Wills, Trusts & Estates Prof Blog

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

Thursday, November 26, 2015

Will More Americans Be Able To Work Into Their 70s?

Senior workingThere are an increasing number of Americans that are delaying their retirement and continuing to work into their 70s. This article discusses many of the concerns senior citizens have about the impact that work will have on their health. A growing number of baby boomers are expressing concerns about the wear and tear that working into their 70s will have on their bodies. This article presents statistical data and resources that show how education and other socioeconomic factors can impact the percentage of seniors with disabilities. As the average life expectancy continues to increase and more people enter into their retirement years society is going to have to make policy adjustments to adapt to the changes.

See Chris Farrell, Will You Really Be Able to Work Into Your 70s?, Next Avenue, November 25, 2015.

November 26, 2015 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Reducing The Income Tax Bill Of A Trust

Trust estateThere are many estate tax planning benefits that trusts can provide. Some trusts even provide income tax benefits as well, and by reducing income tax people can be able to preserve more wealth for their heirs. The U.S. Tax Court ruled last year that a trust is able to “materially participate” in business activities for the purposes of passive activity loss (PAL) rules, and as a result creating income tax benefits by allowing more deductions for many trusts. “The PAL rules prevent taxpayers from deducting losses generated by “passive” business activities against “non-passive” income, such as wages and portfolio interest and dividends.” When it comes to determining what it means for a trust to materially participate in a business the definition of “materially” can become unclear. “The Tax Court disagreed with the IRS that a trust cannot materially participate in a business or qualify as a real estate professional.” This Tax Court ruling discussed in this article is another reason why it is important for people to update their estate plans.

See Tom Kosinski, Can You Reduce Your Trust's Income Tax Bill?, Orba Blog, November 18, 2015.

November 26, 2015 in Estate Planning - Generally, Estate Tax, Trusts | Permalink | Comments (0)

Planning Advice For Managing An Inheritance

Golden eggsWhen a person receives an unexpected inheritance there are estate planning steps that they need to take. There are about a third of Americans that will receive an inheritance within their lifetime and the average beneficiary will lose half of it through bad spending decisions. A person receiving an inheritance should get the assistance of a “financial advisor, a tax professional and an estate-planning attorney.” It is important for a person to be able to factor in their individual lifestyle and circumstances to plan how they are going to spend their inheritance. People should calculate how they are going to make their nest egg last and plan what type of things they might enjoy spending the assets on.

See Judy Martel, Planning for Inheritance: 4 Ways To Handle A Windfall, Forbes, November 6, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 26, 2015 in Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0)

Robin Williams Estate Dispute An Example Of Why Careful Estate Planning Is Important

Robin williamsI have previously discussed the claim by Robin William's widow Susan Schneider Williams that her husband suffered from Lewy body dementia. This type of dementia is a brain disease that can cause hallucinations and severe anxiety. The bitter estate feud that took place after the comedians death is a reminder of why married couples need to be prepared for the sudden and unexpected passing of a spouse. This article suggests resources that people can go to for estate planning assistance. It is also extremely important to speak with an estate planning professional to avoid the type of bitter estate disputes that are growing increasingly common.

See Kyle E. Krull, More on the Robin Williams Estate, The Law Offices of Kyle E. Krull P.A., November 24, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 26, 2015 in Current Affairs, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Wednesday, November 25, 2015

Changes To US Tax Court Rules Of Practice And Procedure Proposed By IRS

GavelThe Internal Revenue Service has recently proposed changes that would help improve tax court procedures. The changes would also enhance efficiencies for both the Tax Courts and the litigants that have cases. The new IRS proposals will cover a wide variety of procedural rules that will include “recommendations related to trial subpoenas, depositions and inadvertent disclosure of privileged material.” They have proposed a modification to Tax Court Rule 147 that “allow for the return of a subpoena duces tecum directed to third party custodian of records in advance of the trial calendar.” The IRS suggests that the subpoena should be returned at least 30 days before trial so that the other side can have time to review the documents. Another proposal is that the Tax Court adopt Fed. R. Civ. P. 26(b)(5)(B) which deals with the disclosure of privileged material. Finally, they have “recommended that the Court allow non-consensual depositions of party witnesses upon notice to the party without requiring leave of the Court by motion.”

See Richard A. Nessler, IRS Proposes Changes To US Tax Court Rules Of Practice And Procedure, Mondaq, November 25, 2015.

