Wills, Trusts & Estates Prof Blog

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

Wednesday, December 7, 2016

Widow Sues Over Husband's Death Due to Emotional Distress

WalgreensA widow is suing an Orlando Walgreens, alleging that the store held her husband captive and made him clean the store’s bathroom. She claims that the humiliation caused emotional distress that led to death of her husband. The lawsuit does not detail how much time passed between the incident and the husband’s death. The amount the widow is suing for is undetermined, but there is a standing offer to settle the suit for $500,000.

See Man Dies of Emotional Distress After Being Forced to Clean Walgreens Bathroom, Widow Says, WFTV 9, December 6, 2016.

December 7, 2016 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Article on Doctrines of Reimbursement, Contribution & Subrogation

Doctrine of reimbursementBrian D. Hulse recently published an Article entitled, After the Guarantor Pays: The Uncertain Equitable Doctrines of Reimbursement, Contribution, and Subrogation, 51 Real Prop. Tr. & Est. L.J. 41 (2016). Provided below is a synopsis of the Article:

This Article addresses the equitable doctrines of reimbursement, contribution, and subrogation as they apply to guarantors and other secondary obligors. Specifically, it explores in detail guarantors' and other secondary obligors' rights after they make payment under the guaranty or other secondary obligation and then seek to recover some or all of the amount paid from the borrower, other guarantors, or the collateral for the primary obligation. This article discusses the inconsistencies in the case law on these subjects, which can create unpredictable results. It concludes that, when multiple parties are liable on a common debt, in whatever capacity, they should enter into appropriate reimbursement and contribution agreements at the outset of the transaction to avoid litigation and unpredictable outcomes.

December 7, 2016 in Articles, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, December 6, 2016

Article on Intellectual Property Dimensions of Real Property

Intellectual propertyMichael N. Widener recently published an Article entitled, Brand: Modern Realty Transfers' Iconic Dimension, 51 Real Property, Trust & Estate L.J. 23 (2016). Provided below is an abstract of the Article:

Any real estate project branded "Trump [Product Type]" is better positioned in marketing circles than equivalent projects lacking that association.* The preceding sentence reminds you that real estate is a consumer product in one seminal respect. Brand, even in real property development, reflects upon the lifestyles of persons shopping, eating, working and sojourning in a unique place. Development projects today need branding to differentiate themselves from other places and to message to potential shoppers, consumers, tenants or buyers what it's like to engage in a dynamic environment or to enjoy the creative energy of fellow occupants or the surrounding neighborhood. Messaging has much to say about the image and reputation of a commercial property – and the expected momentum of the project's lease-out or unit sales. It creates an emotional, visceral connection with shoppers, travelers, workers or whomever is the target of the "experience" narrative. 

Such vital components of those images and messages that cumulatively constitute the "brand" of a real estate development must follow ownership or leasing of the project. This paper identifies all the critical branding elements, discusses how in this digital age they are registered (secured) in their creators, and how (and why) future use of those elements must be secured by the buyer or the ground tenant – whomever is the transferee of the physical project. As new means of expression such as Memes and GIFs, followed by emoticons, populate the branding realm, the practitioner must stay on her toes to advise transferees of their burdens of due diligence and securing rights in the brand. This paper suggests the proper path to transferees' ongoing rights to control the brand elements beyond closing on the concurrent real property transaction. 

*If you doubt this proposition, consult Donald Trump for his view. This abstract itself tests the power of the surname Trump to secure "views" and downloads of the accompanying paper.

December 6, 2016 in Articles, Estate Planning - Generally, Technology | Permalink | Comments (0)

Wealthy Families, the Next Generations & Philanthropic Desires

UnhwWealthy families can now transfer their wealth to the next generations at a transfer tax discount of up to 50% while receiving up to a 50% charitable income tax deduction. Two important developments have allowed ultra wealthy families to enjoin their desires for multi-generation wealth transfer and expansion of charitable visions. A 2004 revised regulation permitted charities to create new pooled income funds (PIFs) that distributed income in the form of post-contribution long term capital gain under a trustee as long as it was included in the trust document—or a total return PIF. This new regulation allowed PIFs to distribute significantly more over time. This opportunity has only recently become an opportunity as these total returns PIFs are now permitting multi-generation donor agreements. Further, any realized long-term capital gain that is not distributed is considered permanently set aside for charity and not taxed to the trust or beneficiaries. This feature allows income to grow and compound tax-free for the benefit of future generations. These availabilities create more opportunity for ultra high net worth families and their charitable desires.

See Richard Haas, Fusing Family and Philanthropic Visions, Wealth Management, December 5, 2016.

