Wills, Trusts & Estates Prof Blog

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

Tuesday, March 20, 2018

Post-Retirement Planning: A Checklist for Seniors

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-03-20/24c28768-1022-40da-9466-a1666b314f5b.pngPrior to exiting the workforce, sagacious seniors will seek the advice of their trusted advisors to ensure their carefully laid out retirement plan comes to fruition. But careful planning does not end at retirement. Prudent seniors should have a solid framework for their post-retirement plans as well. Such a plan includes creating and keeping a list of financial accounts, compiling a list of investments and digital assets, a durable and medical power of attorney, and keeping these documents in a safe location known to at least one trusted friend or family member.

See Post-Retirement Planning: A Checklist for Seniors, Elder Law: Cranfill Sumner & Hartzog, February 20, 2018.

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

March 20, 2018 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Travel, Wills | Permalink | Comments (0)

Tuesday, February 27, 2018

4 Estate Litigation Predictions For 2018

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-02-27/15a70323-f48d-41fb-94d7-0f2a87e18071.pngThe start of a new year is a great time to look forward and predict upcoming trends in estate litigation for 2018. First, it is incredibly likely that the overall volume of estate litigation will increase. As our society ages and passes down more wealth than any other time in human history, the potential for lawsuits continues to grow. Second, the continual inclusion of arbitration clauses in wills and trusts will increasingly serve as the basis of litigation as executors and trustees invoke them to compel binding arbitration. Those opposing these clauses argue that they are void under the Uniform Trust Code, void against public policy, and should not have the power to bind beneficiaries who were never in a position to agree to the arbitration terms. Third, in terrorem, or no-contest clauses, will expand in both breadth and scope. Over the past decade, estate planning attorneys have included broader no-contest clauses in an effort to prevent contests involving beneficiary designations, claims against an executor or trustee for breach of fiduciary duty, and actions that retard the administration of an estate or trust. Finally, the mandatory and default rules under the Uniform Trust Code will be expounded as estate planning attorney’s attempts to limit certain fiduciary duties infringe upon state laws.

See Will Sleeth, 4 Estate Litigation Predictions For 2018, Financial Advisor, February 14, 2018.

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

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

February 27, 2018 in Estate Administration, Estate Planning - Generally, Travel, Wills | Permalink | Comments (0)

Wednesday, November 1, 2017

Article on Of Piketty and Perpetuities

The_protectors_of_our_industriesEric A. Kades recently posted an Article entitled, Of Piketty and Perpetuities, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

For the first time since independence, in a nation founded in large part on the rejection of a fixed nobility determined by birth and perpetuated by inheritance, America is paving the way for the creation of dynastic family wealth. Abolition or evisceration of the Rule Against Perpetuities in over half the states along with the likely repeal of the federal estate tax mean that there soon will be no obstacles to creating large pools of wealth that will insure lavish incomes to lucky heirs for generations without end.

The timing of these legal changes could hardly be worse. Marshaling innovative economic data extending back centuries, Thomas Picketty convincingly argues that the relatively egalitarian incomes enjoyed in developed economies from the end of World War II until around 1980 were an aberration and that we are in the process of returning to the historical norm of much greater income and wealth inequality. The driving force is the return to a world in which the rate of return to capital (r) exceeds the growth rate of national income (g) — another historical norm temporarily abrogated during the 20th century. The wealthy hold an extremely high fraction of national wealth, and when returns to that wealth exceed the growth rate of national income, their relative economic power (and all that goes with that) increases proportionally.

The main contribution of this article is, unhappily, to explore reasons that this revival of unending inherited wealth is of even greater concern than previously thought. First and foremost, the savings rate to a significant degree will be set by the dead hand control of those creating perpetual dynastic trust. In order to insure that trust assets keep up with income and beneficiary class growth, settlors will need to mandate very high savings rates for trust income. In the long term excessive savings (in excess of the “golden rule” savings rate), perhaps surprisingly, can actually retard the growth of consumption. In the shorter term, in a well-known phenomenon called the “paradox of thrift,” high savings rates can cause recessions, make them more severe, and increase their duration.

Second, beneficiaries of dynastic trusts lack the power to dissipate the pools of family wealth that provide their high incomes. Prodigal children’s spending of principal is a powerful force for reducing inequality and increasing socioeconomic mobility. When not barred from doing so, descendants’ ability to sell trust assets to fund even more lavish lifestyles means that they will buy copious goods and services from those with lower incomes and less wealth.

