Wills, Trusts & Estates Prof Blog

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

Tuesday, March 1, 2016

How To Deal With The Deductibility Of Investment Advisory Expenses

Mortgage2This article provides a specific outline for how the rules dealing with the deductibility of investment advisory expenses apply to estate and non-grantor trusts. There is a lot of confusion concerning the subject of the deductibility of investment advisory expenses. This article explains the application of Section 212 limitations on estates and non-grantor trusts. The IRS has also amended the date that these regulations will go into effect to begin on January 1, 2015, for all estates and trusts. There is a requirement to unbundle fiduciary and investment fees that is explained in this article. This article is the the second in a series, and there will be more in depth articles in the future dealing with these subjects. If people want to learn more about how these new rules will impact them they should speak with an estate planning professional who specializes in this area.

See Domingo Such III and Tina Milligan, Deductibility of Investment Advisory Expenses: Estates and Non-Grantor Trusts, Wealth Management, February 29, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

March 1, 2016 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0)

Thursday, February 18, 2016

When An Executor Fails To Properly Administer An Estate

ExecutorThere can be terrible consequences for beneficiaries when an executor fails to properly administer an estate. Executors possess broad authority to control all aspects of an estate, and the value of an estate can be diminished if they act improperly. This column discusses some of the rights that beneficiaries have when it comes to taking action to enforce both the estate and the executor’s fiduciary obligations. This article provides a list of the type of executor misconduct that can devalue an estate. Beneficiaries do have rights to not have the value of their estates mismanaged by an incompetent executor who can be subject to court oversight. The type of remedies that a beneficiary would be entitled to depends on the situation, but beneficiaries need to take action as soon as possible if they suspect that an executor might be improperly administering an estate.

See Robert F. Morris, What Can I Do If Executor Abuses Estate?, The National Law Review, February 17, 2016.

February 18, 2016 in Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Retirement Plan Advisors Will Face More SEC Scrutiny

SECThe SEC is going to place more scrutiny on retirement advisers through its Office of Compliance Inspections and Examinations (OCIE). “As was true in 2015, OCIE has placed “examining matters of importance to retail investors, including investors saving for retirement” at the top of its list of exam priorities for this year.” The OCIE is conducting examinations of SEC-registered investment advisers and broker-dealers through a multi-year targeted examination program called the Retirement-Targeted Industry Reviews and Examinations Initiative (ReTIRE). This will be in addition to the Department of Labor’s recent efforts to increase scrutiny on retirement advisers. It is important for advisers to put in place a deeply ingrained fiduciary best-practice structure that covers ERISA and securities regulations. Taking the necessary steps to adopt better practices will put advisory firms in a good position to prepare for OCIE and DOL regulations.

See Blaine F. Aikin, Not just the DOL: Retirement plan advisers must prepare for increased SEC scrutiny, Investment News, February 18, 2016.

February 18, 2016 in Elder Law, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Monday, February 15, 2016

Purchasing Stocks On Behalf Of An LLC

Buy stockThe business structure known as a limited liability company (LLC) is becoming more popular with business owners who want to limit their legal exposure.  “When a business is incorporated as an LLC, the owner or partners' personal assets are generally protected from litigation or from being used to repay the company's debts.”  This article discusses the steps an LLC will need to follow when deciding to purchase stock.  The first step involves establishing the LLC by following the registration requirements of the state that the LLC is going to be established in.  Usually a person will file the LLC articles of organization through the Secretary of State’s office.  It is also important to have an operating agreement that clearly expresses the authority of designated owners and managers to purchase stocks on behalf of the company.

See How to Buy Stocks on Behalf of an LLC, My San Antonio, February 12, 2016.

February 15, 2016 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0)

Friday, February 12, 2016

When The Experts Cannot Be Trusted

ExpertsThere have been a number of cases recently where financial advisers and sellers who had “blue-chip reputations have been accused of either staggering incompetence or outright fraud that led to multimillion-dollar losses.” People need to be careful when they are seeking out the advice of a professional because there can be times when the advice might not be good. This article discusses some of the high profile cases involving disputes with financial advisors. One of the cases that this article mentions involves the family of William Davidson, the former owner of the Detroit Pistons. This article also addresses some of the problems that can take place in the art collection world with trusted collectors and buyers. It is always important for investors to be prudent and to not always blindly trust people claiming to be experts.

See Patricia Cohen, When the Supposed Experts Lead Buyers Astray, The New York Times, February 12, 2016.