December 6, 2016 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

Article on Wealth Transfer Tax Reform

Wealth transfer taxJoseph M. Dodge recently published an Article entitled, Three Whacks at Wealth Transfer Tax Reform: Retained-Interest Transfers, Generation-Skipping Trusts, and FLP Valuation Discounts, 57 B.C. L. Rev. 999 (2016). Provided below is an abstract of the Article:

This Article offers three sets of proposals to reform the existing federal wealth transfer tax system, the common theme being the link between the timing of the taxable transfer and valuation. Under the first set of proposals, transfers with retained interests would be taxed at the first to occur of the transferor's death or the date the interest expired. In addition, the term “retained interest” would be broadly construed to encompass the power to revoke and the possibility of receiving income or corpus under another person's power. The second set of proposals relates to the generation-skipping tax. To achieve accurate valuation, the tax would be imposed only on taxable distributions, and the exemptions would either be the unused gift/estate exemptions of deemed transferors or separate per-transferee exemptions. The third set of proposals relates to valuation discounts of interests in family-held entities, mostly family limited partnerships. The lack-of-marketability discount for family investment-holding entities should be ignored because the tax-motivated destructions of non-unique value are against public policy, and the removal of the value-depressing restrictions is likely to occur in the future. Minority-interest discounts should not be recognized where minority status exists by reason of marital property rights or arises by gift or bequest. As a transition rule (or as an alternate approach), the disappearance of value-depressing restrictions and the recombining of minority interests into a majority interest should, where valuation discounts were previously obtained, be subject to a recapture excise tax.

December 6, 2016 in Articles, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax | Permalink | Comments (0)

How Your Income Affects Your Longevity

Rich v. poorA recent study shows that poverty, on average, cuts ten years off American men’s lives and seven off women’s. The study examined longevity, smoking, obesity, and childhood poverty among other health information for the richest and poorest Americans. Individuals who grow up in low-income and deprived areas are likely to have lower health trajectories. If there is continued failure to address economic, educational, and health disparities, it will lead to a larger gap between the rich and the poor.

See Richest Americans Live Seven to 10 Years Longer than Poorest, Fox News, December 5, 2016.

December 6, 2016 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Monday, December 5, 2016

How Will Trump Affect Charitable Giving

Charitable giving1Due to our nation’s recent political changes, there is uncertainty about where charitable giving is headed. Trump optimists say that if he expands the economy, there will be additional wealth, which will lead to more giving. This along with tax cuts should allow the wealthiest people to continue leading the category for the most charitable contributions. However, the wealthiest people often give to get their name put on a building rather than to those in need, so it is important to have a wide array of givers. As we wait for these events to unfold, we should not forget that December is the biggest giving month and look to the positive of the future of charitable giving.

See Albert R. Hunt, Where Charitable Giving May Head with Trump, Bloomberg, November 27, 2016.

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

December 5, 2016 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Preparing for Trust Termination

Trust terminationIn the 1930s when gift and estate tax rates increased, wealthy families began to set up trusts. Now, these trusts are approaching mandatory termination dates, which leaves advisors considering how to help the beneficiaries. First, planners must identify the beneficiaries and review the state’s laws that govern the trust. Planners should then meet with these beneficiaries and make sure they understand the terms of the trust, allowing the beneficiaries to deal with any disparity and possibly affording opportunities for equalization strategy. These beneficiaries will need to balance their expectations with their estate plans and keep protected from creditors. Lastly, planners should develop an agreement with the beneficiaries for decision-making, governance, and use purposes.

See Dennis R. Delaney & Charles R. Platt, Six Tips for Depression Era Trusts’ Judgment Day, Wealth Management, December 2, 2016.

December 5, 2016 in Current Events, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Naming a Trust as Your IRA Beneficiary

IRA beneficiaryNaming a trust as your beneficiary for an IRA is not a good decision for everyone. Noncompliance with required minimum distributions (RMDs) can be costly, and naming a trust can be inflexible for individual beneficiaries, so it is a good idea to make sure that it is the right move for you.

To obtain tax efficiency for RMD rules, there must be a designated beneficiary, one who has a measurable life expectancy. This rules out trusts as they are entities, not individuals. However, there are ways to make a trust a designated beneficiary, following “see-through-trust” requirements. If an IRA leaves distributions to a non-see-through trust, then the trust will receive unfavorable benefits under the “no-designated-beneficiary” rules. In order to receive the RMDs, you must use the life expectancy of the oldest beneficiary. If a trust has a younger beneficiary, naming the trust as a beneficiary of an IRA may prevent that individual from maximizing the “stretch,” which would be afforded had the beneficiary been named as an individual. So, should you name a trust as a beneficiary for an IRA? It depends, so you must consider the complexities and limitations before doing so.

See Rockwell T. Gust IV, Is Naming a Trust as Beneficiary of Your IRA a Good Idea?, Financial Advisor, December 2, 2016.

December 5, 2016 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

Cuba Will Ban Monuments Named After Fidel Castro

Fidel castro statuteCuban President Raul Castro declared that his government will not allow the naming of streets or public monuments after Cuba’s former leader, Fidel Castro, keeping with his brother’s desire to avoid a personality cult. In fact, the country’s National Assembly will pass a law fulfilling his brother’s wishes. Conversely, some revolutionary fighters who fought alongside Fidel have their likeness spread across Cuba. This announcement comes at the tail end of Fidel’s four-day public mourning period.

See Raul Castro: Cuba Will Ban Naming of Monuments After Fidel, Fox News, December 3, 2016.

December 5, 2016 in Current Events, Death Event Planning, Estate Planning - Generally, New Legislation | Permalink | Comments (0)