Wills, Trusts & Estates Prof Blog

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

Friday, July 1, 2016

The Impact of Fiduciary Rules on IRA Trusts

 

Ira trustMany IRA owners today are naming a trust as the beneficiary, which gives protection to the owner’s loved ones. Trustees of this type of trust, however, should remain cautious when dealing with these trusts and look out for conflict of interest, especially with the new DOL fiduciary rules taking effect on April 10, 2017. Trustees, specifically CPA or attorney trustees, need to be aware of prohibited transactions of aggregate compensation for trust management and what is deemed reasonable. With such uncertainty, the DOL created a Best Interest Contract Exemption that might allow advisors to retain compensation even if there is a conflict of interest. 

See Seymour Goldberg, New and Old Fiduciary Rules Can Impact an IRA Trust, Ed Slott’s IRA Advisor Newsletter, July 6, 2016.

Download Article - Slotts Advisor 7.16-6

July 1, 2016 in Articles, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Thursday, June 30, 2016

The Florida Fiduciary Access to Digital Assets Act

Digital assetsAs the age of technology flourishes, digital media assets are becoming increasing popular. The Florida Governor signed the Florida Fiduciary Access to Digital Assets Act into law on March 10, 2016. The Act allows people to plan for the management and disposition of their digital assets, such as emails, text messages, and social media accounts, by vesting fiduciaries with the authority to access, control, or copy these assets. Additionally, the Act has rules of priority for the disclosure documents where an online tool of disclosure will trump a user’s estate planning documents. Further, a custodian must comply with a request for disclosure of the digital assets when necessary. The Act goes into effect on July 1, 2016, and will apply to all fiduciaries acting under a will, trust, or guardianship.

See Jennifer J. Wioncek & Michael D. Melrose, Florida Passes Fiduciary Access to Digital Assets Act, Wealth Management, June 27, 2016.

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

June 30, 2016 in Current Events, Estate Administration, Estate Planning - Generally, Guardianship, New Legislation, Trusts, Wills | Permalink | Comments (0)

Wednesday, June 29, 2016

Absence of Marriage License Does Not Invalidate Marriage

Marriage licenseFollowing a divorce, a husband and wife reconciled in 2012 and married in late 2013 when the husband became hospitalized. The couple, however, did not obtain a marriage license, and the husband died intestate the day after the wedding. Shortly after his death, the wife’s surviving spouse claim to her husband’s estate was denied due to the absence of the marriage license. When the wife appealed this decision, the judge reviewed North Carolina and United States Supreme Court precedent, concluding that the lack of a marriage license did not invalidate the marriage. The only question left was whether the couple consented to be married, or rather, did they understand all the legal consequences of marriage. With no evidence to the contrary, their marriage was confirmed upon appeal, entitling the wife to her surviving spouse allowance.

See Julianne Tobin Wojay, Lack of License Didn’t Invalidate Marriage, Bloomberg BNA Family Law Reporter, June 22, 2016.

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

June 29, 2016 in Estate Administration, Intestate Succession, New Cases | Permalink | Comments (0)

Tuesday, June 28, 2016

Inheritance Considerations for Wealthy Estates

Inheriting moneyBeing submerged in one of the greatest wealth transfers in history, can force an estate planner to not only pay attention to financial strategies for a high-income individual’s estate but also the psychological and emotional impacts of such asset transfer. Wealthy individuals normally have more challenges creating a legacy due to the amount of assets and the various vehicles they use to pass their assets to the next generation.

Consequently, clients should have a comprehensive estate plan in order to accomplish their specific goals. Further, it is essential to understand the psychological and interpersonal issues that surround large inheritances due to their risky consequences. Allowing inexperienced heirs to become wealthy upon inheritance can surmount to unforeseen problems, which should be carefully planned for. First, the client must consider the specific concerns and risks for each wealthy individual and their family members. Second, the client should take into account the various alternatives to passing a legacy, including a debt-relief gift, contributions to educational funds, and special needs trusts. These steps will help take into account the reality of the family’s situation and what options are best for passing on their estate.

See Robert G. Kuchner, When Is an Inheritance Too Big?, Private Wealth Magazine, June 27, 2016.

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

June 28, 2016 in Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Trusts, Wills | Permalink | Comments (0)

Friday, June 24, 2016

The Estate Plan Checklist

Estate plan checklistEstate planning is an essential part of life planning. It is important to take the right steps in your delineating your estate while you are healthy and of sound mind, so the earlier the better.

