Wills, Trusts & Estates Prof Blog

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

Monday, October 9, 2017

Would Donald Trump’s Tax Plan Be a Bonanza for the Art World? An Analysis

4712306179621242The estate tax, along with divorce and outstanding debts, is among the more notable reasons for collectors to offer up their rare art masterpieces for sacrifice on the auction block. Ileana Sonnabend, a legendary art dealer who passed away in 2007, left bequests to family members that included works by Andy Warhol, Roy Lichtenstein, Cy Twomby, and Jeff Koons. Considered alone, the artwork left in the estate was valued at over $800 million. Closely behind these unique gifts stalked the tax man; Sonnabend’s heirs owed the federal government $331 million and New York State $140 million in taxes. This placed the family in an unpleasant position. Short on funds and heavy on illiquid assets, they were forced to sell a number of these masterpieces in order to satisfy their tax liabilities.

If the Trump administration’s tax plan makes it through Congress, it appears as though the estate tax would no longer be a concern. But, Ramsey Slugg, wealth strategist at U.S. Trust, notes that any repeal would probably be temporary. “The estate tax is kind of like a bad penny. It always comes back. It’s been repealed three or four times before, and it’s come back every time.”

See Eileen Kinsella, Would Donald Trump’s Tax Plan Be a Bonanza for the Art World? An Analysis, artnet news, October 2, 2017.

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

October 9, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Hefner Timed Death to Launch Playboy Reboot for Modern Era

Hef_bunniesAmidst the rabble of speculation and rumor, time is clearing away the idle speculation that Hugh Hefner died penniless and without a solid estate plan. Apparently, the Playboy mogul has had an ironclad succession plan in place for over 25 years. In 1991, he transferred the Playboy mansion, his art collection, clubs, intellectual property, and the company into a trust. Hefner later began transferring Playboy shares purchased from other stakeholders into a smaller, separate trust. During his life, the trustees acted as a de facto board of directors for Playboy and sought fit to grant Hefner the lifetime title of Editor in Chief and a healthy $1 million-per-year stipend. While the fate of the Playboy brand is uncertain under Hefner’s son, Cooper, there remains a substantial empire to manage.

See Scott Martin, Hefner Timed Death to Launch Playboy Reboot for Modern Era, Wealth Advisor, October 1, 2017.

Special thanks to Mark J. Bade for bringing this article to my attention.

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

Wills for Veterans Initiative

6a49ca822a4572fe83c54424d672c4e9--new-news-news-todayThe Federal Bar Association (FBA) is launching a new pro bono program in order to help veterans draft their wills. “Wills for Veterans” is a project involving FBA chapters across the United States that will coincide with Veterans Days on November 11th. FBA would like local chapters to arrange their events for Thursday, November 9th and is offering planning and scheduling assistance for each chapter.

See Wills for Veterans Initiative, Federal Bar Association, 2017.

October 9, 2017 in Current Events, Estate Planning - Generally, Professional Responsibility, Wills | Permalink | Comments (0)

Sunday, October 8, 2017

40 Years After First Kiss, Gay Couple Will Become First to Marry Under New German Law

Ct-germany-gay-marriage-20170930-002Karl Kriele and Bodo Mende, two civil servants from Berlin, will likely be the first gay couple married in Germany under a new law to take effect on Sunday. In the past, homosexual couples were legally allowed to enter into registered partnerships, but this legal relationship did not boast the same rights that heterosexual couples enjoyed. In response to the new law Kriele said, "This is an emotional moment with great symbolism. The transition to the term 'marriage' shows that the German state recognizes us as real equals."

See Frank Jordans, 40 Years After First Kiss, Gay Couple Will Become First to Marry Under New German Law, Sun Sentinel, September 30, 2017.

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

October 8, 2017 in Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Saturday, October 7, 2017

California Woman Claims She Is Only Living Heir To $15 million Fortune of Writer Who 'Served As Inspiration for J. D. Salinger's Holden Caulfield Character in Catcher in the Rye

Rye_catcherBarbara Sinclair Benson, 80, is claiming that she is the last remaining biological relative of Lamont Buchanan. Buchanan, who died two years ago at the age of 96, was a writer who passed away with no will and a $15.4 million fortune. It is unknown exactly how he amassed his wealth, but acquaintances have surmised that is was from very frugal living and intelligent investing. What is more, Buchanan may have been the source of J.D. Salinger’s inspiration for his iconic Holden Caulfield character from The Catcher in the Rye. The writers were acquainted and a series of interviews revealed that Salinger acknowledged that Buchanan served as part of the inspiration for Caulfield. The City of New York is currently holding the multi-million dollar fortune and Benson is coming forward because she does not “want the state of New York to get the money. My children and grandkids can enjoy it a lot more and put it to better use.”

See California Woman Claims She Is Only Living Heir To $15 million Fortune of Writer Who 'Served As Inspiration for J. D. Salinger's Holden Caulfield Character in Catcher in the Rye', DailyMail.com, September 30, 2017.

