Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Tuesday, September 2, 2014

Retirement for Star Athletes

Star athlete

Retirement for many star athletes is similar to the average American, as they also struggle with some of the same emotional and financial challenges.  A major difference, however, is that pro athletes are forced to deal with it at a much earlier age when Social Security and Medicare are years down the road. 

Annika Sorenstam, who won 72 official LPGA tournaments and tops the LPGA’s career money list with earnings over $22 million, talks about retirement, “My heart and body were telling me that it was time to move on.  I had won the US Open and several other championships.  I had climbed my Mount Everest and the view was beautiful from the top but it was time for me to climb other mountains and see other peaks in my life.”  Super Bowl MVP Desmond Howard explains retirement somewhat differently, “You quickly realize that you’re the boss of something you don’t really understand.  You’re supposed to be the one in charge but you feel subservient because you don’t understand it.”  Pro hockey player Kris Draper explains the emotional turbulence he suffered in retirement, “Nobody prepares you for that kind of stuff.  After taxes, I always tried to save at least 50% of my game checks.” 

Other star athletes reveal sensible and thoughtful advice anyone can use to move toward retirement with equal amounts of courage and determination. 

See How Star Athletes Deal With Retirement, Forbes, Sept. 2, 2014.

September 2, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Article on Discretionary Distributions

Leslie kiefer aman

Leslie Kiefer Amann (Sentinel Trust Company LBA) recently published an article entitled, Discretionary Distributions: Old Rules, New Perspectives, Estate Planning and Community Property Law Journal, Vol. 6 No. 2, 181-220 (2014).  Provided below is a portion of the article’s introduction:

The “discretion” exercised by a trustee includes all aspects of administration, but making payments out of a trust—the discretionary distribution—often seems to be the greatest challenge.  This material was originally created for the Texas Bankers Association Annual Graduate Trust School.  Over a period of nearly fifteen years, it has been gradually expanded to include illustrations and materials from other states; however, the primary focus remains on the information needed to make excellent fiduciary decisions and draft clear fiduciary instructions under Texas law.

Although many of the citations are to Texas law, some principles are universally applied, and regarding those, this article will draw on the case law of other states and sources. 

September 2, 2014 in Articles, Estate Administration, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Student Loan Refund Check Pitfalls

Student loan

Most college graduates with federal student loan debt regret how they spent their student loan refund checks.  The refund checks are issued to the student from the remaining amount of federal student loan after all university costs are paid.  Sometimes these checks are thousands of dollars, which students may feel they can spend as they please.  The problem is that this money is debt that will come due when they must start repaying their student loans.  Below are three mistakes students should avoid:

  1. The check is free money.  Try to think of this as a loan rather than free money.  It may be helpful to consult a financial aid officer and discuss future student loan payments.
  2. Failing to budget.  Student loan refund checks are supposed to be for basic college expenses such as textbooks.  Students should learn to develop a budget and think about needs versus wants.  Furthermore, look for ways to save money.
  3. Skipping out on part-time work.  Just because a student loan refund check covers expenses does not mean students should not work.  Having some work experience is a big part of the employability equation.  When students have excess money, they should save it so that they will not have to borrow as much the following year.

See Reyna Gobel, Avoid these Common Mistakes Made with Student Loan Refund Checks, Forbes, Aug. 31, 2014.

September 2, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Murdering Mother Could Inherit $1 Million

Nicole diggs

A special education teacher who was accused of killing her disabled 8-year-old daughter by withholding food and medical care could inherit almost $1 million form the girl’s trust fund. 

Alayah Savarese, who was killed in 2012, was the beneficiary of a trust fund created from the settlement of a malpractice suit stemming form complications during her birth.  Although the indictment does not allege the trust fund was a motive, Nicole Diggs’ attorney says prosecutors are implying her client “somehow disposed of her daughter in order to obtain the money.”  Prosecutors say Alayah was not provided with daily food, did not receive medical tratement, was often left alone and kept away from school.  She suffered lacerations, bruises and welts from the neglect.

If convicted, Diggs would not disqualify from inheriting her daughter’s fortune because she is not charged with intending to kill the girl.  Many states have slayer statutes to prevent profiting from crime, however, New York courts have generally held that without intent, a homicide does not disqualify someone from inheriting from a victim.  “If it’s unintentional, then the person can still inherit. . . . But the facts of this case are very unsettling and under the circumstances, it doesn’t seem correct that would happen.” 

See The Associated Press, Mom Charged in Girl’s Death Could Get Trust Fund, Monroe News, Sept. 1, 2014.

September 2, 2014 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

IRS 2014-2015 Priority Guidance Plan Released

IRSThe 2014-2015 Priority Guidance Plan, which lists 317 priority projects for the IRS, was released last Tuesday. Among the many tax issues to be addressed through the projects, estate and trusts issues have made the lists. The plans provide the IRS with priorities for releasing guidance on tax issues, and are subject to change throughout the year so that the IRS can address new developments and tax concerns.

