Wills, Trusts & Estates Prof Blog

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

Friday, December 13, 2019

How to Litigate an Inheritance Dispute in Federal Court

CourtUnder the Probate Exception, federal courts are barred from litigating certain aspects of probate suits, including: the probate of a will, the annulment of a will, determining the beneficiaries under a will, disposing of property that is under the jurisdiction of a state probate court, and appointing or removing a representative of an estate. However, there are certain issues that federal courts are not barred from hearing, including the validity of an inter vivos trust, the validity of a pay on death designation for a bank account, and the validity of the designation of a beneficiary under a life insurance policy.

Harken back to your 1L civil procedure days and you will remember that to have federal jurisdiction, the suit is also required to have diversity jurisdiction, meaning that all plaintiffs must be citizens of different states than all of the defendants. The dispute must also concern an amount greater than $75,000.

Several doctrines also prevent federal courts from exercising jurisdiction over particular cases. The Younger Abstention Doctrine prevents a federal court form taking a suit that interferes with actions being undertaken by a state agency. The Colorado River Abstention Doctrine allows a federal court to dismiss a matter when a concurrent state proceeding provides a more appropriate forum. The Rooker-Feldman Doctrine holds that lower United States federal courts (not the United States Supreme Court) should not sit in direct review of state court decisions, absent a specific jurisdictional grant of legislative authority.

See How to Litigate an Inheritance Dispute in Federal Court, Probate Stars.

December 13, 2019 in Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Preserving Small Forestland Through Estate Planning

ForestWashington State University (WSU) Regional Extension Specialist and Forestry Team Leader Andrew Perleberg has taught forestry for 20 years and has also worked on estate planning since 2007. He says that estate planning can be either important or detrimental to small tree farms, depending on how it is utilized. This year is the 20th anniversary of the Forests and Fish Law, and with it comes more conversations on how to preserve forestland owned by individuals rather than larger companies.

Many times owners of these small tree farms had to sell timber or forestland to pay back property or estate taxes. Both of these issues could have been resolved if "they had just organized their assets better," but the subject is rarely broached. Oregon State University (OSU) Assistant Forestry Professor of Practice Tammy Cushing commented that though it has become less of a problem due to a higher federal exclusion amount, that has also “lulled people into not worrying about it.”

Perleberg says there are also misconceptions about how to preserve the forestland. Subdividing the parcels into equal shares may seem fair, but “fair is not equal, and vice versa. It’s about understanding what you want as a family in the future, … or helping your grown kids understand why you own the land. Beyond that, it’s about why you think they should own the land.”

See TJ Martinell, Preserving Small Forestland Through Estate Planning, The Lens, December 11, 2019.

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

December 13, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Wednesday, December 11, 2019

CLE on New LLC Rules You Need to Know

CLEThe National Business Institute is presenting a video webcast entitled, New LLC Rules You Need to Know, on Friday, December 27, 2019 from 9:00 a.m. to 4:00 p.m. Central. Provided below is a description of the event.

Program Description

Get Up to Date on LLC Changes and Avoid Costly Missteps

Are your clients ready? Are you ready? Existing operating agreements will need to be updated and new operating agreements will need to comply. The new rules and regs affect numerous major provisions in the LLC operating agreement such as fiduciary duties, new default provisions, distributions and indemnification. Join us as our expert faculty brings you up to speed on the latest developments and teaches best practices for drafting and reviewing operating agreements. Register today!

    • Review substantial changes to LLC definitions and requirements.
    • Study the timeline of changes, limitations and entities affected.
    • Explore managers' and members' rights and authority.
    • Determine which fiduciary duties should be modified to fit the needs of clients.
    • Understand the new rights of judgment creditors and how they can foreclose on an interest.

Who Should Attend

This informative course is designed for attorneys. Accountants may also benefit.

Course Content

    • H.R. 1, the Tax Cuts and Jobs Act and Other Recent Case Law on LLCs
    • Timeline of Changes, Limitations and Entities Affected
    • What Entity Should You Choose to Receive These New Tax Breaks?
    • Qualifying for the New Deduction; New Ways to Calculate Deductions - Case Example
    • Pass-Through Entity Provisions vs. Lower C Corporation Rates
    • The New Partnership Audit Rules and New Tax Law as it Relates to Partnerships
    • Managers and Members and Fiduciaries: Changes to Rights, Roles and Authority
    • Substantial Changes to Definitions and Requirements
    • Operating Agreements: How the Scope, Function and Limitations Have Changed
    • LLC Formation and Operating Procedures/Requirements: Changes Attorneys Need to Know
    • Ethical Considerations

December 11, 2019 in Conferences & CLE, Current Events, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, December 10, 2019

If $1.6 Trillion Of Student Loan Debt Is Forgiven, This Is What Happens

LoanforgivenessWhat would happen if the country's entire student loan debt was forgiven, all $1.6 trillion of it?

