Wills, Trusts & Estates Prof Blog

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

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Thursday, September 18, 2014

Slew of State Laws Scrutinize Surrogacy


When Crystal Kelly signed a contract to bear a baby for a couple in Connecticut, a routine ultrasound five months later showed that the fetus had a cleft palate, a brain cyst and heart defects.  The couple subsequently asked Ms. Kelley to have an abortion, offering to pay her $10,000 to do so.  However, Ms. Kelley fled to Michigan, where surrogacy contracts are unenforceable and had the child.  She was listed on the birth certificate as the mother, and a family that had other special-needs children adopted the little girl. 

Although surrogacy is becoming more commonplace in the United States, it remains a polarizing issue.  Because there is no national consensus on how to handle it, states are free to do as they wish. 

Seventeen states have laws permitting surrogacy, but vary greatly in range and restrictions.  In many states, surrogacy is a taboo issue, drawing opposition from anti-abortion groups, opponents of same-sex marriage, the Roman Catholic Church, some feminists, and those who view surrogacy as an experiment with unforeseen consequences. 

Many states are now considering certain limits and trying to find middle ground.  “My sense of the big picture is that we’re moving toward laws like the one in Illinois, which accepts that the demand for surrogacy isn’t going away but recognizes the hazards and adds regulations and protections,” says Joanna L. Grossman, a family law professor at the Hofstra University Law School.  The Illinois law requires medical and psychological screenings for all parties before a contract is signed and stipulates that surrogates be at least 21, have given birth at least once before and be represented by an independent lawyer, paid for by the intended parties, thus, “eliminate[ing] some of the concerns about designer babies.” 

Lawmakers in New York, Washington D.C., and elsewhere are considering measures to allow surrogacy.

See Tamar Lewin, Surrogates and Couples Face a Maze of Laws, State by State, The New York Times, Sept. 17, 2014.

Special thanks to Jerome Borison for bringing this article to my attention. 

September 18, 2014 in Current Affairs, New Legislation | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 17, 2014

Financial Planning For Soldiers


Four years ago, Army Sergeant Angelo Stevens almost took his own life in the wake of severe debts.  Although his survival inspired the passage of planning related legislation in the House intending to reduce military suicides, his family faced a new threat earlier this summer.

Stevens emailed his congressmen in June, “I am desperate.  I want nothing more than to stay where my family receives their care.”  Stevens’ landlords called to tell him that his house in Arlington, Virginia was headed into foreclosure, as the expense had grown too high.  Stevens needed to find a new home in sixty days, a difficult task for the sole provider of his family.

Stevens’ struggles are illustrative of the complex financial issues that many soldiers and veterans are facing.  Many soldiers experience costly divorces, legal troubles, problems at work, as well as many other challenges, which drive them to commit suicide.  

Financial planners who provide pro bono care work alongside other experts over a matter of years.  Lawyers and other experts in social services are generally brought in to assist in planning.  “There is a need for the team approach for sure . . . The lead person has to have a holistic approach to the problem . . . It has to be one person who takes a sincere total interest in this person.” 

See Ann Marsh, Team Planning Needed for Soldiers With Suicide Risk, Financial Planning, Sept. 16, 2014.

September 17, 2014 in Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 16, 2014

Colorado Enacts List of Prohibited Words in Insurance Advertising

AntiIn response to complaints about misleading words used in advertising for insurance products, such as life insurance and annuities, Colorado has enacted legislation that bans certain words. The words deemed misleading and banned by Colorado include “investment”, “savings”, “retirement plan”, “safe”, and “secure”, among other commonly used words in insurance advertising. Similar lists of words no longer allowed for advertising insurance plans are used in roughly 13 states, and based on model regulations created by the National Association of Insurance Commissioners.

See Roccy DeFrancesco, Colorado Bans Use of Word “Safe” in Life and Annuity Advertising, Producers Web, Sept. 9, 2014.

