Wills, Trusts & Estates Prof Blog

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

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Wednesday, July 23, 2014

Article on the Israeli Estate Tax

Daphna

Daphna Hacker (Buchman Faculty of Law, Tel Aviv University, Israel) recently published an article entitled, Intergenerational Wealth Transfer and the Need to Revive and Metamorphose the Israeli Estate Tax, Law & Ethics of Human Rights. Vol. 8 Issue 1, 59–101 (June 2014). Provided below is the article’s abstract:

This article suggests enacting an accession tax instead of the estate duty – which was repealed in Israel in 1981. This suggestion evolves from historical and normative explorations of the tension between perceptions of familial intergenerational property rights and justifications for the “death tax,” as termed by its opponents, i.e., estate and inheritance tax. First, the Article explores this tension as expressed in the history of the Israeli Estate Duty Law. This chronological survey reveals a move from the State’s taken-for-granted interest in revenue justifying the Law’s enactment in 1949; moving on to the “needy widow” and “poor orphan” in whose name the tax was attacked during the years 1959–1964, continuing to the abolition of the tax in 1981 in the name of efficiency and the right of the testator to transfer his wealth to his family, and finally cumulating with the targeting of tycoon dynasties that characterizes the recent calls for reintroducing the tax. Next, based on the rich literature on the subject, the Article maps the arguments for and against intergenerational wealth transfer taxation, placing the Israeli case in larger philosophical, political, and pragmatic contexts. Lastly, it associates the ideas of accession tax and “social inheritance” with inspirational sources for rethinking a realistic wealth transfer taxation to bridge the gap between notions of intergenerational familial rights and intergenerational social justice.

July 23, 2014 in Articles, Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 22, 2014

Article on the Non-Identity Problem

David heydDavid Heyd (The Hebrew University of Jerusalem, Jerusalem, Israel) recently published an article entitled, Parfit on the Non-Identity Problem, Again, Law & Ethics of Human Rights Vol. 8 Issue 1, 1-20 (May 2014).  Provided below is the article’s abstract:

In his recent work, Parfit returns to the examination of the non-identity problem, but this time not in the context of a theory of value but as part of a Scanlonian theory of reasons for action. His project is to find a middle ground between pure impersonalism and the narrow person-affecting view so as to do justice to some of our fundamental intuitions regarding procreative choices. The aim of this article is to show that despite the sophisticated and challenging thought experiments and conceptual suggestions (mainly that of a “general person”), Parfit’s project fails and that we are left with the stark choice between personalism and impersonalism.

July 22, 2014 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Monday, July 21, 2014

Article on Technology Probate

Jason havens

Jason E. Havens recently published an article in the series, Technology Probate, Probate & Property, Vol. 28 No. 4, 48-50 (July/August 2014).  Provided below is a portion of the article’s introduction:

As discussed in part one of this series, the modern trust and estates law practice faces new challenges in dealing with clients, one of the most critical of which is drafting and delivering high-quality legal documents that address each client’s issues and objectives.  Part one of this two-part series focused on why to use a drafting system, where to use that system, and when to use it.  Prob. & Prop., Mar./Apr. 2014, at 53.  This second part of the series will discuss specific drafting systems: “who” is behind several of the leading systems, “what” they offer, and “how” to decide among them (or others). 

July 21, 2014 in Articles, Estate Planning - Generally, Technology | Permalink | Comments (0) | TrackBack (0)

Friday, July 18, 2014

Article on ESBTs After the Sale of S Corporation Shares

Saddock

Chris D. Saddock (Saddock Co., Dallas) recently published an article entitled, Qualifying a Grantor Trust as an ESBT After the Sale of S Corporation Shares, Probate & Property Vol. 28 No. 4, 58-60 (July/August 2014).  Provided below is a portion of the article’s introduction:

Often successful small businesses look to the S corporation as a mechanism for avoiding the corporate tax while taking advantage of a corporate entity structure.  Statutory restrictions on S corporation ownership, however, may significantly limit the shareholder’s asset protection and estate planning opportunities.  Specifically, to maintain an S election, stock must be held by a U.S. citizen or a qualified entity.  Only three types of trusts are qualified to hold S corporation shares: grantor trusts, qualified Subchapter S trusts (QSSTs), and electing small business trusts (ESBTs.) 

