Wills, Trusts & Estates Prof Blog

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

Thursday, October 18, 2018

Paul Allen May be Leaving Largest Estate in Washington History

PaPaul Allen constructed an empire over the 35 years after he left Microsoft that consists of funding local museums and arts festivals, sponsoring brain science and artificial intelligence research institutes, and even owning sports teams and an enormous real-estate portfolio. The disposition of possibly the largest estate in the history of the state of Washington poses many questions of the future of these endeavors, and the Internal Revenue Service will be poring through all of it.

There is familial continuity built in to the structure of Allen’s empire even though he was not married and had no children. His sister, Jody, helped carry out many of his endeavors. But there are early signs of how various pieces of the Allen empire have been subtly restructured to operate more independently. And rumors have already started about possible sales of Allen’s sports franchises, the Seahawks and Portland Trail Blazers.

Large estates such as Allen's have their assets moved into a revocable living trust. Engineered to administer an estate, a trust serves in place of a will, but is not subject to the traditional court process of probate. But the issue of estate taxes remain, with substantial estates facing the possibility of being hit with a combined federal and state estate tax rate as high as 52%.

Douglas Lawrence, a lawyer whose practice includes planning and probate matters at the law firm Stokes Lawrence, says that “It all boils down to: What’s the value of that enterprise?” He expects the process to take a full nine months, and he would not be surprised if the estate asks tax authorities for an extension.

See Matt Day, Paul Roberts, & Benjamin Romano, Paul Allen’s Death Leaves Many Questions Around What’s Likely the Largest Estate in Washington History, The Seattle Times, October 17, 2018.

Special thanks to Jay Brinker (Cincinnati Estate Planning Attorney) for bringing this article to my attention.

October 18, 2018 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Non-Probate Assets, Technology, Trusts, Wills | Permalink | Comments (0)

Wednesday, October 17, 2018

Article on Digitalisation and the Future of National Tax Systems: Taxing Robots?

RoboJoachim Englisch recently published an Article entitled, Digitalisation and the Future of National Tax Systems: Taxing Robots?, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article.

It is generally assumed that already in the next decade, the use of labour-saving robots with implemented artificial intelligence will lead to a dramatic transition of the workforce in almost all sectors of production and services. The ensuing loss of jobs that have traditionally been performed by a human employees is likely to result at least temporarily in reduced wage tax and payroll tax revenues, increasing income inequality and a disruption of the labour market. Against this backdrop, the idea of taxing the use of robots that replace human workforce, or even taxing the robots themselves, has emerged in politics and scholarly writings. Several justifications have been brought forward by its proponents: the robot tax has been regarded, respectively, as a corollary to a soon-to-be-expected concession of civil law personhood to robots, as a tax on imputed income earned by means of the robot, as an equalisation levy to restore the level playing field regarding the taxation of robots and of human workers, as an instrument for economically efficient wage compression between winners and losers of automation among the human workforce, or as a corrective tax to slow down the disruption of the labour market.

This paper argues that upon a closer look, the case for taxing robots or their use is relatively weak, though, except when specific conditions are met. There is currently no compelling argument to make robots themselves taxable persons, neither for the purposes of income taxation nor for the purposes of indirect taxes on consumption expenditure. Moreover, significant objections can also be raised regarding suggestions to tax the use of robots. Some of the concepts advanced in literature rely on presumptions that are either conceptually flawed or lack credible empirical support. Other proposals have their merits, but when weighing in on their potential benefits, policymakers will also have to take into account that any tax on robots is liable to result in distortions, complexities, and reduced growth. Besides, proponents of a robot tax tend to underestimate how capital mobility and international tax competition could easily undermine the respective objective of such a tax. As a Pigouvian tax, a robot tax will therefore likely have a very limited field of reasonable application. Regarding income redistribution and revenue raising objectives, the taxation of robots should only be considered as a measure of last resort, and in any event a provisional one. Where politically feasible, priority should instead be given to intensified efforts to tax the return on capital investments and on profits in general, including an adequate taxation of ultimate shareholders. In any event, increasing automation should have implications for the international allocation of taxing rights.

October 17, 2018 in Articles, Estate Planning - Generally, Science, Technology | Permalink | Comments (0)

Tuesday, October 16, 2018

Microsoft Co-Founder Paul Allen Dies of Cancer at 65

PaPaul Allen, co-founder of Microsoft, died from complications of non-Hodgkin’s lymphoma on Monday afternoon. Allen was 65 years old and revealed earlier this month that he was receiving treatment for the disease, the same disease he had fought and conquered in 2009.

