Wills, Trusts & Estates Prof Blog

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

Saturday, January 19, 2013

Bank Fudges A Man's Existence

MoneyStephen Fudge, a man from St. John, Canada, received a letter from his bank the Canadian Imperial Bank of Commerce offering their condolences for his death. The only problem was that Stephen actually physically received the letter and was not dead at all. After receiving the letter, Mr. Fudge humorously remarked, "This is not how I want to find out." The bank apparently thought that Mr. Fudge was dead because he was late to make a payment on his overdraft account.

After he made the payment, Mr. Fudge thought that his problems were over. Unfortunately, he was wrong. The bank would end up freezing his account several times until "the bank killed him off," according to Mr. Fudge. The bank apologized and noted that the problem was likely the result of human error. The bank vowed to correct any error they made and ensured Mr. Fudge that this would not affect his credit score.

See Bank Informed Man That He Passed Away, Yahoo!News, Jan. 2013.

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

January 19, 2013 in Current Events, Humor | Permalink | Comments (0) | TrackBack (0)

Lottery Winner's Body Will Be Exhumed

LotteryAs I have previously discussed, Urooj Khan died as a result of cyanide poisoning shortly before he was set to obtain his lottery winnings and a court was set to determine whether they would exhume his body. Now, a court scheduled that his body be exhumed early on Friday, January 18, 2013. The court scheduled his exhumation early because Khan's body was not embalmed. According to the court papers, a full autopsy is needed to determine whether the results of the blood analysis were accurate. The autopsy will also be used to rule out other possible causes of Khan's death. Additionally, "a pathologist will take samples of Khan's stomach contents" and parts of his lungs. Investigators hope that this will lead them to determine how Khan ingested the cyanide. 

See Jeremy Gorner, Exhumation Set For Friday In Cyanide Poisoning Case, The Chicago Tribune, Jan. 18, 2013.

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

January 19, 2013 in Current Events, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Friday, January 18, 2013

Business Roundtable Executives Want to Raise Social Security and Medicare Age

UnknownTo keep entitlement programs solvent for longer, executives of the Business Roundtable are urging Congress to raise the Social Security and Medicare age eligibility from 67 to 70 as a part of their Social Security Reform and Medicare Modernization Proposals. Those executives also want Congress to adopt means testing for wealthier retirees and want to eliminate the Social Security tax exemption for new state and local workers, known as section 218 of the federal tax code.  That provision results in one our of every four state and local government workers exempt from Social Security payroll taxes, and instead pay into public employee pension plans. 

The executives' proposal is not likely to be popular, but the they contend that older workers can still access subsidized health care through Obamacare, beginning in 2014.  They also predict that 10-15 years from now, we're going to need more of our workers working longer.  

Overall, the CEOs argue that they're looking at options to provide a long-term solution to the unsustainable growth of entitlement spending. 

See Bertha Coombs, Should We Have to Work Until 70? These CEOs Say Yes, NBCNEWS.com, 2013.

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

January 18, 2013 in Current Events, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Article on Family Caregiving and the Law of Succession

Gallanis_tom_sq GittlerThomas P. Gallanis (N. William Hines Chair in Law Professor of History, University of Iowa-College of Law) and Josephine Gittler (Wiley B. Rutledge Professor of Law, University of Iowa-College of Law) recently published their article entitled Family Caregiving and the Law of Succession: A Proposal, University of Michigan Journal of Law Reform, Vol. 45, No. 4 (2012).  The abstract available on SSRN is below: 

As the American population ages, the need for long-term care, already great, will become even greater. Some of this care is paid for by government programs, such as Medicaid, and by individual long-term care insurance policies. But the combination of the public fisc and private insurance are, and will continue to be, insufficient to pay for all of the care our seniors and adults with disabilities need. The provision of care in a family residence by one or more family members is an important component of our health care delivery system and must be supported and encouraged by public policy and law. As experts in the law of estate planning and health care, respectively, we address in this Article the following question: How might the American law of succession realistically recognize, support, and promote family caregiving? Our answer is a pragmatic proposal that can be adopted into the Uniform Probate Code (UPC). We propose a modified elective share for a family member who has provided the decedent with substantial uncompensated care in a family residence. (In this context, “family member” excludes the decedent’s surviving spouse, because the UPC already provides a spousal share.) Our approach contrasts with the prevailing law in the U.S., which treats personal services rendered by family members as gratuitous, hence not compensable. The scope and amount of the caregiver’s elective share can be structured by way of analogy to the surviving spouse’s elective share, though with important differences, as we discuss herein.

January 18, 2013 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Text of the Virginia Digital Asset Bill

LegislationAs I have previously discussed, the State of Virginia is considering a bill that would allow a fiduciary of the estate to gain access to the decedent's digital assets, which would include their accounts from popular social networking sites. Provided here is a link to the full text of House Bill No. 1584.

January 18, 2013 in Estate Administration, New Legislation, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Tax Increases Hit Trusts Hard

TrustsWhile most of the tax increases in American Tax Relief Act of 2012 (ATRA) were meant to affect the wealthiest citizens in this country, the recent tax increases have hit trusts hard. The first tax was the Obamacare Surtax, which added a 3.8% tax on net investment income. Now, ATRA will increase the both the top income tax rate from 35% to 39.6% and the capital gains rate will increase from 15% to 20%. The problem that trust owners face is that top rate is applicable for all income that exceeds $11,950 instead of the $400,000 ATRA and $200,000 thresholds for individuals. The result is that the government will begin to tax those that it never intended to tax. So all trust, including the relatively small trusts, will likely have to pay the 23.8% capital gains tax on the money within the trust. This is more a nuance for wealthy clients, but could become a major problem for middle class people who have trusts in place as part of their basic estate planning documents. Those who use bypass trusts, marital trusts, or even special needs trusts for estate planning purposes will likely be more at risk. 

