Wills, Trusts & Estates Prof Blog

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

Thursday, July 12, 2018

Sixth Municipality in Massachusetts to Call for Death with Dignity Legislation

CapecodOn Monday Falmouth in Massachusetts became the sixth municipality in the state to agree to pass a resolution to request the legislature to legalize allowing terminally ill patients to receive life-ending medication from their medical practitioner. Commonly known as physician-assisted suicide or Death with Dignity, the practice is legal in several United State jurisdictions including Washington, Vermont, and Colorado.

It may be an uphill battle, however. In 2012 voters narrowly defeated a referendum that would have allowed the practice, and in 2017 a medical aid in dying bill did not make it past the public health committee. Right-to-life groups and the Catholic Church are also strongly opposed to the legalization of physician-assisted suicide, fearing it will be used to contain expenditures of costly medical treatments.

There is support for Death with Dignity laws by the medical world, as the American Medical Society declined to reaffirm its opposition to the practice and the Massachusetts Medical Society officially dropped its stance against it.

See Cynthia McCormick, Falmouth Backs Death with Dignity, Cape Cod Times, July 10, 2018.

 

July 12, 2018 in Death Event Planning, Estate Planning - Generally, Religion, Science | Permalink | Comments (0)

Article on The "Charming Head" of the Rule Against Perpetuities

PandpDavid H. Fishman and Edward J. Levin recently published an Article entitled, The "Charming Head" of the Rule Against Perpetuities, Probate & Property Magazine, Vol. 32, No. 4, July/August 2018. Provided below is an abstract of the Article:

The September/October 2017 issue of Probate & Property contained an extensive article regarding purchase options and rights of first refusal. Kathryn E Allan et al., Rethinking Rights of First Refusal, Rights of First Offer, and Options to Purchase, Prob. & Prop., Sept./Oct. 2017 at 48. The article commented that, regarding purchase options, the Rule Against Perpetuities can "rear its charming head regularly, albeit sometimes in useless desperation. This occurs in cases with purchase options under commercial lease where the purchase price in the option clause may bear no relation to current market value of the property.

July 12, 2018 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Aligning Client Lifestyle, Dreams And Legacy Goals With Wealth Objectives

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-07-12/360f065f-4af7-4e93-ae15-68871d6a3fc7.pngFinancial advising companies have a quite peculiar way to categorize their clientele. They determine that the "mass market" are clients that are worth $1 million or less, and that the "high net worth" category are those that have a net worth of more than $20 million. Two vastly different types of companies assist these types of clients, and that often means that the middle section of "lower millionaires" that could be overlooked.

These type of millionaires are often the self-made ones that are more determined and driven than the ones that have had their fortunes come to them through inheritance. Their dreams may be harder to define and it is the job of their advisor to help align their dreams with their reality.

Legacies for self-made millionaires can be tricky, as they understand the need for hard work but also the desire to enjoy the fruits of that labor. It may not just comprise of assets and accounts, but values that the client wants to pass on to their loved ones are desired organizations.

Any good financial advisor will consult with their client about their lifestyle: how they spend their money and how they save it, what brings them comfort and ease, how they like to live on a daily basis. Advisors must know these items if they expect to tell the client what’s necessary to achieve his or her goals. 

See Greg Powell, Aligning Client Lifestyle, Dreams And Legacy Goals With Wealth Objectives, Financial Advisor, July 6, 2018.

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

July 12, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Income Tax, Trusts, Wills | Permalink | Comments (0)

Wednesday, July 11, 2018

How Tax Reform Could Fuel Life Settlement Industry

Tax actThe life settlement industry may have already been growing at a steady pace, but the Trump Administration's passage of the Tax Cuts and Jobs Act gave it much appreciated momentum. Taxpayers could continue to shun life insurance policies due to the increase in the gift and estate tax exemption amount and opt to purchase life settlements instead.

But is the improved tax situation enough? "While the investing environment surrounding the life insurance market is looking ideal, it’s not yet clear if a better tax situation alone is sufficient to encourage long term growth in the life settlement industry." It is no longer a necessity for life insurance programs to be grouped together with a client's entire estate plans.

