Wills, Trusts & Estates Prof Blog

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

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Sunday, August 31, 2014

Ten Considerations for New Wisconsin Trust Code

Trust2As I have previously discussed, newly enacted Wisconsin Trust Code created changes in the state’s default rules for trusts that those with Wisconsin trusts should be aware of. Here are 10 considerations to keep in mind regarding the new code:

  1. The changes do not invalidate existing trust, but do apply to them.
  2. With some exceptions, most of the changes codify previous law for Wisconsin trusts.
  3. The WTC is based on the Uniform Trust Code with some state specific modifications.
  4. The WTC added flexibility for changing circumstances, and court appearances can now be avoided through a nonjudicial settlement agreement.
  5. The Code lists out duties and responsibilities of trustees and rights of beneficiaries.
  6. Special situations can be handled with more flexibility through a Directing Party in a Directed Trust.
  7. There is no change to the prudent investor rule.
  8. Trustees can now give third parties a certification of trust rather than the trust document, to maintain privacy of the trust terms.
  9. Trust Protectors may be appointed and may intervene in trustee and beneficiary disputes.
  10. The underlying purposes of using a trust have not changed

See John A. Herbers, Ten Things You Should Know About Wisconsin’s New Trust Code, Mondaq, Aug. 28, 2014.

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

August 31, 2014 in Estate Planning - Generally, New Legislation, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 26, 2014

Article on The Story of the Texas Estates Code

Bill PargamanWilliam 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 Bk. 2, Summer 2014. Provided below is an excerpt from the introduction of the article:

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 contienuing statutory revision program; the backstory behind our Probate Code; the reasons why Texas replaced the Probate Code with the Estates Code; the organization of the Estates Code; construction issues related to the replacement of the Probate Code; some of the substantive changes that were included with the enactment of the Estates Code; and a few free resources the reader may find helpful.

August 26, 2014 in Articles, Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Monday, August 25, 2014

New Hampshire Law Untangles Probate Process

Last will and testament

Everyday there is a new headline regarding wills, inheritances, and disinheritances that have gone badly.  Recently, the estate of late city resident Geraldine Webber is in dispute to the point that it involves the Portsmouth Police Commission.  During a recent hearing, the situation was described as “a disgusting mess.” 

A new state law in New Hampshire involving the active role of Portsmouth lawyer Sally Mulhem at Mulhem & Scott PLLC, is designed to prevent future messes of this type.  It allows a will to be probated, therefore legal and binding, before a person passes away.  “I saw an alarming increase in the number of probate and trust litigation cases.  It was just devastating families, and the attorneys’ fees were just consuming whatever estate was there.  I didn’t want to see this trend continue.  I wanted to do something to get this under control.” said Ms. Mulhem.

Five years ago, Ms. Mulhem began working with the New Hampshire Trust Council to address the situation regarding wills, estates and trusts, and how to address the legal ramifications of trust law.  Their efforts produced SB 289, with passage of the measure by the Senate and House.  The bill was signed into law on July 11, with a start date of July 1, 2014. 

With the new law, a person with what is likely to be a controversial will can opt to hold a hearing before a probate court judge to determine the validity of what they have done.  “It allows the person to have a definitive say while they’re still here.”

See Paul Briand, New Granite State Estate Law Designed to End Shenanigans, Seacoast Online, Aug. 25, 2014. 

August 25, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation, Wills | Permalink | Comments (0) | TrackBack (0)

Sunday, August 24, 2014

Delaware Sets Stage for Answering Digital Assets Questions

LaptopAs I have previously discussed, Delaware recently passed legislation that allows families in Delaware the ability to access digital assets and accounts of deceased family members the same way they would be given access to physical documents.  This new law makes Delaware the first state to give an answer to what happens to digital assets after death. For those in other states, the burden is on the individual to plan for what is to come of their online accounts. For assets to be available to family members after death, account passwords must be shared, though this is against the policies of most online account providers. If nothing is done, then many accounts just disappear, taking with them family photos, access to bank accounts, e-book collections, music libraries, and important medical information.

See Caitlin Dewey, What Happens to Your Online Life After You Die? Delaware Has Some Suggestions, The Washington Post, Aug. 20, 2014.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

August 24, 2014 in Current Affairs, Estate Planning - Generally, New Legislation, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Saturday, August 23, 2014

Questions Remain in Delaware's Digital Asset Law

Computer 2

Last week Delaware Governor Jack Markell signed into law legislation permitting Delawarean families the right to the digital assets of loved ones who are incapacitated or deceased, the same way they would be given access to physical documents.  Yet many people do not realize that our Twitter, Facebook, and email accounts are not our only online assets. 

The new Delaware law raises the complexities of how to deal with the accounts that house our e-book collections, music and video libraries, or even game purchases, and whether they can be transferred to family and friends after death.  While the bill broadly states digital assets include “data, audio, video, images, sounds, computer source codes, computer programs, software, software licenses,” the law also states these assets can be controlled by the deceased’s trustees only to the extent allowed by the original service’s end user license agreement (EULA). 

I have previously stated that the Delaware statute does not override this feature of Amazon’s, or most, EULAs, which are protected by other forms of federal law.  The bill is not designed to change an asset you could not transfer into one you can. 

