Wills, Trusts & Estates Prof Blog

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

Wednesday, August 16, 2017

Tupac's Hummer Back On Auction Block After High Bidder Flakes

H1Tupac’s 1996 Hummer went to the auction block in May 2016. An anonymous bidder from Ohio bought the heavily modified H1 for an astounding $337,000. As of yet, efforts to solicit payment have been totally unsuccessful and attempts by the auction house to find the buyer have garnered no response. RR Auctions is relisting the vehicle with an expected sale price closer to $100,000; much nearer the actual value of the SUV.

See Tupac's Hummer Back On Auction Block After High Bidder Flakes, TMZ, August 12, 2017.

August 16, 2017 in Current Events, Estate Planning - Generally, Music | Permalink | Comments (0)

Tuesday, August 15, 2017

Americans Are Dying Younger, Saving Corporations Billions

YoungSince 1950, death rates for Americans have improved by approximately 1% per year. 2000-2009 oversaw an acceleration of this trend with annual increases from 1.5-2%. Recently though, these gains have significantly slowed. From 2010 to 2014, death rates in American were only improving at about half a percent per year. In 2015, the first time since 1999, the US mortality rate actually increased slightly.

For most, the increasing mortality of younger Americans is bad news, but this is not necessarily the case for large companies running pension plans. The 2015 increase in the death rate has led a number of large companies to reduce the projected amount they may owe retirees. The estimated pension reduction among twelve leading companies tops a staggering $9.7 billion. This movement in the U.S. death rate is apparently significant enough for actuaries to incorporate the change into their future estimates, but the question remains as to whether the uptick is a short-term blip or a permanent shift.

See John Tozzi, Americans Are Dying Younger, Saving Corporations Billions, Financial Advisor, August 8, 2017.

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

August 15, 2017 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Grieving Family Spot a Decaying FOOT Lying atop Their Grandfather's Casket in New Jersey Cemetery

CasketCleveland Butler, 85, died after suffering from a stroke while in a Brooklyn nursing home. Grieving members of his family gathered to celebrate his life and mourn his loss at a New Jersey cemetery. As Butler’s vibrantly colored casket was lowered into the ground, family members noticed a decaying foot jutting out from the adjacent grave site. Workers chose to ignore the decaying neighbor’s limb and continued with the burial.

James Shmergel, owner of Mount Holiness Cemetery, and Bill Plog, the cemetery’s caretaker, shrugged off the incident as being par for the course for the cemetery. Plog noted that the “grave is from 1969. It's unfortunate that this happened, but this is a graveyard,”

The family is currently considering pursuing legal action.

See Grieving Family Spot a Decaying FOOT Lying atop Their Grandfather's Casket in New Jersey Cemetery, Daily Mail.com, August 11, 2017.

August 15, 2017 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Monday, August 14, 2017

Carrie Fisher's Daughter Billie Lourd Will Inherit Nearly $7 Million

0809-carrie-fisher-billie-lourde-tmz-7Billie Lourd, daughter of Carrie Fisher, is set to inherit nearly $7 million of personal property left to her by her mother. $6.8 million is a relatively substantial inheritance, but it is quite diminutive in comparison to the $2 billion in revenue earned by the latest Star Wars film in which Fisher played. It is possible there is additional money that has been left in trust, which would not be reflected in the probate of Fisher’s will.

See Carrie Fisher's Daughter Billie Lourd Will Inherit Nearly $7 Million, TMZ, August 9, 2017.

August 14, 2017 in Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally, Film, Trusts, Wills | Permalink | Comments (0)

IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust

Farm-Agriculture-Cartoon-059The Internal Revenue Service (IRS) addressed income and gift-tax consequences relating to an incomplete non-grantor trust in PLR 201729009. In the case at issue, the settlor created an irrevocable trust in order to benefit himself, his wife, charitable organizations, siblings, and children. The trust instrument provided for a Distribution Committee to disperse income and principal from the trust to named beneficiaries for their health, education, maintenance, and support (HEMS).

After a request for rulings, the IRS concluded that the settlor’s contributions to the trust did not qualify as a gift for federal gift-tax purposes. This characterization entails that distributions from the trust will be treated as a return of the settlor’s property and, as such, will be included in the settlor’s gross estate upon death.

The IRS ruling also held that the powers maintained by the Distribution Committee were such that transfers to the trust were not complete with respect to the trust’s income interest; the relationship between the settlor and the committee allowed the settlor to retain too much power over distributions of income and principal.

See Jillian Merns, IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust, Wealth Management.com, August 2, 2017.

