Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Wednesday, June 24, 2015

Estate Planning Advice For Same-Sex Couples

Same sex coupleThe legal landscape that same-sex couples often face on a variety of estate planning issues is murky.  Financial advisers need to stay abreast of the latest legislative and legal developments at both the state and federal level.  Some of the estate-planning issues that affect same-sex couples include things like social security, pensions, taxation, wills, and trusts.  It is important for financial advisers to have a strong grasp of the state laws relating to all of these issues, state policies are not consistent, and estate planners will need to understand the local regulations.  The national policies governing same-sex relationships are going to continue to change with future court decisions.  Estate planners will need to have the latest information to provide better advice to clients who are in same-sex relationships.   

See Mark P. Cussen, Top Retirement Planning Tips For Same Sex Couples, Investopedia, June 23, 2015.  

June 24, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Saturday, June 20, 2015

How Estate Planning Issues Can Divide Families

WillConflicts over money and inheritance can often drive families apart.  It is important to discuss estate planning issues ahead of time to avoid unpleasant surprises for the heirs.  Family members often have unrealistic expectations about what they are going to inherit.  Friction in families can develop when people feel like the distribution of money and assets is not fair and just.  A person who is writing a will and planning their estate should be open with their family so that they can have realistic expectations.  By being prudent, and planning ahead, an estate planner will have an easier time keeping their family together. 

See Robert Laura, How Your Kids Really Feel About The Way You Plan To Divvy Up Your Assets, Forbes, June 19, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention. 

June 20, 2015 in Estate Planning - Generally, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Monday, June 15, 2015

How The Upcoming Supreme Court Same-Sex Marriage Decision Will Affect Couples

Same-sex marriageThe Supreme Court will come out with a decision this month that could potentially legalize same-sex marriage marriages nationwide.  If the Supreme Court does rule in favor of same-sex marriage it will impact affected couples in a number of ways.  Married same-sex couples will be able to file joint tax returns.  The upcoming Supreme Court decision would also cause major changes in the way States will treat same-sex estate planning and divorces.  Same-sex couples would also be treated equally to heterosexual couples on matters dealing with social security and veterans’ benefits.  A change in the law would also give same-sex spouses the ability to make important medical decisions. 

See Tara Siegel Bernard, The Same-Sex Marriage Decision: What’s at Stake for Couples, The New York Times, June 14, 2015.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

June 15, 2015 in Current Affairs, Estate Planning - Generally, Estate Tax, Guardianship, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Wednesday, June 10, 2015

A Life Insurance Mistake People Should Avoid

WidowIn this column Ted Jenkin writes about his own experience working with a surviving spouse who received no life insurance because her husband died before he was able to accept and pay for a policy that he was setting up.  There is a period of time between the date a life insurance policy application is signed, and the date it is approved.  A person may submit a first month’s premium with the application; this is called a “conditional receipt.”  An applicant should attach a conditional receipt to the life insurance application to make sure that the policy is in effect once is is received.      

See Ted Jenkin, A Common and Costly Mistake With Life Insurance, The Wall Street Journal, June 10, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention. 

June 10, 2015 in Estate Planning - Generally, Non-Probate Assets, Wills | Permalink | Comments (0)

Wednesday, June 3, 2015

Dealing With Inherited Savings Bonds

US bondInherited savings bonds can often create complications for the beneficiaries who receive such instruments. There are a wide range of choices that a person has to make with the savings bonds they inherit.  The inheritor should first use the ‘savings bond calculator’ to determine the instrument’s worth.  The individual then needs to decide whether to redeem or reissue the savings bonds.  The decisions that a person makes about savings bonds will have a major impact on what sort of taxes they would have to pay.  The savings bond beneficiary would have to choose whether to report the income to the decedent or the estate.  A prudent person who inherits savings bonds should be careful and well informed about the choices that they make. 

See Deborah L. Jacobs, Inherited Savings Bonds: What You Need To Know, Morningstar, June 2, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

June 3, 2015 in Estate Planning - Generally, Income Tax, Non-Probate Assets | Permalink | Comments (0)

Friday, May 15, 2015

No Prenup? No Problem

Asset protectionWhile prenuptial agreements can be a great tool for protecting assets in a divorce, there are ways to safeguard your money even if you do not have this signed document.  Below are several ways to protect, albeit not all of, your money, without a prenup.

