Wills, Trusts & Estates Prof Blog

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

Thursday, February 11, 2016

Issues With The Foreign Account Tax Compliance Act

CitizenshipAccording to the U.S. Treasury Department there has been a sharp rise in the number of American expats renouncing their U.S. citizenship. The Tax Foundation has provided data suggesting a strong correlation between the passage of the Foreign Account Tax Compliance Act (FATCA) in 2010 and the major increase in U.S. citizenship renunciations. This article discusses how the (FATCA) legislation might not be the only factor causing more people to renounce their citizenship, but it is an important contributing factor. The charts provided by the tax foundation do show a major rise in renunciations since 2010. This is going to continue to be a major issue as congress looks for ways to reform tax policy. It is important for expats living abroad to stay informed about current policies when making their decisions.

See David H. Lenok, FATCA: Is the Juice Worth the Squeeze?, Wealth Management, February 10, 2016.

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

February 11, 2016 in Estate Planning - Generally, Income Tax, Travel | Permalink | Comments (0)

Article On Marijuana And Estate Planning

ArticlePictureGerry W. Beyer (Professor of Law, Texas Tech University) & Brooke Dacus (California Lutheran University) recently published an article entitled, Puff, the Magic Dragon and the Estate Planner, Tex. A&M J. Prop. L.. Provided below is an abstract of the article:

With the legalization of medical and recreational marijuana in almost half of the states, practitioners need to be aware of interface between marijuana and estate planning. This article provides a discussion of the major issues that arise. After bringing readers up-to-date with the history of legalized marijuana, the article focuses on how marijuana use may impact a user’s capacity to execute a will and other estate planning documents. The article then examines other estate planning concerns such as will and trust provisions conditioning benefits on the non-use of “illegal drugs” and the impact of marijuana use on life insurance policies. The article wraps up with a discussion of how an estate planner may deal with marijuana-based assets when planning an estate and how to value those assets after the owner has died.

February 11, 2016 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Digital Account Access Is The Estate Planning Problem Of The Future

ComputerThe digital realm is only going to gather more subjects as the whole world gains access to the internet and cheap computers. One of the results of this expansion is that access to online accounts by heirs and executors after the death of the owner will be of supreme importance. Currently, few laws exist that dictate how access is granted which leaves user agreements provided by service providers as the controlling factor. Unfortunately, there is almost zero uniformity which means one account might be easily accessed while another is completely beyond the reach of anyone including personal representatives. This mishmash of policies makes estate planning difficult but there are some steps that can be taken to ensure control. Most important is to provide a list of accounts and passwords to a trusted party, an estate lawyer for example, which can be used in the event of death or incapacitation. In addition, more companies now allow users to dictate access after death although full accessibility is not always guaranteed. No matter the specifics, this is an issue that will grow in importance in the coming years and will likely require legislators to act in order to create some certainty where none exist now.

See Kate Stalter, Why You Should Do a Digital Inventory of Your Assets, USA Today, February 8, 2016.

Special thanks to Lisa Jamieson for bringing this article to my attention.

February 11, 2016 in Estate Planning - Generally, Technology | Permalink | Comments (0)

Posthumously Conceived Children Are An Estate Planning Wildcard

GeneticsModern fertility science has made incredible leaps in the storage of reproductive material be it sperm, eggs, or frozen embryos. As a result, the chance of a child conceived or born after the death of one of the parents is an increasing possibility. This situation creates estate planning conundrums aplenty and, unfortunately, the law has not kept up. Only half the states have laws tackling the subject at all and even then there is little uniformity with seven excluding posthumously conceived children excluded from inheritance completely. But those states were recently bolstered in their stance when the Supreme Court allowed a Florida statute that excluded a posthumously conceived child from intestate inheritance. Estate plans, such as trusts, that leave gifts to children in general, but do not vest for a number of years, can be particularly vulnerable since a surviving spouse could have more children with stored reproductive material and affect intended distributions. As a result, the best way to combat the problem is to specifically address the issue whenever a posthumously conceived child is a possibility. It would be a simple fix and create certainty that could avoid many legal problems down the line.

See Dominic Jones, David Shayne: Benefits Due a Child Conceived After a Parent’s Death Are Uncertain, Wealth Strategies Journal, February 8, 2016.

Special thanks to Dominic Jones for bringing this article to my attention.

February 11, 2016 in Estate Planning - Generally, Science, Technology | Permalink | Comments (0)

Wednesday, February 10, 2016

President Obama Proposes Changes To Tax Policy In New Budget

White houseThis article describes the changes in tax policies that are suggested in Obama’s new proposed budget. “It contains tax provisions affecting education, health care, and retirement, as well as proposing extensive changes affecting businesses.” These proposed changes will impact things like the earned income tax credit, child and dependent care credit, and education credits. Some of the new proposals will also deal with community colleges and retirement savings. There are also proposals to increase the capital gains tax rate and to reduce tax benefits for high-income earners. Included in the proposals are also tax credit proposals designed to incentivize bringing jobs back to the United States. Many of these proposals will likely not be passed by a Republican controlled congress. There will probably have to be changes in order to secure the necessary bi-partisan support to pass these proposals into law.