See Mike Godfrey, IRS Issues 2014-2015 Priority Guidance Plan, Tax News, Aug. 29, 2014.

September 2, 2014 in Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Lou Reed’s Executors Request Surprisingly Low Payment

Lou ReedAs I have previously discussed, the estate of Velvet Underground singer Lou Reed has increased to $20 million since his death last year and is now worth $30 million. Compared to executors of other famous estates, Reed’s executors will be paid a small sum for fees, as they are requesting a total of $220,000. In contrast, the executors for Michael Jackson’s estate are being paid 10 percent, which results in a huge sum considering just one business deal of the estate with Sony was for $250 million.

See Bonnie Kraham, Trusts Can Keep an Estate Private, Times-Herald-Record, Aug. 28. 2014.

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

September 2, 2014 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Music, Wills | Permalink | Comments (0) | TrackBack (0)

Man Pronounced Dead Found Breathing

MistakeTwo hours after the family of Valdelucio de Oliveira Goncalves, a 54-year-old terminally ill cancer patient, was told that he had died of respiratory and organ failure, the family discovered the doctors had made a mistake. The family found Goncalves in a body bag, tied up, with cotton wool in his nose and ears, and breathing.  The family wants answers to how their family member was mispronounced as dead, and hospital directors plan to check with those involved to find out how this mistake occurred.

See Elizabeth Armstrong Moore, ‘Dead’ Man Rescued 2 Hours Later When Family Notices Body Bag Moving, Fox News, Aug. 26, 2014.

September 2, 2014 in Current Affairs, Current Events, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Article on Drafting Attorneys and Litigation Attorneys Need to Collaborate

Michael SneeringerMichael Sneeringer (Law Offices of Nelson & Nelson, P.A.) recently published an article entitled, Drafting Attorneys and Litigation Attorneys Need to Collaborate. Provided below is the introduction of the article.

Solo practitioners and smaller law firms practicing trusts and estates law often specialize in either the planning or litigation of estate plans. For some trusts and estates drafting attorneys (“drafting attorney”) the situation often is as follows: (i) take a client that poses problems and hope the case does not lead to litigation down the line (wherein the drafting attorney attempts litigation his or her self); or (ii) simply not take on the engagement at all and pass on the case to a trusts and estates litigator (“litigation attorney”), thereby hoping that the litigation attorney one day returns the favor with a referral. Instead, the drafting attorney should collaborate with the litigation attorney. This relationship is of mutual benefit to both attorneys.

This article provides eight scenarios where the drafting attorney can be of help to the litigation attorney and underscores why collaboration is absolutely necessary.

September 2, 2014 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Monday, September 1, 2014

Benefits of Giving Appreciated Stock


As the stock market has reached historic highs, fundraisers should be talking to their donors about making a new gift or fulfilling a pledge with appreciated stock.Donor-advised funds, which allow people to set up charitable accounts and help decide which nonprofit groups get grants from those accounts, are seeing a rise in donated stocks this year.  At the National Philanthropic Trust, “we have seen an uptick in gifts of appreciated securities.  The market goes up and a day or two later, people want to capture the higher value of their gift.” 

The surge in stock gifts reflects the rise of publicly traded stock as well as an increase in mergers and acquisitions, which involve privately held companies.  At the Fidelity Charitable gift fund, gifts of complex assets including privately held stock exceeded $100 million in the first six months of 2014. 

Not only are stock donations on the rise, but also an increasing number of charitable remainder trusts are being created with proceeds from the sale of real estate.  These trusts provide income for donors, usually for the life of that person and in some cases a spouse or another individual, before generating a sizable gift to charity.

See Holly Hall, Donors Often Overlook Benefits of Giving Appreciated Stock, The Chronicle of Philanthropy, Aug. 29, 2014.

September 1, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Eight Temptations to Overspend

Shopping SpreeOtherwise effective estate and financial planning can be sabotaged by overspending habits. Here are eight tempting situations and triggers to stray from the budget to be aware of if financial plans are budget contingent:

  1. Thinking something is too good a deal or bargain to pass up.
  2. Falling victim to the new home syndrome and overspending on redecorating.
  3. Treating unexpected funds, such as an inheritance or holiday bonus from work, as expendable income rather than an opportunity to add to savings.
  4. The urge to go all out on a new look when looking for a new job.
  5. Trying to match the spending habits of wealthier friends.
  6. Forgetting to create and stick with a separate budget for vacations.
  7.  Getting caught up in the excitement of a celebratory event, like a promotion or a friend’s birthday party.
  8. Using new purchases to cheer up after a bad day.

See Marianne Hayes, 8 Sneaky Overspending Triggers That Can Sabotage Your Budget, Learn Vest, Aug. 26, 2014.

September 1, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)