Wills, Trusts & Estates Prof Blog

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

Thursday, June 8, 2017

Article on Burdens, Presumptions & Confusion in the Law on Want of Knowledge and Approval

WalesBrian Sloan recently published an Article entitled, Burdens, Presumptions and Confusion in the Law on Want of Knowledge and Approval, Wills, Trusts, & Estate Law eJournal (2017). Provided below is an abstract of the Article:

In the context of an ageing population and numerous challenges to wills in England and Wales, this article considers the doctrine that a testator must know and approve of the contents of his will to ensure its validity. It analyses several ostensible fundamental principles related to it, particularly in light of the potentially difficult and contradictory Court of Appeal decision in Gill v Woodall. These principles include: (1) that the propounder of a will must “prove” it; (2) that a testator with capacity who duly executes a will is nevertheless presumed to know and approve of its contents; and (3) that (notwithstanding principle (2)) “suspicious circumstances” will require affirmative proof of knowledge and approval. The paper investigates the origin, normative justifications and current status of the principles, and in particular whether they are compatible with each other. It suggests a number of reforms.

Special thanks to Robert H. Sitkoff (John L. Gray Professor of Law, Harvard Law School) for bringing this article to my attention.

June 8, 2017 in Articles, Estate Planning - Generally, Wills | Permalink | Comments (0)

Tuesday, June 6, 2017

Transfer Tax Rules for the Non-Citizen Spouse

KimTransferring wealth to a spouse that is not a citizen of the US can create complex tax challenges. An example, a resident alien domiciled in the US may have an estate that is subject to taxes in another nation in which he is a citizen. If the real estate is owned in a third jurisdiction, there may be even more taxes owed. Most countries have tax treaties that must be thoroughly examined at death and for certain taxable events. The provisions in these tax treaties are usually complex, but transfer tax planning for non-citizens cannot occur until all applicable treaties have been examined.

See Kimberly Stogner, Transfer Tax Rules for the Non-Citizen Spouse, Womble Carlyle, May 23, 2017.

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

June 6, 2017 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Trusts, Wills | Permalink | Comments (0)

Monday, June 5, 2017

Alter Ego Trusts

Alter egoFor some, keeping the contents of their estate private upon their death is of paramount concern. Privacy may prevent turmoil among family and can put a stop to unwanted financial requests. Setting up a trust can be an excellent method of avoiding probate and keeping assets out of the public eye. Alter ego trusts are especially beneficial to those wanting to keep the contents of their estate private. In addition to privacy, trusts can also convey tax benefits and may help the settlor avoid probate and administration fees upon death. Although the benefits of trusts are numerous, it is important to consider that assets may not be moved into an alter ego trust prior to age 65 and there are legal fees associated with the establishment and maintenance of a trusts. And although trusts are not a solution for everyone, they can be an excellent estate planning device for many.

See Gordon Stirrett, Alter Ego Trusts Offer Tax, Privacy Benefits, Herald More, June 2017.

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

June 5, 2017 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Article on Estate of Powell

Tax courtSteve R. Akers recently published an Article entitled, Estate of Powell v. Commissioner, 148 T.C. No. 18 (May 18, 2017), Bessemer Trust (June 2017). Provided below is an abstract of the Article:

This “reviewed” Tax Court decision may be the most important Tax Court case addressing FLPs and LLCs in the context of estate planning since the Bongard case (12 years ago). The Tax Court breaks new ground (1) in extending the application of §2036(a)(2) to decedents owing only limited partnership interests, and (2) in raising the risk of double inclusion of assets under §2036 and a partnership interest under §2033, which may (in the court’s own words) result in “duplicative transfer tax.”

The facts involve “aggressive deathbed tax planning,” and the fact that the taxpayer lost the case is no surprise. But the court’s extension of the application of §2036(a)(2) and the extensive discussion of possible double inclusion for assets contributed to an FLP or LLC are surprising (but whether a majority of the judges would apply the double inclusion analysis is not clear).

Special thanks to Scott M. Deke for bringing this article to my attention.

June 5, 2017 in Articles, Current Events, Estate Planning - Generally, Estate Tax, New Cases, Trusts, Wills | Permalink | Comments (0)

Thursday, June 1, 2017

DINKs Need Estate Planning Too

Happy-familyThe traditional nuclear family in America has typically revolved around the notion of two parents, two-and-a-half children, a dog, and a house with a white picket fence. Modern trends are undermining this ideal and estate planning must keep up. A growing demographic in need of estate and financial planning are those with dual-income, no kids (DINKs). This group chooses to forgo procreation and is typically relatively affluent and well educated. Traditional estate planning selling points involving designation of a guardian or setting up trusts for children are inappropriate for this group. But, there is still a variety of estate planning benefits for DINKs. Healthcare planning focused on establishing financial powers of attorney in case of incapacity may avoid future headaches. Setting up a Charitable Remainder Trust may help DINKs meet charitable aims while providing steady income. Finally, creating wills, trusts, and granting powers of attorney can be extremely valuable in case of incapacity or death. By shifting perspective to accommodate the modern family structure, estate planners can better serve their clients in helping them to achieve their planning goals.

