Wills, Trusts & Estates Prof Blog

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

Monday, June 18, 2018

Article on IRD and Charities: The Seperate Share Regulations and the Economic Effect Requirement

Rpte-logoF. Ladson Boyle & Jonathan G. Blattmachr recently published an Article entitled, IRD and Charities: The Seperate Share Regulations and the Economic Effect Requirement, 52 Real Property, Trust and Estate Law Journal, Vol. 52, No. 3, Winter 2018. Provided below is an abstract of the Article:

Taxpayers sometimes die with a right to gross income that has not been received at the time of death and is not reportable on the decedent’s final or other pre-death income tax return, that is, with an entitlement to items of “income in respect of a decedent” (IRD). An estate with charitable beneficiaries that receives IRD will want a section 642(c) income tax charitable deduction for amounts of gross income distributed or distributable to or set aside for a charitable purpose to offset the gross income realized when the IRD is collected and reportable in gross income. This is possible when the IRD is distributable to or set aside for the charity pursuant to the terms of the governing instrument.

This Article analyzes the potential application of the separate share regulations under section 663(c) and the income tax charitable deduction under section 642(c) when the estate has both charitable and non-charitable residuary beneficiaries. This Article concludes that a charity’s interest in the residue of an estate is not a separate share within the meaning of the separate share regulations.

Next, this Article considers whether a direction in the decedent’s will to distribute items of IRD to charity as a part of the charity’s interest in the decedent’s residuary estate satisfies the “economic effect” requirement found in the Treasury Regulations for section 642(c). This Article suggests that it does, but that the conclusion is not certain.

Finally, the Article suggests possible solutions to assure that the income tax charitable deduction is available for an estate when it pays over the proceeds from items of IRD to a charity.


June 18, 2018 in Articles, Estate Administration, Estate Planning - Generally, Gift Tax, Income Tax, Wills | Permalink | Comments (0)

Albany Attorney Admits to Stealing from Elderly Clients in $11.8 Million Estate Fraud

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-06-18/49b0d7c2-9794-46c1-a045-ee9732c86791.pngRichard J Sherwood, 58, pled guilty last week to money laundering and tax crimes stemming from a scheme to steal millions from estates of elderly clients that he was serving as attorney and fiduciary. Between Sherwood and his co-conspirator they stole a total of $11.8 million from an elderly couple, the wife's sister, and a client from Ohio that suffered from dementia.

Sherwood had been a practicing attorney in New York since 1988, primarily in the field of trusts and estates. He became the attorney for the couple of Warren and Pauline Bruggeman in 2006, as well as Pauline's sister Anne Urban, all of Niskayuna, New York. They all signed will directing the majority of their assets to be transferred to charities upon their deaths.

"Warren Bruggeman died in April 2009, and Pauline died in August 2011. At the time of her death, Pauline had personal and trust assets valued at approximately $20 million." Anne Urban passed away not long after in 2013. The conspirarcy also included the grabbing of funds from Julia Rentz, a resident of Ohio, who was suffering from dementia at the time of the thefts and died in 2013 as well.

Sherwood faces up to 20 years in prison, a maximum fine of $250,000, and up to 3 years of post-imprisonment supervised release. He also served as Guilderland Town Justice from 2014 until his arrest on February 23, 2018. He resigned his position on March 5.

See Albany Attorney Admits to Stealing from Elderly Clients in $11.8 Million Estate Fraud, US. Attorney's Office, Northern District of New York, June 11, 2018.

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

June 18, 2018 in Current Events, Elder Law, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Sunday, June 17, 2018

Court Reinstates Doctor-Assisted Suicide in California

CaliflagLast month Judge Daniel Ottolia of Riverside County Superior Court declared a state law allowing terminally ill patients will months or less to live to receive prescriptions to end their lives unconstitutional, but not on its merits. The judge ruled that it had been improperly passed during a special session of the legislature. The state appeals court overturned that ruling and reinstated the law by an immediate state, but gave opponents until July 2, 2018 to file objections.

The Life Legal Defense Foundation, American Academy of Medical Ethics and several physicians were among those who sued to have the law overturned, claiming that the law violates the equal protection and due process clauses of the United States and California constitutions. Proponents of the End of Life Option, law such as Kevin Díaz, national director of legal advocacy for Compassion & Choices, seeing the ruling of the Fourth District Court of Appeals in Riverside sees the stay as " [A] huge win for many terminally ill Californians with six months or less to live because it could take years for the courts to resolve this case."

The first state to allow physician-assisted suicide in America was Oregon in 1997. California's law went into effect on June 9, 2016. Vermont, Washington, Colorado, Washington D.C., and Hawaii all provide end of life option laws for terminally ill patients.

