Wills, Trusts & Estates Prof Blog

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

Monday, August 14, 2017

IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust

Farm-Agriculture-Cartoon-059The Internal Revenue Service (IRS) addressed income and gift-tax consequences relating to an incomplete non-grantor trust in PLR 201729009. In the case at issue, the settlor created an irrevocable trust in order to benefit himself, his wife, charitable organizations, siblings, and children. The trust instrument provided for a Distribution Committee to disperse income and principal from the trust to named beneficiaries for their health, education, maintenance, and support (HEMS).

After a request for rulings, the IRS concluded that the settlor’s contributions to the trust did not qualify as a gift for federal gift-tax purposes. This characterization entails that distributions from the trust will be treated as a return of the settlor’s property and, as such, will be included in the settlor’s gross estate upon death.

The IRS ruling also held that the powers maintained by the Distribution Committee were such that transfers to the trust were not complete with respect to the trust’s income interest; the relationship between the settlor and the committee allowed the settlor to retain too much power over distributions of income and principal.

See Jillian Merns, IRS Rules on Tax Ramifications of Incomplete Non-Grantor Trust, Wealth Management.com, August 2, 2017.

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

August 14, 2017 in Current Events, Estate Planning - Generally, Gift Tax, Income Tax, New Legislation, Trusts | Permalink | Comments (0)

Sunday, August 13, 2017

Danish Queen's Husband Refuses to Be Buried with Her

CryptPrince Henrick of Denmark is refusing to be buried next to his wife, Queen Margrethe. Margrethe had a custom-made glass sarcophagus created for her and her husband of fifty years as a final resting place. The sarcophagus will eventually be installed at Roskilde Cathedral, which has been home to deceased Danish royals for over four centuries.

Henrick’s general dissatisfaction with his current title has been publicly known for many years. The Royal Danish House’s director speculated: "For the prince, the decision not to be buried beside the queen is the natural consequence of not having been treated equally to his spouse."

See Rob Quinn Danish Queen's Husband Refuses to Be Buried with Her, Fox News, August 4, 2017.

August 13, 2017 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

You and the Law: Planning for the Expected Unexpected

AdobeStock_70242561-1024x808Considering one’s mortality can be an unsettling prospect. This natural aversion to discussing what will happen upon death leads many to avoid conversations about wills, trusts, assets, and final expenses. While such conversations may be uncomfortable, dying without an estate plan creates additional headaches for spouses and children that can add frustration and guilt onto their already-present sense of bereavement and loss.

In a modern arena, dying without a will offers problems unique to our technological age. Not disclosing or sharing online financial information may leave some assets overlooked. When passwords and usernames are not accessible, social media pages remain in stasis as heirs look for a means to close accounts.  

See H. Dennis Beaver, You and the Law: Planning for the Expected Unexpected, Times Standard, July 31, 2017.

August 13, 2017 in Estate Administration, Estate Planning - Generally, Technology, Trusts, Wills | Permalink | Comments (0)

Saturday, August 12, 2017

Article on Probate Funding and the Litigation Funding Debate

Probate2Jeremy Kidd recently published an Article entitled, Probate Funding and the Litigation Funding Debate, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

Third-party funding of legal claims is becoming more common, and has been quietly gaining a foothold in the probate arena. Probate funding, the transaction in which a third party purchases the right to some portion of an heir’s interest in an estate, shares many characteristics with broader litigation funding. It also differs in important respects. By comparing and contrasting the two forms of funding, greater insight is gained into the nature of funding and how the law should react to its continuing evolution.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

August 12, 2017 in Articles, Estate Planning - Generally | Permalink | Comments (0)

CLE on Trusts 101

0000000 CLEThe National Business Institute is holding a conference entitled, Trusts 101, which will take place August 10, 2017, at the Holiday Inn Austin Midtown Hotel in Austin, TX. Provided below is a description of the event:

Program Description

Provide your clients with the full spectrum of wealth preservation options.

When assessing complex information, it often helps to break items into basic building blocks. The same approach can be successful when dealing with asset protection. Be prepared for specific challenges associated with various types of trusts by understanding their unique characteristics. Our intensive full-day primer will provide you with a comprehensive overview of the wide variety of trusts available. Register today!

  • Determine what role the settlor will play by weighing the pros and cons of establishing an irrevocable trust over a revocable trust.
  • Learn what not to do when selecting and drafting a revocable trust to avoid common mistakes.
  • Learn how to choose the most beneficial vehicle for preserving your client's wealth: understand the purpose behind the various types of irrevocable trusts.
  • Explore the powers and duties of personal representatives in irrevocable trusts.
  • Save money on taxes with effective use of defective trusts.
  • Learn why it's important to know when to file the tax return for grantor trusts.
  • Determine whether a client qualifies as a beneficiary of a special needs trust.
  • Don't reinvent the wheel - modify our sample trust documents and use our drafting tips to create airtight trusts.

