Wills, Trusts & Estates Prof Blog

Lincoln Man Arrested For Two Unrelated Offenses

A Lincoln man was arrested yesterday for impersonating a funeral director and illegal voting. Terry Kurtzhals went to the Wadlow-Rozanek funeral home on November 21st claiming to be a funeral director. Police say he was trying to take rings from his fiancee who died.  

On an unrelated note, he was also suspected of illegal voting.  Someone familiar with his criminal history saw him wearing an "i Voted Sticker" on election day and they contacted police because they knew he was a convicted felon.  In Nebraska, convicted felons cannot vote until two years after they complete their sentence, parole, and probation. 

See Lincoln Man Arrested for Impersonating a Funeral Director and Illegal Voting, 1011, Dec. 5, 2012.  

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

Don't Spend It All in One Place--Making An Inheritance Last

A US study indicates that one in five people who receives an inheritance of $100,000 or more spends it rather than saving or investing at least some of the money. The Border Mail believes these study results accurately reflect what happens in Australia too.  

The average person only saves half of what they receive.  With superannuation balances looking thin and the fact that government subsidies for elderly care are being reduced, Australians would do well to put most of an inheritance away.  

There are two groups of people when it comes to inheritances: those who view the money as a legacy and those who view it as a lottery win.  The first group usually feel a responsibility to use it wisely because they acknowledge that their parents worked hard for the windfall they are receiving. 

Brendan Burwood, the managing director of ipac financial care, advises that you should pause as soon as you receive an inheritance.  Then consider any tax implications if you liquidate assets.  Next, look at the potential effect of your age-pension entitlements.  After that, you should consider whether the inheritance can be used to pay off credit cards and other debt or provide an emergency fund you never had.  You might also be able to help other people with your inheritance.  And finally once you have considered all of those possibilities, then you could consider indulging yourself.  

While most Australians leave everything to their kids, perhaps consider leaving a bequest to charity.  You don't have to be wealthy or childless to do this. It is as simple as writing something to this effect in your will: "I give one-third of my estate to my daughter and the remainder in equal parts to these three charities."

See Making the Windfall Last, The Border Mail, Dec. 5, 2012.  

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

What One Lawyer Learned From Working at Nordstrom

Current trusts and estates lawyer Wendy S. Goffe used to work as a stock girl at Nordstrom and she shares with Forbes readers what she learned from her stock girl days.  

1. Commit 100% to customer service: Just as Nordstrom customers can go elsewhere to buy merchandise, clients can go elsewhere to get legal services.  A lawyer can set his/her firm apart by focusing on customer service. A lawyer can do this by following through on whatever he or she has committed to, or apologizing when unable to and trying to make up for that.  

2. Provide choices and stay current: Just as any retail associate needs to know options on the sales floor, lawyers should know various ways to solve a problem, or build a network so they can find who does know the answer when they aren't sure.  Give clients options and then let the client choose the solution according to his or her values. 

3. Create an inviting environment: Nordstrom's environment is inviting for various reasons, and similarly, lawyers should offer amenities in their offices to create an inviting environment.  Small gestures such as coffee, tea, or juice and a comfortable public space can go a long way.  

4. Hire thoughtful, motivated employees, and empower them: In retail and in legal practice, it is hard to anticipate what will be important to each particular customer, so it is helpful to educate every employee and empower them to find solutions. 

5. Every customer or client  has a different definition of service: Nordstrom was one of the first companies to have an almost no question asked return policy.  Goffe follows suit and respects that some clients express different preferences.  In this increasingly competitive world, customer service and catering to some of a client's special needs can set a law firm apart. 

See Wendy S. Goffe, How Working As a Stock Girl At Nordstrom Prepared Me For Being a Lawyer, Forbes, Dec. 3, 2012. 

Special thanks to Wendy S. Goffe (Attorney Stoel Rives, LLP) for bringing this article to my attention. 