Thus perpetual dynastic family wealth thus imposes real social costs. This article recommends the conventional solution to such negative externalities: calibrated taxation of the anti-social behaviors. Instead of reinstating the Rule Against Perpetuities, this article instead suggests imposing perpetuities taxes on dynastic trusts with rates set, as closely as possible, to equal the costs imposed in terms of lower growth; more frequent and sharper business cycles; higher inequality; and lower socioeconomic mobility.

November 1, 2017 in Articles, Estate Planning - Generally, Travel | Permalink | Comments (0)

Tuesday, August 22, 2017

The Biggest Estate Planning Mistake People Make

Big-mistake-jason-bateman-15284961-485-322There are a few key documents needed for near-complete estate planning. First, the Advanced Health Care Directive, or Medical Power of Attorney, designates someone to make medical decisions for you if become injured or too sick to make these decisions for yourself. The individual chosen through this document is referred to as your health care agent. Next, a Living Will provides you the ability to specifically dictate what types of medical treatment you may or may not want in an emergency or near-death situation. This document will allow the previously designated health care agent to act in your stead to make these decisions on your behalf.

Third, a Durable Power of Attorney provides for some trusted individual to make decisions on your behalf in case you become incapacitated. This person, your agent, may pay bills, write checks, make deposits, and take money from checking accounts. Finally, a Revocable Living Trust may be set up to avoid some issues inherent with the durable power of attorney. As settlor, you may place assets into a trust and act as both the trustee and the beneficiary. Upon incapacity, a named successor-trustee may take the reins and run the trust for your benefit until recovery or death.

Each of these steps can be extremely complicated and legal assistance should be sought to accomplish these estate-planning necessities.

See Brad Wiewel, The Biggest Estate Planning Mistake People Make, Forbes, August 16, 2017.

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

August 22, 2017 in Estate Planning - Generally, Travel, Wills | Permalink | Comments (0)

Monday, July 31, 2017

So You’re Going on a Trip

GalleryBefore travelling internationally, take some time to understand the legal complications that may arise if an incident occurs overseas. A huge part of avoiding potential legal issues is cultivating an understanding of the laws of the nations where you will be visiting. An example, in Bahrain, you can be arrested for public drunkenness and disorderly behavior. This is pretty standard, but unlike most domestic jurisdictions, the use of vulgar language or hand gestures may result in heavy fines or criminal charges. In addition, it is illegal to photograph certain buildings.

Avoiding arrest in a foreign nation should pretty much be number one on the list of things not to do while abroad, but some events are unavoidable. When an illness strikes, especially when it is serious, it is important to have a backup plan. The American Express Platinum Card will pay up to $2.5 million for treatment fees. Another possibility, MedJetAssist is an emergency service offered for travelers. The unique benefit of the service: if you have an emergency more than 150 miles from your home, they will arrange transport to a hospital of your choice. That means any hospital you choose, not just the closest facility.

Drafting a will and designating beneficiaries or updating your current estate plan are also important chores to complete before heading out to foreign soil.

See George, So You’re Going on a Trip, Fox+Mattson, May 22, 2017.

July 31, 2017 in Estate Planning - Generally, Travel | Permalink | Comments (0)

Friday, July 21, 2017

Why Springfield, Mass., Is a Great Place to Retire

SuessLooking for a great place to retire? Consider Springfield, Massachusetts. The city has a population just shy of 155,000 and is only an hour-and-a-half drive to Boston and just thirty minutes to Hartford. Housing prices are also surprisingly reasonable considering the city's proximity to a number of population-dense metropolitan areas. Within city limits, $300,000 is sufficient to purchase a three-bedroom, three-and-a-half-bath, brick colonial in Forest Park. The city is also home to a number of museums, including a delightfully unique structure that was recently opened in dedication to the life and work of a Springfield native: Theodor Geisiel, better known to children as Dr. Seuss.

The city is not all sunshine and roses, however, as the winters are bitingly cold and the crime rate in the area is relatively high. Springfield has also struggled with urban decay since the exit of a number of local manufacturers. The city has undertaken a concerted effort to reduce these issues by strengthening its police force and encouraging new business entrants. An MGM Casino is slated to open soon and will bring more than 55,000 square feet of retail space. Massachusetts taxes are fairly reasonable, but estates valued at over $1 million may be subject to an estate tax.