The Article details ten steps to take when kick-starting your estate plan. A couple important steps are to designate a power of attorney and health care power of attorney, so that when you are unable to make appropriate decisions, you have the help necessary. Another important step is to create a list of financial accounts and documents, keeping them in a safe place for when your family members need access to them. Additionally, as circumstances and laws change, always review your estate plan yearly.

See Natalie Campisi, Your Estate Planning Checklist: How to Create a Financially Sound Estate Plan, Go Banking Rates, June 22, 2016.

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

June 24, 2016 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Donor-Advised Funds Are Costing American Charities

CharitiesThe United States relies heavily on charities, and in return, those that donate receive a generous tax break on the income donated. Experts argue that this charitable relationship is at risk due to a collective, managing, and distributive fund—donor-advised fund—that is obstructing the stream of money to those who need it. Instead of the money going directly to the charity of choice, it goes to a financial firm that acts as a middleman. These funds are considered legal charities that can distribute money over a long period of time, keeping it out of the hands of those charities that sincerely rely on the funds. As donor-advised funds are on the rise, an estimated $15 billion could be delayed to American charities.

See Ana Swanson, Wall Street Is Sitting on Billions Meant for American Charities, Washington Post, June 21, 2016.

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

June 24, 2016 in Estate Administration, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Wednesday, June 22, 2016

Texas Court Finds No Informal Fiduciary Relationship

Caregiver beneficiaryIn Garrett v. First State Bank of Central Texas, a Texas court of appeals decided on a dispute over the ownership of a decedent’s account. The decedent’s estate and caregiver both claimed the account proceeds. The caregiver was a signatory on the decedent’s money market account, and she claimed that the decedent had expressed his wishes for the account to pass to her upon his death. The trial court, however, ruled that her signature did not make her the beneficiary of the account rather just a signatory to pay bills. The court of appeals affirmed the trials court’s finding because often Texas courts are hesitant to find informal fiduciary relationships.

See J. Michael Young, Garrett v. First State Bank of Central Texas: No Informal Fiduciary Relationship, Texas Probate Litigation, June 20, 2016.

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

June 22, 2016 in Current Events, Estate Administration, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Monday, June 20, 2016

Deceitful Half Sister Ordered to Pay Coin Estate $1.2 Million

LaatschLori Laatsch was ordered to pay $1.2 million to the Derzon Coins estate upon trying to use the family’s assets as her own. The judge ordered this amount due to her “bad faith, fraud and deliberate dishonesty.” This ruling comes after she was stripped of any interest in the $3 million estate of Rebecca Derzon, Laatsch’s half sister who wrote her into her will months before her death, leaving her 75% of the coin business. Laatsch is accused of deceitful behavior over many years, prolonging litigation.

See Cary Spivak, Ex-Derzon Coins Operator Ordered to Pay Estate $1.2 Million, Journal Sentinel, May 22, 2016.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

June 20, 2016 in Current Events, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, June 19, 2016

Minnesota Sues Life Insurance Companies Over Beneficiary Payouts

Life insuranceThe State of Minnesota is suing life insurance companies for not paying beneficiaries, seeking millions of dollars in payouts. We pay into life insurance policies to ensure that our loved ones will be taken care of when we die, but when insurance companies are keeping the proceeds to reinvest, the unconscionable behavior causes outrage. Oftentimes these insurance companies are not alerting beneficiaries to the policies, unless the beneficiary files a claim. The best way to combat these companies’ dishonesty is to share your information with loved ones and keep the information in a safe place.

See Jennifer Mayerle, State Suing Life Insurance Companies for Not Paying Beneficiaries, CBS Minnesota, May 18, 2016.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

June 19, 2016 in Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Friday, June 17, 2016

Martin Luther King Jr.'s Children Battle Over His Prized Possessions

Martin luther king nobel prizeMartin Luther King Jr.’s children continue to battle over his Nobel Peace Prize and traveling Bible, pitting his two sons against his daughter. If the parties do not reach a settlement, the case will most likely go to trial. King’s two sons are in control of his estate and want the two items sold; however, his daughter is opposing the sale, arguing that the items do not belong in the estate. A lawyer for the estate maintains that the sell of the items is essential to the estate’s viability. Former President Jimmy Carter was even helping out as a mediator to help resolve their dispute, one of many in recent years. 

See Associated Press, Family Feud Over Martin Luther King’s Bible, Nobel Prize Moves Closer to Trial, Fox News, June 16, 2016.

June 17, 2016 in Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)