Presidential candidate Senator Bernie Sanders (I-VT) wants to do just that, according to his campaign pitch. His plan has no eligibility requirements, meaning every single borrow - all 45 million, regardless if the loan is federal or through a private lender, would be eligible for a student loan discharge. Sanders says that he would fund this forgiveness plan through a new tax on financial transactions, to the tune of a 0.5% fee on all stock trades, a 0.1% fee on all bond trades and a 0.005% fee on all derivatives trades.

Presidential hopeful Elizabeth Warren has a similar plan, except 95% of borrowers would be eligible for some student loan forgiveness and 75% of borrowers would be eligible for a complete discharge of their student loans. She would also fund the program through a new tax, and neither plan would tax the discharge as income.

Both Warren and Sanders believe that student loan forgiveness would minimize the wealth gap of the country and benefit the middle class. Moody’s assessed the economic impact and found that student loan debt cancellation would result in, a modest increase in household consumption and investment, an improvement in small business and household formation, and increased home ownership over the long-term. However, Moody's also found that the near-term economic impact would be minimal, similar to a tax-cut stimulus. As the majority of those that would benefit from student loan forgiveness would be high income earners, the economic benefit would be limited.

See Zach Friedman, If $1.6 Trillion Of Student Loan Debt Is Forgiven, This Is What Happens, Forbes, December 3, 2019.

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

December 10, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Article on Constitutionalizing the Registered Charity Regime: Reflections on Canada Without Poverty v Canada (AG)

CanadaKathryn Chan recently published an Article entitled, Constitutionalizing the Registered Charity Regime: Reflections on Canada Without Poverty v Canada (AG), Wills, Trusts, & Estates Law eJournal (2019). Provided below is the abstract of the Article.

In Canada Without Poverty v Canada (AG), the Ontario Superior Court of Justice struck down provisions of the federal Income Tax Act that limited the political activities of charitable organizations, on the ground that the provisions violated the freedom of expression of the registered charity before the court. This paper addresses the decision's complex legacy, reflecting on the promise and the perils of charity law’s increasing encounters with public law. I address some of the difficult questions raised by the decision: (1) What types of associations are rights-holders under the Canadian Charter of Rights and Freedoms? (2) What are the constitutional limitations on the government’s ability to set the outer bounds of the registered charity regime? (3) What is the rationale for limiting the political advocacy of charities? While Canada Without Poverty has generated significant improvements to the registered charity regime, I argue, the Ontario Superior Court of Justice missed an important opportunity to draw constitutional law and charity law into closer conversation.

December 10, 2019 in Articles, Current Events, Estate Administration, Estate Planning - Generally, New Cases, Travel | Permalink | Comments (0)

Final Regulations Confirm No Clawback on Gifting

TcjaThe increase in the estate tax exemption amount under the Tax Cuts and Jobs Acts (TCJA) is set to "sunset" or expire on December 31, 2025, and many advisors are encouraging their high net worth clients to make large gifts before that date as to "use up" the exemption amount. Some advisors were concerned that such gifting would trigger an additional transfer tax when the exemption reverted back to pre-TCJA amounts, allowing the Internal Revenue Service to "claw back" any used amount over the exemption rate at the time of the taxpayer's death.

On November 22, 2019, the IRS issued final regulations confirming that used gift tax exemption will not be “clawed back” upon the person’s death, even if they made gifts in excess of the estate tax exemption ultimately in effect at the time of death. Also, a surviving spouse who received unused estate tax exemption from a predeceased spouse — referred to as the Deceased Spousal Unused Exemption (“DSUE”) — can utilize the DSUE amount during lifetime or at death without fear of a clawback or loss of the DSUE.

Tax laws can change with every year and every election, but with the 2020 presidential election looming and the possibility of a shift in the dynamic of Congress, a reduction in gift and estate tax exemptions could take place prior to the end of 2025. Wealthy taxpayers should not wait until December of 2025 to make large gifts to make the most of the increased exemption amounts.

See Dickinson Wright, Final Regulations Confirm No Clawback on Gifting, Lexology, December 9, 2019.

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

December 10, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, New Legislation | Permalink | Comments (0)

Monday, December 9, 2019

Webcast: State Income Taxation of Nongrantor Trusts: Taking Your Trust on the Road

ALI-CLEOn January 9, 2020, the American Law Institute and the American College of Trust and Estate Counsel are co-sponsoring a webcast/telephone seminar entitled State Income Taxation of Nongrantor Trusts: Taking Your Trust on the Road.