  • Keep Separate Funds. If you have an account that has funds in it you owned prior to the marriage or you received during the marriage or an inheritance and subsequently mixed in your earnings from your pay or joint funds from another account, the entire account becomes marital.  This is because courts consider money to be “fungible”—once the marital dollar goes in, you cannot tell which dollar is coming out.
  • Separate Real Estate. If you own a home prior to getting married, be careful before throwing your spouse’s name onto the deed.  Once the non-owning spouse’s name is on the deed, the court will presume you have given half the value to that spouse as a gift.
  • Use Non-marital Funds In Maintaining Non-marital Property. Use your own funds from your premarital or inherited account to maintain your non-marital property.
  • Get A Valuation of Your Business.  The court is able to carve off the appreciated value of a non-marital business. Thus, if your business was worth $1 million on the date of your marriage and $2 million on the date of your divorce, your spouse could be entitled to half of the difference.

See Rebecca Zung, How to Protect Your Money If You Don’t Have A Prenup, Business Insider, May 11, 2015.

May 15, 2015 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Thursday, May 14, 2015

New Edition: Inherited IRAs

Inherited IRAsAmerican Bar Association Publishing recently released the updated 2015 edition of Inherited IRAs: What Every Practitioner Must Know, by Seymour Goldberg, CPA, MBA, JD.  Here is why you should pick up a copy of this book:

Discover how to effectively implement an estate plan that includes retirement-type assets. Written especially for the practitioner, this updated edition of Inherited IRAs will alert you to the most critical retirement distribution rules that you must know in order to effectively safeguard your client and their retirement assets. Within this concise, easy-to-follow guide, you'll find:

  • More than 100 scenarios, questions, and answers that you will most likely encounter
  • Checklists, sample forms, and summaries of court rulings on inherited IRA cases
  • Information and resources to help your clients through what is often a very difficult time in their lives.

May 14, 2015 in Books, Books - For Practitioners, Estate Administration, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 12, 2015

Congress Proposes to Make Death Benefits Available to Fallen Officers

Fallen officerRecently the news has been inundated with reports surrounding the tensions occurring between police officers and members of their respective communities.  Less than two weeks ago, NYPD Officer Brian Moore was gunned down while on duty after stopping a man suspected of carrying a handgun.  In December 2014, two NYPD officers were killed while sitting in their cruiser.  These attacks are viewed as being unified in motivation—retribution for the high profile deaths of unarmed black men Michael Brown, Eric Garner, and Freddie Gray.  Though nothing can be done to ease the suffering of the families who have lost their loved ones, Congress is trying to ensure that they are supported financially. 

When an officer is killed in the line of duty, there are programs that will compensate the family of the deceased.  Families can receive workers compensation benefits as well as payments made by the Law Enforcement Assistance Administration.  There are also various other federal and state programs offering compensatory payments; however, the tax treatment of the amounts paid are unclear.  Congress has issued a string of bills to counteract this uncertainty that would exclude all amounts paid solely as a result of a officer’s death or disability in the line of duty from income tax. 

See Tony Nitti, Congress Proposes to Make All Death Benefits Paid to Families of Fallen Police Officers Tax Free, Forbes, May 11, 2015.

May 12, 2015 in Current Affairs, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Thursday, May 7, 2015

Could Working Be the New Retirement?

Nest eggA new survey from the Transamerica Center for Retirement Studies found that 82 percent of American workers age 60 and older are either currently working, or expect to keep working past the age of 65.  “The days of the gold-watch retirement where we have an office party and maybe some punch and cookies and never work again are more mythical than a reality,” says Catherine Collinson, president of the retirement studies center.  “It even raises the question is retirement the right word.”

Many workers are now worried that they will not have enough money to last during their lifetime.  Outliving investments and savings was a top concern for 44 percent of respondents in the survey.  One-third of all workers believe their standard of living will fall as soon as they stop working.  Yet, regardless a person’s age, they can still save for their golden years.  One rule of thumb Collinson recommends is to stop guessing how much is needed to retire and actually run the numbers, “From there you can build a plan . . . Planning not to retire is not a viable retirement strategy.  At some point in our lives we’ll all stop working.”

See Charisse Jones, Traditional Retirement Possibly Becoming a Thing of the Past, USA Today, May 5, 2015.

May 7, 2015 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Trust Retains GST Tax-Exempt Status After Conversion

GavelIn IRS Letter Ruling 201516028, an irrevocable trust that was grandfathered into tax-exempt status for the generation-skipping transfer (GST) tax, was ruled to have retained that status after it was converted from an income-only trust to a total return unitrust. The conversion was made pursuant to state law. The compliance with state statutes also avoided income and gift tax consequences for the switch.

See Wolters Kluwer Law & Business, GST-Exempt Status Not Altered by Conversion, Resourcefullaw.com, 2015.

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

May 7, 2015 in Estate Planning - Generally, New Cases, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)