Wills, Trusts & Estates Prof Blog

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

Friday, February 3, 2017

The Main Reasons Why Families Fight over Estates

Fighting over estateRecently, the public has been privy to some bitter estate battles, but what are the main reasons families fight over estates? The dynamic between a local sibling who helps support an aging parent and a distant sibling can naturally make the local sibling feel entitled to more from that parent, which can lead to claims of undue influence and continuous litigation. Further, a late-in-life spouse or caregiver can also spur tension between the decedent’s family, resulting in disputes for those that stood to inherit and claims of undue influence. Other estate battles can stem from blended families, those who have more than one marriage with children from previous marriages. If a decedent leaves all assets to their spouse, then the spouse could, at some point, become separated from the stepchildren after the decedent’s death, which could prevent them from benefiting in the estate. Accordingly, estate planners should help their client’s prepare for potential fights and consider all non-probate assets in addition to the will.     

See F. Skip Sugarman, Five Reasons Families Fight over Estates, Wealth Management, January 30, 2017. 


February 3, 2017 in Disability Planning - Health Care, Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Thursday, January 26, 2017

Article on the Corporate Form & Common Law Trust

Common law trustJohn Morley recently published an Article entitled, The Common Law Corporation: The Power of the Trust in Anglo-American Business History, 116 Columbia L. Rev. (2016). Provided below is an abstract of the Article:

This Essay challenges a central narrative in the history of Anglo-American business by questioning the importance of the corporate form. The corporate form was not, as we have long believed, the exclusive historical source of powers such as limited liability, entity shielding, tradable shares, and legal personhood in litigation. These powers were also available throughout modern history through a little-studied, but enormously important, device known as the common law trust. The trust was widely and very effectively used to hold the property of unincorporated partnerships and associations in England and the United States both long before and long after the passage of general incorporation statutes in the mid-nineteenth century. The trust’s success in wielding corporation-like powers suggests that the corporation’s role in legal history was smaller than — or at least different from — the one we have long assigned to it. This Essay thus lays the groundwork for a new account of the corporate form and its place in the development of modern business.


January 26, 2017 in Articles, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0)

Friday, January 6, 2017

Tax Efficiency While Alive and at Death

IRSWhen working to minimize your family’s tax burden, it is best to start while your parents are still alive. There are several strategies to help save your parents money in their later years and limit the taxes owed after their death. One way to reduce taxes while your parents are alive is to have them sell their stocks that have losses, which may allow them to take a tax deduction. If the stock is not sold, then upon your parent’s death there will be no tax deduction for the loss. On the other hand, they should keep stocks that have gains because their heirs will benefit from the stepped-up basis rule. For retirement accounts, like an IRA, it will be beneficial to allow the funds to grow tax-deferred, further allowing the money you would have paid in taxes to earn interest for many years. It may also be wise for those families with large estates to gift assets to beneficiaries while the parents are still alive, reducing their tax liability at death. Another efficient estate planning tool is the trust, which will provide less hassle to beneficiaries. Tax efficiency is a major asset in itself both while alive and at death, so it is important to plan accordingly. 

See Patrick O’Brien, How to Keep Your Parents’ Assets from the Taxman, Market Watch, January 6, 2017. 


January 6, 2017 in Estate Planning - Generally, Estate Tax, Gift Tax, Non-Probate Assets, Trusts | Permalink | Comments (0)

Saturday, October 29, 2016

Changing the Property Ownership of Assets Inside a Revocable Trust

Trust coownerA living trust serves to to transfer ownership of property at the time of the owner’s death. When leaving a piece of property in this type of trust for a beneficiary, the item will not need to go through probate, passing straight to the beneficiary. As far as income and estate taxes on the property within the trust, if the property is to be sold at the time of death or up to one year after, there is no federal income taxes. Additionally, if the estate is under $5 million, there will be no estate taxes to pay. As the trustee (oftentimes the creator of the trust) gets older, they can have a successor trustee in place to serve the trust if the creator becomes incapatictated. 

See Lacey Kessler, Think Twiece About Changing a Revocable Trust to List Your Child as Co-Owner of a Home, Trust Advisor, October 28, 2016. 

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


October 29, 2016 in Disability Planning - Health Care, Estate Administration, Estate Planning - Generally, Estate Tax, Income Tax, Non-Probate Assets, Trusts | Permalink | Comments (0)

Monday, October 24, 2016

The Ugly Realization About Teacher's Retirement Plans

Teaching retirement planOftentimes, companies provide 401(k) retirement plans for their employees, including a mix of prudent investment options. Millions of Americans—like public school teachers and clergy members—however, are not offered these plans, forcing them to rely of 403(b) plans. Ironically, the people who do the most good get the worst retirement plans. 403(b) plans carry excessive investment fees that can cost the owner tens of thousands of dollars or more. Further, these accounts are not subject to the more stringent rules and consumer protections that the average 401(k) plan is. This Article details several stories of public schools teacher’s fight to retire efficiently.  

