Wills, Trusts & Estates Prof Blog

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

Saturday, September 8, 2012

O.J. and the IRS

Images-8The IRS alleges that O.J. Simpson has not paid taxes since 2007.  In response, they filed a tax lien against O.J. until they can recover the nearly $180,000 he supposedly has not paid.  The IRS filed the lien against his Miami home, which is now in foreclosure.

Simpson has been serving a 33-year prison sentence since he was convicted of armed robbery and kidnapping in 2008. 

See Michael Cohn, IRS Files Tax Lien Against O.J. Simpson, Accounting Today, Aug. 31, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention. 

September 8, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Lawyer Is Remorseful About Stealing Money From Client

Images-7David R. Schnell, 53, was convicted of stealing almost $34,000 from a client’s estate.  Erie County Judge Sheila A DiTullio ordered the disbarred lawyer to repay the money and serve six months in jail and five years on probation. 

Schnell admitted to a gambling addiction, and expressed extreme remorse for betraying his client’s trust.  He makes no excuses for his actions and only blames himself. 

As a result of his gambling addiction, Schnell ran into other trouble with the law.  He plead guilty to grand larceny for thefts from other estates in Niagra County.  Currently, Schnell is serving two consecutive one-year sentences in Niagra County, and he has to pay the full amount back to the victims over 10 years. 

See North Tonawanda Lawyer Sentenced For Stealing From Client, The Buffalo News, Sept. 8, 2012.   

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

September 8, 2012 in Current Events, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Article of Gift Taxes

Bridget Crawford Jay SoledJay A. Soled (Professor of Business, Rutgers University) & Bridget J. Crawford (Professor of Law, Pace University School of Law) have recently published their article entitled, Gift Taxes, Valuation, and the Need for Quarterly Information Returns, Tax Notes, Vol. 136, No. 7 (2012). The abstract from SSRN is provided below:

Gifts of tangible personal property and closely-held business interests typically are made without a paper trail (e.g., cancelled check or deed recording). Because gift tax returns are not due until April 15 of the calendar year following the transfer, a non-compliant taxpayer can game the system by taking a “wait and see” approach. For example, if a taxpayer makes a gift of valuable gold ring on January 1, and by December 31 the value of gold significantly declines to an all-time low, a taxpayer might choose to report the gift as occurring on the latter date. Similarly, if a taxpayer makes a gift of privately-held stock to a grantor retained annuity trust on January 1, and, likewise, the value of that stock declines to an all-time low by December 31, the taxpayer might claim that the gift never happened. 

Professors Soled and Crawford propose reviving a quarterly gift tax return filing system applicable to all taxpayers whose aggregate taxable gifts equal or exceed $100,000 during a calendar quarter. Such a system would increase both compliance and revenue.

September 8, 2012 in Articles, Gift Tax | Permalink | Comments (0) | TrackBack (0)

Pet Trusts

CatsA person who cares for his or her pet like a member of the family or a child might want to consider planning for them as if they were a member of the family. This means that a person might want to consider how a pet is going to be taken care of when the owner cannot anymore. Speaking in legal terms, animals are considered property that belong to their owner. Because of this classification, animals cannot inherit property through a will or other traditional estate planning documents. In fact, most will likely be sent to an animal shelter upon their owner's death. 

Now, it looks as if the popular estate planning document creation site LegalZoom.com is teaming with the ASPCA "to promote LegalZoom's Pet Protection Agreement, which identifies guardians for your pets, allows you to leave funds for their care and lets ou list their caregivers, such as your veterinarian or groomer." If a person wants to do this, they will still need to determine who will be the guardian of his or her pet. A person might want to actually receive a written commitment from the person that is going to take care of that person's pet. If the owner cannot find a person, then they might try shelters who would be willing to take that person's pet. A person might also want to amend his or her power-of-attorney to include instructions for the care of a person's pets should that drafter become incapacitated. This last one may seem obvious, but a person might want to provide the necessary funds for the care of his or her pet. This is where the pet trusts comes in. If a person wants to provide more than $25,000 for the care of his or her pet, then that person qualifies for a pet trust. Like a normal trust, this document has a trustee who would manage the money in the trust for the pet. This person is separate from the caregiver of the pet. Only four states do not have pet trusts, including Kentucky, Louisiana, Minnesota and Mississippi. 