Here is a description of the program:

Planning for state income taxation on trusts is a critical aspect of the estate planning process. If done well, it can produce substantial benefits; if done poorly, it can produce substantial cost. Register today for this 90 minute webcast to better understand how states tax trust income and how you can establish the situs of a trust in order to minimize those taxes. Learn ways to reduce or eliminate the state tax on any new trusts you draft as well as any existing trusts you’ve worked on – your clients will thank you!

The stellar faculty includes Richard H. Greenberg, Richard W. Nenno, and Margaret E.W. Sager.

Follow this link for more information and to register.

December 9, 2019 in Conferences & CLE | Permalink | Comments (0)

Indians Must Set Aside Fears of Death — and Write Wills

IndiafuneralIndia has a majestic and colorful culture, and with 80% of the country's population belonging to Hinduism, they generally believe in reincarnation. They also believe that there are not the owners to any wealth that they have acquired, but rather more akin to caretakers of those assets. When a member of the family passes away, a place at the dinner table can be set for them for months and even be included in annual reports. So when a person dies intestate in India, a mission of ownership of assets for that individual begins.

Many Hindu families use a unique tax system called the Hindu undivided family (HUF), mentioned in the 1961 Income Tax Act. A HUF is a group of persons lineally descended from a common ancestor and would be considered a single "person" for assessment purposes, and thus would only need to file one tax return. It can wrongly create the impression that all the property belonged to the family collectively, and thus perpetrate the belief that a will is not needed for these assets

A 2018 report from wealth advisory firm BAF Consultants said 97% of Indian families with significant businesses had no succession plan in place. Through the courts the succession process has evolved with the Hindu Succession (Amendment) Act 2005, which among many things the Act provided that daughters would inherit the same as sons. But these new regulations are no substitute for a thorough and detailed will.

See Shruti Advani, Indians Must Set Aside Fears of Death — and Write Wills, Financial Times, December 3, 2019.

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

December 9, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Travel, Wills | Permalink | Comments (1)

Saturday, December 7, 2019

Article on Age, Equality, and Vulnerability

ElderlawAlexander A. Boni-Saenz recently published an Article entitled, Age, Equality, and Vulnerability, Elder Law eJournal (2019). Provided below is the abstract of the Article.

This Article uses age as an entry point for examining how temporal and methodological issues in egalitarianism make substantive equality an unattractive goal for vulnerability theory. Instead, vulnerability theory should adopt a continuous doctrine of sufficiency, which is a better fit with vulnerability theory’s underlying aims and rhetoric. Instead of evaluating what individuals have in relation to others, sufficiency refocuses the inquiry on whether we have enough throughout the lifecourse. In the context of vulnerability theory, enough should be defined as the capability to be resilient as guaranteed by the responsive state.

December 7, 2019 in Articles, Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Friday, December 6, 2019

Biogen’s Experimental Drug to Treat Alzheimer’s Disease is Greeted with Cautious Optimism Following Scientific Presentation on Thursday

PillsPharmaceutical maker Biogen provided the scientific community a detailed presentation at the Clinical Trials on Alzheimer’s Disease conference in San Diego about an experimental drug that appears to slow the brain’s deterioration in the early stages of Alzheimer’s disease. The drug, aducanumab, may be the first significant advancement in the treatment of the disease since the introduction of memantine, which is commonly marketed as Namenda in 2003 and relieves some of the symptoms of dementia.

R. Scott Turner, director of Georgetown University’s Memory Disorders Program, a partner in the study, said “This study proves that we are on the right track to developing more effective, disease-modifying treatments designed to stop or slow memory decline in the earliest disease stage — when patients are still relatively independent in their daily functions.” The company says they hope to seek FDA approval next year, and if Biogen succeeds, it will be the first drug to treat the underlying pathology of the dementia-causing disease.

The medication assists patients in the early stages of Alzheimer’s disease to continue independently going about their daily business longer than people who did not take it, even slowing down the condition's progression by as much as 40%. Not all of the professionals that witnessed the presentation were sold on the medication, but many saw this as a positive for the Alzheimer's treatment community.

See Fredrick Kunkle, Biogen’s Experimental Drug to Treat Alzheimer’s Disease is Greeted with Cautious Optimism Following Scientific Presentation on Thursday, Washington Post, December 5, 2019.

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

December 6, 2019 in Current Affairs, Current Events, Elder Law, Estate Planning - Generally, Science | Permalink | Comments (0)