See Alistair M. Nevius, President’s budget proposes many tax changes, Journal of Accountancy, February 9, 2016.

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

February 10, 2016 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Court Blocks State From Retroactively Recovering Medicaid Benefits From Estates

JudgmentAn appeals court in Michigan has recently barred states from being able to recover Medicaid benefits from estates before the date “that the estate recovery program was implemented.” This column provides a brief description of how In Re Estate of Gorney held that "by applying the recovery program retroactively to July 1, 2010, the Legislature deprived individuals of their right to elect whether to accept benefits and encumber their estates, or whether to make alternative healthcare arrangements." The court held that the notice that the state provided to the estate in 2012 did not violate due process, but the state could not retroactively go back to July 1, 2010 to recover benefits. The full text of the Michigan Court of Appeals decision can be found here.

See State Cannot Retroactively Recover Medicaid Benefits from Estates, Elder Law Answers, February 9, 2016.

February 10, 2016 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Lessons To Take Away From David Bowie’s Estate

David bowieRock legend David Bowie has left his family an estate that is worth about $100 million. According to his will each of his two children will get a quarter of his estate, though his youngest child is not yet legally allowed to inherit. “Unless Bowie made other provisions, such as a trust, the state -- in this case, New York -- will appoint a financial guardian to manage the money until Alexandria is of age, says Leslie Thompson, managing principal and co-founder of Spectrum Management Group in Indianapolis.” This column discusses how trusts allow celebrities like David Bowie to engage in flexible estate planning. A person does not need to be wealthy like David Bowie to have an estate plan. There are many estate planning issues that impact people in all income levels and it is a good idea to plan ahead for these kinds of situations.

See Judy Martel, Lessons from David Bowie’s estate, Bankrate, February 10, 2016.

February 10, 2016 in Estate Planning - Generally, Estate Tax, Income Tax, Music, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Charity Wine Auctions Are Becoming More Popular

Charity auctionsThe article examines the growing popularity of charity wine auctions with celebrities. “Unlike many charity auctions, which are fixtures in affluent communities, the price of entry for wine auctions in places like Napa Valley and Naples would constitute a large charitable gift in itself.” The oldest charity wine auction in the United States is Auction Napa Valley where attendees bid on cases of wine after tasting it right out of the barrel. These private auctions have been successful at helping poorer residence in surrounding communities. These charity wine auctions can be complicated affairs that require meticulous planning. When planning these sorts of events it is a good idea to start small and stay focused. These types of events can do a lot of good for society if they are done right.

See Paul Sullivan, Charity Wine Auctions Are More Than Parties, The New York Times, January 29, 2016.

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

February 10, 2016 in Current Affairs, Estate Planning - Generally, Food and Drink | Permalink | Comments (0)

Promises Can Be Hard To Keep When It Comes To Caring For Loved Ones

Nursing HomeCaring for loved ones that are aging or suffering from a debilitating disease is a task that many people are willing to take on. Despite the heartache and burdens that are sure to come, the loyalty felt towards another can be more than enough to make any sacrifice worthwhile. But there is often a hitch, request may be made to stay out of nursing and assisted living facilities which can impose a harsh duty on potential caregivers. The choice can put those tasked with the caring into a difficult position as they are faced with honoring their loved one's wishes even when taking care of the person is no longer practical. As a result, abuse, driven from feeling trapped in a difficult situation, can increase as well as neglect when the limits of what can be done by the caretaker are reached. Because of these difficult facts, it is always a good idea to be honest between those in need and those that will carry the burden about lines that, if crossed, will trigger a change. No matter how much someone wants an arrangement to continue, eventually specialized care might be needed and making sure that both parties are prepared for the potential for change will only make the situation better and allow everyone to mentally prepare for what may come.

See Tara Bahrampour, ‘Promise you’ll never put me in a nursing home’, The Washington Post, February 8, 2016.

Special thanks to Naomi Cahn for bringing this article to my attention.

February 10, 2016 in Disability Planning - Health Care, Estate Planning - Generally | Permalink | Comments (0)

To Give Or Not To Give, That Is The Question

ArticleThe Baby Boomers are generally a wealthy bunch which makes sense seeing as how they have been the generation in charge and at the peak of earnings capacity for years now. But they are now starting to move into the twilight years and will soon represent a community of retirees unprecedented in number. But what will happen to all that hard earned money? In many ways it depends on how they lived throughout retirement with those that saved just enough to make it through being unlikely to leave much behind for the following generations. That fact is likely what is behind the results of a recent survey which revealed only 40% intend to leave behind a legacy for their heirs. But even for those that do no expect to be able to leave anything behind, the inter vivos gift can still allow them to give to their loved ones during the boomer's lifetime. While it might be nice to be able to leave behind a big chunk of change, giving smaller amounts throughout retirement can give great satisfaction by being able to see the good that comes from the gift.


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

February 10, 2016 in Current Affairs, Estate Planning - Generally | Permalink | Comments (0)