See Patrick Carlson, DINKs Need Estate Planning Too, Wealth Management.com, May 30, 2017.

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

June 1, 2017 in Disability Planning - Health Care, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Wednesday, May 31, 2017

Pets in Estate Planning

Adorable puppyMany pets find themselves without a home when their owners pass away. Without a plan in place, these furry friends may find themselves facing a dire situation in a local animal shelter after their owner’s death. In states like Maine, it is possible for owners to include pets in their wills in order to set up a trust for their care. Carol and Dave Santora, Maine residents and animal lovers, hired an attorney to accomplish this task. Biscuit and Dixie, the Santora’s dogs, will be given to the Animal Welfare Society upon the Santoras’ demise. Funds will be set aside for the shelter to care for the dogs and they may also be used to provide support for any family that adopts the dogs. Working with an attorney to plan for their animals’ welfare provides peace-of-mind for the Santoras so they can concentrate on enjoying their pets now.

See Julia Bayly, A Trust Fund for a Pooch? How Some Mainers Are Including Their Pets in Estate Planning, BDN Maine, May 28, 2017.

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

May 31, 2017 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Tuesday, May 30, 2017

Planning for Pets

PuppiesWhile a pet can be as close as family to some, this does not mean they warm the depths of anyone else’s heart. Because of the legal status of these furry companions, it is important to plan for their care in case you become unable to provide for them. Some simple advice includes filing an advance veterinary directive. These forms can usually be found online or at the local vet. In case a move is required to a retirement facility, make sure the facility accepts pets; many currently do. It may also be prudent to consider placing specific provisions in a will detailing beneficiaries or creating a trust for the care of the pet after death. And in all of these cases, make sure to consider the impact inflation will have on money set aside for pet care.

See Hilary Kramer, Pooch Planning, AARP, May 18, 2017.

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

May 30, 2017 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Updating Wills After Tax Changes

TaxChanges in tax laws may very well affect the suitability of various provisions in a will. When state and federal tax laws are amended, added, or repealed, intelligent and forward-looking will provisions may no longer be effective to shield a decedent’s estate from heavy taxes. In some jurisdictions, New York for example, reformation of a will is sometimes possible after death. New York precedent allows (rarely) changes to a will if the reformation is consistent with the decedent’s intent to maximize tax savings. While reformation is a possible avenue to fix will provisions, it is usually best practice to revisit clients’ estate plans immediately after changes in tax laws to ensure tax-avoidance provisions remain effective.

See Carole M. Bass, Reforming a Will for Tax Savings, Wealth Management.com, May 19, 2017.

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

May 30, 2017 in Estate Planning - Generally, Income Tax, Wills | Permalink | Comments (0)

Sunday, May 28, 2017

When Wills Become Won'ts

Family_fight-700x430The transfer of wealth from the baby boomer generation, while a boon to their children, may be of even greater benefit to lawyers. A recent report from BMO Wealth Management indicates that a failure to prepare family and beneficiaries for a parent’s demise may lead to discord and possibly litigation. This situation can be exacerbated by non-traditional family arrangements or divorce; arrangements that are becoming much more prevalent in the US. Among the report’s findings, 40% of beneficiaries thought the estate distribution was unfair, 40% of parents surveyed had not discussed their estate disposition with their children, and a quarter of married adults said only their spouse knew the location of their will. While estate distribution schemes may be potentially upsetting, it is generally better to engage in open communication with possible heirs in order to avoid family discord at death.  

See When Wills Become Won'ts, Financial Advisor, May 1, 2017.

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

May 28, 2017 in Estate Planning - Generally, Wills | Permalink | Comments (0)

Saturday, May 27, 2017

Laissez-Faire Estate Planning

How-to-avoid-family-feuds-over-your-inheritance-300x195More than half of Americans do not have a formal estate plan; 52% do not currently have a will in place. Among those that do have a will in place, a majority intend an equal distribution among beneficiaries, but a significant minority plan an unequal distribution. These uneven distribution schemes may be a cause of division in some families if not dealt with prior to a client’s death. Despite the possibility of litigation and familial strife after a client passes, many individuals with a will had not disclosed its contents or its whereabouts to their children or possible beneficiaries. Seemingly ignoring the possible consequences of a laissez-faire approach to estate planning, this is how many Americans are handling their estate and financial legacy.

See Christopher Robbins, Most Americans Still Avoid Estate Planning, Study Says, Financial Advisor, April 7, 2017.

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

May 27, 2017 in Estate Planning - Generally, Wills | Permalink | Comments (0)