No market is entirely level for too long, and the truth of the matter is that Americans aren’t investing nearly enough in their retirement. A change of government in the near future could see new tax legislation introduced, altering or even removing the current master overhaul from President Trump.

See Gary Eastwood, How Tax Reform Could Fuel Life Settlement Industry, Accounting Web, June 13, 2018.

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

July 11, 2018 in Current Affairs, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation, Wills | Permalink | Comments (0)

Article on From Switzerland with Love: Surrey’s Papers and the Original Intent(s) of Subpart-F

SwitzerlandNir Fishbien recently published an Article entitled, From Switzerland with Love: Surrey’s Papers and the Original Intent(s) of Subpart-F, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article:

For the first time since 1913, and as part of the 2017 tax reform, Congress adopted a tax regime that exempted from U.S. taxation dividends from foreign subsidiaries. By doing so, Congress abandoned the general principle that U.S. residents should be subject to tax on all income “from whatever source derived.” This shift marked a good occasion for considering the reasons the United States taxed such dividends in the first place. In 1962, Congress enacted a new law, also known as ‘Subpart-F’, which subjected certain earnings of foreign subsidiaries of American parent corporations to current-base taxation. This was a deviation from the general tax principle of tax deferral, under which earnings of foreign subsidiaries are taxed only upon repatriation of these earnings (by a dividend, for example). The new legislation was the result of a political compromise. While Treasury supported a wide-scale elimination of tax deferral, Congress eventually adopted a much narrower law, eliminating tax deferral only in cases where it was abused by using it to avoid otherwise owed U.S. taxes.

Seven internal Treasury Department reports found in the archive of Harvard Law School Library reveal the dramatic sequence of events that led to the legislation of Subpart-F, one of the most prominent international tax reforms the United States had ever known. The reports unequivocally support the notion that the idea behind Subpart F was initially formed mainly due to the deteriorate U.S. Balance of Payment position, and that its “original intent”, as designed by its main architect, Assistant Secretary of the Treasury, Stanley S. Surrey, was to eliminate tax deferral and protect the U.S. tax base. This was based on the principles of equity, efficiency (Capital Export Neutrality), and elegance. Congress, on the other hand, rejected the proposal and adopted a much more limited in scope legislation, mainly due to the concern that eliminating tax deferral would result in a competitive disadvantage to American corporations operating abroad.

Based on the reports, as well as the controlling legal and economic concepts of that time, I argue that Congress was mistaken in limiting the original proposal to eliminate tax deferral. This mistake was the result of relying on overly-emphasized and exaggerated competitive concerns, instead of on concrete tax and sound fiscal policies.

July 11, 2018 in Current Affairs, Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0)

Anthony Bourdain May Have Been Richer Than First Assumed

Ab2Famous television chef Anthony Bourdain committed suicide in France in June and his will was filed in a Manhattan court last week, determining that his worth totaled approximately $1.2 million. The will though also included language that implied that he had placed much of his assets into a trust. Bourdain had a mortgage that was for $1.1 million, but the corresponding property was not specified.

"It is a common practice among the wealthy to create trusts because it allows their beneficiaries to pay less in estate taxes and avoid the publicity of the probate court."

It does not appear that the details of the trust have been revealed, nor can it be determined how many assets the late chef placed into the trust.

See Megan Sheets, Revealed: Anthony Bourdain 'Was Richer Than His Will Suggested After the Tragic Star Put Many of His Assets in a Trust', Daily Mail, July 6, 2018.

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

July 11, 2018 in Current Events, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Body of Dead Teen, Honored with ‘Extreme Embalming,’ is Posed with Video Games, Sunglasses, and Snacks

MatthewsA funeral home in New Orleans, Louisiana claims that have a history of unique requests and attempt to meet every grieving family's wishes for their deceased loved ones. 18-year-old Renard Matthews was sadly killed while walking his dog, but his family attempted to faithfully respect his laid-back lifestyle. The family had the teenager embalmed and positioned low in a comfy chair wearing dark sunglasses, holding a video game controller, and to the side was a small table with Doritos and soda.

The unique custom has been called “extreme embalming,” reports ABC News, and honors the deceased in personalized ways. It’s particularly popular in Puerto Rico. "In 2015, Green Lantern fan Renato Garcia, 55, died of an asthma attack and was bid goodbye in the costume he often wore around town. “It is what he would have wanted,” said sister Milagros Garcia."