July 18, 2014 in Articles, Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, July 17, 2014

Article on Net Gifts

Gift 2

Tiffany B. Carmona (Bessemer Trust, Chicago) recently published an article entitled, Client Out of Exemption? Consider a Net Gift, Probate & Property Vol. 28 No. 4, 43-47 (July/August 2014).  Provided below is a portion of the article’s introduction:

An unprecedented wave of large lifetime gifts were made in 2011 and 2012 in light of the increased amount that could be given away without incurring federal gift tax under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (TRA 2010), Pub. L. No. 111-312, 124 Stat. 3296, and its sunset provision, which caused many taxpayers to anticipate an end to the opportunity to use the increased exclusion come 2013.  Instead, 2013 brought with it the American Taxpayer Relief Act of 2012 (ATRA 2012), Pub. L. No. 112-240, 126 Stat. 2313, which continued the increased basic exclusion amount first codified by TRA 2010.

As a result of those large 2011 and 2012 gifts, many high net worth taxpayers are devoid of exclusion for future gifting, apart from the inflation adjustments to the basic exclusion amount that ATRA 2012 sustained as well.  Being out of exclusion does not foreclose the possibility of continued planning for those taxpayers, however, because certain techniques in the estate planner’s toolkit can be employed without the application of exclusion or the payment of gift tax by the donor.  Among these is the net gift. 

July 17, 2014 in Articles, Estate Planning - Generally, Gift Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 16, 2014

Article on Small Estate Procedures Across the Country

Joseph blumberg

Joseph N. Blumberg (Polsinelli PC, St. Louis) recently published an article entitled, 51 Flavors: A Survey of Small Estate Procedures Across the Country, Probate & Property Vol. 28 No. 4, 31-37 (July/August 2014).  Provided below is the article’s introduction:

Properly navigating a probate administration in any one state can be challenging enough, but often the client’s estate—and the attorney’s practice—is not so neatly confined within one state’s boundaries.  Fortunately, for certain types of assets and smaller estates, clients can avoid full probate proceedings and, in some states, any court involvement whatsoever.  This article and the accompanying chart of state-by-state options seek to provide a starting point for attorneys who find their clients’ assets in unfamiliar territory.

The 50 states plus the District of Columbia generally implement on or both of two procedures for handling and disposing of assets in small estates: (1) a summary administrative procedure, whereby the personal representative must receive court approval to gather and distribute assets (“Summary Administration”); and (2) an independent affidavit procedure, whereby an appropriate person can prepare an affidavit to directly collect and distribute money or property owned by the decedent (“Affidavit Procedure”).  In the simplest terms, Summary Administration requires court formalities before collecting assets, but the Affidavit Procedure requires no court action, that is, it is a self-executing affidavit.  Another major point of distinction between the states is the maximum dollar amount, or “cap,” under which an estate can qualify for a small estate procedure.  Although these major distinctions are apparent, each state’s experimentations have produced numerous fine distinctions—the 51 flavors of small estate administration. 

July 16, 2014 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Monday, July 14, 2014

Article on Financial Abuse of Elders

Kristen lewis

Kristen M. Lewis (Smith, Gambrell & Russell, LLP) recently published an article entitled, Financial Abuse of Elders, Probate & Property, Vol. 28 No. 4, 11-15 (July/August 2014).  Provided below is the article’s introduction:

Elder financial abuse (EFA) is a societal blight resulting in estimated losses to victims of $2.9 billion annually.  Attorneys who advise elders and other at-risk adults must strive to recognize their clients’ risk for EFA and endeavor to design protective estate plans that will help prevent it.  Victims of EFA include a pro bono client living alone in her government-subsidized studio apartment and Brooke Astor in her opulent Park Avenue home surrounded by family members.  Studies have shown that one of every six adults over the age of 65 has been a victim of EFA, and that women are twice as likely as men to be victims.  Nationally, 30% of adults with disabilities who use personal assistance services report one or more types of abuse by their primary care provider.  

