Wills, Trusts & Estates Prof Blog

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

Thursday, May 26, 2016

Same-Sex Partner Misses Out on New Jersey Estate Tax Exemption

Same-sexThe New Jersey Tax Court ruled that a man was not entitled to a $101,041 estate tax deduction after his partner of 31 years died six days before their wedding because they were not married or in a civil union. Six days before their wedding, is this considered exceptional circumstances? The couple was registered as domestic partners but chose not to enter into a civil union. The court noted that it could not apply the Domestic Partnership Act in a way to provide estate tax exemptions for a couple that could have entered into a civil union or marriage.

See Leslie A. Pappas, Same-Sex Partner Not Spouse for New Jersey Estate Tax Break, Bloomberg BNA, May 17, 2016.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

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

Wednesday, May 25, 2016

Hillary Clinton Moves New York Home into Trust

Hillary clintonHillary and Bill Clinton purchased their Chappaqua, New York home in 1999 and have now moved it into a residence trust. This will allow them to legally evade the so-called ‘death tax.’ Moving the home into trust will reduce their estate tax bills and avoid the IRS’s reach. This move comes at an interesting time because Hillary is fighting for estate tax reform, which would raise taxes for wealthy Americans.

See Kelly McLaughlin, Hillary and Bill Clinton Dodge ‘Death Tax’ by Putting Their New York Home into Trust – Despite Presidential Candidate’s Efforts to Make the Wealthiest Pay More, Daily Mail, May 23, 2016.

Special thanks to Jay Brinker for bringing this Article to my attention.

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

Tuesday, May 24, 2016

Article on Estate Tax and Combating Wealth Inequality

Goldburn+P.+Maynard+Jr.Goldburn P. Maynard Jr. recently published an article entitled, Perpetuating Inequality by Taxing Wealth, 84 Fordham L. Rev. 2429 (2016). Provided below is an abstract of the Article:

            Proposals to “fix” the estate tax by making it both more far-reaching and meaningful are plentiful. While these suggested improvements are reasonable, and even modest, they have failed to confront an important part of Graetz and Shapiro’s book, Death by a Thousand Cuts: stories trump science. This Article attempts to correct this shortcoming in the progressive argument by returning narrative to its central place in the estate tax debate. Drawing on psychological insights, I hope to underscore the difficulty of the effort to preserve progressive taxation and combat wealth inequality. I argue that the proposals have not confronted the underlying narratives that estate tax abolitionists have advanced. I use System Justification Theory to explain the entrenched and persistent nature of these narratives.



May 24, 2016 in Articles, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Monday, May 23, 2016

Article on Estate and Gift Tax Reform

Bridget_Crawford_1Bridget J. Crawford recently published an article entitled, Valuation, Values, Norms: Proposals for Estate and Gift Tax Reform, Boston College Law Review, Vol. 57 (Forthcoming). Provided below is an abstract of the Article:

            In their contributions to the Symposium on The Centennial of the Estate and Gift Tax, Professor Joseph Dodge, Professor Wendy Gerzog, and Professor Kerry Ryan offer concrete proposals for improving the existing estate and gift tax system. Professor Dodge and Professor Gerzog are especially interested in accuracy in valuation, and advance specific proposals with respect to split-interest transfers and family limited partnerships. Professor Dodge makes an additional proposal to improve the generation-skipping transfer tax system, an understudied area of the law. Professor Gerzog’s Symposium contribution draws particular attention to the legal fiction on which the estate and gift tax marital deductions rely. She would restrict the availability of the deduction to only meaningful economic transfers to a spouse, consistent with a desire that tax results reflect the underlying substantive results. Professor Ryan also focuses on the estate and gift tax marital deduction, along with other wealth transfer tax benefits available to spouses. She imagines an expansion of those rules, showing how easily the law can be separated from economic substance. These authors' proposals are technically expert, relevant to the legislative and regulatory regime that taxpayers face daily, focused on solutions, and deeply engaged in understanding how well the law meets its goals.

May 23, 2016 in Articles, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax | Permalink | Comments (0)

Article on Importance of Estate Tax

Graetz_michaelMichael J. Graetz recently published an article entitled, 'Death Tax' Politics, Boston College Law Review, Vol. 57 (Nov. 2016). Provided below is an abstract of the Article:

            In his Keynote Address “Death Tax” Politics at the October 2, 2015 Boston College Law School and American College of Trust and Estate Counsel Symposium, The Centennial of the Estate and Gift Tax: Perspectives and Recommendations, Michael Graetz describes the fight over the repeal of the estate tax and its current diminished state. Graetz argues that the political battle over the repeal of the estate tax reflects a fundamental challenge to our nation’s progressive tax system. This Address concludes that a revitalized estate tax is important for managing the national debt and reducing massive inequalities in wealth.

