Wills, Trusts & Estates Prof Blog

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

Wednesday, October 18, 2017

4 Ways You Can Start Planning for Possible Tax Law Changes Now

6a00d8345157c669e201b8d23bb74c970c-800wiJean-Luc Bourdon, principal and wealth advisor at BrightPath Wealth Planning, was critical of President Trump’s sparse tax plan: “In the tax world, a nine-page tax framework is equivalent to a tweet. It leaves many questions unanswered.” With so many unknowns regarding tax reform, most advisors are recommending waiting out the proposed legislation. For a few of the less ambiguous provisions though, pre-planning may be beneficial. The elimination of many currently allowable itemized deductions may end up costing retirees. It may be beneficial for these individuals to pack up and ship out to a more tax-friendly state if tax reform legislation is passed.

See Robert Powell, Retirees, 4 Ways You Can Start Planning for Possible Tax Law Changes Now, USA Today, October 13, 2017.

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

October 18, 2017 in Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Saturday, October 7, 2017

CLE on Estate Administration Boot Camp

0000000 CLEThe National Business Institute is holding a conference entitled, Estate Administration Boot Camp, which will take place on Tuesday, October 10, 2017, at the Courtyard by Marriott San Luis Obispo in San Luis Obispo, CA. Provided below is a description of the event:

Program Description

Everything You Need to Know About Effectively Administering an Estate

Are you fully confident in your knowledge of the latest court and tax rules and the most effective transfer tools to ensure each client's estate is laid to rest according to the decedent's wishes, with minimal tax burden? This comprehensive 2-day instruction will give you all the skills you need to administer estates that include trusts and/or business interests without a hitch. Register today!

  • Don't miss any crucial notice and filing requirements when opening the estate - learn what must be done right away.
  • Get helpful forms and checklists that will help you in administration.
  • Understand how income and estate tax deductions interact and find the most advantageous way to structure the tax returns
  • Learn how to use disclaimers more effectively.
  • Clarify what must be done when the trust becomes irrevocable.
  • Protect your professional reputation with a practical legal ethics guide focused on trusts and estates practice.
  • Prevent mistakes in final petition and ensure each estate is closed quickly and without disputes.

Who Should Attend

This two-day, basic level seminar is designed for:

  • Attorneys
  • Accountants/CPAs
  • Certified Financial Planners
  • Trust Officers/Administrators/Managers
  • Paralegals

Course Content

DAY 1

  • Forms of Administration and When They are Used
  • First Steps and Notices, Executor Duties, Opening the Estate
  • Marshalling the Assets
  • Handling Debts and Claims Against the Estate
  • Spouse Elective Share and Disclaimers
  • Key Intestacy Laws You Must Know
  • Trusts That Affect Estate Administration

DAY 2

  • Income Tax Returns
  • Handling Distributions
  • Legal Ethics in Estate Administration
  • Estate and Trust Contests, Disputes, Challenges
  • Business Interests in Estate Administration
  • Portability and Estate, Gift, GST Taxes
  • Closing the Estate and Final Accounting

Continuing Education Credit

Continuing Legal Education – CLE: 12.00 *

International Association for Continuing Education Training – IACET: 1.20

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 14.00 *

* denotes specialty credits

October 7, 2017 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Intestate Succession, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Thursday, October 5, 2017

What the Trump Tax Plan Means for Art Collectors and Dealers

1200px-David_Teniers_d._J._008The Trump Administration’s latest release of its proposed tax reform remains sparse on specifics, but the little that is known indicates possible implications for art-related businesses and art collectors. The most recent proposal would eliminate some currently-allowed itemized deductions, lower the number of tax brackets from seven to three, eliminate the estate tax, and change tax rates for smaller businesses.

A repeal of the 40% estate tax on estates valued at over $5.49 million would substantially change the manner in which many who own significant art collections or art pieces manage and distribute their estates. The absence of the 40% tax might encourage collectors to reconsider possible beneficiaries as there would be little need to accommodate paying the hefty tax on a highly illiquid asset. While the abrogation of the estate tax may appear to be all sunshine and open meadows, some are pointing to rain clouds on the horizon.

Under current law, beneficiaries receive a step-up in basis on art received through bequests, so capital gains earned by the original owner have no income tax implications for the beneficiary. Because the newest tax proposals do not seem to address this issue, there is some concern that beneficiaries may end up paying more in capital gains, which mitigates the substantial savings that would be earned with the removal of the estate tax.