Allen ranked among the world’s wealthiest individuals. As of Monday afternoon, he ranked 44th on Forbes’ 2018 list of billionaires with an estimated net worth of more than $20 billion. He was also the owner of the Seattle Seahawks and the Portland Trail Blazers. He was an avid electric guitarist who enjoyed jamming with celebrity musicians such as Mick Jagger and Bono, and he funded the Experience Music Project in Seattle (now dubbed the Museum of Pop Culture), devoted to the history of rock music and dedicated to his musical hero Jimi Hendrix.

Vulcan CEO Bill Hilf said, “All of us who had the honor of working with Paul feel inexpressible loss today.” Vulcan is a network of philanthropic efforts and organizations that Allen utilized to support research in artificial intelligence and new frontier technologies. The group also invested in Seattle’s cultural institutions and the revitalization of parts of the city.

Bill Gates, who co-founded Microsoft with Allen, said that “personal computing would not have existed without him.”

See Christine Wang, Microsoft Co-Founder Paul Allen Dies of Cancer at Age 65, CNBC, October 15, 2018.

October 16, 2018 in Current Events, Estate Planning - Generally, Sports, Technology | Permalink | Comments (0)

Thursday, October 11, 2018

Podcast: Data Scraping

ACTEC_FoundationData Scraping sounds like something painful that you would have to experience at the dentist.  It is actually the term for aggregating information that is available on the internet and using it for research and even for commercial purposes  Listen to the latest ACTEC Trust and Estate Talk podcast to hear ACTEC Fellow Mark Parthemer of Palm Beach, Florida, discuss this timely topic.

October 11, 2018 in Technology | Permalink | Comments (0)

Tuesday, October 2, 2018

Comment on Save that Money: Ensuring Donations Received Through Crowdfunding are Properly Protected

GofundmeBlake Scott recently published a Comment entitled, Save that Money: Ensuring Donations Received Through Crowdfunding are Properly Protected, 10 Tex. Tech Est. Plan. & Cmty. Prop. L. J. 395-416 (Summer 2018). Provided below is the introduction to the Comment.

Crowdfunding has quickly become one of the most popular ways to raise money in today's internet-driven society. The purpose of this comment is to bring awareness to the major property and estate planning issues embedded in crowdfunding, consider possible solutions to those issues, and ultimately offer guidance to attorneys so they can provide informed and competent advice to clients engaged in crowdfunding.

Before diving headfirst into the relatively new world of crowdfunding, specific nomenclature and terms must be established and defined. Following the definitions, this comment will provide a brief background on crowdfunding and the exponential growth it has seen in the past decade. It is important to understand the rapidly growing trend of crowdfunding to properly plan for the future impact it will have on estate planning as well as society as a whole. The comment will conclude  by offering guidance on how Texas attorneys can advise their clients before, during, and after such clients take on the challenge of running a successful crowdfunding campaign.

October 2, 2018 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, Technology | Permalink | Comments (0)

Tuesday, September 25, 2018

Don’t Forget About Digital Assets in Your Estate Plan [Canada]

InstagramA recent poll found that only half of Canadians have wills and that only one-third of those wills are current. Because of these frightening statistics, it is even less likely that they have included their all-too-important digital assets.

The amount of digital assets that can be attributed to a person can be vast, and maybe larger than they believe because some of them may not be seen as normal "assets." Reward member points, social media log-in information, and email accounts are are designated as digital assets. Then there is the daunting of question on how to distribute them after the owner passes away. If you fail to include explicit instructions it can lead to headaches for your executor or loved ones later on.

Barry Corbin, an estate lawyer with Corbin Estates Law Professional Corp. in Toronto, says lawyers drawing up wills and powers of attorney should encourage clients to take stock of their digital assets and who they want to know about them. Many of these assets are treated differently than other items in a person's estate because they may lack monetary value, but be rich in sentimental value, such as digital family pictures on Facebook or Instagram.

Canadians are sitting on about $16-billion of unredeemed loyalty points, according to Bond Brand Loyalty. Television host and chef Anthony Bourdain brought bequeathing frequent flyer miles to the limelight when he left his considerable collections of miles to his estranged wife earlier this year.

See Brenda Bouw, Don’t Forget About Digital Assets in Your Estate Plan, The Globe and Mail, September 24, 2018.

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

September 25, 2018 in Estate Administration, Estate Planning - Generally, Technology, Wills | Permalink | Comments (0)

Wednesday, September 12, 2018

Making Wills Easier and Cheaper with Do-It-Yourself Options

WillPeople are bombarded with different avenues of technology and advancements, and with these advances come the benefit of convenience and decreased expense for undertakings that seemed out of reach for some. While it is recommended that every person over the age of 18 possess a legal and valid will, numerous people saw them as too cumbersome and expensive - or in selected cases if unnecessary as they may have limited assets to pass on to heirs. In fact, a recent survey by Caring.com found that 60% of Americans do not have a will in place.

