Wills, Trusts & Estates Prof Blog

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

Saturday, September 15, 2018

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)

Thursday, September 13, 2018

New IRS Proposed Regulations Nullify SALT Limitation Workaround Attempts

SaltA number of state have enacted legislation that seeks to allow taxpayers to take an income tax charitable deduction for contributions to certain charitable organizations while permitting a credit against state or local income, real estate or other taxes for the contributions. This allows individuals to avoid the $10,000 annual limitation on the deductibility of state and local tax (SALT) payments under Section 164(b)(6) of the Tax Cuts and Jobs Act, in essence casting SALT payments as charitable contributions.

Proposed regulations issued by the Treasury Department and the Internal Revenue Service warns citizens that this method will not accomplish its intended goal and those that attempt the endeavor could find themselves in hot water with penalties and fees. The IRS indicated that the regulations are intended for contributions to newly created state or local controlled charities formed in response to the SALT cap, as opposed to contributions in connection with those preexisting tax credit programs that benefit a number of charitable organizations.

The regulations may still be seen as overly broad as they new not differentiate between a contribution to a newly formed state-controlled entity and a contribution to an independent public charity, such as a community organization or private school.

See Richard L. Fox & Jonathon G. Blattmachr,  New IRS Proposed Regs Nullify SALT Limitation Workaround Attempts, Wealth Management, September 5, 2018.

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

September 13, 2018 in Current Affairs, Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Wednesday, September 12, 2018

Hamptons Estate Linked to JFK's Sister Selling for $35 Million

JeanA Hamptons estate owned by a trust associated with Jean Kennedy Smith has just hit the market for $35 million. Smith, 90, is the longest surviving sibling of president John F. Kennedy. The estate is actually two separate parcels comprising of a total of 10 acres — a waterfront property asking $20 million, and a cottage with a pool asking $15 million.

"Built in 1850, the main house is 6,000 square feet and comes with nine bedrooms and six bathrooms — on 4.9 acres. The property features a dock, a pool, a tennis court and lots of patios and gardens. The cottage is a 2,850-square-foot ranch home with four bedrooms. This property also has a pool and sits on 5.27 acres."

Smith served as the U.S. ambassador to Ireland from 1993 to 1998 and was awarded the Presidential Medal of Freedom by President Obama for her work with people with disabilities.

See Jennifer Gould Keil, Hamptons Estate Linked to JFK's Sister Selling for $35 Million, Fox News, September 5, 2018.

 

September 12, 2018 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Monday, September 10, 2018

A Dying Mother Wrote Her Children Letters, Leaving a Gift of Love for Years

ZinnJacqueline Zinn passed away in 2013 from brain cancer and spent the previous 18 months fighting as hard as she could, enduring surgery, radiation and chemotherapy. When she knew that she only had precious weeks left Jacquie decided to think of her four children and what they would need when she was gone.

Her husband Doug said that Jacquie wanted to be “present with her kids" at special milestones in their life, even after her death, so she wrote letters to be opened by the children when those times came. One was for each of them to be opened immediately after her death to help with the crushing grief, the second at college graduation, and the third at their wedding. This way they could still feel their mother's love at these emotional moments.

The idea that a mother facing her own early demise would focus beyond her death, to want to cushion the blow of it to her offspring, is simply amazing. When a normal person may easily deny their mortality, thinking they had plenty of time to write a will or make an estate plan, Jacqueline Zinn knew her days were numbered. Yet she did not fall into depression or denial; instead, she faced it with a determination and grace that we can all admire.

See Steven Petrow, A Dying Mother Wrote Her Children Letters, Leaving a Gift of Love for Years, Washington Post, September 2, 2018.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

September 10, 2018 in Current Events, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, September 9, 2018

Trump Helps the Rich with Retirement Executive Order

IraPresident Trump's new Executive Order instructs the Treasury to to review the rules on required minimum distributions from tax favored retirement plans with the intent to change the rules so elders can keep more money in 401(k)s and individual retirement accounts longer – delaying collecting after age 70 1/2.

The general idea was to help individuals that are financing their retirement through these retirement accounts with more money during their retirement years, but instead it may have an unintended effect: assisting the wealthy with accruing more tax-free income to pass on to their heirs. True, the eventual beneficiaries will have to pay taxes on these inherited funds, but they will still get the opportunity to grow without the risk of income tax or capital gains tax.