Trust Advisor Launches “Trust Concierge” To Match Advisors With Friendly Trust Firms

Here in an except from the Trust Advisor announcement:

For many advisors, the hunt for a corporate trustee to administer a favored client’s assets was fraught with confusion and even considerable professional risk.

With 1,700 trust companies to choose from, there’s plenty of room for error.

And since some of them have a reputation — well-earned or otherwise — for prospecting relationships right off advisors’ plates, it’s crucial to find one you can trust not to run a wealth management business of their own. * * *

“Trust Concierge is a high-touch service designed to provide complimentary guidance on selecting a trust firm for your particular needs,” publisher Jerry Cooper explains.

“Recommendations will be made on suitability for your client situation.” * * *

The plan is for Trust Concierge to go live early next year as a toll-free 24/7 phone support line ready to interview advisors, weigh their criteria against our list and make introductions to firms that fit the bill.  * * *

There’s also going to be a free app for both iPhone and Android phones.

Article on Gifting Strategies

Robert L. Moshman (Attorney, New York and New Jersey) recently published his article entitled, Winning (and Losing) Gift Strategies,The Estate Analyst (Nov. 2012). An excerpt from the article is below:

Cue the ball to drop on Times Square, prepare to bid adieu to 2012 and its ironically short-lived “lifetime” gift tax exclusion of $5.12 million, and let’s have a chorus of “Auld Lang Syne,” lest our old acquaintance, the $1 million gift tax exclusion, be forgot.

Oh, how we would like to forget the $1 million exclusion from 2001 that was evicted from our Tax Code ages ago, yet, like an unwanted houseguest who has been blindfolded, driven 1,000 miles away, spun around three times but somehow finds his way back, the $1 million exclusion now comes a’knockin’ on the door for 2013.

Is it possible to exploit the $5.12 million gift tax exclusion in the waning days of 2012 and not lose control of one’s wealth? Which techniques work and which may backfire? And what techniques apply if you miss the deadline?

CLE on Year-End Estate Planning

The ALI-CLE is sponsoring a telephone seminar/audio website with The American College of Trust and Estate Counsel (ACTEC) entitled, Hurry Up or Wait? Year-End and 2013 Estate Planning Ideas, on Thursday, December 13, 2012 from 12:00 - 1:30 p.m. EST. Provided below is description of the event:

Estate Planners Who Closely Monitor Legislative activity on Capitol Hill will bring you the latest thinking on how to manage your clients' estate plans in a volatile environment, conducting a cogent discussion that includes:

• Prospects for 2012 or 2013 legislation and the role of politics and the election
• Significance of current legislative and administrative proposals
• Actions to take in 2012 in light of the uncertainty
• Balancing estate planning goals with the need for control and access
• Preparing for 2013 and beyond, possibly including high, portable exemptions

Conference on Advanced Estate Planning Strategies

The Real Estate, Probate & Trust Law Section of the State Bar of Texas is co-sponsoring the 19th annual Advanced Estate Planning Strategies Course in Santa Fe, New Mexico.

The course will be on April 4-5, 2013 in the El Dorado Hotel and it is a live presentation that will not be recorded.  The following topics will be covered in the interactive panel discussions: 

• Trust and Trustees: A New and Expanding World of Trust Fiduciaries, Flexibility, & Situs 
• Protecting Assets for the Intended Beneficiaries
• Planning in 2013: Planning While in the "Eye of the Storm" of Uncertainty 
• Selected Issues in Estate Administration 

Please click here to register.

Book on 2012 Estate Planning

Before the year is up, get your e-copy of 2012 Estate Planning: Tax Planning Steps to Take Now.  Martin M. Shenkman (Esq.), Jonathan Blatmachr (Esq.) and Robert S. Keebler (CPA) authored the book that is available on amazon.com for $39.95. Please click here to purchase the book. 

