Wills, Trusts & Estates Prof Blog

Michael Levin's New Minibook for People in the Financial Industry

Michael Levin (Founder and CEO of Business Ghost, Inc., Orange County, Caliornia) recently published a book, The Financial Advisor's Dilemma.(2013). A description of the book as provided by Business Ghost, Inc., is below:

This short, powerful minibook by New York Times best-selling author and Shark Tank entrepreneur Michael Levin, with a foreword by Baseball Hall of Famer Dave Winfield, can transform your position in the marketplace.

In The Financial Advisor’s Dilemma, you’ll get answers to these pressing questions:

• Why do those in the financial industry have such a difficult time creating trust with prospects?
• Is there a proven alternative to both cold calls and spending thousands of dollars on dinner events for high net worth prospects?
• How can you stand out from the pack without breaking the bank?
• What’s the easiest way to get speaking engagements, radio and TV appearances?
• What’s the one thing to add to your website that practically no other financial advisor can offer?

Homeless Man Returns Diamond Ring

A homeless man named Billy Ray Harris who accidentally received a diamond ring in his change cup showed a great amount integrity by returning the ring to its rightful owner, Sarah Darling. Darling stated that she did not even know that her ring was missing until the next day. While Darling was upset at the lost of her ring, it was not because of its value but because of its sentimental value. When Harris found the ring, he instantly knew that the ring was expensive. The surprising turn in this story is when Darling went to look for her ring. She re-appoached Harris and asked him if he had her ring.

He recalled, "She squatted down like you did like right there and says, ‘Do you remember me?' And I was like, ‘I don't know. I see a lot of faces.' She says, ‘I might have gave you something very valuable.' I said, ‘Was it a ring?' And she says, ‘Yeah.' And I said, ‘Well, I have it.'"

Harris attributes his attitude to his father's teachings. His father who was reverend taught him many values. He claimed that "he wasn't the type of cash in on someones misfortune." As a reward for his virtue, Darling happily paid him all the money she had in her wallet.

See Claudine Zap, Homeless Man Returns Diamond Ring Accidentially Dropped Into His Change Cup, Yahoo, Feb. 13, 2013.

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

Ruling Releases Legion of Christ Documents

As I have previously discussed, Gabrielle Mee bequeathed $60 million to the Legion of Christ, and her niece, Mary Lou Dauray, challenged the validity of the will that made such a large gift. Amidst the current lawsuit challenging Mee's will, the highest court in Rhode Island has ruled that "documents related to a disgraced Roman Catholic organization called the Legion of Christ [are going to] be unsealed and [made] available to the public." More specifically, the court issued an order that declined to delay the release of the documents related to the case. The Legion did not want to documents released because they felt that information contained within them could possibly taint the opinion of a future jury. The unsealed documents could be released as early as today, February 15, 2013. 

Previously, a court ruled against the niece because she lacked standing to bring the suit. Dauray's attorney plans to the appeal the ruling by the court.  

See David Klepper, RI Ruling Means Release of Legion of Christ Docs, GoUpstate.com, Feb. 14, 2013.

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

Re-broadcast of a CLE on the American Taxpayer Relief Act of 2012

The ALI-CLE and the American College of Trust and Estate Counsel (ACTEC) is sponsoring a telephone seminar/audio webcast entitled, Estate Planning After the American Taxpayer Relief Act of 2012, on Friday, March 1, 2013 from 12:00 - 1:00 p.m. EST. Provided below is description of the event:

Although the American Taxpayer Relief Act of 2012 preserves tax cuts for nearly 99% of the American people, the federal estate tax rate rises to 40%.

Find out what's changed and what remains the same in the estate tax universe. Featuring a faculty of experienced estate planners who closely watch the action on Capitol Hill, this timely webcast will give you an update on the latest changes, practical advice to follow up on actions taken in 2012, and strategies for living with the estate tax law in 2013 and beyond.

Who should attend:

• Estate Planners
• Wealth Management Advisors
• Accountants

This replay was originally presented on January 25, 2013.

More on the Urooj Khan Estate Dispute

As I have previously discussed, the investigation into the death of a lottery winner and the battle for his estate is ongoing. Now, one of largest questions surrounding Khan's death and investigation have been answered. The identity of the relative that questioned Khan's death has been revealed. According to the Chicago Tribune, it was his brother, Imtiaz Khan, who first raised suspicions about Khan's death to authorities. 

See Jeremy Gorner, Brother Says He Raised Suspicions In Death of Lottery Winner, Chicago Tribune, Feb. 11, 2013.

