Wills, Trusts & Estates Prof Blog

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

Thursday, May 18, 2017

ACTEC Annual Meeting Summary

CLEThe American College of Trust and Estate Council (ACTEC) is a nationwide organization consisting of nearly 2,600 lawyers. The central objective of the organization is to study and improve trust, estate and tax laws, procedures and professional responsibility. Recently, ACTEC held its annual meeting in Scottsdale, Arizona. A veritable oasis in the desert, Scottsdale is known for its spa resorts and expansive golf courses.

The topics covered at the annual meeting include:

  • Estate planning current developments over the last year
  • Trachtman lecture (by Hanson Reynolds) regarding end-of-life decisions
  • Planning Issues for S Corporations and C Corporations
  • Charitable bequests of retirement assets
  • Tips for estate and gift tax audits from trial lawyers' perspectives
  • Common reporting standard and FATCA
  • Community property in common law states
  • Trusts in divorce, and
  • Structuring settlement agreements

Steve R. Akers, Senior Fiduciary Counsel at Bessemer Trust, wrote a synopsis of his observations at the event. His musings can be found here.

May 18, 2017 in Conferences & CLE, Estate Planning - Generally, Estate Tax, Gift Tax, Trusts | Permalink | Comments (0)

The Flexible SLAT

Home-large-gumbyThe spousal lifetime asset trust (SLAT) is an excellent means for married clients with moderate to ultra-high net worth to gain planning flexibility and tax benefits in an uncertain and tumultuous estate-planning environment. The use of a SLAT enables clients to avoid probate, reduce estate taxes, and reduce capital gains on death tax. SLATs may also function as life insurance trusts and can be utilized to manage and protect life insurance proceeds. This is important given the central role life insurance takes in the estate and financial planning processes. These are among only a few of the benefits associated with SLATs, but they do require teamwork for proper optimization.

Wealth advisors should be included in order to manage securities both inside and outside the trust. These advisors should also be on the lookout for appreciated property swaps that may be advantageous. Estate planners are useful in growing assets inside the SLAT that are outside the client’s estate, and accountants should look to the SLAT to help the client avoid state income tax. While tax reform is currently nebulous at best, SLATs can serve clients as a flexible planning tool with a unique ability to meet their multifaceted goals.

See Andrew T. Wolfe & Martin M. Shenkman, SLATs Provide Flexible Plans for Many Clients, Wealth Management, May 15, 2017.

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

May 18, 2017 in Estate Planning - Generally, Estate Tax, Gift Tax, Trusts | Permalink | Comments (0)

Wednesday, May 17, 2017

Alan Thicke's Sons Go to War

0516-alan-thicke-tanya-callau-tmz-instagram-3Alan Thicke’s sons, Robin and Brennan, believe Thicke’s third wife, Tanya Callau, is attempting to carve out more of his estate than she deserves. The sons are claiming that Callau has threatened to go to the tabloids if she does not receive more than what Thicke left her in his will. As it is, Callau allegedly received 25% of Thicke’s personal assets, 40% of the remaining estate, a $500,000 life insurance policy, and a guarantee that she could remain at the ranch. The sons do not want Callau to receive any additional dispersion and want a judge to enforce the will and prenup.

See Alan Thicke: Sons Go to War with His Wife to Protect the Estate, TMZ, May 16, 2017.

May 17, 2017 in Current Events, Estate Planning - Generally, Film, Wills | Permalink | Comments (0)

Electronic Wills in Florida

510665-the-best-video-conferencing-software-of-2016The Florida legislature recently passed a bill through both houses authorizing electronic wills and electronic will execution. The purpose of the legislation is to aid in reducing fraud and misdeeds associated with paper wills. Paper wills will not be affected by the legislation, but they may be revoked by an electronic will.

 A few key provisions, if the electronic will is signed by the testator electronically, then the witnesses must sign electronically as well; two witnesses are still required and they must be in the testator’s presence. The digital signature does not require a third party intermediary for the testator to establish an online identity. If the will contains a self-proving affidavit, both the will and the affidavit must be stored with an authorized custodian. There are a number of restrictions on who may be a custodian and their subsequent liability; persons drafting electronic wills should include the name of the custodian in the will.

This new bill will likely aid Internet-based will preparation companies. It is also reasonable to expect some attorneys to use electronic means to draft a will when it is not feasible for the client to come to the attorney’s office. While these attorneys may opt to create in-house custodians, the regulatory restrictions and liability may encourage more third-party firms to handle the digital storage. The larger question is whether this legislation will push more attorneys to utilize their option at drafting electronic wills, or if the status quo will remain unchanged.

See Charles Rubin, Florida Wills Go Electronic, Rubin on Tax, May 13, 2017.

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

May 17, 2017 in Current Events, Estate Planning - Generally, New Legislation, Wills | Permalink | Comments (1)

New Focus for Estate Planning

Family.happy_Among wealthy families, there is a seeming disconnect between their current wealth plans and what they actually want their wealth to accomplish. Many affluent parents believe in leaving wealth to the next generation, but few believe their putative heirs are capable of handling the incoming assets. Most of these families also believe in creating some sort of guidelines to manage this wealth, but few actually implement these guidelines. Some of these problems stem from traditional planning.

