Wills, Trusts & Estates Prof Blog

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

Thursday, October 19, 2017

Trump Tax Plan Paints Pretty Picture for Art Collectors

PJ-BH298_barnes_G_20120523175632Attorney Malcom Taub, an expert in law dealing with art, noted that the abrogation of the estate tax might be bad news for universities, museums, and other institutions that benefit from the federal government vandalizing the estates of individuals passing away with large art collections. Though art collectors would certainly benefit, President Trump has painted the plan as a boon for family businesses, especially family farms. A harsh critic of the estate tax, Trump brushed it aside as a “tax that has destroyed so many businesses and kept those businesses out of your family, your children, your grandchildren.”

See Catherine Lucey, Trump Tax Plan Paints Pretty Picture for Art Collectors, ABC News, October 16, 2017.

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

October 19, 2017 in Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Monday, October 16, 2017

Unsent Text Message OK As Valid Will

1507586132688A 55-year-old Australian man drafted a text for his brother just before taking his life. The text message included a terse disposition of real property, but it was never sent. The Supreme Court in Brisbane held the draft to be enough for consideration as a valid will. Justice Susan Brown reasoned: “The reference to his house and superannuation and his specification that the applicant was to take her own things indicates he was aware of the nature and extent of his estate, which was relatively small.”

See Unsent Text Message OK As Valid Will, Says Australian Court, Fox News, October 10, 2017.

October 16, 2017 in Current Events, Death Event Planning, Estate Planning - Generally, New Legislation, Technology, Wills | Permalink | Comments (0)

Sunday, October 8, 2017

40 Years After First Kiss, Gay Couple Will Become First to Marry Under New German Law

Ct-germany-gay-marriage-20170930-002Karl Kriele and Bodo Mende, two civil servants from Berlin, will likely be the first gay couple married in Germany under a new law to take effect on Sunday. In the past, homosexual couples were legally allowed to enter into registered partnerships, but this legal relationship did not boast the same rights that heterosexual couples enjoyed. In response to the new law Kriele said, "This is an emotional moment with great symbolism. The transition to the term 'marriage' shows that the German state recognizes us as real equals."

See Frank Jordans, 40 Years After First Kiss, Gay Couple Will Become First to Marry Under New German Law, Sun Sentinel, September 30, 2017.

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

October 8, 2017 in Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Friday, September 29, 2017

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)

Monday, September 25, 2017

New Laws Address Access To Clients' Online Accounts After They Die

Digital-assets-online-accountsThe passage and signing of Uniform Fiduciary Access to Digital Assets Act makes New Jersey the 24th state to enact laws affecting the final disposition of an individual’s digital assets. Under the new law, fiduciaries have the same powers to manage digital property as they do tangible property. This applies to estate executors, trustees, court-appointed guardians, and agents granted power of attorney. The ability to handle these assets may entail a duty to handle the assets and attorneys and fiduciaries should be on the alert for clients with digital property.

See Christopher Robbins, New Laws Address Access To Clients' Online Accounts After They Die, Financial Advisor, September 15, 2017.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) & Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.

September 25, 2017 in Current Events, Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Tuesday, September 12, 2017

Capital Letter No. 40

40Ronald D. Aucutt recently wrote Capital Letter No. 40, which considers the history of proposed regulations concerning section 2704. Below is a short abstract of the paper: 

The Proposed Regulations were released on August 2, 2016, and published in the Federal Register on August 4.  They were instantly controversial.  They produced severe contention, not only between estate planning professionals and the IRS, but among estate planning professionals themselves, who have not reached a consensus on what effect the Proposed Regulations would have if finalized or what the Proposed Regulations even mean.  The IRS reportedly received over 28,000 comments from members of the public, many very cursory and clichéd of course, but many deeper and broader and sometimes bitter.  There were 36 speakers at the all-day public hearing on December 1.  ACTEC submitted Comments on October 27 that, in ACTEC’s tradition, were thoughtful, professional, and evenhanded, and Stephanie Loomis-Price ably spoke on ACTEC’s behalf at the hearing.

This Capital Letter will describe the latest round of attention to the Proposed Regulations spurred by the Executive Order.  Unless unforeseen developments intervene, Capital Letter Number 41 will look in more depth at the Proposed Regulations themselves, particularly at the factors that created so much contention.  Capital Letter Number 42 will take a broader look at the current political and rhetorical climate and its implications for tax guidance.