Although tech companies have been dealing with some of the issues surrounding the accounts of the deceased, they have not specifically addressed the effect of EULAs on the fate of any products purchased with those accounts after someone has passed.  For now, estate planners are coming up with creative solutions.  Some planners suggest setting up a trust and using it to purchase digital assets.  In naming themselves and children as trust beneficiaries, they can pass down e-books or music without breaking any ban on third party transfers.

See Ariel Bogle, Who Owns Your iTunes Library After Death? Slate, Aug. 22, 2014.

Special thanks to Howard M. Zaritsky for bringing this article to my attention.

August 23, 2014 in Estate Administration, Estate Planning - Generally, New Legislation, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, August 22, 2014

Understanding FATCA


Enacted in 2010, the Foreign Account Tax Compliance Act (FATCA) is America’s global tax law.  Not only does FATCA effect Americans, but its impact on the world is most astounding.  FATCA requires foreign banks to reveal Americans with accounts over $50,000 and non-compliant institutions could be frozen out of U.S. markets, thus, everyone is complying.  Provided below are a few facts about FATCA:

  1. FATCA Grew out of a Controversial Rule.  In 2009, the IRS struck a deal with UBS for $780 million in penalties and American names.  Since then, for hundreds of Swiss banks taking a DOJ deal, banking is more transparent. 
  2. China and Russia Agreed.  While Russia and China have been notoriously difficult, they are even on board with the agreement. 
  3. FBARs are Required.  FBARs predate FATCA, yet, be ready for duplicate reporting.  FATCA adds to the burden, and does not replace FBARs.  U.S. persons with foreign bank accounts exceeding $10,000 must file an FBAR by each June 30th
  4. No Repeal in Sight.  Republicans have mounted a repeal effort, however, there is no serious effort to repeal FATCA.  Canadians recently filed suit to block FATCA and prohibit handover of U.S. names to the IRS.  The legal claim challenges the constitutionality of the agreement the Canadian government struck with the United States.   
  5. Other Passports Won’t Work.  Dual nationals or U.S. Green Cardholders think they can bypass FATCA by using a non-U.S. passport and non-U.S. address with their foreign bank.  However, this is not possible.  Your bank and IRS will eventually figure it out. 

See Robert W. Wood, 10 Facts About FATCA, America’s Manifest Destiny Law Changing Banking Worldwide, Forbes, Aug. 19, 2014.

August 22, 2014 in Estate Planning - Generally, Income Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 20, 2014

New Intestacy Law in England May Affect Foreign Investors

LawNew intestacy rules will go into effect in England and Wales October 1 of this year and may add additional incentive for U.S. investors with real estate properties in England or Wales to have a valid will in place. The new rules are part of the English Inheritance and Trustees’ Powers Act 2014. Under the new rules if an owner of real estate in England or Wales dies intestate the entire property will pass to a surviving spouse if there is one. If there are children as well as a spouse, then the rules do not change as much. However, the spouse will receive their share absolutely rather than as a life estate.  If these outcomes are not agreeable with an investor’s intentions, then the good news is that foreign wills will be recognized as long as they are valid and executed in the individual’s country of domicile or continuous residence, or where the individual is a national.

See Richard Norridge, Mark Johnson & Gareth Thomas, Changes to Inheritance and Intestacy Rules in England and Wales May Affect Overseas Property Investors, Herbert Smith Freehills, Aug. 12 2014.

August 20, 2014 in Estate Planning - Generally, Intestate Succession, New Legislation, Wills | Permalink | Comments (0) | TrackBack (0)

Friday, August 15, 2014

Missouri Amends State Constitution to Add Protection for Electronic Communication

LaptopDigital asset protection is a growing concern for individuals and planners. Last week, Missouri amended their state constitution to expressly protect “electronic communications and data” from search and seizure the same as other property. However, it is still unclear what the implications of this constitutional addition will be.

See Eugene Volokh, Missouri Voters Amend Constitution to Expressly Protect “Electronic Communications and Data”, The Washington Post, Aug. 6, 2014.

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

August 15, 2014 in Estate Planning - Generally, New Legislation, Technology, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Thursday, August 14, 2014

New Law Authorizing Access to Digital Assets

Computer 2On Tuesday, Delaware Governor Jack Markell signed legislation authorizing fiduciaries to access and control digital assets and accounts of those they represent.  The law recognizes that more people are piloting more of their lives online, which can pose challenges when a person dies or becomes incapacitated.  The new law permits fiduciaries to access email, social media, financial management, health care and other digital accounts. 

Developed by the Uniform Law Commission, this law is the first of its kind in the country. 

See Associated Press, Delaware Fiduciaries Gain Access to Digital Assets, The Washington Post, Aug. 12, 2014.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

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

Thursday, August 7, 2014

Auto IRA Bills Face Potential Problem

IRAThere have not been any states to pass a bill that authorizes employers in the private-sector to enroll their employees in IRA plans automatically. The idea is catching on though, with four states initiating studies on the issue, and 17 states considering passing a law to allow the practice. However, 14 of these states will have conflicting laws on the books if they do pass auto IRA legislation, as those 14 states currently have a law that requires an employee to first authorize any deductions that are taken by an employer.

See John Iekel, State Auto IRA Bills Face an Inconvenient Wrinkle, July 18, 2014.

August 7, 2014 in Estate Planning - Generally, New Legislation, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)