Wills, Trusts & Estates Prof Blog

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

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Saturday, November 10, 2012

Sherman Hemsley Can Finally Be Buried

Images-6As I previously discussed, On Friday, the judge ruled that Sherman Hemsley's longtime friend, Flora Enchinton Bernal can proceed to bury Sherman and Administer his estate.

Even though DNA results showed that Richard Thornton is Hemsley's half brother, Judge Patricia B. Chew declared Hemsley's will, which named Enchinton as executor of his estate and left her all his possessions, to be valid.  The attorney and notary who did Hemsley's will testified that he never suspected Hemsley lacked capacity at any point when drafting and signing the will.  The witnesses for the will signing also testified that Hemsley had full use of his facilities when he signed the will.

Both Thornton and Enchinton agree to give Hemsley a military burial.

See Judge: 'Jeffersons' Actor Sherman Hemsley's Will Valid, Actor Can Be Buried, accesshollywood, Nov. 9, 2012. 

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

November 10, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Governing Law Does Not Determine A Trust's State Income Tax Liability

TrustsWhile it is well-established that if a trustee wants to know what law governs the trust he or she should look to the choice of law provision in the applicable trust instrument. However, if the trustee wants to know whether the trust must pay a state income tax on the ordinary and capital gains earned on the principal of the trust, the trustee must look to a few different factors. In particular, a trustee might want to answer the following questions because these are crucial to determining whether he must pay a state income tax.

  1. "Where does the testator reside?"
  2. "Where does the [settlor] reside?"
  3. "Where will the trustee administer the trust?"
  4. "Where does the trustee reside?"
  5. "Where do current and future beneficiaries reside?"

It is important to note that there are also a few states that follow the governing law of the trust, such as Louisiana, Idaho, and North Dakota.

See Richard W. Nenno, Governing Law Matters Not When Assessing Whether a Trustee Must Pay a State's Income Tax, Bloomberg, BNA, Nov. 9, 2012.

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

November 10, 2012 in Income Tax, Trusts | Permalink | Comments (0) | TrackBack (0)

Lawyer, Philanthropist, Defrauder

Court FightJoseph Caramadre is the first two and perhaps the latter. He is accused of using the identities of terminally ill people on annuities. The annuities that he used had death benefits. These benefits allow the owner of the annuity to collect the profits or receive the initial investment if the stocks were to fall. Caramadre and other investors allegedly used these annuities to make millions of dollars. The United States Attorney General's Office has charged Caramadre with several crimes, including "wire fraud, identity fraud, identity theft and money laundering." If convicted, Caramadre could be sentenced to more than 100 years in prison.

See Jim Taricani, Philanthropist's Fraud Trial to Begin Next Week, NBC, Nov. 9, 2012.

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

November 10, 2012 in Current Events, Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Friday, November 9, 2012

Supreme Court to Consider Cert Petitions Involving Gay Marriage

Images-1At a private conference on November 20, the U.S. Supreme Court will consider several cert petitions involving gay marriage. The justices will consider 10 petitions and it is almost certain that the court will agree to hear at least one case on the subject.

The Obama administration recommends that the court hear Windsor v. United States. In Windsor, the 2nd Circuit Court of Appeals struck down a provision of the Defense of Marriage Act that bars the federal government from giving benefits to married gay couples. House Republicans argue that this case presents standing issues because it is not even clear if plaintiff Edith Windsor's Canadian marriage would have been accepted by New York because it was performed before New York allowed same sex marriage.

House republicans would like for the court to review what is now known as Gill v. Office of Personnel Management. In this case, the 1st Circuit Court of Appeals also struck down DOMA. If this case is heard, Justice Elena Kagan could recuse herself because of her work as Solicitor General on the litigation.

See Debra Cassens Weiss, Supreme Court to Consider Gay-Marriage Cert Petitions Before Thanksgiving, ABAJournal, Nov. 9, 2012.

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

November 9, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Ten Tips For Military Families

Unknown-3Kiplinger lists ten financial tips for military families. They are as follows: 

1. Take advantage of low-cost investments. Servicemembers have access to the thrift savings plan and the Roth TSP which is a Roth IRA without the income restrictions. 

2. Get 10% on your savings, guaranteed. The military Savings Deposit Program lets deployed servicemembers invest up to $10,000 in the program and receive 10% annual interest, compounded quarterly, for up to three months after their return.  

3. Benefit from tax-free in, tax-free out. If you're receiving tax-free combat-zone pay, your money goes into the Roth tax-free and your contributions and your earnings come out tax-free. 

4. Transfer your education benefits. If you have served at least 36 months since September 11, 2001, you have access to the Post-9/11 GI Bill which can cover up to four academic years at a public college or up to $17,500 per year for a private college or foreign school. 

5. Sign up for inexpensive life insurance. Servicemembers have access to one of the lowest-cost life insurance programs available.

6. Maximize your tax breaks. As long as they are in the military, servicemembers can maintain legal residence in one state even if they are transferred to another state.  

7. Take advantage of low loan rates. The Servicemembers Civil Relief Act provides special legal benefits for servicemembers, including an interest-rate cap of 6% on any loans you took out before you were called to active duty. 

