Wills, Trusts & Estates Prof Blog

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

Saturday, September 22, 2018

Giant Firm Finds Proof is in the Principles

BibleRonald Blue Trust, a former registered investment advisor, converted to a trust company after joining Thrivent Trust Company, owned by Thrivent Financial, in 2017. Ronald Blue is based in Atlanta and has more than 8,000 clients, 13 office locations, and $8 billion in assets under advisement, and is based on socially responsible investment principles. The company steers away from tobacco, alcohol and gambling investments.

“We envision a world where Christians are more confident, content and living their God-given callings in service to one another, their churches and their communities,” according to Thrivent’s website. The firm’s principles-based framework has proven to be successful in helping clients achieve their goals over the long term, said Brian McClard, director of Ronald Blue Trust’s Investment Strategy Group.

The firm’s principle of uncertainty states that the future is uncertain; therefore planning, saving and investing are inherently important. The principle is guided by the belief that God created humans with the tools necessary to steward the world’s limited resources. Ron Blue Trust has partnered with Church Law & Tax, a publication of Christian Today, to provide content for ChurchSalary, a tool developed as a result of the National Initiative to Address Economic Challenges Facing Pastoral Leaders — an initiative to improve faith leaders’ financial confidence.

See Jadah Riley, Giant Firm Finds Proof is in the Principles, Financial Advisor, September 6, 2018.

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

September 22, 2018 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, September 21, 2018

Clients Who Lose a Spouse Require Both Empathy and Skill

Calla-liliesAccording to a new Merrill Lynch/Age Wave Study, nationwide 53% of widows did not financially prepare for when their spouse passed away. Dan Lash, a partner at Vienna, Va.-based VLP Financial Advisors, advised calculating the value of marital property within six months of a spouse’s death. “An appraisal will determine what the gain is and set a new cost basis in the event you sell the home five years later,” said Lash.

Another study from Merrill Lynch found that among widows, four-in-10 of them found widowhood as a trigger to begin working with a financial advisor. “They are in their 70s and 80s and single again for the first time in years,” said Tom Balcom, a financial advisor at 1650 Wealth Management based in Lauderdale by the Sea, Florida.

Unlike older clients that have never been married or perpetual bachelors, widows and widowers are in mourning for their loved one. “The danger is for the widow to be overwhelmed with grief and to allow finances to take a backseat, which makes decisions even tougher to deal with later,” said Lisa Margeson, head of retirement client experience and communications at Bank of America Merrill Lynch.

“Widowed clients are often unsure and scared because they don’t want to be taken advantage of,” said Cary Carbonaro, managing director of United Capital of New York and New Jersey and 2014 CFP Board Ambassador.

See Juliette Fairley, Clients Who Lose a Spouse Require Both Empathy and Skill, Financial Advisor, September 11, 2018.

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

 

September 21, 2018 in Current Affairs, Death Event Planning, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Thursday, September 20, 2018

CLE on The Proposed § 199A Regulations and Multiple Trust Rules: What Estate Planners Need to Know

CLEThe American Law Institute is holding a webcast / teleconference entitled, The Proposed § 199A Regulations and Multiple Trust Rules: What Estate Planners Need to Know, on Wednesday, October 17, 2018, at 12:00 p.m. - 1:30 p.m. Eastern. Provided below is a description of the event:

Why You Should Attend

In conjunction with a massive tax cut for C corporations, 2017 tax reform enacted Internal Revenue Code § 199A, providing owners of pass-through entities, such as S corporations, partnerships (including LLCs), and sole proprietorships, with a deduction of up to 20% of their qualified business income. Whether one receives the deduction and how much it is depends on a variety of factors. In addition to the law needing clarification, several commentators suggested ways to avoid limitations that reduce the deduction – ways the IRS viewed as abusive.   Proposed regulations released in August fill in many details and close perceived loopholes. Join us to learn how the proposed regulations inform business structuring, when the deduction is available and when it is not, how to try to work within the rules to maximize the deduction, the effect of basis on the deduction and the government’s position on when basis step-up helps and when it does not, the desirability of shifting income to get a better result, and how the deduction works for trusts and informs our planning for them.  

