Wills, Trusts & Estates Prof Blog

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

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Friday, December 19, 2014

Tax Extenders for Charitable Contributions Passed

Tax CutAs I have previously discussed, a bill that would have made three charitable tax breaks permanent failed in the House last week. However, with the Senate passing a one-year tax extenders bill on Tuesday, the three charitable tax breaks are now extended through December 31, 2014. The three charitable extenders are for charitable IRA rollovers, Conservation Donations, and Food Inventory Gifts.

See Ashlea Ebeling, Charity Tax Breaks Extended Through 2014 Only, Forbes, Dec. 17, 2014.

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

December 19, 2014 in Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Thursday, December 18, 2014

Congress Passes ABLE Act

LawAs I have previously discussed, the Achieving a Better Life Experience (ABLE) Act supported by disability rights groups would change the current limitation that individuals with a disability may not hold assets over $2,000 without losing Medicaid and other government benefits eligibility. The Act passed the House on December 3, and the Senate this past Tuesday. Under the Act, a tax-free savings account for disability-related expenses is allowed up to $100,000.

See Gail Russel Chaddock, ABLE Act: How One Bill Offers Hope on Congress's Biggest Problems, The Christian Science Monitor, Dec. 17, 2014.

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

December 18, 2014 in Disability Planning - Health Care, New Legislation | Permalink | Comments (0) | TrackBack (0)

Sunday, December 14, 2014

Clarifying the Digital Asset Issue

Computer 2

If you search for the late actor and comedian Robin Williams on Facebook you will likely come across an invitation to “connect” with him.  However, this could be difficult as the beloved Academy Award winner passed away four months ago.  His page is now set up to receive tributes from his large fan base.

While Williams’ page is dedicated to him for well-wishes, it would be almost impossible for your family or estate executors to access your social media, email and online entertainment or financial accounts.  Under current law, it is illegal to access another’s digital accounts without the person’s prior approval, and many online companies keep the deceased’s logins and passwords confidential, even from family members. 

State Senator Dorothy Hukill seeks to clarify this digital-age issue.  The Port Orange Republican has filed a bill that would allow designated individuals to access the digital accounts of people who have died or become incapacitated.  This year, Delaware became the first state to pass such a law.   

Under Hukill’s bill, an executor, personal representative, trustee or guardian would treat electronic property as part of an estate’s assets, and those representatives could inventory the digital accounts as with other physical assets and dispose of them properly.  In order to gain access to the accounts, a request would be sent to companies that act as custodians, such as Google or Facebook. 

See Access Bill: Clarify Online Life After Death, The Ledger, Dec. 13, 2014. 

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

December 14, 2014 in Estate Administration, Estate Planning - Generally, New Legislation, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, December 11, 2014

Article on Settlor's Ignorance Constituting Mistake of Law

TrustZachary R. Eiken recently published a case comment entitled, Trust Law: Settlor Ignorance of Applicable Laws May Constitute A Mistake of Law Under North Dakota Century Code Section 59-12-15 (In re Mattew Larson Agreement, 831 N.W.2d 388), 89 N.D. L. Rev. 503-520 (2013).  Provided below is the article’s abstract:

In In re Matthew Larson Trust Agreement, the North Dakota Supreme Court held that the mistaken legal effects caused by a settlor's ignorance of applicable laws may warrant trust reformation under North Dakota Century Code section 59-12-15 if the moving party proves beyond clear and convincing evidence that such effects negate the settlor's intentions in creating the trust. With this conclusion, the court unequivocally rejected the application of contracting principles within the context of trust reformation claims. As a matter of first impression in North Dakota, Matthew Larson resolves a number of questions under North Dakota trust reformation law, but the decision unfortunately leaves some issues unresolved, the most important of which is Matthew Larson's applicability to commercial trust reformation claims. Because contracting principles will control commercial trust reformation claims, the North Dakota Supreme Court will have to qualify Matthew Larson so to apply solely to noncommercial trust reformations. In doing so, North Dakota will have to adopt a bifurcated trust reformation scheme that recognizes two distinct categories of trust reformation claims that are premised upon the exchange of consideration or the lack thereof.