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

August 14, 2017 in Current Events, Estate Planning - Generally, Gift Tax, Income Tax, New Legislation, Trusts | Permalink | Comments (0)

Sunday, August 13, 2017

Danish Queen's Husband Refuses to Be Buried with Her

CryptPrince Henrick of Denmark is refusing to be buried next to his wife, Queen Margrethe. Margrethe had a custom-made glass sarcophagus created for her and her husband of fifty years as a final resting place. The sarcophagus will eventually be installed at Roskilde Cathedral, which has been home to deceased Danish royals for over four centuries.

Henrick’s general dissatisfaction with his current title has been publicly known for many years. The Royal Danish House’s director speculated: "For the prince, the decision not to be buried beside the queen is the natural consequence of not having been treated equally to his spouse."

See Rob Quinn Danish Queen's Husband Refuses to Be Buried with Her, Fox News, August 4, 2017.

August 13, 2017 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Friday, August 11, 2017

Death of ‘Stretch’ IRAs Would Mean Loss of Flexibility for Beneficiaries

Uncle-Sam-wants-your-moneyIf the Retirement Enhancement and Savings Act of 2016 becomes law, it may become more difficult to leave a qualified plan account or sizable IRA to beneficiaries without also leaving them with a substantial tax burden. The Act passed through the Senate Finance Committee in 2016 and calls for the abrogation of “stretch” provisions currently available to non-spouse beneficiaries of 401(k)s and IRAs. These provisions allow certain beneficiaries to extend minimum required distributions for as long as they like.

If the legislation moves forward, these accounts would have to be completely emptied in five years of all but $450,000. While this certainly does not work to the benefit of the account-holder, Uncle Sam gains about $3.18 billion in revenue from 2017 to 2026. Although passage of the bill is still very uncertain, if a stretch IRA is part of your estate plan, it may be a good idea to start looking for alternatives.

See Scott M. Dougan, Death of ‘Stretch’ IRAs Would Mean Loss of Flexibility for Beneficiaries, Kiplinger, August 2017.

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

August 11, 2017 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Thursday, August 10, 2017

This Miner’s $190 Billion Tax Bill Would Take Centuries to Pay

Tanz-LMAP-mdAcacia Mining Plc received a tax bill from the Tanzanian government for $190 billion. Tanzanian officials are claiming that Acacia under-declared revenues from exports. Representatives from Acacia stated that they declared all their revenues and do not owe the massive debt. The mining company reported sales of $1.05 billion last year and $7.7 billion since 2009. Even if the company gave every cent of profit to Tanzania every year, it would take centuries to repay the debt.

This huge tax bill represents another incident in an increasingly unpleasant dispute between the Tanzanian government and the mining company. Acacia stock dropped as much as 17% in response to the news and the company is looking to the possibility of shutting down some of its operations.

See Thomas Biesheuvel, This Miner’s $190 Billion Tax Bill Would Take Centuries to Pay, Bloomberg, July 25, 2017.

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

August 10, 2017 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Rich SF Residents Get a Shock: Someone Bought Their Street

SfTina Lam and Michael Cheng, a couple from South Bay, are the proud owners of one of the wealthiest and most exclusive residential streets in San Francisco. The couple won a city auction for a privately-owned street, Presidio Terrace, in April of 2015. The couple has been quietly holding onto the property while seeking the advice of land-use attorneys to explore options for earning a return on their investment. The street spans a single city block and is lined on both sides with multi-million dollar mansions. The extravagant and very private neighborhood has housed the likes of Senator Dianne Feinstein, Nancy Pelosi, and the late mayor Joseph Alioto.  

The city’s tax office placed the street up for auction because the Homeowners Association had not paid $994 in back taxes. Current homeowners are understandably upset, but a representative for the city council was unmerciful: “Ninety-nine percent of property owners in San Francisco know what they need to do, and they pay their taxes on time — and they keep their mailing address up to date.”

See Matier & Ross, Rich SF Residents Get a Shock: Someone Bought Their Street, San Francisco Chronicle, August 7, 2017.

August 10, 2017 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, August 9, 2017

Appeals Court Rules in $573 Million Griffin Industries Family Dispute

Road killIn 1943, John L. Griffin borrowed $200 to buy a used truck so he could go out and collect dead animals off the side of the road. From these extremely humble beginnings, Griffin grew his road-kill collecting business into a multi-million dollar animal-processing empire. Unfortunately, upon his death, his sons transferred property that should have gone to their sisters into the company in order to lubricate an $840 million sale. What has become a decades-long family dispute was somewhat finalized on Monday when the Sixth Circuit Court of Appeals weighed in on the feud. The court awarded the Griffin sisters $573 million in damages in recognition of the fraudulent manner their brothers handled the administration of the estate.

See Bruce Crippen, Appeals Court Rules in $573 Million Griffin Industries Family Dispute, Cincinnati Business Courier, August 1, 2017.

Special thanks to Jay Brinker, estate planning attorney, for bringing this article to my attention. 

August 9, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)