See Anna Louie Sussman, What the Trump Tax Plan Means for Art Collectors and Dealers, Artsy, September 29, 2017.

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

October 5, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

Tuesday, October 3, 2017

Article on A Nominal Credit: Why Donor Recognition Should Not Limit the Deductibility of Section 170 Charitable Contributions

HqdefaultBenjamin J. Imdieke recently wrote an Article entitled, A Nominal Credit: Why Donor Recognition Should Not Limit the Deductibility of Section 170 Charitable Contributions, 42 ACTEC Law Journal 119 (2016). Provided below is an abstract of the Article:

Part One explores whether law and policy support limiting a recognized donor's charitable deduction and concludes that they do not. Part Two explores the proposals of two legals scholars, Professors William Drennan and Linda Sugin, who argue that donor recognition should limit deductibility. Professor Drennan argues that the fair market value of donor recognition should affect deductibility and Professor Sugin argues that the duration of recognition should affect it. Part Three presents the author's disagreement with the arguments. First, as Professor Evelyn Brody has recognized, property, and not contract, is the proper legal doctrine to apply. Second, a reduced deduction is ill-fitting with the legal and theoretical justifications that underlie the charitable gift deduction, especially Professor Henry Hansmann's capital formation theory. Third, the donor recognition question is analogous to corporate sponsorship wherein charities must pay unrelated business income tax on corporate advertising revenue, but not when charities merely recognize their corporate sponsors. Fourth, the way private foundations and donor advised funds recognize their donors, and the fact that public entities recognize non-donors, illustrate how changing the current regime would probably not curb perceived abuses, but would likely create perverse outcomes. 

October 3, 2017 in Articles, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

CLE on Advanced Estate and Trust Administration

0000000 CLEThe National Business Institute is holding a conference entitled, Advanced Estate and Trust Administration, which will take place on Wednesday, October 11, 2017, at the Doubletree Hotel Downtown in Tulsa, OK. Provided below is a description of the event:

Program Description

Tackling the Toughest Issues You're Likely to Face in Estate Administration

In this fast-paced, incisive course, seasoned attorney faculty skip the basics and get right to the heart of the complex and diverse problems and peculiarities that make up the estate administration process. Get expert guidance on tough inventory issues, trust administration, claims and insolvency, taxes, and many more. Increase your legal mastery - register today!

  • Clarify what's recoverable under Medicaid estate recovery, and when and how it can be contested.
  • Effectively handle discretionary trust distributions in estate planning.
  • Find out how to locate and value digital assets.
  • Distinguish between mineral rights and royalties, and learn how to distribute them.
  • Get a tax law update and realign your practices with the new post-ATRA realities.
  • Tackle contentious beneficiary disputes in and out of court.

Who Should Attend

This advanced-level estate administration seminar is designed for:

  • Attorneys
  • Personal Representatives
  • Trust Officers
  • Paralegals
  • Accountants and CPAs
  • Tax Preparers
  • Enrolled Agents
  • Estate and Financial Planners
  • Investment Advisers

Course Content

  1. Tough Inventory and Appraisal Issues
  2. Post-Mortem Trust Administration
  3. Medicaid Recovery Claims Against the Estate
  4. Creditor Claims, Disputes, and Insolvency
  5. Legal Ethics
  6. Tax Planning and Reporting
  7. Estate Litigation
  8. Other Complex Estate Administration Issues

Continuing Education Credit

Continuing Legal Education – CLE: 7.00 *

Financial Planners – Financial Planners: 7.00

International Association for Continuing Education Training – IACET: 0.60

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 7.00 *

Professional Achievement in Continuing Education – PACE: 7.00 *

* denotes specialty credits

October 3, 2017 in Conferences & CLE, Estate Administration, Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0)

Friday, September 29, 2017

Want to make that inherited Roth IRA last longer? Here’s how...

E18daf5a230eec78a5326bed777b3bedIt can be difficult to resist the temptation to cash out an inherited Roth IRA, but stalwartness in the face of becoming flush with cash can be beneficial. Taking advantage of current provisions and “stretching” the account may decrease tax liabilities and improve overall fund usefulness. Inherited Roth IRAs have different tax implications for beneficiaries relative to the original owners in that the distributions are tax-free. If a beneficiary does not immediately need money, he or she can take the required minimum distributions and leave the remaining assets in the account to continue growing. Over time, the result is a larger pool of tax-free funds that can be saved and used later.

