Wills, Trusts & Estates Prof Blog

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

Tuesday, October 18, 2016

Section 6166 Lien Causes Executor to Miss Out on Fees

Estate tax lien1In United States v. Spoor, an executor was granted a special estate tax lien as part of a § 6166 election that defers payment of federal estate taxes. At the time of the grant, the executor had only been paid part of his executor fees, and the IRS is allowed to demand a lien before allowing the Section 6166 election. Eventually, the property fell below the amount still due to the IRS, forcing the executor to assert his claim that he could use the liened property as funding for his unpaid fees. On appeal, the executor argued that his executor fees should have priority, otherwise making it difficult to obtain serving executors. Subsequently, the Eleventh Circuit Court of Appeals ruled that the lien has priority. The moral of this case is that executors should make pay arrangements of estate administrative expenses, especially when making a § 6166 election. 

See Charles Rubin, Executor Loses Out on Fees Due to Section 6166 Lien, Rubin on Tax, October 16, 2016. 

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


October 18, 2016 in Estate Administration, Estate Planning - Generally, Estate Tax, New Cases | Permalink | Comments (0)

CLE on Estate Planning for Family Business Owner

CLEThe American Law Institute is holding a CLE entitled, Estate Planning for the Family Business Owner, which will take place Thursday–Friday, November 3–4, 2016, at Dallas Marriott City Center in Dallas, Texas. Provided below is a description of the event:

Don’t miss this comprehensive conference on estate planning for family businesses! It will help you become better prepared to recognize and evaluate family business issues and, as a result, better skilled than ever at designing customized succession plans for your family business clients.

Featuring updates on the hottest topics, including the new proposed Section 2704(b) regulations, this nationally recognized program examines:

  • Income tax issues and planning strategies for business entities
  • Incentive or deferred compensation
  • Practical uses of life insurance for the family business
  • Buy-sell agreements
  • Valuation of a family business
  • Family rivalries and divisive reorganization planning
  • Trust advisors, trust protectors for business interests

Register today for this webcast or in-person program on November 3-4. You can also register two or more from your organization and SAVE!


October 18, 2016 in Conferences & CLE, Current Events, Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0)

Tupac's Estate Threatens Suit Over Sale of Bullet-Dented Pendant

Tupac pendantTupac’s gold and diamond pendant that he was wearing when he was shot in 1994—two years before his death—is up for sale. Moments in Time, a memorabilia dealer, is selling the bullet-dented pendant for $125,000. A Tupac family member gave the company the item to sell in exchange for a majority of the profits. Tupac’s estate, however, is strongly against the sale, stating that no one has authority to sell Tupac’s memorabilia, not even a family member. They are determined to file suit against anyone forking over a Tupac item for sale and anyone purchasing one.  

See Tupac Bullet-Dented Pendant . . . Up for Grabs for $125k!, TMZ, October 16, 2016. 


October 18, 2016 in Current Events, Estate Planning - Generally, Music | Permalink | Comments (0)

Monday, October 17, 2016

Article on Estate Planning Challenges for Digital Assets

Digital assets actElizabeth Ruth Carter recently published an Article entitled, Estate Planning for Digital Assets: Assigning Tax Basis and Value to Digital Assets, LSU 46th Annual Estate Planning Seminar (2016). Provided below is an abstract of the Article:

These materials were prepared in conjunction with the LSU 46th Estate Planning Seminar. They explore the various types of digital assets--including social media (Facebook, Twitter, Linked In, etc.), audiobooks, music and video files, and bitcoin--and the estate planning challenges these assets present. These material also consider the federal estate and gift tax issues posed by digital assets, including questions related to small business valuation.


October 17, 2016 in Articles, Estate Planning - Generally, Technology | Permalink | Comments (0)

How the Tax Code Benefits the Ultra-Wealthy

Ultra wealthyWarren Buffet is one prime example of the ultra-rich. His adjusted gross income was approximately $11 million in 2015. This may not sound like a lot, but his wealth is measured in billions. Buffet’s net worth fluctuates based on the price of stocks he owns in his company. In the past five years, the value has increased to $26 billion, which is about $5 billion per year. According to the tax code, however, this increase does not qualify as income until the stock is sold. This allows wealthy individuals like Buffet to defer paying taxes on stock appreciation while even their heirs stand to benefit from a step-up in basis. Essentially, by deferring these capital gains taxes, wealthy families can defer taxes for generation after generation. This loophole represents one of the biggest problems with the tax system—extremely wealthy families passing large accumulations of wealth through the generations. 