See Sandra Block, Why Springfield, Mass., Is a Great Place to Retire, Kiplinger, 2017.

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

July 21, 2017 in Estate Planning - Generally, Travel | Permalink | Comments (0)

Thursday, July 13, 2017

Why Northfield, MN Is a Great Place to Retire

NorthfieldNorthfield, MN rests peacefully within a majestic tree-scape just forty-five miles south of the hustle and bustle of the Twin Cities. The city houses two colleges: St. Olaf College and Carleton College. The presence of these institutions injects a youthful element into a city with a substantial population of retirees. The city’s unique character caters to lovers of the arts with a plethora of music festivals, film screenings, and live performances. The downtown area is a veritable hive of activity and features an open-air market each Saturday as well as festivals throughout the year.

Do not pack your bags too quickly though, as Minnesota is not a tax-friendly state for retirees. Income and sales tax rates are both very high, and Social Security income is taxed the same as on your federal tax return.

See Pat Mertz Esswein, Why Northfield, Minn., Is a Great Place to Retire, Kiplinger.

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

July 13, 2017 in Estate Planning - Generally, Estate Tax, Income Tax, Travel | Permalink | Comments (0)

Monday, June 19, 2017

Your Child’s Tuition Is Paid While You’re in Tahiti

TahitiStuart Ross, a former insurance executive, sold his Puerto Rico-based company twelve years ago. Ross has since enjoyed the fruits of his success with multiple homes and extensive international travel. But, like anyone else, while Ross and his wife travel, the bills and other burdens of daily life pile up. To handle these day-to-day issues, Ross hired Total Personal Services. Total Personal Services, based in Garden City, N.Y., performs the mundane tasks of sorting through personal mail, paying bills, arranging international transfers, and setting up routine household services. Unlike a family office, this service only provides for helping with basic, daily tasks, not providing money management and family coordination services. Ross offers some advice for those wanting to take dream vacations but have difficulty escaping the tedium of daily life: “I would say there are really good options to deal with it and life is short—take the trip.”

See Liz Moyer, Your Child’s Tuition Is Paid While You’re in Tahiti, The New York Times, June 16, 2017.

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

June 19, 2017 in Travel, Trusts | Permalink | Comments (0)

Monday, April 10, 2017

The Search for Offshore Havens Begins to Tighten

Offshore havensThe super wealthy and their money are increasingly searching for second passports and offshore havens as capital controls, tax reporting, and visa procedures tighten around the world. Approximately 100 nations have signed the Common Reporting Standard, which promotes a wider exchange of information on taxable assets and income across international governments. However, the United States is not one of those countries; in fact, we often demand that foreign financial institutions hand over anything they know about Americans’ offshore assets, but we do not return the favor. One thing is for sure, the game of international musical money chairs will soon come to an end, as moving capital in the future will prove more difficult.

See John Dizard, The Search for Second Passports and Offshore Havens, Financial Times, April 7, 2017.

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

April 10, 2017 in Current Events, Estate Planning - Generally, Travel | Permalink | Comments (0)

Saturday, February 18, 2017

Americans Retiring Abroad Must Plan Ahead

Retiring abroadAs many Americans look to retire overseas, they will need to seek advice on the best way to plan for their ultimate destination. Between 2010 and 2015, the number of Americans receiving Social Security benefits abroad jumped from 400,000 to 550,000; similarly, the number of Americans annually retiring abroad increased by 17%. Not only are American retirees looking for a better climate, but they are also searching for better costs. Other reasons for retiring overseas include maximizing their nest egg with the strength of the United States dollar and benefiting from nationalized healthcare systems. 

However, retiring abroad does have its concerns—the first being financial. It is necessary to plan for any tax implications and impact on retirement benefits. Before fleeing the United States for a relaxing retirement lifestyle, Americans will also need to make sure they have solid estate plans that will put inheritances into the right hands. Further, contingency plans are always essential, so retirees need to maintain a location in the United States or set aside money to use for a potential return. Ultimately, American retirees should consider all social and psychological concerns as they venture into retirement abroad.    

See Christopher Robbins, More Americans Are Retiring Abroad—But Do They Have a Plan?, Financial Advisor, February 15, 2017. 


February 18, 2017 in Disability Planning - Health Care, Estate Planning - Generally, Travel | Permalink | Comments (0)