September 12, 2017 in Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Monday, August 21, 2017

Revised Uniform Fiduciary Access to Digital Assets Act -- Explanation and Forms

DigitalGerry W. Beyer and Kerri Nipp have just posted on SSRN their article entitled Cyber Estate Planning and Administration.

This article aims to educate estate planning professionals on the importance of planning for the disposition and administration of digital assets so that fiduciaries can locate, access, protect, and properly dispose of them. The operation of the Revised Uniform Fiduciary Access to Digital Assets Act now enacted in at least thirty-six states is explained in detail. Several planning techniques that may be employed are discussed and the appendices include sample forms clients may use to organize their digital assets and sample language that can be used in estate planning documents, court orders, and in request letters to digital asset custodians.

August 21, 2017 in Estate Administration, Estate Planning - Generally, New Legislation, Technology, Wills | Permalink | Comments (0)

Monday, August 14, 2017

IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust

Farm-Agriculture-Cartoon-059The Internal Revenue Service (IRS) addressed income and gift-tax consequences relating to an incomplete non-grantor trust in PLR 201729009. In the case at issue, the settlor created an irrevocable trust in order to benefit himself, his wife, charitable organizations, siblings, and children. The trust instrument provided for a Distribution Committee to disperse income and principal from the trust to named beneficiaries for their health, education, maintenance, and support (HEMS).

After a request for rulings, the IRS concluded that the settlor’s contributions to the trust did not qualify as a gift for federal gift-tax purposes. This characterization entails that distributions from the trust will be treated as a return of the settlor’s property and, as such, will be included in the settlor’s gross estate upon death.

The IRS ruling also held that the powers maintained by the Distribution Committee were such that transfers to the trust were not complete with respect to the trust’s income interest; the relationship between the settlor and the committee allowed the settlor to retain too much power over distributions of income and principal.

See Jillian Merns, IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust, Wealth Management.com, August 2, 2017.

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

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

Friday, August 11, 2017

Article on 2017 Texas Estates & Trust Codes with Commentary

Beyer_TeachingGerry W. Beyer recently published an Article entitled, 2017 Texas Estates & Trust Codes with Commentary, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

This document contains the Texas Estates Code and the Texas Trusts Code (and related Property Code provisions) showing all changes made by the Regular Session of the 2017 Texas Legislature. The changes, most of which take effect on September 1, 2017, are shown in red-lined format for easy comparison of the prior and new versions of the statutes. Also included are charts converting Probate Code to Estates Code sections and Estates Code to Probate Code sections.

Caveat: This document was prepared before the conclusion of the 2017 Special Session. Thus, readers need to check to see if any of the statutes were impacted by the Special Session.

I have included commentary entitled Statutes in Context to many sections. These annotations provide background information, explanations, and citations to key cases which should assist you in identifying the significance of the statutes and how they operate.

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

August 11, 2017 in Articles, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Wednesday, July 26, 2017

The Ethics of Adjusting Your Assets to Qualify for Medicaid

Tumblr_m44fzypxpc1qbr0g2o1_1280Medicaid qualifications tend to vary from state to state. Generally, there exist some asset thresholds that may not be exceeded in order to qualify for aid. With Republicans in Congress seeking legislation aimed at reducing Medicaid benefits, ethical concerns regarding hiding wealth in order to achieve qualification have been forced back into the limelight.

There are two well-defined perspectives when it comes to hiding assets: those that refuse to do it, and those who are perfectly willing to hide their property in order to qualify for Medicaid. Janet Kinzer offered a poignant rebuke to those hiding assets: “People who engage in such planning are privileged enough to be aware of it and can afford the legal fees. Shouldn’t tax dollars only go toward the care of people who lack such access?”

While a fair point, there are a number of rebuttals, including the general unavailability of benefits for those suffering from dementia and other degenerative diseases; maladies that often require highly skilled care and constant supervision for extended periods of time. When faced with the very real possibility of exhausting every penny of saved wealth and leaving nothing to children in order to pay for long-term care, this ethical consideration becomes a bit less black-and-white for many. 

A quick warning, if you are ethically comfortable hiding assets to gain Medicaid benefits, be sure to hire a qualified attorney to help with the process. The intricacies of hiding assets is extremely convoluted, complex, and may have unintended consequences if undertaken without competent legal assistance.

See Ron Liber, The Ethics of Adjusting Your Assets to Qualify for Medicaid, The New York Times, July 21, 2017.

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

July 26, 2017 in Current Events, Elder Law, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)