See Karen Blumenthal, Pondering a Trust for Your Pet, Wall Street Journal, Sept. 7, 2012.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention. Make sure to check out Gerry W. Beyer's & Barry Seltzer's book, Fat Cats & Lucky Dogs – How to Leave (Some of) Your Estate to Your Pets (2010) for more information.

September 8, 2012 in Trusts | Permalink | Comments (0) | TrackBack (0)

Friday, September 7, 2012

Con Law Professors Weigh In on The Constitutionality of DOMA

Images-6The Defense of Marriage Act (DOMA) defines marriage as between a man and a woman. Professor Dale Carpenter of University of Minnesota Law School asked constitutional law professors whether they believe the DOMA is constitutional.  He sent the survey to 1,579 constitutional law teachers that were listed in the 2011-12 directory of the Association of American Law Schools.  485 of those professors responded to his survey. 

Professor Carpenter’s results showed that 87% of constitutional law professors support marriage for same-sex couples, and 7 out of 10 professors think DOMA is unconstitutional.  A smaller 54% of the professors think that the Constitution requires states to recognize same sex marriage.

See Joe Palazzolo, Survey: 7 Out of 10 Con Law Profs Think DOMA is Unconstitutional, The Wall Street Journal Law Blog, Sept. 7, 2012.   

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention. 

September 7, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Moves to Make Before 2012 Expires When the Gift Tax Exemption Might Expire Too

Images-5I have previously blogged about how the estate tax is set to expire at the end of 2012.  As a result of this uncertainty, estate planners are seeing a drastic rise in business from clients concerned that the gift-tax exemption will decrease dramatically next year. 

NerdWallet recommends avoiding the rush and consulting a financial planner to create a viable financial plan.  This planning can take several months to complete with valuations of assets and completion of paperwork, so it is best to see a planner as soon as possible.  That way you can put your plan into action before the $5 million gift tax exemption potentially expires.

Also, remember that there are other ways to gift your estate, tax-free.  Individuals can give up to $13,000 to another person per year before gift taxes kick in.  Tuition or medical expenses for others are also tax-exempt if individuals pay them directly to the institution.  Additionally, individuals can still make tax-free gifts to spouses and charitable organizations.

See Ashwin, I’ve Heard The Gift Tax Exemption Is Going To End Soon—Does That Mean I Should Change My Will?, NerdWallet, Aug. 24, 2012. 

September 7, 2012 in Estate Tax, Gift Tax | Permalink | Comments (1) | TrackBack (0)

Stetson University College of Law to sponsor 14th Annual Special Needs Trusts National Conference

StestonOn October 17-19, 2012 at the Don CeSar Beach Resort in St. Pete Beach, Florida, the Stetson University College of Law is sponsoring the 14th Annual Special Needs Trusts National ConferenceHere is a description of the conference:

This year's conference offers two pre-conferences. One pre-conference will focus on the technology and social media issues faced by attorneys and their staff. The other pre-conference will focus on issues for pooled trust administrators, attorneys and those who work with pooled trustees.

Pre-conference: Law Office Management Technology highlights:
  • What Law Office Staff Need to Know About Using Social Media in/for the Law Office
  • The Firm's Digital Assets - How to Protect Them, How to Value Them, What to Do With Them
  • Developing Written Policies for All Sorts of Things in the Law Office
Pre-conference: Hot Topics About Pooled Trusts highlights:
  • Breaking News - Recent Developments For, About, or Affecting Pooled Trusts
  • Decision-Making for a Pooled SNT - Using a Decision Tree for SNT Distributions: Dealing with Clients and Attorneys
  • Pooled Trusts Meet Subsidized Housing: Understanding How SNTs Are Treated in the World of HUD Housing

The Conference (Oct. 18-19, 2012)

The National Conference is hosting a two-day main conference featuring excellent speakers and support materials on basic and advanced topics for a variety of professionals who work in the field.

