Wills, Trusts & Estates Prof Blog

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

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Monday, July 27, 2015

Article On Refinements To The Uniform Fraudulent Transfer Act

Article PictureGary A. Foster & Eric C. Boughman (Forster Boughman & Lefkowitz) recently published an article entitled, The Uniform Voidable Transactions Act: An Overview of Refinements to the uniform Fraudulent Transfer Act, 29 Probate & Property 4 (July/August 2015). Provided below is an excerpt from the article:

The most noticeable change made in the UVTA is the absence of the word “fraudulent” from the title and body of the act. In the UFTA, “fraudulent” and “voidable” are used inconsistently to refer to transactions for which the act provided a remedy. UVTA replaces “fraudulent” with “voidable” to clear up the inconsistency. Another purpose of the change is to discourage the “oxymoronic usage” of the phrase “constructive fraud” and the misleading phrase “actual fraud.” UVTA § 14, cmt. 1. The use of these phrases perpetuates the confusion and inconsistent application of the act among the courts. The prior language is also inappropriate because “constructive fraud” is confusing, and what is deemed actual fraud (under UVTA § 4(a)(1)), does not actually require proof of fraudulent intent.

July 27, 2015 in Current Affairs, New Legislation | Permalink | Comments (0)

Saturday, July 25, 2015

Texas Passes New Rules To Disclaim Property

TexasThe Texas Legislature recently passed new rules concerning the proper procedure to disclaim property. Among the major changes, the new act unifies the right to disclaim under the Property Code rather than have the rights spread between the Estate and Trust Code. In addition, fiduciaries now have the right to disclaim property though some, such as guardians, must seek court approval although trustees have the right to disclaim without a judge's blessing. The most important change, however, is the elimination of the nine month time limit to disclaim; from here on out a disclaimer will be effective as long as no control has been exerted over the property. A version of the new statute may be found here.

See Glenn Karisch, The new Texas Uniform Disclaimer of Property Interests Act, Texas Probate, July 9, 2015.

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

July 25, 2015 in Estate Administration, New Legislation, Trusts, Wills | Permalink | Comments (0)

Friday, July 24, 2015

Special Needs Trust Fairness Act Reintroduced In Congress

CapitolAfter failing to pass in the last legislature, the Special Needs Trust Fairness Act was reintroduced by a bipartisan group of Congressman. Specifically, the act applies to first-party special needs trusts which are trusts that are established using the incapacitated person's own assets to provide additional financial support while they are receiving certain government benefits. Current law requires that the first-party trust be requested by guardians or the court with the new legislation seeking to allow an otherwise mentally competent individual to set up a first-party trust without the intervention of any other party. Proponents of the bill argue that forcing a person to seek a family member or court to set up this type of trust imposes an unnecessary burden without any benefit.

See David H. Lenok, Spotlight: The Special Needs Trust Fairness Act of 2015, Wealth Management, July 22, 2015.

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

July 24, 2015 in Disability Planning - Property Management, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Saturday, July 11, 2015

Super Wealthy Families Behind Drive To Repeal Estate Tax?

Piggy BankThe repeal of estate taxes at the federal and state level has become a hot button political issue on both sides of the aisle. The House of Representatives recently voted to repeal the tax although the Senate has failed to take up the legislation and the Obama administration has indicated it would veto in any case. But who is behind this push to repeal? A new report indicates that a handful of billionaire families have donated millions per year to repeal the tax and stand to retain vast amounts of money if their estates were not taxed. However, the justification for repeal is often based on the harm small business may suffer with the tax although there are many options offered to small firms to cope with paying the tax. Ultimately, any debate on estate tax repeal must keep in mind that it will likely benefit a small number of people and offer little relief to the small businesses of the world who are supposed to be protected.

See Susan Harley, Who is behind the push to repeal the estate tax?, The Hill, July 8, 2015.

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

July 11, 2015 in Current Affairs, Current Events, Elder Law, New Legislation | Permalink | Comments (0)

Friday, July 10, 2015

Big Changes To Nevada Estate And Trust Code

Article PictureRecently, the Nevada legislature conducted an update of their estate and trust laws when SB484 was signed by the governor. Below is a summary of some of the key updates from this new legislation:

  • The ability to decant from one trust to another has been altered to allow a transfer as long as the trust did not pay interest under IRC § 2702 or qualified for a marital or charitable deduction. This change, among many potential uses, will allow trust that have mandatory distributions of income to be decanted to avoid creditors gaining a claim on an asset that was distributed to the beneficiary.
  • Trust that had been decanted into another were prohibited from adding any new beneficiary to the second trust under old law. Now, the trustee of the new trust may add to the current beneficiary pool anyone that was a present or future beneficiary under the old trust.
  • Nevada law has been clarified concerning the transfer of trust situs from other states and now clearly states that trust that move will be governed under Nevada law and take advantage of the laws of the state.
  • Non-judicial settlement agreement are now allowed to change the terms of a trust, in certain circumstances outline in the new statute, with the agreement of all indispensable parties.

