Wills, Trusts & Estates Prof Blog

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

Tuesday, October 6, 2015

How Single Clients Should Deal With Estate Planning

SavingsAmericas singles population has been growing lately and a majority of the U.S. population that is over 15 is single.  There are certain important steps that single people need to take in regards to estate planning.  When a single person dies intestate State law determines how their assets are distributed.  It is extremely important for clients to have a Will if they want their intentions for how they want their property distributed carried out.  Finding a trustworthy person to designate with the power of attorney is also crucial.  Clients should also be proactive about making sure insurance, IRA, and any other retirement accounts have clearly named beneficiaries.  Make sure to also have any desired health care directives put in writing.  Single clients should speak with an estate planning attorney about coming up with an individualized estate plan that will accommodate their needs.

See Shoshanna Delventhal, Estate Planning for Single Individuals, Investopedia, October 6, 2015.


October 6, 2015 in Estate Planning - Generally, Estate Tax, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Scaife Estate Claims To Have Overpaid State Estate Tax By $10 Million

Richard-ScaifeI have previously discussed the dispute over the estate of the late Tribune-Review Publisher Richard Scaife.  The Estate has filed a tax return with the State of Pennsylvania claiming that the estate overpaid the State's estate tax by $10 million.  According to accountants for the estate the tax payments amounted to $104.7 million, but that a year-long review that they did on the estate shows that they should have only paid $94.5 million.  This current estate tax dispute is separate from many of the other legal actions that the Scaife estate is involved in.  The Scaife estate was worth about $830 million and about according to the tax return about $630 of that was subject to tax.  Because of the large size of this estate there will likely be more future developments to this story.  

See Mike Wereschagin, Scaife estate overpaid state taxes by $10M, return filed Monday states, Trib Live News, October 5, 2015. 



October 6, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Trusts, Wills | Permalink | Comments (0)

Sunday, October 4, 2015

The Responsibilities Of Serving As An Estate Executor

ExecutorTaking on the responsibilities of being an estate executor for a friend or loved one can be a risky burden.  An executive that breaches his or her fiduciary duties can be held personally liable.  The real work of an executor begins after the testator's death when the executor must settle all outstanding taxes and debts and then distribute the estate's assets to the correct beneficiaries.  There are many different difficult tasks involved with this process and the policies can vary from state to state.  It is important to protect the estate and make sure everything is properly managed.  The position of estate executor carries with it immense responsibilities and people should think carefully before taking on such a task.  

See Shelly Schwartz, The other side of a will: Serving as executor to an estate, CNBC, October 3, 2015.  

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

October 4, 2015 in Estate Administration, Estate Planning - Generally, Estate Tax, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Saturday, October 3, 2015

Tips To Keep In Mind When A Client Makes Large Gifts To Family While Living

GiftsMost people will wait until death before making large transfers of property to family members and other heirs. However, some chose to make gifts during their lifetime so they can take enjoyment from helping a loved one and make sure that the money is going towards the intended cause. But there are several concerns that must be taken into account before gifting including the following:

  • Up to $14,000 per year can be given to any one individual with triggering a tax on the gift. This exclusion applies to each giver individually which allows a married couple to each give $14,000 which means a person, such as a child, can essentially take $28,000 per year tax free.
  • Direct payments to the providers of medical and dental care or an institute of higher education will not count towards the $14,000 yearly cap. This exclusion does not include any other educational expenses so room, board, and books and will still count if they are bought by a third party.
  • Many states have 529 college savings plans which allow up to five years of payments to be made in one year without facing gift taxes. In addition, the plans allow the money to be taken out tax free for educational expenses. However, any payments to a school not by the parents will hurt the ability of the student to receive financial aid in most circumstances so a wise move is to have parents set up the plan but have it funded by the giftor.

See Nick Clements, 4 Rules for Giving Your Heirs Money While You’re Alive, Next Avenue, October 2, 2015.

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

October 3, 2015 in Estate Planning - Generally, Estate Tax, Gift Tax, Wills | Permalink | Comments (0)

Friday, October 2, 2015

How The Supreme Court Same-Sex Marriage Decision Will Impact Texas Couples

Same-sexThis article discusses the major impact that the Obergefell decision will have on Texas same-sex couples.  The State of Texas uses a community property system where assets accumulated during the marriage are dived evenly.  Texas also recognizes common law marriages (informal marriages).  If a couple agreed to be married, lived together as a married couple, and represented to others that they were married then the elements of a common law marriage in Texas are met.  The question many lawyers and same-sex spouses are asking is whether this common law marriage rule will apply to same-sex relationships that were formed before the Supreme Court decision.  This would have a huge impact on how the same-sex couple’s property is distributed. 