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

November 25, 2015 in Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Lawsuit By Former Girlfriend Alleges That Sumner Redstone Is Unable To Make Decisions

Sumner redstoneA former girlfriend of billionaire Sumner Redstone has filed a lawsuit alleging that the 92-year-old media mogul is mentally impaired and unable to make decisions. The lawsuit questions his ability to continue to oversee Viacom Inc. and CBS Corp., which are the two media companies that Mr. Redstone controls. An attorney for Sumner Redstone has called the lawsuit “meritless” and described it as an “invasion of privacy.” Mr. Redstone is currently estimated to be worth $5.5 billion and much of his wealth is tied up in Viacom and CBS stock. Manuela Herzer was in charge of Redstone's advance healthcare directive until his decision in October to expel her from his home and life. A preliminary hearing on the lawsuit was held Wednesday morning and the sitting judge has set a scheduling conference to be held on Monday.

See Meg James, Billionaire Sumner Redstone unable to make decisions, says lawsuit by ex-girlfriend, The Los Angeles Times, November 25, 2015.

November 25, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Film, Guardianship, Television, Trusts, Wills | Permalink | Comments (0)

Court Holds That Income Tax Refunds Are Property

IRSThe Tax Court has recently held in Estate of Russell Badgett, Jr. et al. v. Commissioner, that federal income tax refunds that were due to a decedent at the time of his death are to be included as a property interest in his gross estate for federal estate tax purposes. Internal Revenue Code Section 2033 requires the gross estate to include the value of all property. If there is no offsetting liability in existence then under Section 6402(c) of the Internal Revenue Code the IRS “shall” refund the balance of any tax over-payments to the taxpayer. The Tax Court held that Section 6402(c) did not apply to the Russell estate and the court upheld the Notice of Deficiency that the estate received. The full text of the Tax Court decision can be read here.

See Dawn S. Markowitz, Income Tax Refunds Constitute Property, Trusts & Estates, November 25, 2015.

November 25, 2015 in Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

IRS Provides Guidance On ABLE Accounts

ABLEThe Internal Revenue Service (IRS) has recently issued Notice 2015-81 that provides interim guidance which clarifies the criteria for establishing qualified Achieving Better Life Experience (ABLE) accounts. Until final regulations are issued taxpayers and states may use the interim guidance when implementing qualified ABLE account programs. The purpose of an ABLE account is to provide a person with a disability the ability to accumulate assets tax-free without jeopardizing their eligibility for Medicaid and Supplemental Security Income (SSI). The proposed regulations will implement a number of safeguards that commentators have noted might impose administrative cost burdens on the states that are administering ABLE programs. There is also mention of new recording requirements for contributors. This article discusses some of the policy changes in more specific detail.

See Bernard A. Krooks and Amy O'Hara, IRS Issues Guidance to Simplify ABLE Accounts, Wealth Management, November 25, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 25, 2015 in Current Affairs, Disability Planning - Property Management, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Tuesday, November 24, 2015

Avoiding Unpleasant Surprises With The Inherited Roth Rollover

Adult childrenIn recent years it has become more common for people to inherit the balance of a retirement account. Clients are increasingly looking for information on what they can do with these inherited funds to maximize their future tax savings potential. The rules governing the rolling over of inherited retirement funds into an inherited Roth IRA can be complicated. This tax-savings technique can often be used if the designated beneficiary is the original account holder's spouse. This column discusses some of the pros and cons of converting to an inherited Roth. Understanding these complex rules is important for avoiding unpleasant surprises, so people should consult with an estate planning professional for more information.

See Robert Bloink and William H. Byrnes, The inherited Roth rollover: How to avoid unpleasant surprises, Life Health Pro, November 23, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 24, 2015 in Elder Law, Estate Planning - Generally, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Court Orders Adult Son To Pay For Mother's Care-giving Expenses Despite Claims Of Childhood Abuse

Business_expenseA Pennsylvania Appeals Court has held that under the State's filial responsibility law an adult son is obligated to pay for his mother's health care expenses even though he claimed that he had an abusive childhood. There are a handful of States that have filial responsibility laws that obligate adult children to care for indigent parents. The Pennsylvania Court held in Eori v. Eori that there was no evidence Joshua Ryan was abandoned by his mother for a 10-year period. The full text of the Pennsylvania Appeals Court decision can be read here.

See Son Must Pay for Mother's Care Under Filial Responsibility Law Despite Abusive Childhood, Elder Law Answers, November 24, 2015.

November 24, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Guardianship | Permalink | Comments (0)