Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Friday, October 24, 2014

Article on Estate Division

DivideOscar Erixson (Research Institute of Industrial Economics, Uppsala University - Department of Economics)& Henry Ohlsson (Uppsala University - Department of Economics) recently published an article entitled, Estate Division: Equal Sharing as Choice, Social Norm, and Legal Requirement, IFN Working Paper No. 1006, February 11, 2014. Provided below is the abstract from SSRN:

The objective of this essay is to study to what extent parents divide their estates unequally between their children and the determinants of this decision. We use a new dataset based on the estate reports for almost 70,000 Swedish widows, widowers, divorcees and unmarried individuals who died with positive estates and at least two children. Unequal sharing is unusual; depending on definitions only 2-12 percent of the estates are unequally divided. Previous studies for other countries, particularly from the US, find that around 20-40 percent of parents divide their estates unequally. We argue that the relatively low frequency of unequal sharing in Sweden might be explained by contextual factors such as the inheritance law, the transfer tax system, the income distribution, and the welfare state. We also estimate models with family fixed effects to study how the characteristics of children to parents who choose unequal division affect the size of the transfer. The empirical estimates show that bequests are not used to compensate for income differences between children, suggesting that bequests are not guided by altruistic motives. Children who are likely to have provided services to the parent receive more than their siblings however. This suggests that, at least some bequests are guided by exchange motives.

October 24, 2014 in Articles, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

CLE on Recent Tax Developments for Estate Planners

CLEThe American Law Institute Continuing Legal Education (ALI CLE) is presenting a CLE entitled, Recent Tax Developments for Estate Planners, Wednesday December 10, 2014, 12:30 – 2:00pm Eastern, online and by phone. Here is why you should attend:

Since the passage of the American Taxpayer Relief Act of 2012, plans to minimize estate taxes have been much less important for the majority of Americans. However, higher marginal income tax rates and the “Medicare” tax on net investment income can still negatively affect estates and beneficiaries.

As 2014 draws to a close, what recent tax developments should be considered by estate planners so that they can most effectively assist their clients with wealth management and estate planning? Join veteran estate planners with expertise in taxation issues for an enlightening discussion of caselaw and administrative and legislative changes that affect testators, grantors, and beneficiaries.

What You Will Learn

Fellows of The American College of Trust and Estate Counsel will discuss the most recent cases, rulings, and other federal tax developments that are likely to be of interest to estate planners across the country.

Particularly emphasized will be how practitioners will want to incorporate these developments into the practice to avoid problems and take advantage of opportunities. Any year-end sensitive topics will also command center stage.

Questions submitted during the program will be answered live by the faculty. In addition, all registrants will receive a set of downloadable course materials and free access to the archived online program.

October 24, 2014 in Conferences & CLE, Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Thursday, October 23, 2014

Approaching Charitable Giving

Charity

Over the past decade, wealthy investors have increased their charitable donations by thirty-six percent.  However, only one in five feel their approach to giving is effective. 

Only nine percent of millionaire investors say they have received advice on charitable giving, as they believe a planned approach is only for the extremely wealthy.  "While it is clear that America truly has the 'giving gene,' the whole point of giving is to make an impact; yet few millionaires believe they are actually doing so. The majority are engaged in reactive, 'checkbook philanthropy' that is not strategic and not part of a broader financial plan.” 

Research indicates that investors with over $5 million are more satisfied and effective givers, not because of the amount in which they give; rather, it is because of the strategy they put into their philanthropic giving.  Thus, all investors at any wealth level would benefit from replicating this planned approach. 

See Wealthy Not Confident in Philanthropic Approach, Wealth Management, Oct. 21, 2014.

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

October 23, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Melissa Rivers to Inherit More than $100 Million

Joan and Melissa Rivers

Following the tragic death of iconic comedian Joan Rivers, her daughter will inherit more than $100 million in cash and property.  Melissa Rivers will receive $75 million in cash from her mother and the comedian’s $35 million Upper East Side New York condo. 

