Wills, Trusts & Estates Prof Blog

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

Tuesday, September 27, 2016

Article on New Regulations Affecting the Deductibility of Investment Advisory Expenses

DeductibilityDomingo P. Such, III & Tina D. Milligan recently published an Article entitled, Understanding the Regulations Affecting the Deductibility of Investment Advisory Expenses by Individuals, Estates and Non-grantor Trusts, 50 Real Prop. Tr. & Est. L.J. 439 (2016). Provided below is an abstract of the Article:

This Article addresses the new 2015 federal income tax rules governing the deductibility of investment advisory expenses and the confusion surrounding them. Specifically, the Article provides the context and impact of these new regulations, clarifies the current classification of investment advisory expenses, outlines methodologies for fiduciaries in unbundling fiduciary and investment advisory fees, and explains the limitations under current law. The Article also addresses the confusion surrounding the new rules for corporate fiduciaries, which require the “unbundling” of investment advisory fees when comingled with fiduciary fees using “any reasonable method.” The Article concludes that taxpayers should consult with their financial advisors and tax professionals to minimize the impact of deductibility limitations.

 

September 27, 2016 in Articles, Current Events, Estate Planning - Generally, Trusts | Permalink | Comments (0)

The 'Bahamas Papers'

Bahama papersOn Thursday, a new cache of leaked offshore corporate documents were made public from the Bahamas, marking the latest setback for international financial transparency. The same group that released the Panama Papers has now brought documents containing information about 175,000 Bahamian companies to light. The information from these documents is more basic but nevertheless, still enlightening with links to prime ministers, cabinet officials, princes, and convicted felons. 

See David H. Lenok, ‘Bahamas Papers’ Are Latest Chink in Offshore Armor, Wealth Management, September 22, 2016. 

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

 

September 27, 2016 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

New York Allows People to Be Buried with Their Pets

Forever with fidoNew York is now allowing pet owners to be buried with the cremated remains of their pet. Governor Cuomo signed the proposal into law on Monday. Cemeteries do not have to offer the option, and religious cemeteries are forbidden from offering it. This law comes at the tail end of a series of measures that honor the bond between human and beast in New York.

See Forever with Fido: New York to Allow People to Be Buried with Pets, NBC New York, September 27, 2016. 

 

September 27, 2016 in Current Events, Death Event Planning, Estate Planning - Generally, New Legislation, Religion | Permalink | Comments (0)

Article on Beneficiaries Modifying Irrevocable Trusts

Irrevocable trustBradley E.S. Fogel recently published an Article entitled, Terminating or Modifying Irrevocable Trusts by Consent of the Beneficiaries – A Proposal to Respect the Primacy of the Settlor’s Intent, 50 Real Prop. Tr. & Est. L.J. 337 (2016). Provided below is an abstract of the Article:

In most states, an otherwise irrevocable trust may be terminated or modified by all of the beneficiaries as long as the trust does not have an unfulfilled material purpose. With few exceptions, however, a settlor of a trust is allowed to put whatever conditions she likes on her largesse. The beneficiaries might dislike the trust terms or wish they were different, but they are merely looking a gift horse in the mouth. After all, it was the settlor's choice to make the gift in the first place. The wants of the beneficiaries are only relevant to the extent that the settlor decided to make them relevant. Thus, trust termination by consent of the beneficiaries is inapposite in American trust law.

Trust modification or termination by consent of the beneficiaries should be abandoned in favor of the doctrine of equitable deviation. Equitable deviation allows trust modification (or even termination) based on circumstances not anticipated by the settlor. Such changes are made to better effect the settlor's intent. Equitable deviation respects the primacy of the settlor's intent and recognizes that, due to unanticipated circumstances, trust modification or termination may improve the trust's efficacy in effecting that intent.

 

September 27, 2016 in Articles, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Monday, September 26, 2016

Book on Mediation for Estate Planners

MediationSusan N. Gary recently published a book entitled, Mediation for Estate Planners: Managing Family Conflict (2016). Provided below is a summary of the book:

This book represents an important new resource for attorneys to assist clients in resolving--and avoiding--disputes in an estate planning practice.

Estate planners and elder law practitioners are increasingly aware of the availability of mediation as a tool for resolving family disputes. Probate courts around the country are increasingly interested in encouraging parties to try mediation before resorting to litigation. But by the time a dispute reaches the probate court, damage to family relationships may have already occurred.

Mediation for Estate Planners: Managing Family Conflict provides the basic tools to understand and employ mediation within an estate planning practice and appreciate the usefulness of these alternative dispute resolution processes.

A lawyer familiar with mediation can help clients resolve disputes in a way that accomplishes the client's personal as well as legal goals. Written by an experienced team of attorneys and mediators, Mediation for Estate Planners:

  • Supplies the basic tools to understand and employ mediation within an estate planning practice
  • Provides guidance for lawyers in recommending mediation to clients at an early stage so that families are able to resolve disagreements with less damage to personal relationships
  • Offers perspectives from both the mediator and the lawyer
  • Considers the range of specific applications for mediation, including its use at the planning stage and after death; use in guardianship and conservatorship; end of life decision-making; and more
  • Examines and explains the ways that mediation can help in family business succession planning, and much more!

