Wills, Trusts & Estates Prof Blog

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

Thursday, January 19, 2017

Article on Why Hitting the Pause Button for Your Taxes May Not Be Optimal

Trump taxes2Jonathan G. Blattmachr & Martin M. Shenkman recently published an Article entitled, Planning in a Time of Uncertainty: Part I—Why Hitting the Pause Button May Not Be the Optimal Approach, Tr. & Est. 106 (Jan. 2017). Provided below is an abstract of the Article:

The election of Donald J. Trump as our 45th President was largely unexpected. While it’s difficult to forecast the specifics of what that will mean during his term, and, perhaps, his second term, predictions can be useful to evaluate current planning. President-elect Trump has proposed wide-ranging changes to the nation’s tax system that will affect virtually all Americans and their advisors. He appears to have made tax legislation a priority for his administration. He’s suggested substantial reductions in corporate and individual tax rates and the simplification of the tax system generally through elimination of many deductions and other complexities. Estate planners, in particular, are already facing a dramatic impact on their practices, as many clients have hit the pause button on planning in anticipation of a possible repeal of the estate tax. This may not be the optimal approach for clients, and this two-part article will explore why. 


January 19, 2017 in Articles, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Plan Ahead for Your Estate

Writing a willThe current number of those who do not have a will can be astonishing, especially knowing that they run the risk of letting the state decide what happens to their estate. Those who do have wills also often fail to update them after a change in circumstances. With a lot of important estate decisions, it is necessary to prep for your loved ones—spouses, significant others, children, and grandchildren alike. Issues like body disposition and organ donation are crucial steps to consider because if not, you leave your family members guessing as to what you would have wanted, which often leads to fights. Further, in our technology era, it will be essential to specify actions for your digital accounts. Ultimately, one must plan their estate so that the bureaucracy does not consume those we care about at the worst possible time.  

See Lisa Pollack, One Day It Will Be Curtains, so I’m Planning for It, Financial Times, January 17, 2017. 

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


January 19, 2017 in Death Event Planning, Disability Planning - Health Care, Estate Planning - Generally, Wills | Permalink | Comments (0)

Article on Gift Tax Consequences Between American & Brazilian Spouses

American and brazilFlávia Allegro Gerola recently published an Article entitled, Gift Tax Consequences Between Spouses of Different Citizenships: A Comparative Analysis Between American and Brazilian Laws, 31 Probate & Property 54 (Jan/Feb 2017). Provided below is an abstract of the Article:

As globalization and immigration increase, the tax implications of marriages between citizens of different countries must be taken into consideration by practitioners designing an estate plan for such couples. In particular, gifts between spouses may have tax consequences in both countries. 

The United States has estate and gift tax treaties with 18 countries. These treaties minimize and avoid double taxation when two countries have the right to tax the transfers of a donor or decedent under the applicable domestic law. The treaties provide primary and secondary taxing rights, stius rules, and special rules dealing with credits, deductions, and exemptions. There is no tax treaty between Brazil and the United States, so the applicable law of both countries must be considered for gifts between American and Brazilian spouses. This article provides an overview of the most common gifting strategies and gift tax consequences for gifts made between American and Brazilian spouses.  


January 19, 2017 in Articles, Estate Planning - Generally, Gift Tax | Permalink | Comments (0)

The Final Battle of the War on Estate Tax

Democrat estate taxPresident-elect Donald Trump will soon assume his position, and as it stands, the Democrats have control over the Executive and Legislative branches, but their party was severely wounded after the election. Consequently, many assume that they will raise the white flag in regards to the estate tax. With the greatest wealth transfer in human history occurring, however, it would be foolish to assume the Democrats would not put up a fight. This final battle over the estate tax should not come as a surprise due to the long 100-year history on the United States’ war over taxation. Throughout this time span, liberal economists and academics have argued over the estate tax’s economic importance and its service to inequality. Those Republicans seeking to repeal the estate tax believe it will be one of the final components to stir economic growth, while the Democrats seek to maintain its existence.   

See Darren T. Case, Trump vs. the Democrats: Is This the End of the 100-Year War over the Estate Tax?, Hill, January 12, 2017. 


January 19, 2017 in Current Events, Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0)

Wednesday, January 18, 2017

Article on ESOPs & EOTs

EsopChristopher Michael recently published an Article entitled, The Employee Ownership Trust, an ESOP Alternative, 31 Probate & Property 42 (Jan/Feb 2017). Provided below is an abstract of the Article:

For the last four decades, an employee stock ownership plan (ESOP) has been the optimal legal mechanism for transferring ownership of stock to employees in the company in which they work. A primary goal of ESOPs is often long-term employee ownership, as an ongoing employee reward program that leads to improvements in productivity and profitability and helps to ensure the longevity of the company. Unfortunately, the laws applicable to ESOPs have not kept pace with evolving trust law. In particular, legislators have not adapted ESOP policy to states’ widespread reform of the rule against perpetuities, the “exclusive benefit” rule imposed by federal law requires ESOPs to prioritize employees’ retirement income at the expense of employees’ continued ownership of their business and thus prohibits a perpetual ESOP trust. As such, ESOPs are an uncertain vehicle when it comes to safeguarding the ownership of a firm by its employees. The ESOP structure is also exceedingly complex, which warrants additional concern. This article discusses perpetuity and other related problems with ESOPs and introduces the employee ownership trust (EOT) as a viable alternative. 