What You Will Learn

A faculty of highly experienced estate planners will review the basic rules for context and summarize ACTEC’s comments on the proposed regulations. They will then dive into the complexities of:   

How optional aggregation can help those who have set up multiple entities for their business

How activities associated with specialized service trades or businesses can become tainted

How changes in basis may or may not affect the § 199A deduction

Planning for trusts to maximize the § 199A deduction

How the scope of the multiple trust rules under § 643(f) affects trust planning (even when the § 199A deduction is not involved)

Who Should Attend

This webcast from ALI CLE and ACTEC will benefit any estate planner, but particularly those who advise sole proprietorships, partnerships, and S corporations.

September 20, 2018 in Conferences & CLE, Current Affairs, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Wednesday, September 19, 2018

Section 199A — Qualified Business Income Deduction Including Highlights of Proposed Regulations

TaxreformSteve R. Akers recently published a summary of Section 199A entitled, Section 199A — Qualified Business Income Deduction Including Highlights of Proposed Regulations, Bessemer Trust, September 11, 2018. Provided below is an abstract of the summary.

Section 199A is an important provision in the 2017 Tax Act, permitting a 20% deduction for qualified business income from proprietorships or passthrough entities, subject to complicated limitations. Proposed regulations were issued on August 8, 2018 (184 pages of preamble and regulations!) for Sections 199A and 643(f) (regarding the multiple trust rule).

The proposed regulations provide substantial additions for administering the statutory provisions (some of which ar taxpayer-friendly and some of which are not). A few highlights include:

  • Exceptions for "self-rental" property (as to the trade or business requirement) and for management companies (as to the W-2 limitation);
  • Prohibitions on "cracking and packing" strategies (regarding limitations on the deduction for "specified service trades or businesses"); and
  • Anti-abuse rules for trusts owning business interests

September 19, 2018 in Articles, Current Affairs, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Tuesday, September 18, 2018

Jeff and MacKenzie Bezos Create $2 Billion Fund to Fight Homelessness

BezosBillionaires and other members of the esteemed 1% of the American wealthy are becoming quite pragmatic about using their fortunes to help justified causes. For Amazon's Jeff Bezos and his wife MacKenzie, that cause has been revealed as the country's homelessness. The couple will call their project the "Bezos Day One Fund," and they will commit $2 billion to the fund.

According to Bloomber, Bezos became the world's wealthiest person this year, with an estimated net worth of $164 billion. The fund will will issue annual leadership awards to organizations "doing compassionate, needle-moving work to provide shelter and hunger support to address the immediate needs of young families" Bezos tweeted last week.

Earlier this month, Bezos and his wife donated $10 million to With Honor, a nonpartisan organization and super PAC looking to boost the number of veterans in politics. Though they have made political contributions to different entities in the the past, it has never been to this magnitude.

See Kaya Yurieff, Jeff and MacKenzie Bezos Create $2 Billion Fund to Fight Homelessness, CNN, September 13, 2018.

Special thanks to Adam J. Hirsch (Professor of Law at the University of San Diego School of Law) for bringing this article to my attention.

September 18, 2018 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Monday, September 17, 2018

Congress Pushes Forward this Week with Tax Reform 2.0

GopHouse Republicans continue to push what has been titled "Tax Reform 2.0" through Congress, hoping to get the legislation's new three tax bills passed: H.R. 6760, H.R. 6756, and H.R. 6757.

H.R. 6760 Protecting Family and Small Business Tax Cuts Act of 2018, is sponsored by Representative Rodney Davis (R-IL). Notably, the bill would make the Tax Cuts and Jobs Act (TCJA) individual and small business tax cuts (the so-called pass-through tax cuts) permanent. The individual cuts are currently set to expire in 2025, while the TCJA corporate tax cuts are permanent.