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

September 16, 2014 in Estate Planning - Generally, New Legislation, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Friday, September 12, 2014

Eight States Usher in Changes to Estate Tax Laws

Where not to die

Although the count of death tax jurisdictions remains the same for 2015 (19 states and the District of Columbia), eight states are marshaling in changes in 2015.  These states are increasing the amount exempt from death tax, indexing the exemption amount for inflation, and eradicating “cliff” provisions that tax the first dollar of an estate.  Moreover, there is action taking place in New Jersey to keep up with the pack, “Gov. Chris Christie can’t run for President with the worst estate tax exemption in the country . . . He has to say he tried.”

New York and Maryland are making the largest changes.  The Maryland legislature acted first by gradually increasing the amount exempt from the state estate from $1 million this year, to $1.5 million in 2015, $2 million in 2016, $3 million in 2017, and $4 million in 2018. Finally, in 2019 it will match the federal exemption that is projected to be $5.9 million.

In New York, exemption amounts were doubled almost immediately.  Like Maryland but using a faster timetable, the New York exemption is set to rise gradually through 2019 to eventually match the federal exemption.  By April 1, 2017, the New York exemption will be $5,250,000. 

As other states continue to make changes, it is assured that there will be more changes on the state death tax map for 2016, if not before. 

See Ashlea Ebeling, Where Not to Die In 2015, Forbes, Sept. 11, 2014.

September 12, 2014 in Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Friday, September 5, 2014

New York Revisits Estate Tax Laws

Estate tax

Last week, New York State’s Department of Taxation and Finance released a summary of amendments to New York’s estate tax that became effective April 1 with the enactment of the 2015-15 Executive Budget. 

Sharon Klein, managing director of family offices services and wealth strategies at Wilmington Trust, said that the summary included clarifications of language in the budget in addition to implications of several amendments.  Klein noted that the summary clarified that gifts were not added to the gross estate if they consisted of real or tangible property located outside New York. 

Under the new law, the New York estate tax computation contained an estate tax “cliff.”  Hence, estates that are less than or equal to the New York estate tax exclusion will not pay a tax.  However, the credit for New York taxable estates between 100% and 105% of the basic exclusion amount is phased out, and eliminated if the New York taxable estate exceeds 105% of the basic exclusion amount.  This means “if a resident decedent’s taxable estate exceeds the basic exclusion amount by more than 5%, the entire taxable estate will be subject to New York estate tax.” 

The summary further states that a federal estate tax return must be filed when a decedent’s gross estate exceeds the federal filing threshold, “and also when the federal return is the only means for claiming certain tax treatment.

See Michael S. Fischer, New York Revises Estate Tax Laws, Think Advisor, Sept. 3, 2014. 

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

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

Article on the Texas Estates Code


William D. Pargaman (Saunders, Norval, Pargaman & Atkins, LLP) recently published an article entitled, The Story of the Texas Estates Code, Estate Planning and Community Property Law Journal, Vol. 6 No. 2, 323-373 (2014).  Provided below is the article’s introduction: 

On January 1, 2014, our new Estates Code replaced Texas’ beloved Probate Code, which has been with us for almost six decades—these changes were enacted into law in 2009, 2011, and 2013, and they went into effect on January 1, 2014.  But, the story of the Texas Estates Code goes back more than half a century.

Here’s what this article will attempt to discuss: Texas’ fifty-year-old continuing statutory revision program; the backstory behind our Probate Code, the reasons why Texas replaced the Probate Code with the Estates Code; the process of drafting the Estates Code; the organization of the Estates Code; substantive changes that were included with the enactment of the Estates Code; and a few free resources the reader may find helpful.

Portions of this article have been adapted from legislative updates that I have previously written for the 2009 through 2013 legislative sessions.  In addition, while not cited directly, an article by T. Aaron Dobbs aided in the writing of, and provided a number of authorities cited in, this article. 

