Wills, Trusts & Estates Prof Blog

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

A Member of the Law Professor Blogs Network

Sunday, August 2, 2015

The Ongoing Dispute Over Tom Benson’s Control Over Texas Trust

Tom bensonI have previously discussed the ongoing dispute over Tom Benson’s estate.  New Orleans Saints owner Tom Benson is appealing a decision by a San Antonio Judge to temporarily relieve him of his position as trustee over a Texas trust fund.  Benson’s daughter is seeking to have her father permanently removed from the position of trustee alleging that he breached his duties.  Tom Benson’s lawyers are arguing that the trustee was simply exercising his discretion.  The dispute over the Texas trust is part of an even larger estate fight between the billionaire and his heirs.  The case will now be heard by the Texas Fourth District Court of Appeals.  There are other cases that are pending in both state and federal courts in Louisiana. 

See Katherine Sayre, Saints, Pelicans owner Tom Benson’s control over Texas assets challenged, defended, The Times-Picayune, July 31, 2015.

August 2, 2015 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Thursday, July 30, 2015

The Investor Control Doctrine Still Has Some Bite Left

Estate taxA recent tax court decision has held that the investor control doctrine is still in effect.  In Webber v. Commissioner, the court held that because the taxpayer exhibited control over life insurance assets held in different accounts he could be held liable for taxation on those assets.  In 2003 the investor control doctrine was expanded to cover variable life insurance policies.  In the Webber case the taxpayer formed a grantor trust that purchased two variable life insurance policies that insured two elderly relatives.  The policy holder was supposed to an investment manager to make decisions and there were supposed to be restrictions on the policy holder to influence them, yet the tax court held that these restrictions were not followed.  This article discusses many of the implications of this recent tax court decision.

See John W. Weber, Jr., The Investor Control Doctrine: Alive and Well, The National Law Review, July 29, 2015.

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

July 30, 2015 in Current Affairs, Estate Planning - Generally, Income Tax, Trusts | Permalink | Comments (0)

Sister’s Will Inherit A Fortune If They Complete These Tasks

SistersA deceased real estate tycoon has left a combined $20 million fortune to his two daughters, but in his Will he has imposed strict conditions.  Maurice Laboz was a New York real estate investor who passed away recently.  The two daughters, who are 17 and 21 years old, will be able to receive the inheritance when they turn 35.  If either of the daughters would like to receive early bonuses they would have to fulfill a list of conditions.  These conditions include going to a good university and waiting until marriage before having kids.  Maurice Laboz’s wife, who was in the process of divorcing him before his death, is currently in the process of contesting her late husband’s Will.  What is left of the estate is to be donated to charitable organizations like the Michael J Fox foundation.

See Laurence Bonk, These Sisters Will Inherit $20 Million – If They Complete All The Tasks On This List, IJR Review, July 29, 2015. 

July 30, 2015 in Current Affairs, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

When A Loved One Has Alzheimer’s Careful Planning Is Essential

AlzheimersWhen a family member or loved one has Alzheimer’s it is important to plan ahead.  Early planning can potentially alleviate a lot of stress that might come up as a result of waiting too long.  It is important to put in place both legal and financial plans.  Another benefit of planning early is that the person who has Alzheimer’s can be involved in the process.  There are a number of costs involved with treating Alzheimer’s, planning ahead for medical care and treatments is essential.  The person suffering from Alzheimer’s should be encouraged to make decisions for his or her future while that person still has legal capacity.  Planning ahead is a good way to make sure the person with Alzheimer’s is able to get the sort of care and treatment that they need.

See Idaho Estate Planning, Helping Loved Ones Suffering From Alzheimer’s, Wealth Management, July 28, 2015.

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

July 30, 2015 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally, Guardianship, Trusts | Permalink | Comments (1)

CLE On Special Needs Trust

CLE PictureThe University of Texas School of Law is presenting a CLE entitled, Special Needs Trusts: A Guide for Attorneys, Financial Advisors and Trust Officers, Thursday & Friday February 4-5, 2016, at the Radisson Hotel and Suites in downtown Austin.  Here are some details about the event:

Mark your calendar for the 12th Annual Changes and Trends Affecting Special Needs Trusts on February 4–5, 2016 at the Radisson Hotel and Suites in downtown Austin, Texas.

The conference brings together leading professionals in the SNT field, features the latest updates and hot topics, and offers a great set of materials including sample forms, drafting tips, sample language and resources. If you work with special needs trusts—or want to learn how to use, draft, fund and administer them—don't miss this program!

The Radisson Hotel and Suites is offering attendees a special room rate of $189. Call 512.478.9611 and mention 'UT Law' by January 4, 2016 to receive this special rate.