See Dan Moisand, Want to make that inherited Roth IRA last longer? Here’s how, MarketWatch, September 22, 2017.

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

September 29, 2017 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Trump GOP Tax Reform Framework Calls for Estate Tax Repeal

Estate-tax-cartoonIn its current form, the federal estate tax applies to estates valued at over $5.49 million. The tax is considered draconian by many, as assets in excess of the $5.49 million threshold are subject to a 40% tax. Couples may combine their exemptions and are able to shield up to $11 million from the tax. The generation-skipping tax (GST) applies to transfers of wealth that pass over a generation during life or upon death. A grandmother giving a gift to a grandchild would be an example where the tax applies.

The Trump Administration’s most recent framework for tax reform includes proposals for repeal of the GST and the estate tax. The plan also calls for the repeal of the alternative minimum tax, the elimination of itemized deductions and personal exemptions, and reductions to the top individual and corporate tax rates. Though repeal and tax reform is far from a certainty, those opposed to the death tax are optimistic. The Family Business Coalition is “all in” for the repeal of the estate and GST taxes believing that their elimination would boost the economy and spur job creation.

See Ashlea Ebeling, Trump GOP Tax Reform Framework Calls for Estate Tax Repeal, Forbes, September 27, 2017.

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

September 29, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation | Permalink | Comments (0)

Thursday, September 28, 2017

Article on Elder Law Issues and Recent Developments 2016-2017

Elder-LawElizabeth Ruth Carter recently posted an Article entitled, Elder Law Issues and Recent Developments 2016-2017, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

These materials are part of the 2017 LSU Recent Developments CLE. The paper includes recent ethical developments; scam and abuse prevention and reporting; recent developments in mandate and interdiction; recent developments in Louisiana's medical consent law, recent developments in living wills and advance directives; recent developments with anatomical gifts and bodily remains; tax; and recent developments in criminal law.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

September 28, 2017 in Articles, Conferences & CLE, Elder Law, Estate Planning - Generally, Estate Tax, Income Tax, Wills | Permalink | Comments (0)

Thursday, September 21, 2017

Est. of Sower v. Commissioner: IRS Allowed to Examine Predeceased Spouse’s Estate Tax Return

Baton_passingIn Estate of Minnie Lynn Sower v. Commissioner, Husband predeceased Wife in 2012 with a deceased spousal unused exclusion (DSUE). Husband’s estate elected portability for the DSUE. When Wife passed away in 2013, her estate claimed the husband’s DSUE. The IRS examined Husband’s estate tax return as part of an investigation into Wife’s estate tax return and found a deficiency in Wife’s estate based on the return submitted by Husband’s estate. Wife’s estate argued that the IRS could not examine Husband’s estate tax return due to the statute of limitations and because the letter accepting Husband’s estate tax return represented a closing agreement between the parties. 

The Tax Court ultimately held that the statute of limitations did not bar the IRS from examining a deceased spouse’s estate tax return to determine the deceased spousal unused exclusion (DSUE), and that the letter accepting Husband’s estate tax return did not signify a closing agreement.

See Est. of Sower v. Commissioner: IRS Allowed to Examine Predeceased Spouse’s Estate Tax Return, Wealth Strategies Journal, September 12, 2017.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

September 21, 2017 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Tuesday, September 12, 2017

Why Continuous Estate Planning Is Essential For The Rich And Super-Rich

Cruel-intentions-435-1Not having an estate plan means the government gets to decide how your assets will be distributed. For many decedents, the government structure for intestate succession would not match their desire for distribution while living. This issue can be avoided with a current estate plan. For those with significant assets though, this may not be enough. Changes in the laws can open opportunities for tax savings or can possibly create negative tax repercussions under new laws. Because laws are always in flux, it is especially important for the wealthy and super-rich to update their estate plans regularly.

See Russ Alan Prince, Why Continuous Estate Planning Is Essential For The Rich And Super-Rich, Forbes, September 6, 2017.

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

September 12, 2017 in Estate Planning - Generally, Estate Tax, Income Tax, Wills | Permalink | Comments (0)