Study on Access To Electronic Accounts by The Executor or Administrator of Estate

As I have previously discussed, there are only a number of states that have passed laws that provide administrators of an estate access to the electronic accounts of the decedent. This group includes Connecticut. Now, the General Assembly of Connecticut has introduced an act that would study the effects of allowing the public administrator of an estate to have access to the testator's electronic accounts following their death. Provided here a copy of Proposed Bill No. 5227.

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

Overview of an Executor's Role

Forbes offers a basic explanation of an executor's role as a starting point for anyone who has been named an executor.  An executor or personal representative is charged with carrying out the wishes of the deceased person.  Typically, an executor offers the will for probate, protects the assets of the estate, distributes property to beneficiaries and pays the debts and taxes of the estate. In all duties, it is important for an executor to pay close attention to detail and engage in a careful, deliberative process.  Forbes also suggests that an executor consult a knowledgable estate planning attorney with any concerns.

See Bernard A. Krooks, Understanding the Role and Responsibilities of an Executor, Forbes, Feb. 14, 2013. 

U.K. Will Raise Money Through Inheritance Tax and Fund Elderly Care

UK Health Secretary Jeremy Hunt reports that Prime Minister David Cameron's government will raise more money through inheritance tax to fund planned improvements to financial support for the elderly.  When the measures come into force in 2017, the government will step in when any individual pays over 75,000 pounds for old age care.  Those with less than 123,000 pounds will receive help sooner. The government aims to encourage wealthier people to take out insurance or use pension products to cover the 75,000 pound cap.  

Successive governments have been ignoring the issue of social care for too long, and Hunt comments that this has led to "an unfair system that has seen people selling their homes and losing nearly everything they've worked for to pay for their care." 

See Robert Hutton, U.K. Will Use Inheritance Tax to Fund More Elderly Care, Bloomberg, Feb. 11, 2013. 

Legal Services Board Recommends Regulation on Will-Writing

The Legal Services Board (LSB) recommended to the Lord Chancellor that will-writing be subject to regulation.  One charity director believes that this could lead to more legacies by making consumers more confident in writing a will.  Currently, legacy income is worth almost  £2bn a year to the UK charity sector

The Board seeks to give consumers greater ability to seek redress through the Legal Ombudsman and create a level playing field between traditional law firms and other services, including online services and will-writing companies among others. 

The Lord Chancellor must decide within 90 days whether to proceed with the LSB's recommendations. 

See Niki May Young, Will-writing Regulation Recommended By Legal Services Board, civilsociety.co.uk, Feb. 14, 2013.

Tax Panel On Conservation Easements

Strafford Webinars & Teleconferences will host a live 110-minute CLE/CPE teleconference with interactive Q&A entitled, Tax Planning With Conservation Easements on March 7, 2013 from 1:00-2:50 EST. If a person registers by tomorrow, there is $50 discount on the registration fee. Provided below is a description of the event.

This teleconference will explain the tax advantages and potential tax treatment of conservation easements. The panel will discuss recent case law developments, how to structure easements to avoid IRS challenges, and how to pair conservation easements with the historic tax credit.

Description

Conservation easements granted in perpetuity as a charitable donation can provide donors with significant income, estate and property tax planning opportunities if structured properly.

The charitable contribution deduction for conservation easements has been under heightened IRS scrutiny in recent years. The IRS has frequently challenged the valuation of the easement, and also attacked other deficiencies in structuring transactions. Several critical tax court cases were decided in 2012.

Moreover, the 3rd Circuit’s Historic Boardwalk Hall ruling regarding a historic tax credit transaction could also have a significant impact on existing and planned tax credit structures for conservation easement transactions.

Listen as our authoritative panel of practitioners reviews tax planning opportunities with conservation easements and recent IRS scrutiny of the charitable donation. The panel will explain how to structure easements to avoid IRS challenges and pair conservation easements with the historic tax credit.

Outline

1. Tax planning opportunities with conservation easements
2. Potential IRS challenges to the charitable donation of conservation easements
3. Recent case law developments
4. Structuring easements to avoid IRS challenges
5. Pairing conservation easements with the historic tax credit

Benefits

The panel will review these and other key questions:

• What are common IRS challenges to conservation easement donations?
• What lessons does recent case law provide on elements practitioners should consider when structuring conservation easements to minimize challenges by the IRS?
• What is the potential impact of the Historic Boardwalk Hall ruling on existing and planned tax credit structures for conservation easement transactions?
• How can conservation easements be paired or combined with the historic tax credit?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Upon completing this seminar, you will understand the tax advantages and potential tax treatment of conservation easements, how to structure easements to avoid IRS challenges, and how to pair conservation easements with the historic tax credit.

Special Thanks to Alice McCarthy for bringing this article to my attention.

