Tuesday, August 23, 2016
The IRS will implement new rules likely limiting techniques used by rich individuals to lower their estate and gift taxes. These new regulations apply to valuation discounts, which allow people with assets greater than the current $5.45 million exemption to lower the value of their assets subject to gift and estate taxes. Asset owners of this type typically put their assets into a holding company that is not traded, giving shares of the company to family or charity. Subsequently, the assets’ value drops due to dispersed control of the company. The proposed regulations will allow the IRS to ignore these discounts.
See Laura Saunders, The Controversial Way Wealthy Americans Are Lowering Their Estate Taxes, Wall Street Journal, August 19, 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.
New Treasury guidelines will require that residential property be subjected to inheritance tax even if the property is owned offshore. These guidelines add pressure to wealthy UK residents who are domiciled elsewhere; it forces them to consider the benefits of remaining in the UK. The rules will take effect on April 6, 2017 and subject non-domiciled residents to inheritance tax on their residential property. However, the guidelines will allow non-domiciled individuals a grace period until April 2018 to separate their assets.
See Hugo Greenhalgh, UK Inheritance Tax Move to Hit Non-Doms, Financial Times, August 20, 2016.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
Friday, August 19, 2016
The section 2704 new proposed regulations may be the most significant regulations in the transfer tax area in a long time, resulting in substantial restrictions on valuation discounts for transfers of interests in family entities. Please click here for a detailed analysis of the Section 2704 proposed regulations and planning implications.
Monday, August 15, 2016
In July, Betsy Davis sent out invitations to her “rebirth” party, one that required emotional stamina, centeredness, and openness. The party would conclude with a physician-assisted suicide. For the past three years, Betsy had been losing control of her body due to ALS. Her party came one month after California passed a law that gave terminally ill patients the option to hasten death. Her friends and family were at peace knowing she was able to turn her departure into a work of art.
See Karen Mizoguchi, Terminally Ill California Woman with ALS Throws One Last Party Before Ending Her Life, People, August 11, 2016.
Monday, August 8, 2016
As of Saturday, a new Medicare law is in force that requires hospitals to notify patients of the possibility that they could incur substantial out-of-pocket medical costs if their stay is more than 24 hours without being formally admitted. The problem stems from patients who are under “observation”—for fear of Medicare penalizing over inappropriate admissions—making them liable for large hospital bills; further, Medicare will not pay for any subsequent nursing home care, unless the patient was an inpatient for three consecutive days. Patients can expect to start receiving these warnings in January. With this new law, the estimated notices per year are 1.4 million.
See Robert Pear, New Medicare Law to Notify Patients of Loophole in Nursing Home Coverage, NY Times, August 6, 2016.
Special thanks to Jerry Borison (Professor of Law, University of Denver Strum College of Law) for bringing this article to my attention.
Tuesday, August 2, 2016
On July 29, 2016, the governor of Delaware signed new trust legislation into law, modifying Delaware’s nonjudicial settlement agreement (NSJA) statute. It will expand the utility and availability of NJSAs. These agreements will help resolve trust administration issues without the time commitment and expense of going to court. Also, this new trust legislation will add a new statue, allowing modification of trusts when the settlor is living and upon consent of the settlor, all living fiduciaries, and all beneficiaries.
See Morris, Nichols, Arsht & Tunnell LLP, Trust Act 2016 Legislative Update, Trusts, Estates & Tax Alert, August 1, 2016.
Monday, August 1, 2016
On July 1, 2016, Indiana adopted the Revised Uniform Fiduciary Access to Digital Assets Act. The Act authorizes the utilization of an online tool to direct the user’s custodian to disclose or not disclose the user’s digital assets. The online tool allows the user to modify or delete directions at all times, so a user’s online direction detailing disclosure overrides a contrary direction in the user’s will, trust, power of attorney, or other record. So, for example, a direction made under the online tool will trump the specified agent under a power of attorney or any other estate planning document.
See Senate Bill 253, Indiana General Assembly 2016 Session.
Special thanks to Keith Huffman (Attorney, Dale, Huffman, & Babcock Lawyers) for bringing this Article to my attention.
Monday, July 11, 2016
Gerry W. Beyer recently published an Article entitled, Estate Planning Ramifications of Obergefell v. Hodges, Estate Planning Developments for Texas Professionals (2016). Provided below is an abstract of the Article:
One year ago, the Supreme Court of the United States handed down its landmark ruling in Obergefell v. Hodges holding that “same-sex couples may exercise the fundamental right to marry.” Since then, an estimated 123,000 same-sex marriages have occurred bringing the total number of same-sex marriages in the United States to almost one-half million. The number of Texas same-sex marriages will be difficult to track because the government does not plan on keeping a separate count of same-sex marriage licenses. Nonetheless, with over three percent of Texans identifying themselves as gay or lesbian, it is of vital importance for estate planners to understand the current and potential future impact of same-sex marriage on estate planning in Texas.
Friday, July 1, 2016
The New Mexico Supreme Court ruled that there is no fundamental right for a terminally ill patient to seek assistance from a physician in ending their life. As this aid in dying trend is making its way across the United States, New Mexico resisted and upheld their Assisted Suicide Act. One Justice overseeing the case indicated that it would be hard to determine the qualifications for terminally ill patients or what constitutes a safe medical practice or medication. Some supporters of the decision also warn of coercion and abuse that could slip its way into the passage of an aid in dying law.
See Scott Sandlin, New Mexico Assisted Suicide Law Affirmed, Albuquerque Journal, June 30, 2016.
Thursday, June 30, 2016
As the age of technology flourishes, digital media assets are becoming increasing popular. The Florida Governor signed the Florida Fiduciary Access to Digital Assets Act into law on March 10, 2016. The Act allows people to plan for the management and disposition of their digital assets, such as emails, text messages, and social media accounts, by vesting fiduciaries with the authority to access, control, or copy these assets. Additionally, the Act has rules of priority for the disclosure documents where an online tool of disclosure will trump a user’s estate planning documents. Further, a custodian must comply with a request for disclosure of the digital assets when necessary. The Act goes into effect on July 1, 2016, and will apply to all fiduciaries acting under a will, trust, or guardianship.
See Jennifer J. Wioncek & Michael D. Melrose, Florida Passes Fiduciary Access to Digital Assets Act, Wealth Management, June 27, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.