Patrick Schmitt, co-founder and co-chief executive of FreeWill, said he set out to offer wills that were easy to create and update, and the site even allows users to leave money to charities. Their business models works in that the company receives money from the charitable institutions that pay a fee for using the FreeWill service to reach out to donors. Schmitt had worked during the Obama administration on the Democratic National Committee’s midterm fund-raising team and was frustrated in with the availability of estate planning service online.

Attorneys disagree over to what degree technology can substitute for legal counsel. Richard A. Behrendt, a trust and estates lawyer outside Milwaukee, said, “There are so many things that can be done improperly or planning opportunities that could be overlooked if you’re just sitting at your computer trying to make a one-size-fits-all will work for you.”

See Paul Sullivan, Making Wills Easier and Cheaper with Do-It-Yourself Options, New York Times, September 7, 2018.

Special thanks to Richard A. Behrendt, Esq. (Wisconsin Estate & Legacy Planning Attorney) for bringing this article to my attention.

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

Special thanks to Lewis Saret (Attorney, Washington, D.C.) for bringing this article to my attention.  

September 12, 2018 in Current Affairs, Estate Planning - Generally, Intestate Succession, Technology, Wills | Permalink | Comments (0)

Friday, August 31, 2018

CLE on Ethical Hazards of Digital Assets: What Estate Planners Need to Know

CLEThe American Law Institute is holding a webcast / telephone seminar entitled, Ethical Hazards of Digital Assets: What Estate Planners Need to Know, on Thursday, September 13, 2018, at 12:00 pm - 1:30 pm Eastern. Provided below is a description of the event.

Why You Should Attend

More and more of your estate planning clients now have digital assets – from social media profiles to cloud storage to online investment accounts and more. After a decedent dies or an individual becomes incapacitated, however, fiduciaries often have difficulty accessing and managing these assets due to encryption, secret passwords, and federal and state data privacy laws.   As a trusts and estates attorney, you are ethically obligated to understand digital technology and what the challenges are. Do you know as much as you should, as well as what steps your client needs to take to ensure that their electronic assets will be managed or disposed of appropriately? Join us for this 90 minute audio webcast to confirm that you are meeting your ethical obligations AND are providing your clients with superior counsel in this emerging area!  

What You Will Learn

A panel of experienced practitioners – all members of the American College of Trust and Estate Counsel (ACTEC) – will discuss:

- The attorney’s ethical obligation for:

o   technological competence

o   protecting client data and securing files

- The status of the Uniform Fiduciary Access to Digital Assets Act and state adaptations of it

- What kinds of documents should be drafted to account for digital assets

  All registrants will receive a set of downloadable course materials to accompany the program.   Need ethics credit? This seminar provides 1.5 to 1.8 hours of ethics instruction, depending on state requirements, in MCLE jurisdictions that accredit live telephone seminars and/or webcasts.  

Who Should Attend

Attorneys and other legal professionals in Estate Planning should attend this accredited continuing legal education program from ALI CLE.

August 31, 2018 in Conferences & CLE, Estate Planning - Generally, Technology, Trusts, Wills | Permalink | Comments (0)

Thursday, August 30, 2018

Article on Social Media Abuse in Long-Term Care Facilities: Why the Law is Failing to Protect Elderly Residents and How States Should Address It

SnapBreanne Hitchen recently published an Article entitled, Social Media Abuse in Long-Term Care Facilities: Why the Law is Failing to Protect Elderly Residents and How States Should Address It, 49 U. Tol. L. Rev. 141 (2017). Provided below is an abstract of the Article:

In March 2016, state health officials in Iowa received a report that a certified nursing assistant for a long-term care facility shared an indecent photo of an elderly resident on Snapchat--with six of the nursing assistant's colleagues. The photo displayed the resident with his pants around his ankles, and his legs and hands covered in feces. Yet, the most disturbing part of the official's investigation was that the nursing assistant's actions were not against the law. Even though the elderly resident had dementia, and the humiliating photo was shared with a larger audience on social media, the state could not punish the nursing assistant criminally. The Iowa law intended to protect elderly adults from abuse in long-term care facilities had not been updated since 2008--before social media use exploded and mobile applications became available. The law would have applied had the resident's genitals been exposed in the photo, but that was not the case. Although the facility fired the nursing assistant, she can still be employed by any other long-term care facility in the state.
Social media use has had a profound impact on human communication and interaction. Using a smartphone, people are able to access social media platforms to simultaneously connect and share personal thoughts or photos with virtually anyone, at any given time. But the removal of communication barriers has led to a breakdown of personal barriers, causing people to over-share details about their personal, and even professional, lives. As a result, victimization through online public shaming has substantially increased. Taking an embarrassing or funny photo of a stranger and then sharing it on social media has become all too common. Yet, most people fail to perceive the harm done to the victim when embarrassing photos are shared online.
Unfortunately, between January 2012 and August 2016, there were 47 documented incidents of long-term care facility employees sharing photos or videos of elderly residents on social media. While these incidents are certainly humiliating and inappropriate, they are also abusive invasions of the resident's privacy. The harm that results from an invasion of privacy extends beyond mental anguish; social media abuse compromises the trust placed in facility staff by the vulnerable elderly residents and their family members.
Currently, most federal and state laws do not allow prosecutors to pursue justice for elderly victims in social media abuse cases. Although there are federal health laws that could potentially apply to nearly every reported incident, the appropriate federal agencies have not taken the necessary actions to enforce those laws, in spite of at least one U.S. Senator's calls for increased federal oversight in this area. Ultimately, states are left to oversee and investigate incidents that occur in facilities in their state. Many states, like Iowa, are quickly discovering that they do not have laws to adequately address privacy violations occurring in long-term care facilities. Moreover, state laws in this area vary considerably from state to state.
This Comment argues that current federal and state statutes and regulations do not adequately address social media abuse of elderly long-term care facility residents, and proposes that states should adopt criminal statutes to punish the act of capturing and disseminating inappropriate images of elderly residents on social media. Part II provides a description of the growth of social media, relevant types of social media used in elderly victimization, and the issues social media use has created in society, including increased victimization. Part III explains the status of the laws and regulations regarding elderly abuse in long-term care facilities and victimization through social media abuse. Part IV highlights how current federal and state laws and regulations are failing to adequately curtail victimization of the elderly, recommends preliminary steps that can be taken to meet that end, and proposes that states adopt criminal statutes to punish facility staff members that commit social media abuse. Part V concludes.

August 30, 2018 in Articles, Current Affairs, Current Events, Elder Law, Estate Planning - Generally, Technology | Permalink | Comments (0)

Friday, August 24, 2018

Article on Tax Talk and Reproductive Technology

EggdonationBridget J. Crawford recently published an Article entitled, Tax Talk and Reproductive Technology, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article:

The tax system both reacts to and helps create attitudes about the value of certain behaviors and choices. This Article makes three principal claims – one empirical, one normative, and one interpretative. The Article demonstrates empirically that a representative sample of fertility clinics in the United States do not make publicly available information about the tax consequences of compensated human egg transfers – commonly called egg “donation.” The United States Tax Court recently decided in a case of first impression, Perez v. Commissioner, that a compensated egg transferor must report as income any amount she receives for her eggs. Although the Tax Court missed an opportunity to clarify further complex questions about the tax consequences of transfers of human bodily materials, the basic holding of Perez was clear. Even so, a content-based analysis of public Internet forums and bulletin boards suggests that compensated egg transferors remain unclear about their tax obligations. This confusion is due in large part to the absence of what this Article calls “tax talk” on the part of the fertility clinics themselves. Women who receive compensation for providing eggs reject the idea they are engaged in any sort of commercial activity, and think of themselves as altruistic actors who do receive money, but only because of their generosity and willingness to endure discomfort and inconvenience. Intended parents benefit from construing egg transferors as “givers,” because that allows the intended parents to relegate compensation to a secondary role in any negotiations with the egg transferor. The absence of tax talk also allows intended parents to minimize the specter of “baby buying.” That cloud hovers over any assisted reproductive technology involving compensation for either gestational services or activity resulting in gamete transfers. The altruism narrative is reinforced by fertility clinics and is the foundation on which a multi-billion-dollar industry stands. The absence of tax talk depresses the price of eggs and allows most of the industry profits to go to the drug manufacturers, fertility clinics, and the doctors who own the clinics. They all profit handsomely from the reproductive work of others. The normative solution to the absence of tax talk in the reproductive technology context is for the United States Internal Revenue Service to issue clear guidance to all fertility clinics regarding the tax consequences of egg transfers. Furthermore, the American Society for Reproductive Medicine should move from merely recommending to requiring issuance of appropriate tax forms to compensated egg transferors. This will put taxpayers on notice of their filing obligations and likely increase tax compliance. From an interpretative perspective, taxing compensated egg transfers recognizes the importance of that activity. Taxation signals that reproductive work deserves to be treated like any other labor. The tax system thereby exercises its power to mark an activity as important and within the mainstream of human experience. The alternative – allowing compensated human egg transfers to escape taxation despite the law – turns compensated reproductive work into a preferred (and economically risky) type of labor activity with unintended consequences for women and others.

August 24, 2018 in Articles, Current Affairs, Estate Planning - Generally, Technology | Permalink | Comments (0)