Love and Estate Planning Are In the Air

With Valentine's Day on the horizon, many people are heading to the stores to get last minute cards, carnations, and candy for their significant others. While these gifts are nice, there are other nice gifts that people can give to show that they care about someone. For example, take these gifts into consideration:

1. A person might want to involve their significant other in their financial planning because it would allow that person and his or her significant to plan for their possible future together.
2. This could also be said for daily money management although not for the same reasons. First, this is important because it could prevent the couple from resenting each other. According to Forbes, "if you're scrimping and sacrificing, while you feel like your partner is splurging, it can also lead to resentment and tensions in the relationship." Meeting with your partner and discussing the family's finances could lead to agreement and understanding with your significant other.
3. Not only should a couple communicate with each other about their finances, if one person handles the finances alone, they might want to consider teaching his or her significant other about personal finances while he or she still can. It is an unpleasant thought to have on Valentine's Day, but what if the person that handles the finances were to pass away? If this involves you, would your spouse or significant other be able to handle the finances if you were gone?
4. On that subject, a person might want to ensure that his or her significant is taken care of if something were to happen to that person. A person might want to consider ensuring that he or she has an adequate amount of insurance, and that his or her estate planning documents are up to date. 
5. Finally, the best way for a person to show that he or she cares is to have all of his or her financial documents organized and easy to find. While a filing cabinet will do, technology has advanced to the point that a person can store documents in one convenient place online. One such website is Mint.com. 

See Erik Carter, 5 Non-Romantic But Vital Things To Do This Valentine's Day, Forbes, Feb. 13, 2013. 

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

Happy Valentine's Day!

Wishing you and your special someone a very Happy Valentine's Day,

Gerry

New Case: In Re Paschall

In in re Paschall, the Waco Court of Appeals considered a mandamus challenge to a trial court's order that that an estate executor had to produce a copy of testamentary trust documents to those contesting the underlying will.  The executor argued that the contestants did not have standing since they were not parties interested in the estate or trust. The court of appeals held that the trial court did not abuse its discretion because the contestants did show at least some evidence that they were parties interested in the estate. 

See Trial Court Did Not Abuse Its Discretion in Ordering Production of Trust Documents, Texas Probate Litigation, Feb. 13, 2013. 

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

Forbes Updates Their Guide to Estate Planning

Forbes recently updated their list of helpful estate planning articles to help readers keep up with the latest information on estate, tax and retirement planning.  Please click here to see the updated list of articles to guide you through estate planning post-fiscal cliff. 

See Janet Novack, The Forbes Guide to Estate Planning: 2013 Edition, Forbes, Feb. 3, 2013. 

Norwegian Dies in Phuket and Leaves His Assets to Elderly and Children

On Saturday, a Norwegian died of asthma and left behind a will that distributed his assets, worth more than 100 million baht are to be donated to foundation for the elderly and children in Phuket to show his gratitude to Thailand. 

A housekeeper returned from cleaning up houses in the Banjama Housing Estate and found Frank Robert. Frank Robert arrived in Phuket over 10 years ago and bought 21 houses in Banjama Housing Estate to rent foreign tourists.  Police went to examine the body and found no traces of injury to the body. Before he died, Frank Robert had told the housekeeper that he had a will kept in the safe in the house.

See Norwegian Gifts Phuket Needy, Bangkok Post, Feb. 10, 2013.  

Turn a Profit From Succession Planning

I previously discussed the importance of succession planning for small businesses. According to Accounting Today, succession planning may also be positive for CPAs. The article suggests if CPAs consider the following options, they could turn a profit from the recent increase in succession planning.

•  Evaluate product and service lines
•  Cashflow management
•  Use recurring models 
•  Add an annual valuation statement 
•  Develop a tax plan 
•  Offer personal wealth consulting 

A CPA might help his client by separating and ranking what products and services the client is profiting from. This restructuring will help streamline products and services. CPAs can also show clients how to lower their working capital needs by creating a positive cash flow cycle. As a result, this increases the purchasing money the buyer has to buy the company. Using a recurring model is another way CPAs might profit from succession planning. Recurring models are ongoing services that people are willing to pay more for. This increases the value of your client's firm. A CPA might consider encouraging clients to add a valuation statement to their annual progress report. This can help them understand the factors that determine value. CPAs might want to consider offering to develop a tax plan that allows clients who have sold their business to maximize their after-tax proceeds. Last, CPAs can offer to manage a clients personal wealth created from the sale of his business. 

See John Warrillow, Six Ways to Profit from the Succession Planning Boom, Accounting Today, Feb. 12, 2013.