Who Should Attend

This basic level seminar is designed for the professionals involved in creating, administering and terminating trusts:

  • Attorneys
  • Accountants and CPAs
  • Trust Officers
  • Financial Planners
  • Tax Preparers
  • Paralegals

Course Content

  1. Where to Begin? - An Overview of Trusts
  2. Revocable Living Trusts
  3. Trusts Used for Tax Reduction
  4. Grantor Trusts
  5. Estate Planning for the Disabled
  6. Ethical Considerations

Continuing Education Credit

 

Continuing Legal Education – CLE: 6.75 *

Financial Planners – Financial Planners: 8.00

International Association for Continuing Education Training – IACET: 0.70

National Association of Legal Assistants, Inc. – NALA: 6.50 *

National Association of State Boards of Accountancy – CPE for Accountants: 8.00 *

National Federation of Paralegal Associations, Inc. – NFPA

Professional Achievement in Continuing Education – PACE: 8.00 *

* denotes specialty credits

August 12, 2017 in Conferences & CLE, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, August 11, 2017

Article on Salient Effect of Maliki's Solution to the Problem of 'Grandfather and Collaterals in Competition'

IslamIsmael Saka Ismael recently published an Article entitled, Salient Effect of Maliki's Solution to the Problem of 'Grandfather and Collaterals in Competition', Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

This paper is a critical analysis of the solution adopted by the Maliki School of Law to solve the knotty problem of 'grandfather and collaterals in competition' in Islamic Law of Intestate Succession. It examines the various doctrines: Al-Malikiyya, Al-Shibh Al-Malikiyya, Al-Akdariyya as propounded by the school to boost the share of the grandfather as a result of the adverse effect of the solution adopted by the school has on the grandfather in resolving the problem of superiority of claim between the grandfather and the collaterals. Upon the analysis, it is discovered that the purpose of the propounded doctrines is to give the grandfather a kind of leverage over the 'claim' of the collaterals as upheld by the Hanafi School of Law in resolving the problem of Grandfather and Collaterals in Competition in Islamic Law of Intestate Succession.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

August 11, 2017 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Article on 2017 Texas Estates & Trust Codes with Commentary

Beyer_TeachingGerry W. Beyer recently published an Article entitled, 2017 Texas Estates & Trust Codes with Commentary, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

This document contains the Texas Estates Code and the Texas Trusts Code (and related Property Code provisions) showing all changes made by the Regular Session of the 2017 Texas Legislature. The changes, most of which take effect on September 1, 2017, are shown in red-lined format for easy comparison of the prior and new versions of the statutes. Also included are charts converting Probate Code to Estates Code sections and Estates Code to Probate Code sections.

Caveat: This document was prepared before the conclusion of the 2017 Special Session. Thus, readers need to check to see if any of the statutes were impacted by the Special Session.

I have included commentary entitled Statutes in Context to many sections. These annotations provide background information, explanations, and citations to key cases which should assist you in identifying the significance of the statutes and how they operate.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

August 11, 2017 in Articles, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Death of ‘Stretch’ IRAs Would Mean Loss of Flexibility for Beneficiaries

Uncle-Sam-wants-your-moneyIf the Retirement Enhancement and Savings Act of 2016 becomes law, it may become more difficult to leave a qualified plan account or sizable IRA to beneficiaries without also leaving them with a substantial tax burden. The Act passed through the Senate Finance Committee in 2016 and calls for the abrogation of “stretch” provisions currently available to non-spouse beneficiaries of 401(k)s and IRAs. These provisions allow certain beneficiaries to extend minimum required distributions for as long as they like.

If the legislation moves forward, these accounts would have to be completely emptied in five years of all but $450,000. While this certainly does not work to the benefit of the account-holder, Uncle Sam gains about $3.18 billion in revenue from 2017 to 2026. Although passage of the bill is still very uncertain, if a stretch IRA is part of your estate plan, it may be a good idea to start looking for alternatives.

See Scott M. Dougan, Death of ‘Stretch’ IRAs Would Mean Loss of Flexibility for Beneficiaries, Kiplinger, August 2017.

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

August 11, 2017 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Corpus Christi Court Upholds Undue Influence Verdict

CorpusA Corpus Christi Court of Appeals upheld a lower court’s jury verdict denying probate of a will based on allegations of undue influence. To show undue influence, a plaintiff must prove three elements: “(1) the existence and exertion of an influence; (2) that subverted or overpowered the testator’s mind at the time he executed the instrument; (3) so that the testator executed an instrument he would not otherwise have executed but for that influence.” In Estate of Jose M. Rodriguez, the jury found that the decedent’s daughter was the sole beneficiary of the will, that she wrote checks on his account until they bounced, chose the lawyer that drafted the will, and that the testator disinherited seven of this other children in favor of his daughter; one of the children is confined to a wheelchair. While no piece of evidence, on its own, is usually enough to justify a finding of undue influence, the aggregate of these factors was enough for the jury to find the daughter exercised undue influence over her father.

See J. Michael Young, Corpus Christi Court Upholds Undue Influence Verdict, Texas Probate Litigation, August 1, 2017.

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

August 11, 2017 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Thursday, August 10, 2017

A Nurturing Campaign

NurturingAs an estate or financial planner interested in building a practice concentrated on affluent clients, it is both beneficial and necessary to transform centers of influence into pipelines for new business. Working with accountants, attorneys, and other planners offers an opportunity to build relationships based on mutual respect and a confidence in competency. Professionals that know you well and recognize you as an honest and knowledgeable advisor are more likely to point high-net-worth clients in your direction.

An advisor can effectively transform friendships and professional relationships into client growth through the following: by intelligently communicating your professional expertise, positioning yourself as a valuable resource, and openly but humbly sharing best practices with other professionals. A caveat, there exists a dangerously thin line between offering helpful advice and being an arrogant know-it-all. It is best practice to tread lightly when attempting to build these relationships.

See Russ Alan Prince & Brett Van Bortel, A Nurturing Campaign, Financial Advisor, August 1, 2017.

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

August 10, 2017 in Estate Planning - Generally | Permalink | Comments (0)