 

Canyon Donated to New York's Museum of Modern Art

As I have previously discussed, Robert Rauschenberg's work "Canyon" was in the midst of a battle between the estate of art dealer Ileana Sonnabend and the IRS. The conflict arose from the unusual fact that the central piece of the artwork is a stuffed bald eagle. This ensures that the piece of art cannot be sold without violating "the 1940 Bald and Golden Eagle Protection Act and the 1918 Migratory Bird Treaty Act." The estate concluded that because Canyon could not be sold it was not worth anything for tax purposes. However, the IRS concluded that someone might be willing to purchase Canyon, and so it valued the collage at $15 million. It would later choose to increase Canyon's value to $65 million when the Sonnabend's estate refused the first valuation amount. 

Faced with a large tax without the ability to sell the work to pay for the tax the estate had two options. They could either pay the large tax or they could donate Canyon to a museum. They choose the second option by donating it to New York's Museum of Modern Art. Sonnabend's heirs declared that the collage had no value, which would forfeit any charitable deduction that the estate might otherwise been allowed to take. In exchange, the IRS agreed to drop its tax claim against the estate. 

See Eric Gibson, Eric Gibson: the Illegal Eagle and a Baldly Grasping IRS, The Wall Street Journal, Dec. 2, 2012.

Special thanks to Douglas Cowan (Manager, International Tax Group, Washington National Tax, Deloitte Tax LLP) for bringing this article to my attention.

SLATs and Gifting

With 2012 coming to a close, many people have gifted large amounts of money in the attempt to take advantage of $5.12 million estate tax exemption before it decreases to $1 million in 2013. Sometimes, a married couple chooses to use a spousal limited access trust or a SLAT. Unfortunately, using a SLAT can come with some tax risk even if the planner acts to minimize the risk. There is always some chance that the assets that a grantor places within the SLAT could be included in the grantor's estate. The problem here is that the grantor might losesthe ability to use the martial deduction, which would otherwise allow him or her to transfer all of his or her assets to the surviving spouse without incurring a tax. If a person wants to use a SLAT, that person might want to consider including a provision that would use "the martial deduction in the event of gross estate inclusion in the estate of the grantor spouse."

See Charles Rubin & Robert Chaves, SLAT Backup, Rubin on Tax, Dec. 1, 2012.

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

Second Wife of Chinese Investor Will Receive His Money

A local court in the People's Republic of China held that a decreased man named Lin intended to leave the money he earned from investing to his second wife, Zhang Qian, and not his children. The amount that his three sons and widow fought over was about 374,000 yuan or $60,101 that remained his investment account. The court also gave his widow their home in which they lived when he died.

The man reportedly had made four will over the last decade. He made two wills, one in both 2001 and 2002. Those wills, which he had notarized, gave the money in his investment account and the house to Zhang. In 2007, Lin reportedly wrote a new will that would give all of his property to his three sons. Finally, the four will was made in 2009. In his last will, Lin stated revoked the third will and stated that the first two wills were valid. Under Chinese law, the will a person writes in his or her lifetime gets precedence over the others. According to People's Daily Online, "Zhang agreed to give Lin's [sons his] "Titoni watch, his gold ring and the expensive wooden furniture in their home."

See Second Wife Wins Hubby's Inheritance, People's Daily Online, China Society, Dec. 3, 2012.

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

First Jurisdiction to Allow Registered Image Rights

Guernsey, one of the Channel Islands and a dependency of the British crown, will be the first jurisdiction in the word that will allow people to register their image, likeness, identity, voice, expressions, and other characteristics as a form of intellectual property. The Image Rights will allow any person, not only residents of Guernsey, to register their image and all that encompasses. The law will also allow for the registration of images that are associated with dead people, such as celebrities Michael Jackson and Elvis Presley. The only condition is that the person must have dead within the last 100 years. A person does also not have to be famous to register the image; they only need to be well-known at the time of infringement claim.

If a person chooses to register his or her image, that person is said to have "image rights," which means that that the person who owns these rights have the right to control the commercial use of the image. Notice, this law does not give the owner a complete monopoly over the use of the image. People can still use the image for private, non-commercial uses. Furthermore, there is an exception for the use of the imagine that is in the public interest, such as "new reporting, parody, satire, or the arts." In addition, the law provides for moral rights. This gives the owner "the right to object to derogatory treatment of the personality and its images."