Family Financial Fight

Here we have a a common occurrence. We have an aging mother and her three daughters. Two of her daughters are married but have no children. One has a teenage son and is divorced. The divorcee and her son have lived with the mother in her condo for sometime but has not contributed financially to the household. As it stands now, if their mother were to pass away all three daughters would take equally from their mother. Now, the mother has entered an assisted-living facility. The daughter that was living with her is still residing at the condo, and has finally started to pay the bills at home.

One of the other daughters is afraid that the daughter that lives at home is pressuring their mother to pay for her nephew's college education. The other daughter is worried because she thinks that her nephew will not be able to complete a four-year college education program and that her mother will squander this money. She thinks that her mother should hold making any gift until her nephew can mature a bit. The conflict also arises from the fact that one daughter feels that it is wrong for her sister to ask for a separate slice of the money especially because that sister has been irresponsible and has already asked a great deal from their mother. As usual, this family could probably benefit from the advice of a good estate planning attorney. The attorney would likely be able to determine how best to provide the grandson with money to college but ensure that he is responsible with his money. A trust with an independent trustee might be the best solution for the grandson in this case.

In this case, some would argue that "it's quite audacious for the sister to push her ailing mother to pay" especially because she could probably pay for her own son's education with her share. Some would also argue that it is important for other potential heirs to voice their concerns if they believe that one potential heir is taking advantage of an aging parent. Unfortunately though, it is important for everyone to remember that the money ultimately belongs to the parent and they will decide how they will spend that money.

See Michelle Singletary, Who's Right In This Family's Financial Fight?, Washington Post, Feb. 9, 2013.

Special thanks to Naomi Cahn (John Theodore Fey Research Professor of Law, George Washington University School of Law) for bringing this article to my attention. 

Happy Belated-Birthday to President Abraham Lincoln

A Happy Belated-Birthday to the great emancipator and the President who led us through one of the greatest crisis that this nation has faced, the American Civil War. As you already know, President Lincoln was assassinated by John Wilkes Booth at Ford's Theatre. What you may not know was that Lincoln died intestate. This is a brief summary of what happened to his estate after his death. 

It was his son Robert who took it upon himself to ask Justice David Davis, Associate Justice of the Supreme Court of the United States, to become the administrator of his father's estate. Upon his arrival, Robert and Mary Todd Lincoln "wrote a letter to the Judge of the Sangamon County Court, in Illinois, and asked that he appoint Davis as the administrator of Lincoln's Estate." In his initial report, Davis valued the estate at about $85,000. This may not seem like much but his estate would be worth millions of dollars by today's standards. At the time (as it is now) it would be strange to pass that much money without a will, especially for an attorney. The estate finally settled two years later and was valued at $110,296.80. This amount was divided into three equal shares among his widow and his two surviving sons. Mary Todd declined an additional cash allowance that she was entitled to as the surviving spouse. As for Justice Davis, he was never compensated for his work and did not seek reimbursement for his administrative duties, which he handled largely on his own. This is strange because it was customary to at least hire an attorney to take of the administrative duties.

See Danielle & Andrew Mayoras, Are You Better Prepared Than Abraham Lincoln Was?, Forbes, Dec. 4, 2012. 

Digital Assets Bill Passes House In Virginia

As I have previously discussed, the State of Virginia brought legislation to the House floor that would provide the personal representative access to a deceased minor's online accounts following their deaths. More specifically, the law "[p]rovides that the personal representative of a deceased minor has the power to assume the deceased minor's terms of service agreement with an internet service provider, communications service provider, or other online account service provider for the purposes of consenting to and obtaining the disclosure of the minor's digital assets." Recently, the Virginia House of Representatives passed the bill with a vote of 96-0-4. 

See HB 1752 Personal Representatives; Internet Provider Shall Provide Access To Deceased Minor's Digital Assets, Virginia's Legislative Information System, Feb. 5, 2013.

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

Sir James Tillie's Remains Found in a Vault

Sir James Tillie left instructions that his body should be placed in an open windowed room in the mausoleum on the highest point of his land.  He wanted to be placed there upright in his favorite chair with food, drink, and a crate of books by his side.  He expected that he would be resurrected.

Family legends indicate that his servants faithfully obeyed the orders for two years, but they buried him when his rotting body became intolerable.  There were no records about where he was buried, but he was believed to be buried in one of the local churchyards. 

Archaeologists recently found human remains in a previously unknown vaulted chamber directly below the spot where Tillie sat for years. Since there really isn't any doubt about who the remains belong to, there are no plans to exhume the body or do any further DNA tests. 

See Maev Kennedy, Missing Cornish Lord Found in His Own Grave, The Guardian, Feb. 12, 2013. 

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