Main conference highlights:

  • Goal-Based Investing and Management of the SNT - Different Investment Models and the Prudent Investor Rule
  • Focus on SNTs: Checklists to Keep You on Track
  • Marketing on Special Needs Practice - Five Tips in 60 Minutes
  • Update from Social Security
  • Reasons Why SSI Turns Down a SNT and How to Appeal
  • HUD Policy and SNTs - Bringing Finley v. City of Santa Monica to Your State
  • Fees - How Courts Interpret the Standard of Reasonableness
  • The Update: Cases and Breaking News About SNTs

September 7, 2012 in Conferences & CLE, Elder Law, Trusts | Permalink | Comments (0) | TrackBack (0)

Raising the Medicare Eligibility Age

Images-4As we all know, Medicare’s long term success is grim.  Some have proposed gradually raising the eligibility age from 65 to 67, pointing out that we are living longer now than we did when Medicare began in 1966.  Opponents of this proposed solution argue that it is unfair to the poor to make Americans wait two years to get Medicare.  They also argue that it would increase the number of uninsured, and end up costing Americans more than it saves them. 

Please click here to view a life expectancy chart.  When retirement was set at age 65, the life expectacy age was less than age 65 and very few people lived to reach age 65. In fact, when social security started, the life expectancy was 61.  People were expected to work until they died and retirement was not part of a life plan.  The age should now be 78 to match “life inflation.”

See Should Medicare’s Eligibility Age Be Raised?, Wall Street Journal, Sept. 6, 2012.     

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention. 

September 7, 2012 in Elder Law, Estate Planning - Generally | Permalink | Comments (1) | TrackBack (0)

Estate Planning Is Critical

Sherman HemsleyAs I have previously discussed numerous times, it is important for a person to create their estate planning documents sooner rather than later. The issues with the estate of Sherman Hemsley provide an excellent example of why that's a good idea. As I have previously discussed, the star of "The Jeffersons" is still not buried because his family is still in a battle over his will and estate. What is particularly unfortunate about this situation is that these problems are common. That is why it is important for a person to have his or her estate planning documents up-to-date, which include: how a person wants to allocate his or her assets, a durable power of attorney, a medical proxy, and an advance directive. As in the case of Sherman Hemsley, a person might want to insert the details surrounding the funeral arrangements and how to pay for the funeral itself.

See THELAW.TV, Why Estate Planning Is Critical For Your Family, DenverLaw.TV, Sept. 

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

September 7, 2012 in Current Events, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Brain Damage and the NFL

FootballA study has recently shown that former NFL Players are more prone "to dying from degenerate brain disease" than the general population. In fact, these numbers have shown that the death rate is three times the normal rate among the general population. These diseases include Alzheimer's, Parkinson's, and Lou Gehrig's Disease. While many might want to claim that the cause of this is the number of repeated head injuries that football players receive, the study cannot prove that this is the case. In fact, this study did not examine the number of deaths that resulted from CTE or Chronic Traumatic Encephalopathy, which is caused by repeated blows to the head. In addition, the study might be a bit under inclusive because the survey might not include players that have played less than five years. To make the waters even more muddy, some believe that several cases that were part of the survey may have been CTE and was misdiagnosed. The reason that this occurs is because CTE can only truly be diagnosed after that person's death throught a chemical test. 

See Study: Players Prone To Brain Disease, ESPN, Sept. 5, 2012.

Special thanks to David S. Luber(Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.

September 7, 2012 in Current Affairs, Estate Planning - Generally | Permalink | Comments (1) | TrackBack (0)