See Jason Romer & Kate Storey, Guernsey Registered Image Rights, Collas, Nov. 26, 2012.

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

Stepchildren Now Get Rights in Western Australia

In Western Australia (WA), a recent change now allows stepchildren to challenge the wills of their step-paretns. These changes are some of the most significant steps in decades and brings WA in line with all other Australian jurisdictions.  Before this change, no matter how dependent a stepchild was on the deceased, they had no standing in the law.  Now, stepchildren can challenge wills based on claims that there was failure to provide adequate or proper provision for a stepchild who was being, or entitled to be, entirely or prartly maintained by the dead step-parent.  Stepchildren can also bring claims based on a setp-parent receiving property from the estate of a birth parent on the understanding that at least a substantial part would be left to the child when the surviving step-parent died. 

See Amanda Banks, Stepchildren Get Will Rights, thewest.com.au, Dec. 3, 2012. 

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

Jefferson Declines To Carryout Will That Would of Purchased and Freed Slaves

Thomas Jefferson, one of our founding fathers, author of the Declaration of Independence, and an advocate for the freeing of the slaves, was nominated to become the executor of the estate of Tadeusz Kosciuszko in 1798. Kosciuszko's will itself left $17,000 that was supposed to be used to "purchase and free American slaves and to educate and train them to be good citizens." According to the Wall Street Journal, "[w]hen Kosciuszko died in 1817, Jefferson was 74 and in poor health." Jefferson would decline to become the executor of the estate because he was in declining health and was too old to start a task that would likely take a great amount of time and effort. Unfortunately, litigation over the estate prevented Kosciuszko's goal from ever being carried out. The money in the estate would later be dispersed to Kosciuszko's sisters. 

This was sad turn of events for the founding father who did more to combat the rise of slavery than most people in his time. In fact, the only reason that he never freed his own slaves was because as property they were subject to the claims of his creditors. Jefferson would die in debt. 

See Robert F. Turner, Jefferson and the Freeing of Slaves, The Wall Street Journal, Letters to the Editor, Nov. 23, 2012.

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

Divisiveness Among Democrats Could Undercut Obama's Estate Tax Proposal

As I have previously discussed earlier today, President Obama made his offer to House Republicans on what he believes the estate tax exemption and the estate tax rate should be on property passed at death. I also discussed how certain members of the Democrat party have opted to support maintaining the estate tax at its current levels. The most notable member of Congress to do this was Democrat and Senate Finance Committee Chair Max Baucus. Some argue that this disagreement among Democrats in Congress will likely hurt President Obama's efforts to reform the estate tax.

The problem for President Obama is that some Democrats, Senators "Claire McCaskill of Missouri, Jon Tester of Montana and Mark Pryor of Arkansas," understand and agree with the concerns of farmers and ranchers, who account for only a small amount of people who actually incur an estate tax. In fact, according to the Joint Committee on Tax, only 100 of the 3600 estates who incurred an estate tax were farming estates. This is a problem for President Obama because historically the Republicans have benefited from a division among the democrats on the issue of the estate tax. 

See Kim Dixon, Analysis: Democrats' Discord Undercuts Obama Estate Tax Push, Nov. 30, 2012.

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

Obama Makes First Offer On Estate Tax

As I have previously discussed, there is much uncertainty about the estate tax and the fiscal cliff, which is making several groups of people worried about the state of our country and their finances. I have also discussed the proposed offers that both political parties have given each other on how they would handle the estate tax. On Thursday, November, 29, 2012, Timothy Geithner, the Secretary of the Treasury, gave President Obama's initial offer to the Republicans in the house. Well, the news has not changed. President Obama's offer is the same that I reported on in my previous post. He has offered to lower the estate tax exemption from $5.12 million to $3.5 million. In addition, President Obama would also like to increase the estate tax rate from 35% to 45%.