On October 16th, the New York City medical examiner released a statement saying that Joan Rivers died from throat surgery complications. 

In light of this report, Melissa Rivers continues to struggle with the loss of her mother and business partner.  “My mother would have been overwhelmed by the scope and depth of the love that people have expressed for her. It is certainly helping to lift our spirits during this time.  We are forever grateful for your kindness and support in continuing to honor my mother’s legacy, and for remembering the joy and laughter that she brought to so many.”

See Clyde Hughes, Melissa Rivers Inheriting $100M in Cash, Property From Mother, News Max, Oct. 23, 2014.

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

October 23, 2014 in Current Affairs, Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Impact of Slayer Statutes on ERISA Benefits

Goodyear

A recent opinion by the U.S. District Court for the Northern District of Alabama in Box v. Goodyear Tire & Rubber Co., Case No. 4:11-CV-02829-MHH, discusses the variations among state “slayer statutes”—laws preventing murderers from inheriting from their victims.

On August 5, 2003, Barbara Box shot and killed her husband, Kenneth Box.  He was found dead on the sidewalk in front of their home.  A jury convicted Barbara of murder, and she is currently incarcerated. 

Before his life came to an abrupt end, Kenneth worked for Goodyear and participated in the company’s pension plan—governed by the Employee Retirement Income Security Act of 1974 (ERISA).   The Goodyear plan provides a qualified pre-retirement benefit in the form of a survivor annuity (a QPSA) for the surviving spouse of a vested plan participant if the participant dies before he’s eligible to receive his pension benefits. The plan only provides for surviving spouses.  The plan does not address whether a surviving spouse is eligible to receive QPSA payments if she murdered the plan participant. 

While both federal and state law would prevent Barbara from inheriting the pension, Kenneth and Barbara’s two kids brought a petition in the District Court seeking an order requiring the QPSA benefit to be paid either to the estate or to them as their father’s heirs in light of the fact their mother was ineligible for the benefit.   Goodyear responded to the petition and argued that because the plan doesn’t provide a contingent beneficiary, the pre-retirement spousal benefit was only available to an employee’s spouse under the terms of the plan, and Barbara’s disqualification meant that the QPSA wasn’t payable to anyone.

The District Court ultimately decided with Goodyear.  Applying the legal narrative that Barbara predeceased Kenneth, the court found there was no surviving spouse statute under the terms of the plan and, consequently, no beneficiary to whom Goodyear would be required to pay the spousal benefit. 

See John T. Brooks and Jena L. Levin, The Impact of Slayer Statutes on Surviving Spouse Benefits Under ERISA, Wealth Management, Oct. 21, 2014.

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

October 23, 2014 in Estate Administration, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Essential California Guardianship Clauses

Guardianship

One of the most important things you can do for your children is ensure they will be taken care of after you are gone.  This can be effectuated by a written will.  However, if you do not write your will properly, the binding legal document can be powerless.  For those who live in California, it is essential to take some of the state’s guardianship laws into consideration while creating your will.  Some of the laws are as follows:

  • Name a temporary guardian and an alternate temporary guardian. This is an important consideration especially for those who have chosen permanent guardians who live far away.  Without a temporary guardian, your children may spend their first days without parents with strangers.
  • Name a permanent guardian and an alternate. Including an alternate guardian will ensure that if something happens to your primary choice, your children will still be placed with someone you are comfortable with.
  • Explain why you have chosen your guardians. In California, the court system can determine who gets guardianship of your children.  Thus, the more information you include about why you have made this choice for your kids, the more likely the court will comply with your wishes.
  • Include special instructions. While you cannot watch a guardians every move, you can leave them with general wishes or guidelines, especially regarding your family’s culture, religion, values or ethics.  

See Janet Brewer, 5 Guardianship Clauses You Need in Your California Will, Probate, Trusts, and Estate Law Blog, Oct. 17, 2014. 