May 23, 2016 in Articles, Estate Planning - Generally, Estate Tax, Gift Tax | Permalink | Comments (0)

Tuesday, May 17, 2016

The Pros And Cons Of An A/B Trust

Charitable trustThis article discusses the new estate tax law and why it is important for people to keep updating their estate plans.  It explains how people have used the A/B Trust (also known as a spousal or family trust) to avoid or reduce estate tax liabilities.  There are also some downsides to these family trusts.  Most people do not have to worry about the estate tax because of the high tax exemption threshold of $5.45 million.  There are many inconveniences of setting up trusts and the incentive of avoiding estate taxes only exists for a small portion of society.  There are also the pains of capital gains tax that people would have to deal with when setting up an A/B Trust.  It is important for people to update their estate plans if they will be impacted by the changes in the law that this article discusses. 

See Arie Korving, Why It’s So Important to Update Your Estate Plan, Investopedia, May 12, 2016.

May 17, 2016 in Estate Planning - Generally, Estate Tax, Trusts | Permalink | Comments (0)

Thursday, May 5, 2016

New Changes In Estate Planning Laws Provide Reason For Updating Estate Plan

New legislationMany people are revising and updating their estate plan because of recent changes to estate planning and tax laws.  Another reason for updating estate plans is the increase in the average life expectancy thanks to developments in modern health care.  This article discusses some of the recent changes in the law and why it is important for people to update their estate plans.  People need to update their planning if they are going to be impacted by estate and gift taxes.  Those who have trusts will also need to review their estate plans.  “Another very important development in estate planning is the use of proper beneficiary designations for qualified plans and IRA interests.”  There are many parents who have reason to be concerned about the property that they plan to leave to beneficiaries being subject to creditor or spousal claims, and they will want to take proactive estate planning measures. 

See Dickinson Wright PLLC, Recent Changes in Estate Planning Laws May be Cause for Review of Your Estate Plan, Lexology, May 4, 2016.

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

May 5, 2016 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Wednesday, May 4, 2016

Should The Estate Tax Be Done Away With?

IRSThe federal estate, gift and generation skipping transfer tax turned 100 recently.  This tax is often called the “death tax” by pundits.  In this column Ryan Ellis argues for why he thinks the “death tax” should be done away with.  He points out that the tax does not actually collect that much money and might be a dead weight on the economy.  It can also cause wealthy estates to waste resources avoiding it.  According to this column there are better and more effective ways for the federal government to tax the rich.  This column also points out the surveys which show that the death tax is unpopular with many Americans.  The debate over the inheritance tax is an ongoing one and will likely be an important issue in the 2016 elections. 

See Ryan Ellis, Top Five Reasons The Death Tax’s 100th Birthday Should Be Its Last, Forbes, May 3, 2016.

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

May 4, 2016 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Tuesday, May 3, 2016

Harvard Law Professor Robert Sitkoff Gives Lecture On Estate Planning

Business_expenseHarvard Law Professor Robert Sitkoff made his contribution to the Last Lecture series with his March 29 lecture titled ‘Hope for the best; plan for the worst.’  This article provides a video of the lecture delivered by Mr. Sitkoff, who is an expert in trusts and estates.  “The Last Lecture Series, which is organized by the Class Marshals, asks popular HLS professors to give lectures addressing the graduating class.”  The main goal of the lecture was to discuss private law and to distinguish it from public law.  He discusses ways that the private law practice can be improved and how lawyers need to address their client’s concerns.  Another thing that he discusses is how law schools can work to improve the legal education that is provided to students to help get them more prepared for private practice.

See Raishay Lin, A trust and estates lawyer’s ‘last lecture’: ‘Hope for the best; plan for the worst’, Harvard Law Today, April 27, 2016.

May 3, 2016 in Estate Planning - Generally, Estate Tax, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Sunday, May 1, 2016

Look Who Is A Centenarian Now...

BithdayIn 2016, a special birthday is afoot for what must be one of the most controversial hundred year old's to ever have existed. Except this is no person but the federal estate tax which came about a century ago when emperors still ruled Europe and the information super highway was arguably still the telegraph. Much, obviously, has changed over the years but the wisdom of a central government sponsored death levy is as hotly debated today as when it was introduced. Then, as of now, it is a battle of federalism with with the right of individual states to institute the tax being almost not at all in controversy though the question of a state actually imposing one being as much contested as the federal issue. In any case, let us wish a happy birthday to the never ending hot button topic that has, aside from all else, at least given us much fodder for the minds of the politically inclined reader and writer.

See Laura Saunders, The 100th anniversary of the estate tax, Morningstar, April 30, 2016.

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

May 1, 2016 in Estate Tax | Permalink | Comments (0)