See Court Reinstates Doctor-Assisted Suicide in California, KVOA.com, June 16, 2018.

June 17, 2018 in Current Affairs, Death Event Planning, Estate Planning - Generally, New Cases, New Legislation | Permalink | Comments (0)

Article on Note: Solving America’s Long-Term Care Financing Crisis: Financing Universal Long-Term Care Insurance with a Mandatory Federal Income Tax Surcharge that Increases with Age

LtcZachary Anderson recently published an Article entitled, Note: Solving America’s Long-Term Care Financing Crisis: Financing Universal Long-Term Care Insurance with a Mandatory Federal Income Tax Surcharge that Increases with Age, 25 Elder L.J. 473-507, (2018). Provided below is an abstract of the Article:

As America’s elderly population rapidly grows, the number of elders that will require Long-Term Care (“LTC”) will correspondingly increase. Many elders lack the financial resources to pay for such care, and existing government programs that currently pay for LTC are underfinanced. While solutions have been proposed, no proposed solution has solved the core issue: how will millions of elders pay for LTC? It is imperative that a viable LTC financing reform solution be introduced and implemented. This Note analyzes a few of the many proposed solutions, establishes a framework that a viable solution should satisfy, and finally proposes a financing solution that could solve the LTC financing crisis.

June 17, 2018 in Articles, Elder Law, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Saturday, June 16, 2018

Being an Executor is an Important and Often Risky Task

Will and testamentWriting out a will is often pushed back on a person's agenda, as well as updating it when important life changed occur. There are are potential risks that happen if you fail to do either of these, such as their assets and possession landing with a person that they never intended to benefit.

Another undertaking that is crucial is assigning an executor. Though when the person officially takes on the role who will already have passed, the job is an important one with several possible pitfalls. The person you designated should understand that it could be a time-consuming and highly demanding job - especially when performed correctly. Finding tax documents, insurance policies, bank accounts, debt records, paying off any bills, etc. could take up a huge chunk of time.

It's also important for the executor to correctly file the appropriate taxes for the estate as if this is not done timely the executor themselves could be billed for late fees and penalties. The courts have recognized that it is the responsibility of the person conducting the probate process to pay the taxes, so the law has been continuously upheld.

See Julian Block, When You Write Your Will, Don't Mess This Up, Market Watch, June 12, 2018.

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

June 16, 2018 in Estate Planning - Generally, Gift Tax, Income Tax, Intestate Succession, Wills | Permalink | Comments (0)

CLE on Estate Planning from A to Z

CLEThe National Business Institute is holding conference entitled, Estate Planning from A to Z, on Tuesday, June 26, 2018, at the Sheraton Wilmington South Hotel in New Castle, Delaware. Provided below is a description of the event:

Program Description

A Detailed Overview of the Estate Planning Procedure and Strategy

Do you have all the knowledge and skills you need to draft tailored testamentary documents and minimize taxable estate for each of your clients? This comprehensive course will become your ultimate guide to estate planning. You will receive tips, sample forms and answers to your most pressing questions to help you excel. Get the latest knowledge on effective will and trust planning techniques - register today!

  • Stave off conflicts of interest with a clear determination of who your client is from the start.
  • Get practical will and trust drafting skills to speed up the process and give the testator's last wishes power.
  • Minimize the taxable estate with effective tax planning techniques.
  • Explore the functions and mechanics of major trust structures - and make certain you choose the right tool for each job.
  • Make sure your remarried and unmarried clients know the default inheritance laws and help them make sure the right beneficiaries are assigned.
  • Help your clients make the tough medical decisions regarding long-term care, end-of-life and organ donation.

Who Should Attend

This basic-to-intermediate level seminar is designed for:

  • Attorneys
  • Estate and Financial Planners
  • Trust Officers
  • Paralegals
  • Accountants

Course Content

  1. Client Screening and Intake
  2. Key Elements of Effective Wills
  3. Basic Tax Planning
  4. Documenting Long-Term Care, Incapacity and End-of-Life Decisions
  5. Trusts 101
  6. Planning for Unmarried and Remarried Couples
  7. Ethical Considerations

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 6.00 -  DE*
CLE 7.20 -  NJ*
CLE 6.00 -  PA*

Financial Planners – Financial Planners: 7.00

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 7.00 *

* denotes specialty credits

June 16, 2018 in Conferences & CLE, Death Event Planning, Estate Planning - Generally, Estate Tax, Gift Tax, Guardianship, Trusts, Wills | Permalink | Comments (0)

Friday, June 15, 2018

Tom Wolfe's Wife of Years to Inherit Majority of His Estate

WolfeAuthor Tom Wolfe passed away last month of an unidentified infection in New York City and his will was filed in Manhattan Surrogate’s Court on Thursday. The 12-page document revealed that the writer left all of his personal property to his wife of 40 years, Sheila, as well as "all my right, title and interest to any real property and any cooperative apartment used by me or my family as a residence…" He left the interests to his books to his two adult children, Alexandra and Tommy.