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

October 7, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession | Permalink | Comments (0)

Friday, October 6, 2017

Estate Tax Repeal Could Cost Charities, Attorney Says

Please-sir-may-I-have-some-moreThe estate tax is headed for the chopping block according to the most recent release of the Trump administration’s plan for tax reform. Those with over $5.49 million in assets are likely trembling with excitement at the mere possibility of avoiding the draconian 40% tax on their estates. Not everybody shares their excitement though. Robert Strauss, an estate planning attorney, points to the secondary consequences of the current estate tax regime. As it is, many of the ultra-wealthy provide substantial donations to charities in order receive deductions on the amount of estate tax paid. In 2010, when the estate tax was temporarily repealed, donations to charity fell by over four billion dollars from the prior year. Strauss believes that charities “are concerned that donations at the death of a benefactor will be reduced. Advisors need to think more carefully about how to advise their wealthy clients on donations because the rules may change this year.”

See Karen DeMasters, Estate Tax Repeal Could Cost Charities, Attorney Says, Financial Advisor, September 11, 2017.

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

October 6, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

What Your Estate Planning Clients Should Do in Response To Trump's Tax Plan

37152The Trump administration’s plan for tax reform is far from unequivocal, and this ambiguity leaves estate planners in a difficult position. But while the future remains unknown, there are a few suggestions planners can offer clients to deal with uncertainty. The first critical step is to make sure estate plans maintain flexibility. Consider granting another individual an expanded power of attorney in order that he may make the necessary changes to the principle’s estate plan if tax reform brings about significant changes. In a similar vein, independent trustees of irrevocable trusts may be granted additional powers so they can act to reduce future tax exposure. Regardless of possible tax reform outcomes, estate planning will remain important to those wanting to distribute assets to children prior to death, as those assets will likely face gift tax consequences unless moved to a trust.

See Carol A. Harrington, Ellen K. Harrison, & Carlyn S. McCaffrey, What Your Estate Planning Clients Should Do in Response To Trump's Tax Plan, Financial Advisor, September 29, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) & Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

October 6, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Gift Tax, Trusts | Permalink | Comments (0)

Thursday, October 5, 2017

With a Focus on the Estates and Legacies of Artists, a New Advisory Opens for Business

Unnamed-2-640x640During life, Vincent van Gogh was unable to reap the benefits or enjoy the renown and fame his name carries today. This is the case for many artists who earn little recognition until after their demise and through the passage of time. The world of art is fickle, and art history tends to be capricious. For artists without resources to fund a foundation, it can be difficult to ensure a lifetime of artwork survives after their death.

Now, a group of art professions may have a solution. A cohort made up of art advisors, critics, historians, and teachers has gathered to form a company, Art Legacy Planning, that will provide consulting services to heirs, collectors, artists, and anyone else in need of estate or foundation planning that involves art. The company seems to be the first of its kind and plans to cater to artists’ heirs in addition to active artists. Mary Dinaburg, one of the partners behind the enterprise notes, “Nobody likes to think of their demise. You make art to not die, obviously, but by actively following through on estate planning you can be organized before you leave the world.”

See Andrew Russeth, With a Focus on the Estates and Legacies of Artists, a New Advisory Opens for Business, Art News, September 29, 2017.

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

October 5, 2017 in Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

What the Trump Tax Plan Means for Art Collectors and Dealers

1200px-David_Teniers_d._J._008The Trump Administration’s latest release of its proposed tax reform remains sparse on specifics, but the little that is known indicates possible implications for art-related businesses and art collectors. The most recent proposal would eliminate some currently-allowed itemized deductions, lower the number of tax brackets from seven to three, eliminate the estate tax, and change tax rates for smaller businesses.

A repeal of the 40% estate tax on estates valued at over $5.49 million would substantially change the manner in which many who own significant art collections or art pieces manage and distribute their estates. The absence of the 40% tax might encourage collectors to reconsider possible beneficiaries as there would be little need to accommodate paying the hefty tax on a highly illiquid asset. While the abrogation of the estate tax may appear to be all sunshine and open meadows, some are pointing to rain clouds on the horizon.

Under current law, beneficiaries receive a step-up in basis on art received through bequests, so capital gains earned by the original owner have no income tax implications for the beneficiary. Because the newest tax proposals do not seem to address this issue, there is some concern that beneficiaries may end up paying more in capital gains, which mitigates the substantial savings that would be earned with the removal of the estate tax.

See Anna Louie Sussman, What the Trump Tax Plan Means for Art Collectors and Dealers, Artsy, September 29, 2017.

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

October 5, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Santa Found Dead

Saint-nicholas18Archeologists in Turkey claim they have discovered the remains of the real Santa Claus, St. Nicholas, and are fairly certain of his demise. The archeologists discovered his bones buried under a church in Southern Turkey using electronic surveys that detected gaps underneath the structure. St. Nicholas was known for his generosity to the needy, impoverished, and sick and was popularized as Father Christmas in 16th-century Europe.

See Lia Eustachwich Santa Found Dead, New York Post, October 4, 2017.

October 5, 2017 in Current Events, Estate Planning - Generally | Permalink | Comments (0)