February 12, 2016 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0)

Thursday, February 4, 2016

Information About Elder Abuse Cases

ElderlyThis column provides a breakdown of elder abuse statistics in the State of Minnesota which has recently established an award-winning system that audits how court appointed handle the finances of people with dementia. Elder financial abuse is a growing problem as the American population continues to age. State governments will need to adopt policies to stay ahead of this problem. In this article is a chart that represents the number of audits that were done on conservatorship accounts “under the online Minnesota’s Conservator Account Auditing Program (CAAP).” This growing concern and awareness about the problem of elder financial abuse is not just going to be limited to the State of Minnesota but is instead an issue of national importance. Policy makers should consider crafting policies to tackle this issue so that vulnerable senior citizens can be protected.

See Jim Foster, Elder abuse cases, by the numbers, Star Tribune, January 30, 2016.

February 4, 2016 in Elder Law, Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0)

Monday, February 1, 2016

Common Pitfalls Executors Should Avoid

New estate planServing as an executor is a very difficult task that carries with it many legal responsibilities. An executor should be careful to not pay bills be careful and should instead get a good grasp of the estate’s financial situation. They should also be careful not to use the estate’s assets to play the market, and they should avoid mishandling real estate. Executors also need to be aware of the tangible assets that belong to the estate to avoid losing any of them. “Executors must find all of the deceased’s assets and sort through all of their personal belongings to account for the entire estate, says Victor Ngai, an executive at Guardian Life Insurance Co. of America in New York.” Being an executor is a tough job and a person needs to be well prepared for dealing with all their fiduciary responsibilities.

See Veronica Dagher, The Biggest Mistakes Executors Make, The Wall Street Journal, January 31, 2016.

Special thanks to Jim Hillhouse for bringing this article to my attention.

February 1, 2016 in Estate Administration, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Friday, January 29, 2016

Obama Administration Close To Approving New Investment Advice Rule

Obama regulationThe Obama administration is close to approving a new controversial investment advice rule that will deal with retirement accounts. “The Department of Labor sent the so-called fiduciary rule to the White House’s Office of Management and Budget (OMB) for final approval Thursday.” This new fiduciary rule proposal will be made public once the White House signs off on it. It will raise the investment standards for retirement advisors and require them to act in the best interest of their clients. The new proposed rules would also try to prevent advisers from purchasing expensive investment products that will benefit them more than their clients. Critics of the new proposed rules say it will impose more costs and burdens on investment advisers who will then have to pass the increased costs their services onto consumers.

See Tim Devaney, Retirement advice rule nears White House approval, The Hill, January 29, 2016.

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

January 29, 2016 in Current Affairs, Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0)

Tuesday, January 26, 2016

The Work That Goes Into Finding The Heirs Of An Estate

Last willThe duty of an executor to locate all heirs who are entitled to a share in the assets of an estate is something that is recognized in many jurisdictions. The difficulty involved with the process of locating heirs will often depend on the Will and the circumstances surrounding the specific situation. This article discusses some of the self-help remedies that executors can use to locate heirs. The executor might also want to consider hiring a professional researcher if the task of locating heirs becomes too difficult or complex. It is important for the executor to make a “reasonable effort” to find the heirs in order to fulfill the required standard that this column discusses.

See Suzana Popovic-Montag and Ian M. Hull, The Process of Locating The Heirs of an Estate, The Huffington Post, January 25, 2016.

January 26, 2016 in Estate Administration, Estate Planning - Generally, Intestate Succession, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Monday, January 25, 2016

Lawyer Wins $350,000 Judgment In Defamation Lawsuit Over Bad Online Review

JudgmentAn appeals court in Florida has upheld a $350,000 judgment for a lawyer who sued a former client for defamation over negative reviews that the client posted about the lawyer on the internet. In this case the client had posted reviews that claimed the attorney charged the client “four times the amount of fees originally quoted, that she lacked integrity, and that she falsified a contract.” The court of appeals rejected the defendants First Amendment argument holding that their review had made factual allegations that the evidence showed to be false. The reviews that a person posts online can have a negative impact on a person’s livelihood, especially if they are making false and libelous allegations about that person.

See Lawyer Awarded $350,000 Based On Negative Online Reviews Posted By Former Client, Law Office of Donald D. Vanarelli, January 22, 2016.

January 25, 2016 in Estate Planning - Generally, Professional Responsibility, Web/Tech | Permalink | Comments (0)