts and Revocable Living Trusts
  3. Special Needs Trusts (SNTs)
  4. Grantor Trusts
  5. Marital Trusts in a Nutshell
  6. Tax Reduction With Trusts
  7. Charitable Trusts
  8. Other Trust Structures and Issues
  9. Legal Ethics

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 6.50 -  CT*
CLE 8.00 -  NY*

Enrolled Agent – Enrolled Agent: 8.00

Financial Planners – Financial Planners: 8.00

International Association for Continuing Education Training – IACET: 0.70

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 8.00 *

Professional Achievement in Continuing Education – PACE: 8.00

* denotes specialty credits

May 23, 2018 in Estate Planning - Generally, Gift Tax, Income Tax, Trusts | Permalink | Comments (0)

Drafting Do's and Don'ts, May/June 2018

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-23/e43de761-3a00-4c72-b4da-f7caf4f386df.pngThis installment of "Drafting Do's and Don'ts" pertains to inconsistent drafting. There are two basic forms of drafting inconsistency: inconsistent drafting philosophy and inconsistency in the technical aspects of a trust instrument.

The most common philosophical inconsistencies deal with the provisions governing trusts that benefit different generations. One generation may be given certain authorities or particular benefits while those same aspects are denied to subsequent generations. A certain recently reviewed trust was created that was exempt from the generation-skipping tax by benefiting a child but not a grandchild. The philosophical inconsistency would become apparent when the child would die. The instructions stipulated the income would go to the beneficiaries or the beneficiaries issue. This translates to that one generation between the two other generations may not receive any income from the trust, and that the third generation does not have to wait until the passing of the previous generation to receive distributions.

Technical inconsistencies concern mandatory income provisions that are ambiguous, repetitive, or redundant. A familiar theme is to dictate that income from the trust is to pay beneficiaries health, education, maintenance, and support, but this stipulation is unnecessary if distributions must be made at least annually.

See Stephen Liss, Drafting Do's and Don'ts, Probate and Property Magazine, Vol. 32, No. 3, May/June 2018.

May 23, 2018 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

The 3 Reasons Why People Do Estate Planning

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-05-23/8728d035-95c6-4c14-b959-f6f32667371d.png55% of Americans do not have a will, and that is a great concern for many as some states has laws that designate how a descendant's belongings are distributed after their passing. Even if you believe that your assets are minimal, there is still a need to actively participate in estate planning.

Depending on how the probate process operates in your particular jurisdiction, there may be extensive fees or taxes that could be eliminated by hiring a knowledgeable estate planning attorney.

Estate planning is highly important for asset protection when thinking about nursing home care, Medicaid qualifications, and exceeding insurance limits due to medical emergencies.

Family dynamics can be thorny, and having tangible directions of who will manage your assets and how to decipher your last wishes would bring any person peace of mind.

See Joel Johnson, The 3 Reasons Why People Do Estate Planning, Forbes, May 21, 2018.

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

May 23, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)