Some claim that even if everything goes smoothly and this is only the beginning of the talks, we will probably not have a plan for another few weeks. Much of it relies on whether House Speaker John Boehner and the Republicans will offer a plan of their own. Stagnation in Congress is a problem for everyone looking to plan their estates for the estate tax. The problem is that this stagnation creates uncertainty, which means that estate planners cannot properly advice their clients because they simply do not know what will happen. 

See Arthur D. Postal, Obama's First Offer On Estate Tax, LifeHealthPro, Nov. 30, 2012.

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

Frost's Estate Blocks Use of Poem Because of Copyright

The Estate of Robert Frost is one estate that has renewed its copyrights of his poems and does pursue those who fail to obtain a license before using the late-poet's works. The problem for these who have opted to use Frost's poems is that they seem to not know that the author's works are still under copyright. In one instance, a songwriter named Eric Whitacre wanted to place Frost's poem "Stopping By Woods" to music and did even so. While it is unclear whether the songwriter thought that Frost's poem was in the public domain or thought that he had a license to use the work, the fact is that the estate stopped him from using the work. This was even more tragic after it was discovered that Frost's estate never properly renewed the copyright for that poem, only the book in which the work appears. Later, Whitacre would admit that he did fail to gain permission from the estate to use the work. Whitacre thought, admittedly naive on his part, that because the estate had hired someone to set some of Frost's poems to work to music earlier anyone could do that. If Whitacre still wants to use "Stopping By Woods" he must wait until 2038 when the copyright expires. Thankfully for Whitacre, another poet named Charles Anthony Silvestri wrote new words for his song and saved the piece.

See Virginia Postrel, Robert Frost's Estate Does Use Copyright to Crush Use of "Stopping By Woods...", Dynamist Blog, Nov. 30, 2012.

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

FBI Issues Warning About Investment Scheme After Caramadre Guilty Verdict

As I have previously discussed, Joseph Caramadre and his employee, Raymour Radharishnan, pleaded guilty to conspiracy to commit identity theft and wire fraud. Now, the FBI has released a warning about investment strategies that are designed to take advantage of the elderly. In its warning, the FBI explained in full detail just what Caramadre did in carrying out his scheme. Provided below is a link to the warning. The lesson here that we need to learn is that "if you or a family member is suffering, physically or financially, don't make quick business decisions...you still need to do your due diligence." 

See Plea Press Release & Indictment Press Release, Preying on the Weak, Estate Planner Victimized Terminally Ill, FBI: Stories, Nov. 30, 2012.

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

Vacuum Saleswoman Charges With Stealing From Elderly Woman

Yolanda Gadsby, a door-to-door vacuum cleaner saleswoman, and her boss, Daniel Bierworth, have been charged with a number of crimes for their involvement in the theft of jewerly from an elderly customer. Gadsby apparently met the victim on one of her door-to-door sales. Gadsby asked to use the restroom and took advantage of opportunity to steal several pieces of jewelry from the woman. Gadsby would later sell the jewelry at a Pawn Shop to make some easy money. Unfortunately for Gadsby, her conscience would foil her theft. She reportedly told police that she was experiencing some difficult times and that she needed the easy money from the sale. When she decided to try to return the jewelry she contacted her boss, Bierworth, in the hope that he could help her recover the jewelry. The two only managed to purchase one piece of the jewelry that was stolen, a ring. Bierworth returned the ring to the old woman, Gadsby apologized, and apparently the woman gave Bierworth a letter stating that she did not want to prosecute anymore. Bierworth lied to investigators by stating that the woman just happened to find her jewelry. The woman reportedly did not want to lie to the police and told them the story.

Gadsby has been charged with larceny, tampering with evidence, and tampering with a witness. Bierworth has also been charged with tampering with evidence and tampering with a witness. 

See Berkeley Brean, Door to Door Vacuum Saleswoman Charged With Stealing Jewelry From Elderly Woman, WHEC.com, Nov. 27, 2012.

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