Instead of proposing reforms to benefit the wealthy, President Trump should focus on the retirement savings crisis facing the middle class. Among workers aged 55-64, about 33% have no retirement wealth, and the median IRA and 401(k) balance of the remainder is only $60,000. A better plan is to help people accumulate more money and convert to a fair annuity. None of us know when we are going to die, and we need insurance against outliving our money.

See Teresa Ghilarducci, Trump Helps the Rich with Retirement Executive Order, Forbes, September 4, 2018.

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

September 9, 2018 in Current Events, Elder Law, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Friday, September 7, 2018

Article on The Use and Abuse of Governing-Law Clauses in Trusts: What Should the New Restatement Say?

TrustThomas P. Gallanis recently published an Article entitled, The Use and Abuse of Governing-Law Clauses in Trusts: What Should the New Restatement Say?, 103 Iowa L. Rev. 1711-1727 (2018). Provided below is an abstract of the Article:

This Essay offers a novel solution to a thorny problem at the intersection of trust law and the conflict of laws: When should the settlor be able to choose a governing law other than the law of the jurisdiction with the most significant relationship to the trust? The law of the conflict of laws gives effect to a governing-law clause in a trust instrument except when contrary to the “strong public policy” of the jurisdiction with the most significant relationship to the matter at issue. But what is “strong public policy”? The answer should not depend on the size of the Chancellor's foot. This Essay proposes, instead, that the answer should incorporate the well-established distinction between the default rules of trust law, which aim to effectuate the intention of the typical settlor but yield to a particular settlor's contrary intention, and the mandatory rules of trust law, which apply without regard to intention for reasons of overriding public policy. This Essay proposes that a governing-law clause in a trust instrument should be effective unless contrary to the mandatory law of the jurisdiction with the most significant relationship to the matter at issue. The Essay urges the adoption of this approach by the Restatement (Third) of the Conflict of Laws, which is currently in the process of being drafted.

September 7, 2018 in Articles, Current Events, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Burt Reynolds, star of "Smokey and the Bandit," Dead at 82

BurtBurt Reynolds, the acting superstar that first appeared on the silver screen over 5 decades ago, passed away on Thursday, September 6, at the age of 82. His agent, Todd Eisner, said that the "Smokey and the Bandit" star suffered a cardiac arrest. According to a 911 report an ambulance had been called to his estate Thursday.

A Michigan native, Reynolds and his family moved to Florida when he was five. In high school, he showed promise as a football star and even received a scholarship to attend Florida State University. When his athletic career was derailed due to injury, the charismatic Reynolds turned to acting.

An iconic Hollywood sex symbol in front of the camera for a couple decades, Reynolds also tried his directorial hand behind it, and later earned a reputation for philanthropy after founding the Burt Reynolds Institute for Film & Theatre in Florida.

Reynolds is survived by his son, Quinton, and his ex-wife, Loni Anderson.

See David Ariosto & Megan Thomas, Burt Reynolds, "Smokey and the Bandit" Star, Dead at 82, CNN, September 7, 2018.

September 7, 2018 in Current Events, Estate Planning - Generally, Television | Permalink | Comments (0)

Wednesday, September 5, 2018

IRS Proposes Amendments to Regulations Regarding Charitable Contributions

SunshineThe Internal Revenue Service has proposed amendments to regulations under section 170 of the Internal Revenue Code concerning rules governing availability of charitable contribution deductions when the taxpayer receives or expects to receive a corresponding state or local tax credit. Accordingly, the IRS also has proposed similar amendments to he regulations under section 642(c) to apply similar rules to payments made by a trust or decedent's estate.

The proposal, REG-112176-18, was published on August 27, 2018, and will be discussed at a public hearing on November 5, 2018.

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

September 5, 2018 in Current Events, Estate Planning - Generally, New Cases, Trusts, Wills | Permalink | Comments (0)

Tuesday, September 4, 2018

CLE on Drafting IRA Trusts

CLEThe National Business Institute is holding a video webcast entitled, Drafting IRA Trusts, on Thursday, October 18, 2018, at 9:00 a.m. - 4:00 p.m. Central Time. Provided below is a description of the event:

Program Description

Provide Your Clients with a Thorough Understanding of IRA Trusts

Be prepared for specific challenges associated with IRA trusts by understanding their unique characteristics. Our essential primer will provide you with a comprehensive overview of these popular trusts, including drafting tactics, advantages of an IRA trust and critical sample forms needed to complete the process. Register today!