8. Make the most of housing breaks. Take advantage of the perks, including tax-free housing allowance and access to Veterans Administration loans. 

9. Calculate a comparable salary. When thinking about leaving the military, make careful calculations to figure out how your new job compares to your military career. Be sure to consider the military benefits that you're giving up as well. 

10. Make the most of resources for finding a new job. When you're ready to leave the military, if you have trouble translating your military skills to the civilian job market, you can get help from the military community-service office on your base. 

See Kimberly Lankford, 10 Financial Tips for Military Families, Kiplinger, Nov. 9, 2012. 

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

November 9, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Judge Deceives Former Client

Court FightA District Court judge in Malahide, Dublin is set to go to trial for deceiving a former client of hers by writing a will for him that did not do what he intended. The judge here, Heather Perrin, was once the head solicitor at her firm in Dublin. One of her clients, Thomas Davis, came to her so that she could write a will for him that would bequeath his property to his wife's nieces. Mr. Davis did not inspect the document because he trusted Ms. Perrin. When Ms. Perrin became a judge, a new solicitor took over her cases and informed Mr. Davis that his will, in fact, gave about half of his estate to the children of Judge Perrin. At trial, Judge Perrin claimed in her defense that she did what Mr. Davis wanted. She claimed that the reason for this change was that Mr. Davis stated that he was not happy with how his nieces were irresponsible with their money.

See District Court Judge's Deception Trial Opens, BreakingNews.ie, Nov. 9, 2012.

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

November 9, 2012 in Current Events, Professional Responsibility, Wills | Permalink | Comments (0) | TrackBack (0)

New Haven Funeral Home Director Blamed Ex-Wife For Mishandling Funeral Home Funds

CementaryJohn Olszewski, an ex-Michigan Funeral Home Director, has pleaded guilty to mishandling $13,000 in prepaid burial expenses in a plea bargain agreement with prosecutors. He was recently sentenced by a judge and ordered to return the funds to the six customers that were affected.  As a result of these events, Olszewski had to close his funeral home in New Haven, Michigan. Mr. Olszewski blames his wife for actually misappropriating the funds because he alleges that she failed to place the funds he received in escrow.

See Former New Haven Funeral Director Blames Ex For Burial Foul-Up, Click On Detroit, Nov. 8, 2012.

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

November 9, 2012 in Current Events, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Tom Hanks and Other Celebrities Defrauded By Insurance Broker

MoneyAn insurance broker from Southern California, Jerry B. Goldman, has been arrested and charged with defrauding Tom Hanks and other celebrity clients. The broker allegedly overcharged Tom Hanks, musician Andy Summers, and others on their insurance premiums. He would collect the inflated insurance premiums, send the company the correct amount, and keep the surplus that he charged. Goldman was quite thorough in his criminal actions. When his clients would ask for their policies, Goldman would alter the document so that it did not disclose their actual premiums. Goldman did this "'to lull his clients into a false sense of security.'" On October 30, 2012, a federal grand jury indicted him for overcharging the victims over $800,000 on their insurance policies.

See Robert Jablon, Insurance Broker Charged With Defrauding Tom Hanks, Kypost.com, Nov. 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.

November 9, 2012 in Current Events, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Thursday, November 8, 2012

Congress Won't Likely Address Estate Tax

Unknown-2Congress probably will not act soon enough to stop the $5 million estate and gift tax exemption from going back to $1 million in the new year.  However, this does not necessarily mean that clients only have 7 more weeks to take advantage of this planning opportunity.  

Thomas Pauloski, national managing director of Alliance Bernstein's Wealth Management Group, predicts that Congress will come up with less dramatic increases to the estate and gift tax provisions in the first nine months and make them retroactive to Jan. 1, 2013.

With this in mind, Mr. Pauloski recommends setting up an irrevocable grantor trust before the end of the year and funding it with the maximum $5 million for an individual or $10 million for a couple.  Ideally, the trust should be funded with assets that are easy to value, such as cash and stock. Next year the trust can buy assets that are more difficult to value.

See Liz Skinner, Estate Department: Inheritance Tax Changes Likely to Be Retroactive, InvestmentNews, Nov. 8, 2012. 

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

November 8, 2012 in Estate Tax | Permalink | Comments (0) | TrackBack (0)

Article on 2012 Transfer Tax Exemptions And Spousal Lifetime Access Trusts

LEDERMANJ TaylorpParker F. Taylor (Associate, Greenberg Traurig) and Jason A. Lederman (Associate, Greenberg Traurig recently published their article entitled Cashing In on 2012 Transfer Tax Exemptions Using Spousal Lifetime Access Trusts.  The abstract is available below: 

Unless the law is changed, at the end of 2012, the favorable estate and generation-skipping transfer (GST) tax rates and the amounts sheltered from those taxes under the Tax Relief Act of 2010 will end and less favorable ones will be reinstated. In view of the potential increases in rates and reduction in shelters, clients should consider strategies to use their shelters during the remaining days of 2012 before up to $8,240,000 of transfer tax shelter potentially is lost forever.

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