See Kristen Simmons, Nevada Legislature Allows for Greater Flexibility with Irrevocable Trusts, Trust Advisor, June 17, 2015.

July 10, 2015 in Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Thursday, July 9, 2015

Medicare May Reimburse Doctors For End Of Life Talks With Patients

HospiceNew regulations have been proposed that would allow Medicare to reimburse medical professionals that talk with patients about end of life medical options. Supporters of the plan say that it will empower individuals to plan out what measures could be taken to prolong life such as long term life support or allow support to be withdrawn in certain circumstances. This issue has been a political hot button with critics of the Affordable Care Act saying that "death panels" would be set up which would make the choice of life or death for the chronically ill. A similar proposal was made in 2009 but scuttled by the Obama administration due to political concern but it now being sought due to increased control it offers to the elderly or ill.

See Pam Belluck, Medicare Proposes Paying Doctors for End-of-Life Counseling, new York Times, July 8, 2015.

Special thanks to Lewis Saret for bringing this article to my attention.

 

July 9, 2015 in Death Event Planning, Elder Law, New Legislation | Permalink | Comments (0)

Wednesday, July 8, 2015

Maine Makes Big Changes To Estate Tax Code

TaxasMaine has made significant changes to their estate tax following a legislative override of the governor's veto. The new law pegs the estate tax exemption to the federal level and sets a tax rate that starts at %8 and caps at %12 for estates worth more than $6 million over the exception. As with many recent changes by states, supporters argue that the tax drives wealthy families out to other states that have abolished death levies and hurts small family business.

See Jana Magnuson, New Maine Budget Brings Significant Change to Estate Tax Law, JD Supra, July 3, 2015.

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

July 8, 2015 in Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0)

Tuesday, July 7, 2015

Delaware Looks To Abolish State Death Tax

600px-Delaware_State_CapitolDelaware is set to allow the estate tax that was created in 2011 to expire after seeing a drop in revenue from the tax over the last four years. Critics of the tax argue that it punishes self made persons rather than those with vast inherited wealth and that wealthy families have the ability to transfer residence to tax free states which has caused some to abandon the state entirely. The expiration of the tax causes Delaware to join a growing number of states that have repealed or scaled back estate taxes due to strong political pressure from small business groups.

See Tony Corvo, Delaware Lawmakers Plan to Kill State’s ‘Death Tax’, Heartland, July 6, 2015.

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

July 7, 2015 in Current Affairs, Estate Tax, New Legislation | Permalink | Comments (0)

Monday, July 6, 2015

Conservatives Plan To Lower U.K. Inheritance Tax For Homes

Royal_Coat_of_Arms_of_the_United_Kingdom_(HM_Government)_svgThe Chancellor of the Exchequer, the British version of a Treasury Secretary, has announced changes to the inheritance tax threshold when it comes to family housing. The current amount needed to trigger the tax is £650,000 for a married couple but the new rules will allow for a £175,000 allowance to each spouse when a primary residence is being inherited. This change was proposed in the previous parliament but was blocked by the Liberal-Democrats who were, at the time, in coalition with the Tories.

See Svenja O'Donnell & Angelina Rascouet, Osborne Plans to Raise Inheritance Tax Threshold in Budget, Bloomberg, July 3, 2015.

July 6, 2015 in Current Affairs, Current Events, Estate Tax, New Legislation | Permalink | Comments (0)

Wednesday, July 1, 2015

IRS Set To Issue New Regulations Taking Away Key Estate Planning Tactic

Beyer Blog IRS LogoSetting up a family partnership or LLC and transferring assets to the entity is a popular estate planning tactic. The transfer of certain assets that are considered illiquid, such as minority shares in a family corporation, receive a discount on the value of the asset. This tactic was originally created to protect the family of a minority share holder from having to sell for a bad deal in order to pay an inflated tax bill. However, estate planners seized on the rule and began to create entities that, while technically in compliance, violated the spirit of the valuation break by transferring items like a personal art collection and still getting the discount. The new regulations are expected in September and many planners are having clients form the entities now in order to protect against any changes.

See Robert Milburn, IRS Considers New Tax on Wealthy Families, Barron's, June 30, 2015.

July 1, 2015 in Estate Planning - Generally, Estate Tax, Income Tax, New Legislation | Permalink | Comments (0)