July 30, 2015 in Conferences & CLE, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Article On The Benefits and Burdens of Foreign Trusts

Article PictureStephen Liss recently published an article entitled, The Benefits and Burdens of Foreign Trusts, 29 Probate & Property 3 (May/June 2015). Provided below is an excerpt from the article:

Part of globalization is the increasing movement of human capital (that is, people) across the borders of traditional nation states. This trend shows no signs of ebbing, and the United States remains an attractive destination for the globally mobile. As a result, an increasing number of people resident in the Untied States benefit from trust located outside the United States. This article summarizes some of the key tax and reporting issues associated with U.S. beneficiaries of foreign trusts.

July 30, 2015 in Articles, Trusts | Permalink | Comments (0)

Wednesday, July 29, 2015

The Balancing Act Involved With Charitable Giving

CharityWhen it comes to charitable giving there are multiple layers of intertwined motivations that are both personal and philanthropic.  A financial planner needs to perform a balancing act when assisting a client with overcoming conflicting desires in charitable giving.  This article discusses how financial planners will need to help their clients adapt to changes in the tax law dealing with charitable gift giving.  There will also be changes to how clients will handle charitable remainder unitrusts (CRUTs).  This article explains the different techniques advisers can use to help balance the client’s interest taking into account the interest of the beneficiary charity as well.  It discusses the different ways to structure split-interest gifts.  This article will hopefully provide more information about the importance of planning ahead when making charitable gifts. 

See Robert F. Sharpe, Jr., The Charitable Planning Balancing Act, Wealth Management, June 25, 2015.

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

July 29, 2015 in Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Trusts | Permalink | Comments (0)

Whitney Houston’s Will Could Have Provided Daughter With More Protection

BrownI have previously discussed the passing of Bobbi Kristina Brown, the daughter of the late musician Whitney Houston.  Some estate planning attorneys are now putting forward the argument that Whitney Houston’s Will could have provided her daughter with more protection.  Whitney Houston’s Will was 19 years old when the 48 year old musician passed away in 2012.  Estate planners argue that the singer’s Will should have specifically mentioned Bobbi Kristina Brown instead of leaving money to a trust to benefit “any children.”  A revocable living trust could have provided more control over how the estate could have been distributed to Kristina Brown. 

See Liz Skinner, Could Bobbi Kristina Brown have been better protected by Whitney Houston’s estate?, Investment News, July 28, 2015. 

July 29, 2015 in Current Affairs, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Tuesday, July 28, 2015

Fat Cats & Lucky Dogs: How to Leave (some of) Your Estate to Your Pets

Fat catsIn this audio interview with Peggy Hoyt I discuss my book, ‘Fat Cats & Lucky Dogs: How to Leave (some of) Your Estate to Your Pets.’  This interview explores the ways people can plan for the well-being of their pets after they pass away.  Pet trusts have been gaining in popularity within the United States; today all fifty states now have some sort of pet trust statute with Louisiana and Minnesota being the most recent.  I go over the history of how Pet Trust Statutes developed and the ways people can use them to make sure their beloved pets are provided for.  This interview will hopefully give people the information they need to provide for their pets after they die.  No one wants their beloved companion to be sent to the shelter to walk the green mile after they pass away.

See Peggy Hoyt and Gerry Beyer, Planning for Your Pet with Gerry Beyer on All My Children Wear Fur Coats, blogtalkradio: Natures Channel, July 27, 2015. 

July 28, 2015 in Books, Books - For Practitioners, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Monday, July 27, 2015

Use An Incentive Trust To Make Sure Beneficiaries Stay On The Up And Up

TrustA primary concern for those setting up trust with a third party beneficiary is how the money will be used once it is distributed. As a result, incentive trust have become popular as they dictate how the assets will be distributed and often creates a reward for behavior that is in line with the settlor's expectations. Here are some tips and considerations to keep in mind when a client is considering the use of an incentive trust:
  • Make a plan for the distributions such as granting a trustee total discretion or creating a list of actions that, if complied with by the beneficiary, will net an additional (or any in some circumstances) distribution. The settlor will also need to determine if distributions will come from income, principle, or both.
  • If the trust is set up to support a particular goal, such as attending college, then the settlor must decide if the distributions will be made directly to the beneficiary or if the trustee will pay any bills that accrue directly. This is particularly important if the beneficiary has shown signs of irresponsible use of money in the past or there are concerns that a distribution will not be used appropriately.
  • The client will need to determine if the trust will continue for the life of the beneficiary or will terminate with its assets distributed at a predetermined time. Most importantly, the settlor, preferably in consultation with advisors, must determine what the future needs of the beneficiary will be and if a trust will remain useful in the distant future when circumstances change.
  • Determine any penalty that will be applied if the beneficiary does not comply with the terms of the trust. For example, if the purpose of the trust is to fund an advanced degree, which the beneficiary never completes, then the trust corpus will pass to a charity.
  • Always make sure that the final draft of the instrument contains all key terms and conditions. One forgotten sentence may lead to years of legal wrangling down the line and defeat the purpose of the trust.
See Charles A. Redd, Tips From The Pros: The Ultimate in Dead Hand Control–Incentive Trusts Part II, Wealth Management, June 25, 2015.

July 27, 2015 in Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)