 Traditional estate planning focuses on assets and tends to overlook the individual.  This, along with proliferation of planning software, has made estate planning a product for the masses instead of the individual.  Modern planning should be based on the unique needs of the client. This entails planners undertaking an increased examination of the needs, talents, capacity, and weaknesses of the beneficiaries. There are a few possible solutions to traditional planning problems. One possible solution is to involve a family consultant or coach to take part in the estate planning in order to help the family create a mission statement reflecting their values. Another step is to encourage openness and conversation between parents and children who are beneficiaries. And finally, add purpose to the planning. A significant percentage of affluent families have said that their estate plans ignored their personal goals. Creating a mission statement prior to estate planning may alleviate this issue. Whatever the solution for the client, holistic wealth transfer and the needs of the beneficiaries should be the main focus of estate planning.

See David R. York & Andrew L. Howell, Pushing Wealth Transfer Plans into the 21st Century, Wealth Management, May 12, 2017.

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

May 17, 2017 in Estate Planning - Generally | Permalink | Comments (0)

Article on Biologically Biased Beneficence

Last-Will-and-Testament-Attorney-LakelandJeffrey Evans Stake recently published an Article entitled, Biologically Biased Beneficence, 48 Ariz. St. L.J. 1101 (2016). Provided below is an abstract of the Article:

After death and after taxes, the laws relating to wills, trusts, and intestate succession determine what to do with a decedent’s assets. Much of that body of law is built upon the assumption that the law should help the decedent reach her goals if she has expressed them, or mimic her probable goals if she has not. As put by Daniel Kelly, “The organizing principle of succession law is testamentary freedom.” While the wishes of decedents are certainly relevant, as a normative matter there are other concerns deserving attention. This Paper discusses some biological reasons to worry about the behavior of benefactors. Various potential bio-biases in the hearts of donors will be identified, followed in each case by ideas for reforming the law. My main message is that testamentary freedom should be demoted from the organizing principle to an important consideration in the design of the law of succession.

May 17, 2017 in Articles, Estate Planning - Generally, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Leading Estate Planners Advocate for All Estate Plans to Include a Trust


 In Innovative Trust Designs Better Serve Inheritors [Download ETPL-17-06-03-oshins to be published in the June issue of Estate Planning], Richard A. Oshins (Oshins & Associates, LLC, Las Vegas, Nevada) and L. Paul Hood, Jr. (Director of Planned Giving at The University of Toledo Foundation) explain how trusts can enhance virtually all estate plans. 

Their article "is intended to provide forward-thinking advisors with a road-map of enhanced planning opportunities, without a downside risk, to assist their clients. Many clients, and their advisors as well, fail to consider the potential harm that they expose their loved ones to by not passing wealth to them in trust." They then explain in great detail what benefits are available and how to achieve them.

May 17, 2017 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

Tuesday, May 16, 2017

Remembering Waller Horsley

HorsleyWaller Horsley passed away on May 10, 2017. He graduated from UVA Law School, joining the Hunton & Williams firm shortly after, where he practiced for thirty-three years. Eventually, in 1992, he left the practice to start his own with his two sons—Horsley & Horsley. With so many achievements, Horsley was proud to serve as President of the American College of Trust and Estate Counsel. He will be surely missed by those with the great pleasure of knowing him.

See Horsley, Waller, Richmond Times-Dispatch, May 14, 2017.

May 16, 2017 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Article on Deducting Attorney's Fees

Deduct attorney's feesWesley L. Bowers recently published an Article entitled, Decoding the Deduction: What’s the Right Form to Use for Professional Fees?, Tr. & Est. 30 (Apr. 2017). Provided below is an abstract of the Article:

Given our current tax environment, more and more estate planning and administration professionals are diving (often times, reluctantly) into the abyss of the income tax world. One of the more frequent questions asked by attorneys, CPAs and other professionals during an estate administration is: “Where should we deduct professional fees (attorney, CPA, appraisal, etc.): on Form 706 or Form 1041?” What seems like a simple question at first blush is often extremely complicated and takes you through a labyrinth of decision trees, regulations and case law.

The traditional answer of where to deduct professional fees was often to deduct them on Form 706, simply because more estates were subject to the estate tax in prior years when the exemptions were significantly lower, and the estate tax rate was traditionally much higher than an estate’s income tax rate. Now, however, this question has become even more complicated to answer due in large part to the proximity between the effective estate tax rate (currently, 40 percent) and an estate’s income tax rate (currently, a top bracket of 39.6 percent, with a potential 3.8 percent net investment income tax). In addition, the introduction of portability has changed the traditional estate-planning model, and more estate tax returns are now filed when not otherwise required to take advantage of the portability features. With so many recent changes and a myriad of possible planning structures, it’s no wonder many are confused as to how to answer a seemingly simple question: “Where should I deduct attorney’s fees?”

May 16, 2017 in Articles, Estate Planning - Generally, Estate Tax, Income Tax | Permalink | Comments (0)

How Gene Testing Is Threatening Long-Term Care Insurance

Gene testingApproximately 5.5 million Americans have Alzheimer’s disease, making up half of all nursing home residents, but very few people have been tested for the ApoE4 gene. Last month, however, the gene testing company 23andMe started offering tests that reveal whether people carry the gene, while assessing their risks for developing certain conditions. Following the wave, other genetics companies are planning to offer similar tests, allowing many Americans to get a better grasp on their medical futures. Although a benefit to the American people, insurance companies selling long-term care insurance might experience a disaster, sending risky patients in search of policies and damaging an already fragile business. The potential impact of gene testing has the ability to increase adverse selection, which in turn could impact the availability and affordability of certain products.

See Gina Kolata, New Gene Tests Pose a Threat to Insurers, N.Y. Times, May 12, 2017.

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

May 16, 2017 in Current Events, Disability Planning - Health Care, Elder Law, Estate Planning - Generally, Science, Technology | Permalink | Comments (0)