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

October 23, 2014 in Estate Administration, Estate Planning - Generally, Guardianship, Wills | Permalink | Comments (0) | TrackBack (0)

Joan Rivers Leaves Over $125 Million to Daughter

Joan_RiversAs I have previously discussed, Comedian Joan Rivers passed away at 81-years-old early last month after complications arose from a routine outpatient surgery. A large portion of River's estate will pass to her daughter Melissa Rivers. Melissa is expected to receive over $85 million and River's condo valued at $40 million. In addition, Cooper, Melissa's son who is 13-years-old, will also likely receive an inheritance from his grandmother's estate.

See David K. Li, Melissa Rivers to Inherit Over $125 Million of Joan River's Estate, New York Post, Oct. 23, 2014.

October 23, 2014 in Current Affairs, Current Events, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

CLE on Using Technology to Meet the Challenges of Today's Trust & Estate Practice

CLEThe American Law Institute Continuing Legal Education (ALI CLE) is presenting a CLE entitled, Using Technology to Meet the Challenges of Today's Trust & Estate Practice, Wednesday November 12, 2014, 12:30 – 2:00pm Eastern, online and by phone. Here is why you should attend:

The complexity of an estate planning practice places great demands on your time and your intellect. What are some of the best technological tools that estate planners can use today?

Technology offers time saving benefits of not repeating mindlessly similar computations, and prevents math errors. Join Fellows of the American College of Trust and Estate Counsel for a scintillating discussion of the latest developments in technology for estate planning.

Faculty will discuss:

  • the great and not so great of Document Assembly Engine (DAE) solutions
  • suggested sites for commercial spreadsheets and information on preparing your own
  • tips for producing client diagrams and flowcharts
  • iPad and iPhone apps for trust and estate practitioners
  • free web site resources from The American College of Trust and Estate Counsel (ACTEC) and the ABA Real Property, Probate and Trust Law (RPTE) Section
  • research and other resources on the Internet for trust and estate practitioners

October 23, 2014 in Conferences & CLE, Estate Planning - Generally, Technology, Trusts, Web/Tech | Permalink | Comments (0) | TrackBack (0)

FATCA Enforcement Efforts Continue to Increase

OfficerAs I have previously discussed, the Foreign Account Tax Compliance Act (FATCA) requires financial institutions to report large accounts held by U.S. account holders to ensure compliance with U.S. tax laws. Commitment to enforcement has been demonstrated through the use of investigative resources to indict alleged violators. Enforcement actions continue to increase, and the IRS has begun using customs holds as another method of catching those attempting to avoid taxes through foreign accounts.

See Sean M. Golding, FBAR & FATCA Tax Attorney – IRS Will Use Customs Holds to Facilitate FATCA Compliance, PR Log, Oct. 14, 2014.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

October 23, 2014 in Current Affairs, Current Events, Income Tax | Permalink | Comments (0) | TrackBack (0)

Article on Waivers of Limitation Periods in the Income Tax Act

Income TaxSas Ansari (York University - Osgoode Hall Law School) recently published an article entitled, Waivers of Limitation Periods in the Income Tax Act – Judicial Interpretations and Approaches, Osgoode Legal Studies Research Paper No. 50/ 2014. Provided below is the abstract from SSRN:

The Income Tax Act sets various time limited on actions by the Minister and the Taxpayer. These time limits are there to promote a balance between the need for proper administration of the Act in relation to each taxpayer’s affairs and certainty/finality for both the taxpayer and the Minister. One of such time period is the “normal reassessment period” found in section 152. The Act allows for a taxpayer to waive the normal reassessment period, thereby allowing the Minister to reassess the taxpayer beyond this time period.

This paper examines waivers of the normal reassessment period in the context of the Income Tax Act, examines the judicial interpretation and application of such waivers, and provides guidance for judges faced with waiver issues.

October 23, 2014 in Articles, Income Tax | Permalink | Comments (0) | TrackBack (0)