See James Kwak, The Tax Code for the Ultra-Rich vs. the One for Everyone Else, Atlantic, October 15, 2016. 

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


October 17, 2016 in Estate Planning - Generally | Permalink | Comments (0)

Who Will Inherit Your Digital Collections?

Itunes libraryOur digital collections of music and books can expire at our death, causing family members to lose a huge chunk of change. Normally, customers for digital content own a license to use the digital files without actually owning them. For example, Apple grants users nontransferable rights to use their content, according to your specific account. One lawyer is trying to combat this issue by creating software that acts as a legal trust for client’s online accounts, managing digital accounts and passwords. With such a significant portion of our assets being digital, this type of technology will become essential over the coming years. 

See Quentin Fottrell, Who Inherits Your iTunes Library?, Market Watch, August 23, 2016. 


October 17, 2016 in Current Events, Estate Planning - Generally, Technology | Permalink | Comments (0)

Article on Understanding the Taxonomy of Testamentary Intent

Testamentary intentMark Glover recently published an Article entitled, A Taxonomy of Testamentary Intent, 23 Geo. Mason L. Rev. 569 (2016). Provided below is a summary of the Article:

Recognizing the importance of testamentary intent and the persistent uncertainty surrounding it, this Article seeks to cultivate a deeper understanding of the doctrine by untangling the various strands of testamentary intent. It does so by developing a taxonomy of testamentary intent that can provide guidance to courts charged with evaluating the validity and meaning of wills as well as clarity to the theoretical discussion of the law in this area. With a better understanding of the various strands of testamentary intent and the relationship among them, a more coherent and consistent body of law can develop.

This Article proceeds in three parts. Part I lays the foundation for the taxonomy by describing the general testamentary intent requirement and prior attempts to decipher the meaning of the term. Part II develops the taxonomy by identifying the three primary strands of testamentary intent, including donative testamentary intent, operative testamentary intent, and substantive testamentary intent. Finally, Part III examines the implications of the taxonomy. Specifically, it explains how the taxonomy can bring clarity and consistency to various components of the law of wills and therefore how the taxonomy can foster jurisprudential coherence within the testamentary intent doctrine.


October 17, 2016 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, October 16, 2016

Reducing the Taxes on Your Inherited Stocks

Inherited stocksWhen you inherit stocks, bonds, or mutual funds, you will not owe taxes on these assets, unless the value of the asset is over $5.45 million. Even if it is above this amount, the estate will pay the tax bill, not the heirs. There is the chance, however, that you might have to pay capital gains taxes if the asset’s value increases by selling time. You can combat some of this tax burden by strategically selling. One way is to sell the appreciated assets over time, reducing the substantial one-time capital gains tax bill. Additionally, you can plan to sell in a year where your income is not as high, further lowering your tax bracket and tax hit.  

See Alexandra Mondalek, I Inherited Stocks. How Can I Reduce the Taxes I Owe?, Money Magazine, October 4, 2016. 

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


October 16, 2016 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Make the Holiday Season Your Reason for Giving

Holiday givingAs the holiday season rounds off the end of the year, advisors can help clients understand the benefits of charitable donations. By making charitable donations before the end of the year, a taxpayer can receive credit on their next tax return. It is important to do your research, and only give to IRS registered charities that ensure most of their proceeds go toward their cause. Another way to get philanthropically involved is to do business with companies that give back. Corporate giving has increased by almost 4% in the last two years as companies find it more and more important to support the cause. 

See ‘Tis the Season for Charitable Giving: 5 Tips for Savvy Donors, Orlando Sentinel, October 16, 2016. 

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


October 16, 2016 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Saturday, October 15, 2016

Prenuptial Agreements: A Helpful Estate Planning Tool

PrenupThere has been an increase in Americans getting married multiple times throughout life, requiring proper estate planning. Prenuptial agreements can become a helpful tool in protecting your loved ones as you fall in and out of love. They are especially helpful if either spouse has children from previous marriages because most people want part of their estate passing to their children. Additionally, older couples marrying later in life often come into the marriage with accumulated wealth. Prenuptial agreements can help preserve these assets and keep them from commingling with the new spouse’s assets. 

See Ettinger Law Firm, Planning Your Marriage and Estate Starts with a Prenuptial Agreement, N.Y. Estate Planning Attorney Blog, October 1, 2016. 

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


October 15, 2016 in Estate Planning - Generally | Permalink | Comments (0)