See Tara Siegel Bernard, Think Your Retirement Plan Is Bad? Talk to a Teacher, NY Times, October 21, 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.


October 24, 2016 in Estate Planning - Generally, Non-Probate Assets, Teaching | Permalink | Comments (0)

Wednesday, October 19, 2016

Putting Your Assets in a Living Trust

Living trustPutting your home and other assets in a living trust can make things financially and emotionally easier on your loved ones. A living trust is a legal document that holds your assets in trust while alive and transfers those assets to your beneficiaries at death. This type of trust can either be revocable or irrevocable, depending on the amount of control the creator of the trust desires. On the other hand, a will goes into probate, requiring court supervision of your property over a longer period of time. Diligently exploring your estate planning options can help make the process more manageable. 

See Why Should I Put My Home in a Living Trust?, Fox News, October 5, 2016. 


October 19, 2016 in Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Wednesday, October 12, 2016

What to Do After Losing a Spouse

Losing a spouseLosing a spouse can leave you vulnerable and bereft. Unfortunately, while dealing with this grief and loss, you will be forced to make critical legal and financial decisions. Some immediate priorities after the loss of a spouse include gathering documents; notifications; and update accounts, registrations, and beneficiaries. It is important to gather all relevant documents—such as death certificate, insurance policies, and list of assets—and send out notifications that notify people and business institutions of the death. Additionally, all joint accounts will need to be retitled, and any other accounts will need to go through probate. You should meet with your planners to update financial plans, take into account liquidity needs, assess risk tolerance, and discuss future goals. 

See Aviva Pinto, On Your Own: Financial Advice After Losing a Spouse, Wealth Management, October 11, 2016. 

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


October 12, 2016 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Thursday, October 6, 2016

Protecting Your Loved Ones in Divorce and Remarriage

ProtectionDivorce and remarriage do not eliminate further legal entanglements. There are three important steps to keep in mind. Once your divorce finalizes, update your will. While you may not want to completely cut your ex out of your will, you should remember that most states’ laws automatically change a will, specifically voiding the bequest of property to your ex. Similarly, you will need to update your insurance forms and retirement accounts with new beneficiary information because they too automatically eliminate your ex-spouse’s inheritance. Additionally, you will need to grant legal parenting rights to your new spouse as desired. All of these steps are important to remember in the elevating times of divorce and remarriage. 

See Naomi Cahn, Protect Those Your Love in Divorce, and Remarriage, Splitopia, October 5, 2016. 


October 6, 2016 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Thursday, September 29, 2016

How an ILIT Can Help Preserve Your Assets

ILITAn irrevocable life insurance trust (ILIT) can help provide liquidity to pay estate taxes, safeguarding your assets for your family. When you set up an ILIT, the trust is a holding vehicle for life insurance that removes the policy death proceeds from your estate when you pass. These trust held assets are immune from probate and estate taxes, making them a valuable estate-planning tool. There are some important considerations to keep in mind when deciding to create an ILIT. 

First, you must clearly define your wishes as to how the trust assets will be distributed at death. Next, it is important to remember that the trust increases your liquidity without having to add other assets, like stocks and investment property, allowing you to maintain control over those assets while the ILIT builds value. Finally, you should put forth diligent consideration on who will be the trustee for your ILIT because they must have the willingness and ability to carry out the terms you set forth. 

See 3 Considerations for an Irrevocable Life Insurance Trust, Forbes, September 19, 2016. 

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


September 29, 2016 in Estate Administration, Estate Planning - Generally, Estate Tax, Non-Probate Assets, Trusts | Permalink | Comments (0)

Thursday, September 15, 2016

Florida Slayer Statute Denies Inheritance Without Murder Conviction

Slayer statuteA slayer statute denies an inheritance to a beneficiary who killed the deceased individual. More specifically, is a murder conviction required to trigger the statute? In Stephenson v. Prudential Insurance Co., a deceased Mr. Rigby owned a life insurance policy that named his partner, Mr. McGriff, as the beneficiary. Rigby ended up dying after a physical altercation between the two. The insurance company in charge of the funds filed an interpleader, allowing the court to determine the outcome of the competing claims between McGriff and Rigby’s estate. At trial, McGriff argued that because he was not charged in the death of Rigby, the slayer statute did not apply to him. The court ruled that a murder conviction is not required to determine the applicability of the slayer statute, only the court’s determination that the beneficiary “more likely than not” wrongfully caused the death of the decedent.

See Jeffrey Skatoff, Florida Slayer Statute in Federal Interpleader, Florida Probate Lawyers, September 14, 2016.

September 15, 2016 in Estate Planning - Generally, New Cases, Non-Probate Assets | Permalink | Comments (0)