Wills, Trusts & Estates Prof Blog

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

Wednesday, April 26, 2017

Trump Administration Rolls Out New Tax Plan

Tax proposalToday, President Trump proposed his new tax plan, which promises to repeal the estate tax. The proposal also reduces the number of income tax brackets and slashes the corporate tax rate. The Trump Administration is calling this blueprint one of the largest tax cuts and overhauls in tax history, vowing to create economic growth and jobs.

See Alan Rappeport & Julie Hirschfeld Davis, White House Proposes Slashing Tax Rates for Individuals and Businesses, N.Y. Times, April 26, 2017.

April 26, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Income Tax, New Legislation | Permalink | Comments (0)

Thursday, April 13, 2017

DAPT States Adopting the UVTA

UtvaMichigan and Utah are the most recent states to pass the Uniform Voidable Transactions Act (UVTA). Given the Act’s added protection for creditors’ rights, these passages come at no surprise; however, what makes Michigan and Utah’s passages concerning is that they are the first UVTA states that also have domestic asset protection trust (DAPT) statutes. The UVTA’s impact on estate planning can be summarized by four issues: asset substitution, entity formation/conversion, state homestead law, and DAPTs. Subsequently, a primary goal of the UVTA is to eliminate the use of DAPTs as an estate-planning tool, whereas a primary goal of a DAPT is to preserve assets against future, unknown creditors. So, why would a DAPT state adopt the UVTA? As for in-state DAPTs, it would appear that the two provisions can work in harmony and avoid conflict-of-law analysis. While Michigan and Utah may have seen the interaction of the two laws as an incentive to create in-state DAPTs, they have now opened the door to the negative effects of the UVTA, such as asset substitution, entity formation/conversion, and state homestead laws.

See George Karibjanian, Two DAPT States Adopt the UVTA, Wealth Management, April 11, 2017.

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

April 13, 2017 in Current Events, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Sunday, April 9, 2017

Article on South Dakota DAPTs Removing Assets from Settlor's Estate

Dapt2Mark R. Krogstad & Matthew W. Van Heuvelen recently published an Article entitled, Domestic Asset Protection Trusts: Examining the Effectiveness of South Dakota Asset Protection Trust Statutes for Removing Assets from a Settlor’s Gross Estate, 61 S.D. L. Rev. 378 (2016). Provided below is an abstract of the Article:

Various states have enacted legislation allowing for the creation of self-settled spendthrift trusts in the last decade. This recent trend of legislation has given rise to domestic asset protection trusts (“DAPTs”). The enactment of DAPT laws in South Dakota and various other states has caused debate as to whether transfers to such trusts can be structured as completed gifts for federal gift tax purposes and whether the assets transferred to such trusts by a settlor can effectively be removed from a settlor's gross estate for federal estate tax purposes. This article will discuss why recent changes to South Dakota's DAPT statutes likely provide settlors the option of reducing their gross estates by making completed gifts to self-settled trusts sitused in South Dakota.

April 9, 2017 in Articles, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Monday, April 3, 2017

Trump Administration Sets Sights on Tax Reform

Uncertain taAfter the United States House of Representatives recently failed to pass the American Health Care Act, President Trump and his administration will have their sights set on new legislation for tax reform. Consequently, insurance companies and estate planners are taking notice, as their clients will be greatly affected. In lieu of repealing the estate tax, a capital gains tax could be imposed, while the fate of the gift tax is still unclear. These uncertainties make for a hazy tax-planning environment.

See Warren S. Hersch, Now in the GOP’s Crosshairs on Capitol Hill: The Estate Tax, Think Advisor, March 27, 2017.

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

April 3, 2017 in Current Events, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, New Legislation | Permalink | Comments (0)

Monday, March 27, 2017

Florida Judge Rules that Same Sex Spouses Must Be Added to Death Certificates

Florida judgeAfter the 2015 Obergefell decision, people were asking Florida to change the death certificates that indicated a partner in a same-sex relationship died unmarried without a surviving spouse. Florida refused and stated that they would not do so unless compelled to by an individual court order. Eventually, several widowers filed a lawsuit on behalf of all Floridians whose deceased same-sex spouses’ death certificates recorded them unmarried. The judge ruled in their favor, ordering the state to correct the death certificates and give way to Obergefell’s constitutional command.

See Mark Joseph Stern, Federal Judge Rules Florida Must Add Same Sex Spouses to Death Certificates, Slate, March 24, 2017.