July 14, 2014 in Articles, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Friday, July 11, 2014

Article on Initial Entrance Deposits in Troubled CCRCS

PaymentThomas R. Califano, Jeremy R. Johnson & Jason Karaffa, published an article entitled, Initial Entrance Deposits in Troubled CCRCS. Provided below is the introduction to the article:

Continuing care retirement communities (CCRCs), which provide seniors with the ability to remain within the same community for the remainder of their years and the peace of mind that comes along with such stability, have become increasingly popular over the past few decades. Under one popular business model, prior to moving into a CCRC, a senior typically pays a sizable initial entrance deposit (an IED).

The IEDs, in turn, provide the cash flow necessary to operate the CCRC and to pay down the significant debt used to fund the construction of the CCRC. The resident retains a right to receive a refund of the IED when the resident dies and/or their unit is resold. Because payment of an IED is often linked to the sale of a senior’s home, the success of a CCRC depends greatly on the housing market. Stress in the housing market has slowed the pace of “absorption” at many CCRCs resulting in defaults and bankruptcy filings which have placed residents’ interests in jeopardy. Resident’s interests in IEDs are at risk because the project’s contingent obligation to refund the IEDs is subordinate in fact to the secured debt which funded the project’s construction. The treatment of IEDs and residency agreements after a CCRC is in danger of defaulting on its secured loans has become a hot-button issue which creates great concern among regulators, current and potential residents of a bankrupt CCRC and may impact the post-bankruptcy success of the CCRC.

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

July 11, 2014 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Thursday, July 10, 2014

Article on Clark v. Rameker

IRARobert L. Moshman, recently published an article entitled, Clark v. Rameker, 573 U.S. __ (2014) No Bankruptcy Exemption for Inherited IRA, The Estate Analyst, July 4, 2014. Provided below is the introduction to the article:

It is not often that the Supreme Court provides a clear rule on any aspect of financial planning (or even graces our niche with a passing reference), so these occasions call for special attention.

On June 12, 2014, the Supreme Court’s decision in Clark v. Rameker clarified that an inherited IRA is not a protected retirement fund for bankruptcy purposes.

Here, we analyze the decision and its impact on planning issues and review the applicable rules and caveats that apply to inherited IRAs.

July 10, 2014 in Articles, Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 9, 2014

Article on Law Review Articles You Should’ve Read

Bridget CrawfordBridget J. Crawford (Pace University School of Law) recently published an article entitled, Law Review Articles You Should’ve Read (But Probably Didn’t) in 2013, Tax Notes, Vol. 143, No. 11, June 17, 2014. Provided below is the abstract from SSRN:    

This short column is part of the annual Tax Notes issue that highlights noteworthy law review articles published during the previous year. In this piece, I identify articles relating to estate and gift taxation that practitioners likely will find of interest. The articles reviewed (in alphabetical order by author's last name) are: (1) Ellen Aprill, "Reforming the Charitable Contribution Substantiation Rules," 14 Fla. Tax Rev. 275 (2013); (2) Arianne Renan Barzilay, "You're on Your Own, Baby: Reflections on Capato's Legacy," 46 Ind. L. Rev. 557 (2013); (3) John F. Coverdale, "Of Red Bags and Family Limited Partnerships: Reforming the Estate and Gift Tax Valuation Rules to Achieve Horizontal Equity," 51 U. Louisville L. Rev. 239 (2013); (4) John P. Goldberg and Robert H. Sitkoff, "Torts and Estates: Remedying Wrongful Inheritance," 65 Stan. L. Rev. 335 (2013); (5) Adam Hirsch, "Incomplete Wills," 111 Mich. L. Rev. 1423 (2013); (6) Grayson M.P. McCouch, "Who Killed the Rule Against Perpetuities?" 40 Pepp. L. Rev. 1291 (2013); (7) Carla Spivack, "Killers Shouldn't Inherit From Their Victims -- or Should They?" 48 Georgia L. Rev. 145 (2013).

Special thanks to Professor Adam Hirsch (University of San Diego) for bringing this article to my attention.

July 9, 2014 in Articles, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0) | TrackBack (0)