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

Seven Changes to Kentucky Law Created by the UTC

LawKentucky is one of 28 states that have adopted the Uniform Trust Code (UTC), which affects both new and existing trusts. Here are seven changes that adoption of the UTC has made to Kentucky law:

  1. Court appearances and expenses can be avoided by the parties agreeing to a binding nonjudicial settlement agreement, or by all beneficiaries and the grantor agreeing to modifications to the trust.
  2. Trustees may terminate a trust that has insufficient funds to cover administration costs if the value is less than $100,000 and notice is sent to qualified beneficiaries.
  3. Pet trusts may now be created and will terminate at the pet's death.
  4. Parents may make binding trust decisions for minor children.
  5. The time limit for beneficiaries to bring claims against the trustee is limited to one year after proper notice has been given to the beneficiaries.
  6. Both individual and corporate trustees must act as a prudent investor would.
  7. The mental capacity requirement for creating a revocable trust is the same as for executing a will.

See Jill Scherff & Luke Swain, Seven Changes in Kentucky Trust Law You Should Know About – Uniform Trust Code Affects New and Existing Trusts, JD Supra, Sept. 3, 2014.

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


September 5, 2014 in Estate Planning - Generally, New Legislation, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, September 4, 2014

Colorado's Marijuana Taxes Up In Smoke


Colorado is one of the first states to legalize marijuana for recreational use.  Not only has Colorado propelled legalized marijuana into the mainstream, but it is also trumpeting revenue from the 27.9% in taxes.  However, the $33.5 million Colorado projected to collect in the first six months of 2014 was too enthusiastic.  “It’s now the next morning, so to speak, and Colorado is missing $21.5M in pot taxes!”

One explanation is that with such high taxes, many smokers are still buying on the black market.  In fact, only about 60% of purchases in Colorado will be through legal channels due to prices.   

Despite its opponents, the Colorado tax on marijuana has been upheld notwithstanding claims that paying it amounts to self-incrimination violating the Fifth Amendment.  Plaintiffs want the taxes on recreational pot outlawed, reasoning that they require businesses and consumers to implicate themselves in federal crimes.  Although the plaintiffs have failed to get an injunction, the lawsuit challenging taxes will continue as the stakes are high.

See Robert W. Wood, $21.5 Million In Marijuana Taxes Just Went Up in Smoke, Forbes, Sept. 2, 2014.

September 4, 2014 in Current Affairs, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Addition of Series LLCs Section in the Uniform Voidable Transactions Act

LLCAs I have previously discussed, the Uniform Voidable Transactions Act (UVTA) was adopted July 16, 2014 by the Uniform Law Commission (ULC). One of the new additions to the Act is Section 11, which clarifies that under the Act, separate series of a Series LLC are considered to be a separate person, and thus different series’ assets are not vulnerable to creditors of other series of the same organization. The decision of whether to include Section 11 in the Act received serious debate on the floor of the ULC assembly, but passed unanimously.

See Jay Adkisson, The Uniform Voidable Transactions Act – New Section 11 and Series LLCs, Forbes, Aug. 31, 2014.

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

September 4, 2014 in Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 3, 2014

New Illinois Probate Law Creates Presumption of Fraud

Anti-FraudIllinois has passed a new law that creates enhanced protection against elder financial abuse by non-family member caregivers. The new law creates a presumption in favor of voiding a transfer of property that is through a transfer instrument, such as a will, if the transfer is over $20,000. The law applies to transfers that are to someone defined by the statute as a “caregiver,” which excludes family members. The law will affect challenged transfers that are made through a transfer instrument that is executed on or after Jan. 1, 2015.

See Jeffrey R. Gottlieb, New Illinois Law Questions Bequests to Non-Family Caregivers, Illinois Estate Plan, Sept. 2, 2014.

September 3, 2014 in Elder Law, Estate Administration, Estate Planning - Generally, New Legislation, Wills | Permalink | Comments (0) | TrackBack (0)