Wills, Trusts & Estates Prof Blog

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

Friday, April 28, 2017

Tax Judge Rules Appraiser Placed Lowball Valuation on Estate's Painting

The youngerA Sotheby’s official appraised a painting by Pieter Bruegel the Younger back in 2005 at $500,000, but when the owner of the piece went to sell the painting, it drew more than four times that amount, selling for $2.1 million. So why such a wide gap between the estimated and actual value? The appraiser claimed that artwork prices spiked due to a large influx of Russian buyers who were eager to obtain old masters. However, the United States Tax Court took issue with this matter in a recent decision, ruling that the appraiser had most likely placed a lowball estimate on the piece to “curry favor” with the owner, an estate likely facing a substantial tax bill. With the IRS viewing valuations for artworks in income, estate, and gift tax returns as a potential area for abuse, it comes at no surprise that the IRS challenged the low value placed on the painting, seeking an additional $781,488 in taxes from the estate.

See Colin Moynihan, Don’t Blame the Russians, Tax Judge Tells Sotheby’s Expert, N.Y. Times, April 23, 2017.

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

April 28, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, New Cases | Permalink | Comments (0)

Monday, April 17, 2017

Book on Statutes on Trusts & Estates

Selected statuteMark L. Ascher & Grayson M.P. McCouch recently published a book entitled, Selected Statutes on Trusts and Estates (2017). Provided below is a summary of the book:

This casebook statutory supplement meets the needs of students in basic and advanced courses on wills, trusts, decedents' estates, fiduciary administration, and future interests, providing a compendium of essential uniform act provisions and official comments. It covers a wide range of topics, including intestacy, wills, rules of construction, probate administration, nonprobate transfers, disclaimers, principal and income, prudent investments, perpetuities, trust formation and modification, spendthrift and discretionary trusts, trustee powers and duties, powers of appointment, and powers of attorney. The previous edition has been updated to include amendments to the Uniform Probate Code, the Uniform Custodial Trust Act, and the Uniform Power of Attorney Act.

April 17, 2017 in Books, Books - For Practitioners, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Tuesday, April 11, 2017

How to Prevent Family Feuds in Estate Planning

Family feudsIn the news, we often are witness to frequent celebrity estate battles, but we are rarely aware of such feuds amongst typical American families. As complex family structures become more common, estate planners will need to ensure appropriate measures that will help prevent conflicts among family members. Oftentimes, it will be important to the preservation of the family to memorialize estate intentions and communicate those intentions to the heirs. Another key to creating less animosity amongst family members is to select the right fiduciary to administer the estate and effectively communicate the wishes. And as always, clients must be reminded to periodically review and update their estate planning documents, especially upon significant life events.

See Anna Sulkin, How to Prevent Feuds Among Heirs, Wealth Management, April 10, 2017.

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

April 11, 2017 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Friday, April 7, 2017

How Estate Administration Can Strengthen a Family

Estate administrationThe months after the loss of a loved one are difficult partially due to misunderstandings, differing opinions, and poor communication while dividing up the deceased’s estate. However, a family can be made even stronger after a loss. As an executor of an estate, you can help strengthen a grieving family’s bond. Accordingly, an executor should keep communication channels open, as this will help to reduce the family’s anxiety and concerns. Similarly, family members should be brought together face-to-face as often as possible during this hard time, which allows for socializing and reconnecting. During these times, it is also a good idea to rekindle old traditions to honor your loved ones and recreate lasting memories. Overall, executors have many duties, but they should not lose sight of the bigger picture—family matters most.

See How Administering an Estate Can Make a Family Stronger, Legacy.com, March 23, 2017.

April 7, 2017 in Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Monday, March 13, 2017

Article on Creating a Red File for Estate Planning

Red fileMarvin E. Blum recently published an Article entitled, Filling in the Gaps: Create a “Red File” for Clients to Cover Issues Beyond Traditional Estate Planning, Tr. & Est. 68 (Feb. 2017). Provided below is an abstract of the Article:

Most estate planners will agree that one of the most formidable obstacles to the planning process is the general reluctance of clients to discuss their own mortality. There’s one significant motivating factor, however, that drives clients to confront their mortality and plan for their incapacity and death: control. Clients want to ensure that on incapacity, they’re cared for as they wish and on death, their assets pass exactly how they would like. While crafting an estate plan, both planners and clients tend to focus on the effective and tax-efficient distribution of the client’s assets. It’s all too common for a client to walk away with a perfectly crafted portfolio of estate-planning documents that expertly disseminates the client’s property but fails to provide the control so desperately desired. How is it possible for a perfect plan to be so imperfect? The answer lies outside of the formal estate-planning documents and accordingly often goes overlooked by planners and clients alike, but the answer, itself, is simple. By adding a “red file” to the traditional batch of estate-planning documents, clients increase their level of control in two key areas: (1) incapacity, and (2) administration of the estate at death. 

As part of the planning process, estate planners should encourage clients to create a red file and guide them on how to do it. Essentially, a red file is a notebook or other centralized source of information that will not only aid an executor in navigating the waters of estate administration, but also will make very clear the wishes of a client in the event he becomes incapacitated in the future. 

While only clients can actually establish the red file, estate planners should provide their clients with a framework of guidelines for what it should contain. There’s no specific formula for what makes a red file effective, but clients should know that the more information they include, the more helpful it will be to those managing their assets or making care decisions on their behalf. 