January 18, 2017 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Aid in Dying Gains Acceptance

Aid in dyingAs aid in dying legislation continues to be passed all over the country, nearly 20% of Americans will be living in jurisdictions where terminally ill patients can legally end their life. The laws allow physicians to write prescriptions for lethal drugs when a patient qualifies. The procedure is complicated, requiring two oral requests, a written request, extensive discussions, and two physicians’ approval. Additionally, patients must have the capacity to make medical decisions. The cultural and political context surrounding the legislation, however, has changed considerably over the last two decades. There have been substantial gains in acceptance throughout various groups and organizations, but this alone does not broadly provide aid in dying to those who want it. In the upcoming years, it will be important to address how end-of-life care and aid in dying can improve to provide those in need with the help they desire. 

See Paula Span, Physician Aid in Dying Gains Acceptance in the U.S., N.Y. Times, January 16, 2017. 

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


January 18, 2017 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Article on Trusts & Estate Law Updates

Trust and estate lawBenjamin Orzeske recently published an Article entitled, Uniform Law Updates, 31 Probate & Property 10 (Jan/Feb 2017). Provided below is an abstract of the Article:

Uniform Laws Update provides information on uniform and model state laws in development as they apply to property, trust, and estate matters. The editors of Probate & Property welcome information and suggestions from readers. 

Much of the 2016 legislative activity involved the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). At press time, 20 states had enacted a version of RUFADAA. This innovative new law ensures that fiduciaries who manage the property of decedents and incapacitated persons will have access to on-line property and accounts as necessary. 


January 18, 2017 in Articles, Estate Planning - Generally, Guardianship, Technology, Trusts | Permalink | Comments (0)

Thieves Demand Ransom to Return Remains Back to Family

Thieves steal ashesA California family was recently forced to pay $5,000 to get their son’s remains back. Their son lost his battle with non-Hodgkin’s lymphoma back in 2011, but his ashes remained in a locked safe. In December 2016, the family discovered that the safe had been stolen in a robbery. After working with police, the remains were located, but the thieves insisted on splitting the reward money, threatening to dump the ashes if refused. The family is still working to find out who the criminals are, hoping to bring them to justice. 

See Kyle Foley, Thieves Steal Ashes of 6-Year-Old in California, Demand Ransom to Return Them to Family, Heatstreet, January 16, 2017. 


January 18, 2017 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, January 17, 2017

Article on the Role of Trust Protectors

Trust protector2Andrew T. Huber recently published an Article entitled, Trust Protectors: The Role Continues to Evolve, 3 Probate & Property 28 (Jan/Feb 2017). Provided below is an abstract of the Article:

The trust protector’s role is relatively new in modern trusts. Generally, trust protectors provide oversight of certain decisions and allow for a degree of flexibility not easily accommodated by the traditional parties to a trust. Although the trust protector’s role can be very useful, its role is not precisely defined. For attorney-drafters, settlors, and trustees alike, ambiguity in defining the role can be a difficult challenge because statutes among the states are diverse, inconsistent, and, arguably, incomplete. There is a dearth of domestic case law interpreting state statutes, and identifying whether the trust protector is a fiduciary (or not) can be problematic. The purpose of this article is to provide a broad overview of the role and to identify some of the challenges and opportunities inherent with using trust protectors. 


January 17, 2017 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Article on Where to Set Up a Domestic Asset Protection Trust

Dapt trustsMark Merric & Daniel G. Worthington recently published an Article entitled, Best DAPT Jurisdictions Based on Three Types of Statutes: Analysis of Where to Set Up a Domestic Asset Protection Trust, Tr. & Est. 92 (Jan. 2017). Provided below is an abstract of the Article:

Sixteen states, or over 30 percent of the states in the United States, now have domestic assets protection trusts (DAPT) statutes. Some commentators thought that DAPT statutes would be limited to less populous states, but Ohio, for example, which is a populous state and one with a major banking center, adopted DAPT legislation. Also, at the time of this writing, both of Michigan’s legislatures passed a DAPT statute, which is waiting for the governor’s signature. This adoption would create the 17th DAPT state. While the history of asset protection trusts (APTs) is fairly recent in the United States beginning with Alaska in 1996, we anticipate that many more jurisdictions will adopt DAPT statutes. 

DAPTs are a powerful tool to help clients legally shield assets from third-party liability, while at the same time permit clients to be discretionary beneficiaries of their own trusts. 

In past articles, we gave one ranking of all the DAPT jurisdictions using the factors from the following two major types of statutes: (1) a discretionary support trust statute; and (2) the DAPT statute, which in many states is known as a “qualified disposition statute.” We’ve now deviated from this approach. We’ve added an anti-alter ego statute, and we’re now separately ranking: (1) the discretionary support trust statute; (2) the anti-alter ego statute; and (3) the DAPT statute.  


January 17, 2017 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)