"While there isn’t an extensive breakdown of how much Wolfe was worth, probate paperwork indicates that his estate is valued north of $500,000." Wolfe's will also directed that he desired to be cremated.

Wolfe was a writer that captured the essence of the culture of America for 50 years, writing such books as The Bonfire of the Vanities, The Right Stuff, and The Electric Kool-Aid Acid Test.

See Ariel Zilber, Tom Wolfe's Will Reveals He Left the Bulk of His Fortune to Hife Wife of Years and Asked to be Cremated, Daily Mail, June 14, 2018.

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

June 15, 2018 in Current Events, Estate Planning - Generally, Wills | Permalink | Comments (0)

Book on Selected Statutes on Trusts and Estates, 2018

Statute bookMark L. Ascher & Grayson M.P. McCouch recently published a a book entitled, Selected Statutes on Trusts and Estates, 2018 ed. (2018). Provided below is some information about the book:

This casebook statutory supplement meets the needs of students in basic and advanced courses on wills, trusts, decedents' estates, fiduciary administration, and future interests, providing a compendium of essential uniform act provisions and official comments. It covers a wide range of topics, including: intestacy; wills; probate administration; nonprobate transfers; disclaimers; principal and income; prudent investments; perpetuities; trusts (including trust decanting and directed trusts); powers of appointment; and powers of attorney. The previous edition has been updated to include the recently-promulgated Uniform Directed Trust Act and related conforming amendments.

June 15, 2018 in Books - For Practitioners, Estate Planning - Generally, Guardianship, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Viral Photo of Nigerian Man Being Buried With $90,000 BMW SUV

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-06-15/590d1b7d-d20f-4253-aaa4-c72ba6328d50.pngA Facebook picture supposedly showing a Nigerian man being buried with a brand new BMW X6 SUV in a small village in Nigeria recently went viral. The story was picked up by several news stations and continued to be shared via social media. Upon further investigation, the picture and story most likely is not legitimate.

The picture was originally posted onto the account of Nigerian filmmaker and artist Zevi Gins. Several commentators appeared to be getting annoyed by the rumor of waste and selfishness the photo stirred up, saying such things as "this is a film that's being directed by Tchidi chikere." Also, it appeared that numerous people recognized in the picture were well known Nigerian actors and actresses.

See Gary Gastelu, Photo of Nigerian Man Allegedly Being Buried in New BMW SUV Goes Viral, Fox News, June 13, 2018.

June 15, 2018 in Current Events, Estate Planning - Generally, Humor | Permalink | Comments (0)

Article on NOTE: Uncle Sam Killed Grandma: How The Estate Tax Can Help Alleviate Medicare Uncertainty

Uncle samAlexander G. Karl recently published an Article entitled, NOTE: Uncle Sam Killed Grandma: How The Estate Tax Can Help Alleviate Medicare Uncertainty, 26 Elder L.J. 443 (2018). Provided below is an abstract of the Article:

In the United States, Medicare is the single largest purchaser of medical services. This government program is primarily used by the elderly population. The future of Medicare is murky as there are many obstacles hindering its funding. It is more important than ever to ensure funding for this governmental program. The funding for Medicare has been reduced, even though the aging baby boomer generation has caused an exponential growth in enrollment.

Wealthy individuals who are in similar health conditions as those who are Medicare beneficiaries are subject to the Estate Tax. This tax is calculated based on the estate's value before it is passed to its heirs. As more baby boomers age, there will be more deaths and more estates that are taxable. Reformation of the Estate Tax will generate more revenue and, due to its relationship with Medicare, can justifiably be used to fund Medicare.

This Note: surveys the history and functionality of Medicare and the Estate Tax. This Note: also analyzes the impacts of budget cuts. It suggests a congressional policy change that would allow the collected Estate Tax revenue to fund Medicare. To do so, the Estate Tax must be reformed in two steps: (1) lower the exclusion amount while raising the maximum tax rate; and (2) limit the Grantor Retained Annuity Trusts to prevent large transfers of untaxed wealth.


June 15, 2018 in Articles, Current Events, Elder Law, Estate Planning - Generally | Permalink | Comments (0)