December 11, 2014 in Articles, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0) | TrackBack (0)

Friday, December 5, 2014

Revamped Health Care Power of Attorney in Illinois


On August 26, 2014 Governor Quinn of Illinois signed Senate Bill 3228, which amended the Illinois Power of Attorney for Health Care statute. 

The form has been renamed “My Power of Attorney for Health Care” and reformatted in a Q&A style to look less like a legal document.  This change came from the urge of the Illinois State Medical Society (ISMS), arguing the existing for “is confusing and uses too much technical language and requires college-level English proficiency to understand.”  The new form is written at 8th and 10th grade levels.  Below are some of the key provisions in the new law:

  • Existing Power of Attorney for Health Care’s (PAH) are grandfathered as valid. The statute includes a savings clause, provided that the changes do not invalidate any PAH created prior to 2015.
  • Statutory Form Qualification. The revised law says that “no specific format is required for the statutory health care power of attorney other than the notice must precede the form.”  This is to ensure that PAH’s are not rejected due to for errors or minor edits.
  • Witness Restrictions. The existing PAH requires one witness signature, but no notary.  The amended statute expands the categories of persons prohibited from signing as witness to include certain licensed professionals from providing services to the principal. 
  • Who Can(not) Act as “Health Care Agent.” The Health Care Agent must be at least 18 years old and cannot be a health care provider or any “health care professional” who is administering health care to the patient.
  • Life Sustaining Treatment. The existing law includes references and definitions for “incurable or irreversible condition,” “permanent unconsciousness” and “terminal condition.”  The new law deletes these three definitions.  Instead, the agent is instructed to weigh the burdens versus benefits of proposed treatments. 

See Jeffrey R. Gottileb, Illinois Power of Attorney for Health Care Gets Makeover in 2015, Law Offices of Robert H. Glorch, Dec. 2, 2014. 

December 5, 2014 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Illinois' New Small Estate Affidavit


In Illinois, a significant change is coming to the small estate affidavit form and procedure.  Governor Quinn signed into law an amendment to the Small Estate section of the Illinois Probate Act on August 1 this year, which will apply to decedent’s estates with a date of death on or after January 1, 2015. 

A small estate affidavit (SEA) is a non-judicial estate collection and settlement procedure in Illinois available as an alternative to probate when the total value of the personal estate is less than $100,000.  The biggest changes under the new SEA address the handling of estate debts and expenses and the new collection and distribution mechanism available to the affiant.  Under the new SEA, the affiant is required to list all types of unpaid claims against the estate.  The affiant also has the option to direct the release of assets to the affiant directly rather than heirs or legatees. 

As a result, the changes are going to make the SEA available to more small estates.  However, a potential affiant must be fully cognizant of his or her additional responsibilities and potential for liability.  Because of the added layers of complexity, it is important to consult with counsel.

See Jeffrey R. Gottlieb, New Illinois Small Estate Affidavit Coming in 2015, Law Offices of Robert H. Glorch, Nov. 3, 2014.

December 5, 2014 in Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 2, 2014

Year-End Tax Savings

Tax planning 2

Although the year-end is drawing near, there is still time to do year-end tax planning to accumulate tax savings.  Because some tax breaks expired in 2013 that Congress has not revived, year-end tax planning could be even more complicated and frustrating.  This year, taxpayers will have to deal with tax law changes that include higher marginal income tax rates, higher capital gain tax rates, restoration of the phase out of itemized deductions and exemptions, the new 3.8 percent Medicare tax on unearned income, and the new 0.9 percent tax on earned income. 

Firstly, it is significant to understand the customary year-end planning techniques that can cut income taxes.  It begins with a tax projection as to whether you will be in a higher or lower tax bracket next year.  Once this number is configured, there are two basic considerations: Should income be accelerated or deferred, and should deductions and credits be accelerated or deferred? 