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

March 27, 2017 in Current Events, Death Event Planning, Estate Planning - Generally, New Cases, New Legislation | Permalink | Comments (0)

Friday, March 24, 2017

Judge Rules Obergefell Applies Retroactively

Common law marriageA South Carolina judge recently ruled that a same-sex couple who split up after thirty years together had a common-law marriage. This potentially marks the first time that a judge determined Obergefell applies retroactively. The case originated when one of the partners asked for a division of property. The opposing party argued that she did not consider their relationship a marriage. Ultimately, the judge concluded that the common-law marriage started when one of the women divorced her husband in 1987. The couple owned a home together and shared joint bank accounts.

See Stephanie Francis Ward, Family Court Judge Rules Obergefell Applies Retroactively, and Women Had a Common-Law Marriage, ABA J., March 20, 2017.

March 24, 2017 in Current Events, Estate Planning - Generally, New Cases, New Legislation | Permalink | Comments (0)

Tuesday, March 14, 2017

Michigan Is the Latest State to Allow Asset Protection Trusts

DaptMichigan is now the 17th state that will allow wealthy individuals to set up domestic asset protection trusts, which can shield assets from creditors. The new law became effective on March 8, 2017, and also helps settlors save on estate taxes and keep their assets protected for several generations to come. The state has implemented a two-year statute of limitations for creditors to bring claims against the trust assets and a carve out for child support. Michigan residents can now rely on their own state laws to obtain good asset protection trust laws.  

See Ashlea Ebeling, Michigan Debuts the Latest State Asset Protection Trust, Forbes, February 10, 2017. 

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

 

March 14, 2017 in Current Events, Estate Planning - Generally, Estate Tax, New Legislation, Trusts | Permalink | Comments (0)

Friday, March 10, 2017

Article on the New HEAR Act

Hear actAmelia K. Brankov & Lily Landsman-Roos recently published an Article entitled, Congress Passes Important Law Governing Nazi-Looted Art Claims, Tr. & Est. 62 (March 2017). Provided below is an abstract of the Article:

A new law signed by former President Obama on Dec. 16, 2016 addresses the Nazis’ theft of hundreds of thousands of artworks, an event that Congress has called “the ‘greatest displacement of art in human history.’” That law, the Holocaust Expropriated Art Recovery (HEAR) Act of 2016, establishes a uniform, federal statute of limitations (SOL) for claims seeking the recovery of artwork and certain other objects that were confiscated by the Nazis. Now, these claims may be brought within six years of the claimant’s actual discovery of facts giving rise to the claim (including the whereabouts of the object). Before the HEAR Act, the timeliness of such claims was governed by generally more restrictive state laws, which varied from state to state, leading to costly choice-of-law battles, unpredictability and rulings barring meritorious claims. The new statute, which is a sea change in the law applying to Holocaust recovery claims, is expected to alleviate these concerns in ongoing and future disputes. 

 

March 10, 2017 in Articles, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Thursday, March 2, 2017

Heirs Looking to Invoke New Act in Case over Nazi-Looted Art

Art lootingThe Holocaust Expropriated Art Recovery Act was enacted to help Holocaust heirs recover art stolen from their families during World War II. The Act will finally be put to the test in a New York court, as the heirs of Fritz Grunbaum are looking to claim two valuable drawings by Egon Schiele. The heirs claim that Grunbaum’s collection, which included eighty-one Schieles, was confiscated by the Nazis. Countering that argument, collectors, dealers, and some museums argue that the Nazis did not steal it and that Grunbaum’s sister-in-law sold fifty-three of the Schieles to an art dealer in 1956. Further, the opponents argue that previous courts have found that they were not stolen. Ultimately, the heirs hope the Act will help them prove they are victims of Nazi art looting. 

See William D. Cohan, A Suit over Schiele Drawings Invokes New Law on Nazi-Looted Art, N.Y. Times, February 27, 2017. 

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

 

March 2, 2017 in Current Events, Estate Planning - Generally, New Cases, New Legislation | Permalink | Comments (0)

Tuesday, February 21, 2017

New Jersey Amends Legislation to Discharge Loans for Deceased Students

Discharge student loanNew Jersey recently amended legislation for their college loan program, no longer obligating a parent or guardian cosigner to repay the loan of a student borrower who has passed away. Testimony from grieving parents prompted the New Jersey legislators to modify student loan requirements. New Jersey’s student loan program was one of the strictest in the nation, coming under a substantial amount of criticism. The federal government and approximately one-third of private lenders also discharge student loans after the student has passed.  

See Jerilyn Klein Bier, N.J. Is Discharging Loans for Families of Deceased Students, Financial Advisor, February 21, 2017. 

 

February 21, 2017 in Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)