March 13, 2017 in Articles, Disability Planning - Health Care, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Wednesday, January 25, 2017

How Prince Will Lose the Control He Once Had over His Music

Prince estate tax billDuring Prince’s longstanding career, we saw him part with his record label, change his name, and yank his songs off popular streaming services all to prove a point—no one could tell him what to do. Although his desire to control his music inspired other artists, this limited exposure could hurt the value of the late singer’s music. Without a will, Prince’s wishes will take a backseat because his estate administrators are under a court mandate to get the most for his 1,000-song catalog. The estate administrators have a legal responsibility to maximize the return on his music, which most likely goes against his wishes, in order to pay the looming estate tax bill.  

See Lucas Shaw, With No Will, Prince Loses the Control He Zealously Guarded, Wealth Management, January 18, 2017. 


January 25, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Intestate Succession, Music | Permalink | Comments (0)

Saturday, January 21, 2017

Tips for Estate Planners in 2017

Estate planning 2017In 2017, estate planners should look to take their own advice, just as they easily give necessary advice to their clients. First and foremost, it is essential that estate planners write a letter to their children detailing critical information needed for emergencies. Similarly, one should also give access to any passwords for their digital assets. Also, save your children and family the trouble of guessing your body disposition by making arrangements beforehand, such as buying a burial plot or arranging plans for cremation. Additionally, review life insurance terms and create any necessary trusts that will benefit loved ones. One can also provide for their grandchildren by setting up 529 plans that will provide for their education. Setting up an asset inventory will also make it easier for family members to be organized and informed. Further, one should continue to update charitable bequests as they see fit and revise any beneficiary designations to reflect their wishes. Lastly, estate planners should look to set up family meetings to provide those important to them with the information and security they will need to carry out their estates.     

See Martin M. Shenkman, An Estate Planner’s 11 Tips for the New Year, Wealth Management, January 18, 2017. 


January 21, 2017 in Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, January 13, 2017

The Legal Battle Ensues over Prince's Music

Prince tidalSeveral unanswered questions still remain as to the management and distribution of Prince’s estate since his death in April 2016. Specifically, much is still unknown about the status of his valuable music catalog. Jay-Z’s companies, Tidal and Roc Nation, are in a legal battle with Bremer Trust, the administrator of Prince’s estate, over the late singer’s intellectual property, which includes a vault of unreleased music. Bremer Trust filed a copyright infringement suit, alleging that Tidal only had exclusive rights to stream Prince’s new music for ninety days but instead streamed all fifteen Prince albums. The defendant companies claim they had an oral and written agreement with Prince to exclusively stream his music, while Prince’s label NPG Records claims they terminated any agreement made before his death. Currently, representatives for the singer’s estate are nearing a deal to stream his music on Apple Music and Spotify. However, with Prince’s highly critical perspective of the music industry, it would come as no surprise that Prince struck a deal with Tidal because they have a reputation of being substantially more artist-friendly.  

See Michael Feispor, Jay-Z’s Tidal, Roc Nation and Bremer Trust Battle over Prince’s Music, Forbes, January 11, 2017. 

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


January 13, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Intestate Succession, Music, New Cases, Trusts | Permalink | Comments (0)

Thursday, January 5, 2017

You Should Review Your Estate Plan as Soon as Possible

Review estate planCreating an estate plan is essential to assuring your legacy, but the process does not end when the plan is in place. You must periodically review your estate plan to assure it accurately reflects your current goals. An important time to revise your plan is when your personal or financial situation changes—more specifically, in the event of divorce, remarriage, birth or adoption of children, inheritance, or illness. It is also important to review your estate plan when tax laws change because they can often dramatically affect your plan. Life’s events show us that it is important to keep up with our estate plans to ensure that our assets will go to the proper place.   

See Mark Eghrari, 6 Reasons to Revise Your Estate Plan as Soon as Possible, Forbes, January 2, 2017. 

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


January 5, 2017 in Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Thursday, December 15, 2016

Case Summary on Gift Implications of Testamentary Scheme

Testamentary schemeINTERPRETATION: Testamentary scheme supports gift by implication. The decedent’s will made gifts of $2,000 to each of her eight children and two stepchildren, gave the largest amount that could pass free of federal estate tax to her nominated trustee in trust for her spouse for life, remainder to the 10 children and stepchildren and to the descendants of any who did not survive, and the residue to her spouse. The will made no provision if the spouse predeceased the decedent which happened. At the decedent’s death, the trust could not be funded because the decedent’s applicable exclusion amount had been consumed by lifetime gifts made by her agent, one of her eight children. Had the trust been funded, the remainders in the children, all of whom survived the decedent, would have accelerated. The failure of the residuary gift meant that the residue passed under the intestacy statute to the decedent’s eight children. One of the stepchildren began a proceeding to construe the will and prevailed in the Surrogate’s Court. On appeal, a New York intermediate appellate court affirmed, holding that the decedent’s general testamentary plan as evidenced in the will shows that the decedent intended to treat her children and stepchildren equally, does not show that the decedent intended a different result if her spouse predeceased, and therefore the general plan must be carried out by implying a will provision giving the residue of the estate equally to all ten children. In re Estate of Warren, 39 N.Y.S. 3d 282 (N.Y. App. Div. 2016).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.


December 15, 2016 in Current Events, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)