Additionally, under the bill, the medical expense deduction would remain in place with a lower floor of 7.5% for tax years 2017 through 2020; the TCJA only allowed the limit through 2018. The bill would also make clear that, to claim the credit, a taxpayer identification number (TIN) would be necessary for any non-child dependent, which could consist Social Security number or an individual taxpayer identification number (ITIN).

See Kelly Phillips Erb, Congress Pushes Forward this Week with Tax Reform 2.0, Forbes, September 12, 2018.

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

September 17, 2018 in Current Affairs, Current Events, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Saturday, September 15, 2018

CLE on Installment Sales and Like-Kind Exchanges in Estate Planning

CLEThe National Business Institute is holding a teleconference entitled, Installment Sales and Like-Kind Exchanges in Estate Planning, on Thursday, November 8, 2018, at 12:00 p.m. - 1:30 p.m. Central. Provided below is a description of the event:

Program Description

Add a New Tool to Your Planning Arsenal

Using installment sales in combination with 1031 exchanges is an underutilized tax minimization tool that's incredibly effective when executed correctly. Don't leave anything to chance: let our expert faculty outline the rules and steps of this technique and help you avoid mistakes. Register today!

  • Comply with all the regulatory and statutory requirements governing the transaction.
  • Get an overview of how installment sales are used and understand the key steps involved.
  • Make certain the tax effects of the technique are exactly as intended.

Who Should Attend

This timely legal guide is designed for attorneys. It will also benefit accountants, tax managers, real estate professionals, and paralegals.

Course Content

  1. Using Like-Kind Exchanges in Estate Planning (and the New Definition of a Like-Kind Exchange under the TCJA)
  2. The Mechanics of the Installment Sale and When to Use it
  3. Complying with Statutory Requirements: Practical Tips
  4. Top Tax Considerations: Ensuring the Technique Works as Planned

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 1.50 -  AK
CLE 1.50 -  AL
CLE 1.50 -  AR
CLE 1.50 -  AZ
CLE 1.50 -  CA*
CLE 2.00 -  CO
CLE 1.50 -  CT
CLE 1.50 -  DE
CLE 2.00 -  FL*
CLE 1.50 -  GA
CLE 1.50 -  HI
CLE 1.50 -  IA
CLE 1.50 -  ID
CLE 1.50 -  IL
CLE 1.50 -  IN
CLE 1.50 -  KS
CLE 1.50 -  KY
CLE 1.50 -  LA
CLE 1.50 -  ME
CLE 1.50 -  MN
CLE 1.80 -  MO
CLE 1.50 -  MP
CLE 1.50 -  MS
CLE 1.50 -  MT
CLE 1.50 -  NC
CLE 1.50 -  ND
CLE 1.50 -  NE
CLE 1.50 -  NH
CLE 1.80 -  NJ
CLE 1.50 -  NM
CLE 1.50 -  NV
CLE 1.50 -  NY*
CLE 1.50 -  OH
CLE 2.00 -  OK
CLE 1.50 -  OR
CLE 1.50 -  PA
CLE 1.50 -  RI
CLE 1.50 -  SC
CLE 1.50 -  TN
CLE 1.50 -  TX
CLE 1.50 -  UT
CLE 1.50 -  VA
CLE 1.50 -  VT
CLE 1.50 -  WA
CLE 1.50 -  WI
CLE 1.80 -  WV
CLE 1.50 -  WY

Continuing Professional Education for Accountants

Credit Hrs State
CPE for Accountants 1.50 -  AZ
CPE for Accountants 1.50 -  NY
CPE for Accountants 1.50 -  WA
CPE for Accountants 1.00 -  WI

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 1.50

* denotes specialty credits

September 15, 2018 in Conferences & CLE, Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

House GOP Introduces New Tax Cut Bill Ahead of Midterm Elections

GopEarlier this week, Republican lawmakers of the House introduced legislation that would make the 2017 tax cuts for individuals permanent. Polls consistently show less than half of Americans approve of the tax cut, but members of the Grand Old Party want to highlight it as their largest economic triumph before the November midterm elections.