See Elise Sole, Body of Dead Teen, Honored with ‘Extreme Embalming,’ is Posed with Video Games, Sunglasses, and Snacks, Yahoo, July 9, 2018.

July 11, 2018 in Current Events, Death Event Planning, Estate Planning - Generally, Science | Permalink | Comments (0)

Tuesday, July 10, 2018

Texas: A Cautionary Tale for Medicaid Management and Managed Care Companies

MedicaidState Medicaid Agencies are required to have all medically necessary services accessible to beneficiaries, but also safeguard Medicaid from fraud, waste, or abuse of billing, which equates an intense and challenging balancing act.

"In 2010, Texas entered into a landmark settlement of a 14-year old lawsuit, Frew v. Hawkins.   The Frew litigation, originally filed as a class action in 1993, alleged that Texas had failed to ensure that children enrolled in Medicaid were receiving necessary preventative and specialty health care services." In essence, the plaintiff's alleged that reimbursement for services were low enough that it caused a shortage of Medicaid providers throughout the state.

The settlement required Texas to increase Medicaid to incentivize providers to enroll in the system and fund a 50% increase in dental reimbursement rates. One way Texas decided do implement this was to contract with private companies "including the responsibility for oversight and prevention of fraud waste and abuse; the state also insisted on contract provisions requiring the private companies to swiftly process and pay Medicaid claims to ensure an unimpeded flow of services."

This unfortunately led to more abuse, as initially revealed TV station WFAA-TV in Dallas. Ensuing federal and state audits found that Texas dental providers were being paid for pediatric orthodontic services that were beyond what was medically required or justified - at least $191.4 million.

See Ellyn Sternfield, Texas: A Cautionary Tale for Medicaid Management and Managed Care Companies, Health Law Policy Matters, July 8, 2018.

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

July 10, 2018 in Current Affairs, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Article on Celebrity Estate Planning: Misfires of the Rich and Famous

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-07-10/bf6db905-e082-4d4c-88eb-e90adb7e137b.pngJessica Galligan Goldsmith, Shaina S. Kamen, Christiana M. Lazo, David J. Posner, and Bruce D. Steiner recently published an Article entitled, Celebrity Estate Planning: Misfires of the Rich and Famous, Probate and Property Magazine, Vol. 32, No. 4, July/August 2018. Provided below is an abstract of the Article:

Like many ordinary individuals, celebrities often have outdated or nonexistent estate plans. Even when a celebrity has done careful estate planning and has well-drafted documents, changes in family circumstances or in the tax laws can create unexpected results. The estate plans of the celebrities discussed in this article, each selected to illustrate a different issue, offer useful lessons to estate planners and lay-persons alike.

  • Overly Simplistic Wills: Jim Morrison
  • After-Born Children: Philip Seymour Hoffman
  • Domicile: Heath Ledger
  • Second Families and Decanting:David Bowie
  • Promises, Promises: Anna Nicole Smith

July 10, 2018 in Articles, Current Events, Estate Planning - Generally, Film, Music, Wills | Permalink | Comments (0)

Executors Can Count On Long, Arduous Estate Settlements

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-07-10/2ddba9b9-4299-402e-b577-9492b13f5180.pngThe typical size of an estate at time of settlement is between $50,000 and $250,000, with about 11% falling below $10,000 or more than a million. According to a survey of 1200 people by EstateExec, a company based in the San Francisco area that creates software for estate executors, it takes an average of 16 months to fully settle an estate no matter its size. This generates around 800 hours of work for an executor, and the typical compensation for an executor is $18,000.

The survey found that nearly half, 44%, of those surveyed were part of, or were at least aware of, family conflicts that erupted in the settlement process. Worries included mistrust and stealing, with 19% of those asked claiming they were aware of perceived executor misconduct.

Texans can rejoice though - with their streamlined probate system, simple estates can be executed properly within 6 months.

See Karen DeMasters, Executors Can Count On Long, Arduous Estate Settlements, Financial Advisor, July 9, 2018, see also How Long Does Probate Take in Texas?, Farren Sheehan Law, November 10, 2017.

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

 

July 10, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)