  • Determine the pros and cons of establishing an IRA over other trusts.
  • Gain a better understanding of IRA minimum distribution rules, such as individuals as beneficiaries and trusts as beneficiaries.
  • Learn different tax issues associated with an IRA trust, including income and estate tax.

Who Should Attend

This legal program is designed for attorneys looking to increase their knowledge of IRA trusts. This course may also benefit accountants and CPAs, estate planners, and trust officers.

Course Content

  1. Overview of IRA Trusts
  2. IRA Required Minimum Distribution Rules
  3. Retirement Account Rollover Rules and Mistakes
  4. Drafting an IRA Trust
  5. Tax Issues
  6. Sample Forms
  7. Using Self-Directed IRAs to Create LLCs for Non-Traditional Investments
  8. Ethics in Estate Planning Practice
  9. Distribution and Termination of IRA Trusts in Estate Administration

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 6.00 -  AK*
CLE 6.00 -  AL*
CLE 6.00 -  AR*
CLE 6.00 -  AZ*
CLE 6.00 -  CA*
CLE 7.00 -  CO*
CLE 6.00 -  CT*
CLE 6.00 -  DE*
CLE 7.00 -  FL*
CLE 6.00 -  GA*
CLE 6.00 -  HI*
CLE 6.00 -  IA*
CLE 6.00 -  ID*
CLE 6.00 -  IL*
CLE 6.00 -  IN*
CLE 7.00 -  KS*
CLE 6.00 -  KY*
CLE 6.00 -  LA*
CLE 6.00 -  ME*
CLE 6.00 -  MN*
CLE 7.20 -  MO*
CLE 6.00 -  MP
CLE 6.00 -  MS*
CLE 6.00 -  MT*
CLE 6.00 -  NC*
CLE 6.00 -  ND*
CLE 6.00 -  NE*
CLE 6.00 -  NH*
CLE 7.20 -  NJ*
CLE 6.00 -  NM*
CLE 6.00 -  NV*
CLE 7.00 -  NY*
CLE 6.00 -  OH*
CLE 7.00 -  OK*
CLE 6.00 -  OR*
CLE 6.00 -  PA*
CLE 7.00 -  RI*
CLE 6.00 -  SC*
CLE 6.00 -  TN*
CLE 6.00 -  TX*
CLE 6.00 -  UT*
CLE 6.00 -  VA*
CLE 6.00 -  VT*
CLE 6.00 -  WA*
CLE 7.00 -  WI*
CLE 7.20 -  WV*
CLE 6.00 -  WY*

Continuing Professional Education for Accountants

Credit Hrs State
CPE for Accountants 7.00 -  AZ
CPE for Accountants 7.00 -  NY*
CPE for Accountants 7.00 -  WA
CPE for Accountants 7.00 -  WI

Financial Planners – Financial Planners: 7.00

* denotes specialty credits

 

September 4, 2018 in Conferences & CLE, Current Events, Elder Law, Estate Planning - Generally, Estate Tax, Income Tax, Trusts | Permalink | Comments (0)

Monday, September 3, 2018

Aretha’s Lack of a Will Could Make Things Rocky for Heirs

ArethaEstate law experts expressed surprise but not shock that a wealthy person like Aretha Franklin would put off making a will until it was too late. Laura Zwicker, an attorney who specializes in estate planning but is not affiliated with the Franklin estate, says she sees it happen far too often. "People don't like to face their own mortality."

The documents listed make no mention of the value of Aretha Franklin's estate, though it seems that a surprising aspect of the estate is the ownership of her songs. Though her records were played millions of times, she earned little in radio royalties from smashes like 1967′s “Respect” because such payments go overwhelmingly to the song’s author, not the performer. She only owned the rights to one of her major hits, that of "Think"

Kenneth Abdo, an attorney who specializes in probate law and has worked on the estate of Prince, who also died without a will, says the IRS will conduct an audit of her holdings, and the entire process could take years. Then the IRS will eventually take 40% of the estate's value over $11.2 million. Her entertainment lawyer seemed distraught that the process will be taken place entirely in the public eye after the diva spent years being such a private person.

See Andrew Dalton, Aretha’s Lack of a Will Could Make Things Rocky for Heirs, AP News, September 2, 2o18.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

September 3, 2018 in Current Events, Death Event Planning, Estate Planning - Generally, Wills | Permalink | Comments (0)