House Ways and Means Chairman Kevin Brady said in a statement, “This legislation is our commitment to the American worker to ensure our tax code remains the most competitive in the world.”

Last year’s tax overhaul set the individual changes to expire at the end of 2025 for budget reasons because it passed through a special process where a simple majority was necessary for passage. One of the many provisions was the SALT deduction cap, which is unpopular in high-tax states such as New York and New Jersey. Republicans elected from those high-tax states are now faced with a difficult choice of either supporting a new cap on state and local tax deductions, or voting against tax cuts backed by their party.

The bill includes several retirement-related provisions that would allow small businesses to more easily offer 401(k) plans, as well as new individual savings accounts for education and newborns. The legislation would also allow startups to write off more of their costs.

See Laura Davison & Allyson Versprille, House GOP Introduces New Tax Cut Bill Ahead of Midterm Elections, Time, September 10, 2018.

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

September 15, 2018 in Current Affairs, Current Events, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Friday, September 14, 2018

World’s Richest People Just Can’t Give Away Their Money Fast Enough

BuffettWarren Buffett, who recently turned 88, has a current net worth of $87.1 billion, according to the most recent Bloomberg Billionaires Index. Even after giving away $30 billion worth of shares in his company Berkshire Hathaway Inc since 2010, Buffett's net worth has increased by 86% in that same time frame.

Bill Gates and his wife Melinda have said their namesake private foundation will spend all of its resources within 20 years of their deaths. Mark Zuckerberg and his wife Priscilla Chan said in 2015 that they planned to give away 99 percent of their stock in the social network to advance philanthropic causes. Yet both of these billionaire couples are only worth more after giving away billions of their fortunes. Adding in Buffett's increased wealth, they have upped their wealth by a combined $139 billion.

A commitment by signatories to give away at least half their wealth called the Giving Pledge was formed by Warren Buffett in 2010, and have been signed by 184 wealthy families, including Tesla's Elon Musk and Airbnb's Stephen Ross. The goals Buffett set are encouraging more philanthropists to think about what they need to do to achieve them. “The good news is there are an increasing number of attractive places to invest in social-change causes,” Susan Wolf Ditkoff, partner and co-head of the Bridgespan Group’s philanthropy practice said.

See Tom Metcalf, World’s Richest People Just Can’t Give Away Their Money Fast Enough, Bloomberg, August 30, 2018.

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

September 14, 2018 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)

Thursday, September 13, 2018

Article on Revisiting Revocation upon Divorce?

DivorceNaomi R. Cahn recently published an Article entitled, Revisiting Revocation upon Divorce?, Iowa Law Review, Vol. 103, No. 1879 (2018). Provided below is an abstract of the Article:

In an increasing number of states, divorce presumptively renders an ex-spouse ineligible to benefit from the testator’s will. Divorce may also impact other revocable dispositions in favor of the ex-spouse and exclude the ex-spouse’s family members from benefitting in any way from the decedent’s death. Revocation upon divorce statutes have become more common as divorce itself has become more common, and courts have been quite rigorous in interpreting the statutes, creating an almost irrevocable presumption of revocation. By contrast, other countries vary in their approaches to the effect of a divorce on testamentary and nonprobate transfers to an ex-spouse and family members.

This Article challenges the utility of the presumption of revocation upon divorce. In raising questions about the appropriateness of the presumption, this Article traces developments in divorce law—from the purely fault system to the no-fault system to contemporary, and more collaborative, approaches to divorce—to show the historical shifts towards contemporary attempts to dissolve the acrimony often associated with divorce. This Article also explores the relatively limited sociological and empirical material on actual individuals’ preferences for disposition of their estates to ex-spouses and their families. And it examines the class, gender, and race aspects of wealth ownership as part of an effort to determine who is most likely to have probate and nonprobate assets affected by the revocation statutes. Finally, this Article discusses alternative approaches for states to consider.

September 13, 2018 in Articles, Current Affairs, Estate Planning - Generally, Non-Probate Assets, Wills | Permalink | Comments (0)