Topics are organized in these sections for ease of use and reference:

  • Understanding the essential elements of mediation
  • Practical perspectives
  • Specific applications in the estate planning and administration context
  • Mediator as consultant: family business succession planning
  • Arbitration
  • Resources for practice, including a Tool Kit, bibliography, and more

 

September 26, 2016 in Books, Books - For Practitioners, Books - For the Classroom, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Hiring an Estate Sales Agent

Estate saleEstate sales are different from your regular garage sale, promising nicer items and the potential for rare finds. Estate sales agents exist in an unregulated market and ask for fees around 35% of the sale total. It is important to get a copy of your estate sales agent’s contract and notice any red flags upfront. The Article explains common problems with estate sales agents, such as bouncing checks, accepting too little for certain belongings, and not taking items to auctions as promised. 

See Paul Sullivan, It Pays to Be Wary When Hiring an Estate Sales Agent, NY Times, September 23, 2016. 

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

 

September 26, 2016 in Estate Planning - Generally | Permalink | Comments (0)

Article on How to Deal with Will Contests Over Testamentary Capacity

Diminishing capacityRichard B. Keeton recently published an Article entitled, Balancing Testamentary Incapacity and Undue Influence: How to Handle Will Contests of Testators with Diminishing Capacity, 57 S. Tex. L. Rev. 53 (2015). Provided below is a summary of the Article:

Lack of mental capacity is “the second most commonly alleged ground for setting aside a will.” This Article will explore these ever-increasingly common, yet intricate and complex scenarios. First, Part II of this Article will give the reader a broad overview of the requisite mental capacity to execute a will. Additionally, because each state has its own unique-- but similar--common law tests, sample case studies are provided for the jurisdictions of Missouri, New York, and Texas. Next, Part III will discuss the generally recognized presumption of requisite testamentary capacity--presumed across all jurisdictions--unless evidence is presented to show otherwise. Part IV of this Article will delve into various case law and common law tests used to prove the existence of undue influence in the execution of testamentary documents. Following, Part V attempts to answer the circular question challenging attorneys and courts of whether a testator can actually be unduly influenced if he or she lacked testamentary capacity. Upon conclusion, this Article will provide practical recommendations to consider when assisting persons with Alzheimer's disease and other forms of dementia execute testamentary instruments.

 

September 26, 2016 in Articles, Elder Law, Estate Planning - Generally, Wills | Permalink | Comments (0)

Article on Irrevocable Wills

Irrevocable willAlex M. Johnson, Jr. recently published an Article entitled, Is It Time for Irrevocable Wills?, 53 U. Louisville L. Rev. 393 (2016). Provided below is a summary of the Article:

Almost everyone knows that inter vivos trusts can be made revocable or irrevocable. And the reference to “inter vivos” as opposed to “testamentary” trusts is intentional. Testamentary trusts become effective only upon the death of the settlor by establishing a valid trust in his or her will and, as a result, are by definition irrevocable upon creation (the testator cannot die again nor can he or she undo his or her death to somehow later repudiate the creation of the trust). Hence, it is more precise to say that inter vivos and testamentary trusts may be made irrevocable, but only inter vivos trusts may be made revocable.

Although at one time the default rule in most states was that an inter vivos trust was irrevocable unless the settlor expressly retained the right to later revoke the trust, the modern and current majority view is the opposite: That is, trusts are revocable unless explicitly made irrevocable. Whatever the default rule, it is important to emphasize that inter vivos trusts come in two flavors or varieties: revocable and irrevocable.

Compare, however, wills that become effective only upon the death ofthe testator. By definition and in every jurisdiction, wills are ambulatory documents and can always be revoked prior to death. Indeed, there is no way for a putative testator to make an irrevocable will, meaning that there is no legal method by which an individual can commit to execute a will that is going to be effective upon that individual's death. In a legal regime that has as one of its primary goals the validation of the will maker's freedom of testation or disposition, it is somewhat surprising that individuals have no option to commit their future selves to a will executed by their present self.

 

September 26, 2016 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, September 25, 2016

Drafting a Bulletproof Will

Bulletproof willWith the potential of dissatisfied heirs and will contests, it is important to make your will bulletproof. One thing you can draft in your will is a no-contest clause, which discourages people from disputing your will, especially beneficiaries. Also, if you plan on doing something dramatic with your bequests, announce these wishes to your loved ones while you are still alive, giving clarity to those who might feel blindsided otherwise. Along those same lines, you should have a doctor verify your mental health at the time you plan to draft your will. Additionally, if you do not want your will to become public record in the probate process, you should consider a living trust, which can satisfy your asset transfer without inviting unwanted attention and further challenges. 

See Alex Glenn, 5 Ways to Make a Bulletproof Will, USA Today, September 24, 2016. 

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

 

September 25, 2016 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Hillary Clinton's Proposed 65% Estate Tax Rate

ClintonHillary Clinton is proposing a 65% tax on the richest estates, making it harder for the wealthy to pass appreciated assets on to their heirs without paying taxes. This increase will generate $260 billion over the next decade, allowing her to pay for plans to simplify small business taxes and expansion on the child tax credit. Further, she is adopting a plan that would impose a 50% tax rate on estates over $10 million a person, a 55% rate starting at $50 million a person, and the top rate of 65%, affecting those with assets exceeding $500 million or $1 billion for married couples. Clinton would also like to repeal the step-up in basis rule, which will carry high capital gains taxes for particular assets inherited. Overall, Clinton would increase taxes by approximately $1.5 trillion in the next decade, which would increase the federal revenue by 4%. 

See Richard Rubin, Hillary Clinton Proposes 65% Top Rate for Estate Tax, Wall Street Journal, September 22, 2016. 

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

 

September 25, 2016 in Current Events, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)