For taxpayers who believe they will be in a higher tax bracket next year they should consider employing specific strategies to accelerate income and defer deductions.  Taxpayers in a lower bracket should take the opposite approach.  Below are just a few strategies for taxpayers who think they will be in a higher tax bracket.

  • Receive bonuses before January 1 of the following year.
  • Accelerate billing and collections.
  • Redeem U.S. Savings Bonds, Certificates of Deposit or Annuities.
  • Bunch itemized deductions into the year in which they can exceed the applicable threshold. 
  • Postpone paying certain tax-deductible bills until next year.

See Steven J. Fromm, 2014 Year End Tax Planning Tips: Instantly Discover What You Can Do Now to Start Saving Taxes Before Year End With Proven Tax Attorney Strategies, Philadelphia Estate and Tax Attorney Blog, Nov. 29, 2014.

Special thanks to Steven J. Fromm for bringing this article to my attention. 

December 2, 2014 in Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 26, 2014

Battle Over Officer's Estate

Dave Monrogio

A battle is brewing over the estate of a Naples police officer who killed himself during a domestic violence double shooting. 

The Board of Trustees of the Naples Police Officers’ Retirement Trust Fund filed a complaint this month, asking a judge to determine who should receive Officer Luis “Dave” Monroig’s $100,000 lifetime pension: his ex-wife or his mother. 

Although Monroig’s sixteen-year marriage ended in divorce in August 2013, he never changed the primary beneficiary of his city pension benefits before shooting both himself and his girlfriend in her Estero home. 

The complaint states, “The Board of Trustees cannot determine which defendant is entitled to the death benefit under the terms of the (pension) plan, the marital settlement agreement, the beneficiary designation and (a new state law) without running the risk of double payment.” 

Under the law, which went into effect July 1, 2012, if the policy holder designated an ex-spouse as a primary beneficiary before their marriage legally ended and the policy holder dies on or after July 1, 2012, that beneficiary is considered predeceased and benefits would then go to the contingency beneficiary. The law affects life insurance policies, annuities, IRAs, 401Ks and other employee benefit plans.

Monroig’s father is also challenging his daughter-in-law’s right to his estate, which involves a car worth $5,000 and other personal effects, clothing, and furniture. 

See Aisling Swift, Battle Heats Up Over Dead Officer’s Pension, Estate, Naples News, Nov. 23, 2014.

November 26, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Monday, November 24, 2014

Proposed Changes to Canada's Income Tax Act Could Have Significant Estate Planning Effects

ChangeA bill that includes draft legislation from Canada's Department of Finance that proposes an addition to the Income Tax Act is currently being considered by Parliament. The changes will significantly impact estate planning for Canadian couples by treating the income from a spousal trust as income of the deceased spouse, which will be taxed to the spouse instead of the trust. Concerning implications of this change were addressed during the comment period for the draft legislation by The Joint Committee on Taxation of the Canadian Bar Association and Chartered Professional Accountants of Canada, but the draft legislation was included in the bill without changes.

See Kim G. C Moody, Canada: New Draft Legislation Will Have A Great Impact On Traditional Estate Planning For Canadians, Mondaq, Nov. 11, 2014.

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

November 24, 2014 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 19, 2014

Illinois Amends Virtual Representation Statute

LawA recent amendment to Illinois' Virtual Representation Statute goes into effect January 1, 2015. The amendment clarifies the types of disputes and trust modifications that can be resolved and made without the need for court involvement. In addition to creating a list of settlement agreements that can be made without court proceedings, the amendments remove the prior limitation that the agreements had to be ones that would be court approved if brought in judicial proceedings.

See, Amendments to Virtual Representation Statute Take Effect on January 1, 2015, McDermott Will & Emery, Nov. 11, 2014.

November 19, 2014 in Estate Planning - Generally, New Legislation, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)