See J. Daryl Hinze, How The ‘Obergefell’ Decision Affects Texas Same-Sex Couples and Everyone Who Practices Law, Texas Lawyer, October 5, 2015.

October 2, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Guardianship, Income Tax, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Thursday, October 1, 2015

Estate Planning For Works Of Art Can Get Complex

Estate plan artArt collectors often face complex issues when it comes to estate planning.  These collectors must contemplate financial matters that relate to inheritance.  The planning surrounding art collections has tangible and intangible aspects often involving legacy issues.  There can be tax consequences for heirs that depend on how they are related to the deceased collector. 

Specialist advisers are out there that can handle issues surrounding art collections by focusing on tax and legal concerns in estate planning and philanthropy.  There are various estate planning techniques discussed in this article like placing the art collection into a trust or corporation.  The location and appraisal value of the art collection is also important when putting together a plan.  Collectors need to be aware of the laws and tax regulations that apply to their individual circumstances. 

See Conrad De Aenlle, Estate Planning Can Get Tricky When Art Is Concerned, The New York Times, October 1, 2015. 

October 1, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

How A Lifetime Gifting Programs Are A Way For Clients To Think About Wealth Transfers

CharityThis column discusses the importance of keeping an up-to-date estate plan when giving away assets.  As tax and estate law continues to change each year clients need to be aware of the impact that current laws have on inter-vivos gifts.  Clients should adopt a program for lifetime gifting.  One of the considerations that they need to think about is planning for their own financial needs.  Another consideration is the age of the donor and the size of the estate.  A donor-advised fund (DAF) might be a good way for a client to leave gifts to their loved ones while also establishing a philanthropic legacy.  It is extremely important for clients to not procrastinate on these decisions and to speak with a competent estate planning professional as soon as possible.  

See Scott Thompson, Lifetime Gift Planning: A New Way to Think About Wealth Transfer, Atlantic Trust Blog, September 30, 2015. 

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

October 1, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Wednesday, September 30, 2015

What Non-Citizens Need To Know About Estate Taxes

CitizenshipThis article discusses some of the rules that non-citizen residents should know about estate taxes.  It is important to establish where that person is domiciled (where they live).  Attorneys should understand a person’s citizenship status and where they are domiciled in order to plan for any estate tax issues that the client might encounter.  Estate planning attorneys should gather this knowledge to help their client make better decisions about what sort of connection they might want to pursue with the United States.  The domiciliary test involves many different factors that are discussed in this article.  It is important to get an accurate picture of what assets the client owns and where they are located.

See Olivia Carbajal de Garcia, Understanding the Rules for Estate Taxes and Non-Citizens, Texas Lawyer, October 5, 2015.

September 30, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

Tuesday, September 29, 2015

Trump Tax Plan Mostly Party Orthodoxy With Dash Of Unusual

ArticlePictureThe campaign of Donald Trump finally released its tax plan amid great pomp at the Trump Towers but offered little in the way of new policies. The plan calls for slashing the number of tax brackets and cutting the top rate to %25 while allowing those with incomes under $25,000 to live tax free. In addition, the plan calls for the end of the estate tax and alternative minimum tax while allowing companies to pay a onetime fee to repatriate funds from outside the United States that might otherwise be taxed. However, aside from one over the top requirement that requires non taxpayers to send “I win” forms to the IRS, the plan offers little in the realm of new policies although it firmly entrenches Trump’s rightward shift from his more liberal positions. Only time will tell if the policy proposals will help propel Trump to Washington.

See Russell Berman, Donald Trump’s Amazingly Conventional Tax Plan, The Atlantic, September 28, 2015.


September 29, 2015 in Current Affairs, Current Events, Estate Tax, Income Tax | Permalink | Comments (0)

Forgotten Legal Status In America Could Lead To Big Implications Down The Road

PassportAs the world grows more globalized, it is inevitable that there will be some people that have complicated national identifications and will hold citizenship in multiple countries. As a result, negative tax and other legal implications may come into play as countries that an individual has had little contact with in years come calling. The United States in particular can be a thorny problem due to the claims on income earned overseas that the government has a history of pursuing and the fact that any past legal status, such as a green-card, must be formally renounced to become invalid. When faced with a client with multiple nationalities explore the options that are available including renouncing citizenship or special entities, such as trusts, that can protect a client's assets.

See Abby Schultz,  U.S. Tax Laws Could Snag “Accidental Americans”, Barron's, September 24, 2015.

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

September 29, 2015 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0)