Times like these will be particularly difficult for the trustees of trusts. It is their time to decide whether or not to release more funds to current generations of beneficiaries or to hold on to trusts assets for future generations and pay the higher tax. If a trustee is considering making more distributions to the beneficiaries of their trusts, it is important to note that IRS is allowing a 65-day grace period to make distributions. If a distribution is made within that period, the distribution will be treated as if the distribution was made in 2012 when the tax rates were more favorable. Still, the basic questions that every trustee is probably asking is "how much income is to be distributed, who are the beneficiaries and their tax rates and what are their needs?" These questions can only be truly answered by the trustee because every situation will be different. It might even be feasible under some circumstances to dissolve a trust entirely for tax purposes. It is times at these that remind us that flexibility is a key to trust making. You will never know when it might become feasible to terminate a trust.

See Ashlea Ebeling, Tax Hikes Hit Trusts Hard, Beneficiaries Pull Money Out, Forbes, Jan. 9, 2013.

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

January 18, 2013 in Income Tax, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, January 17, 2013

Survey Indicates Nearly 40% of Pastors Are Without a Will

UnknownLifeWay Research conducted a recent survey on behalf of the Southern Baptist Foundation and found that 37% of SBC pastors do not have a trust, will, living will, electronic will, legacy story, or durable power of attorney with health care directives.  

Scott McConnell, the director of LifeWay Research says that the survey indicates a lack of awareness about estate planning and accompanying laws.  The group of the surveyed participants who have yound gamilies seemed to be the least prepared. 

There are tools that the pastors can access to reduce the percentage of pastors without a will.  The Southern Baptist Foundation and the state foundations are available to assist pastors in making their estate plans. 

See Russ Rankin, Survey: Many Pastors Lack Estate Planning, BRnow.org, Jan. 16, 2013. 

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

January 17, 2013 in Wills | Permalink | Comments (0) | TrackBack (0)

New 15th Edition of Estate Planning and Taxation

Cover_Bost_15e-1The New 15th edition of Estate Planning and Taxation is now available.  Below are some of the book's features as listed on the publisher's website: 

  • Is written for the professional or student pursuing a career in financial services, taxation, or law in which estate planning and estate and gift taxation is but one of several principal areas of practice.
  • Is chock-full of pedagogical devices – including examples to clarify concepts, end-of-chapter questions with solutions, glossary, tax and valuation tables, and more.
  • Includes an instructors package with test bank
  • Draws heavily on primary sources of the law, both Internal Revenue Code and cases.
  • Is adaptable to law school courses in estate planning and taxation, giving the law student a strongly quantitative slant that is often overlooked in traditional law books, even those dealing with taxes.
  • Features access to ETAX 2012 –an educational estate and gift tax spreadsheet program that calculates basic estate tax, state death tax credit, and cumulative gift tax figures.

Please click here for more information or to purchase the book--available as an EBOOK or in printed form.

January 17, 2013 in Books, Books - For Practitioners, Books - For the Classroom | Permalink | Comments (0) | TrackBack (0)

Family Tries To Gain Access To Deceased Son's Facebook

FacebookAs I have previously discussed, several states have moved to pass legislation that would provide access to online accounts following their owner's death. The reason that many states have done this is because social networking sites such as Facebook have privacy policies that do not allow the deceased's family members from accessing their accounts, even if the user was a minor. This exact scenario happened to Ricky and Diane Rash. The Virginia couple's son committed suicide two years ago and the family is hoping to gain some answers as to why their son committed suicide from his Facebook page. Unfortunately, Facebook will not allow the couple to gain access to their son's account because of their privacy policy. 

As a result, the Rash family is determined to change the law. Now, Virginia legislators have brought a piece of proposed legislation to the General Assembly's floor. If the law passes, the legislation would ensure that "digital assets" would become probate assets, subject to the control of the executor of the deceased person's estate. This would give access to an deceased owner's Facebook account and similar social media sites. 

See Tracy Sears, Family, Lawmakers Push For Facebook Changes Following Son's Suicide, CBS, Jan. 8, 2013.

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

January 17, 2013 in Estate Administration, New Legislation, Web/Tech | Permalink | Comments (1) | TrackBack (0)

Daughter Fights To Save Her Father's Life

TrustsIn a case of advance directives gone wrong, Susan Rissman is in a losing battle with her sister Judith Sly over control of their 88-year-old father's health care decisions. Their father Paul G. Smith, who is gravely ill from a number of terminal illnesses, was removed from a ventilator and his feeding tube pursuant to an advance directive he wrote in 2004. In that advance directive, Smith states that "he doesn't want his life prolonged by artificial means." It also appointed Sly to be his health-care representative. The problem emerged because Rissman, who has been Smith's health care provider for the past few years, claims that Smith is still capable of making his own health care decisions and has asked for food and water. Rissman's attorney even argued that "Smith had attempted to change his health-care representative" to Rissman. Judge Steven Nation from the Hamilton Superior Court disagreed with Rissman, claiming that there was not enough evidence to hold that Smith intended to revoke his advance directive or that he intended to appoint Rissman as his health-care representative.

Stories like this remind us that it is important to ensure your advance directive and health-care declaration reflect your current desires. These documents exist to ensure that not only are your wishes are carried out but also that your family members do not have to fight each other at a time when it is already difficult for them.

See Tim Evans, Daughter Vows To Fight On For Her Gravely Ill Carmel Father, Indianapolis Star, Jan. 17, 2013.

Special thanks to Sean J. Fahey (Hall Render Killian Heath & Lyman, P.C.) for bringing this article to my attention.

January 17, 2013 in Current Events, Death Event Planning | Permalink | Comments (1) | TrackBack (0)