Wills, Trusts & Estates Prof Blog

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

Wednesday, September 28, 2011

The Buffett Tax

Warren buffetDenis Kleinfeld recently posted an article on the Newsmax website that addresses Warren Buffet and his credibility on estate and income tax issues. Kleinfeld argues that Buffett’s proposal of raising the estate tax for Americans who have retained enough wealth will not benefit taxpayers or the Treasury and does not serve a positive fiscal purpose.

Kleinfeld also argues that Buffet has vested interests in the tax plan going into effect and opines that Americans can plan for the so-called “Buffet Tax” by following tax structures given by Buffet.

SeeDenis Kleinfeld, How to Plan for the Buffett Tax, Newsmax.com, Sept. 26, 2011.

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

September 28, 2011 in Current Events, Estate Tax, Income Tax | Permalink | Comments (2) | TrackBack (0)

Determining the Beneficiaries of Fisk University's Stieglitz Collection

BU Law Alan L. Feld (Maurice Poch Faculty Research Scholar Professor of Law, Boston University School of Law) recently published his article entitled, Who are the Beneficiaries of Fisk University's Stieglitz Collection?, 91 B.U. L. Rev. 873 (2011). The abstract available on SSRN is below:

Most fiduciary relationships determine with specificity the beneficiaries of the fiduciary's activities. Not-for-profit entities, however, serve a class of unspecified beneficiaries and can exercise discretion in determining who to serve and how to serve them. This paper explores the limits of discretion that recent litigation established for Fisk University in balancing its educational mission and its administration of a valuable art collection donated decades earlier. The paper analyzes the case as it addresses respect for donor conditions, changes in circumstance, standing issues, the doctrine of cy pres and the designation of the appropriate class of public beneficiaries. Race and geography also play contributing roles.

September 28, 2011 in Articles, New Cases | Permalink | Comments (0) | TrackBack (0)

Cemetery Worker Takes Guitar From Coffin

Guitar Before sixty-seven year old Randall Jourdan of Wisconsin passed away, he informed his family that he wanted to be buried with his valuable Fender guitar. According to Jourdan’s family, the guitar was the man’s pride and joy.

After Jourdan died, the guitar was placed in his casket, as per his directions. Steven Conard, a cemetery worker, was aware of the guitar and decided to take it from the casket before the crypt’s stone face was attached. Another worker, James Lang, realized the guitar was missing and reported it to his supervisor who called the police. The authorities located the guitar in Conard’s living room and returned it to Jourdan’s family.

See Cemetery Worker Stole Guitar From Army Vet’s Casket, The Smoking Gun, Sep. 26, 2011.

September 28, 2011 in Death Event Planning | Permalink | Comments (3) | TrackBack (0)

Tuesday, September 27, 2011

Tax Treatment of RDPs and Same-Sex Spouses in Community Property States

Gaymarriage Forbes recently published an article that discusses questions and answers on the tax treatment of RDPs and same-sex spouses in community property states. The author uses his hypothetical clients, Robin and Terry, to discuss some of the nineteen questions and answers. The portion of the article that addresses Question Two is posted below, in full:

Don’t Forget About the Constitution

 Q-2: Can registered domestic partners or same-sex spouses whose marriage is recognized under state law file federal tax returns using a married filing jointly or married filing separately status?

A-2: No. Registered domestic partners cannot file using a married filing separately or jointly filing status, because they are not spouses as defined by federal law. Likewise, same-sex partners who are married under state law may not file using a married filing separately or jointly filing status because federal law does not treat same-sex partners as spouses.

I don’t entirely agree with the “likewise”. It is understandable that the IRS would put it that way, but the answer is debatable. Gill v. OPM holds that Section 3 of DOMA is unconstitutional. DOJ has determined that the constitutionality of Section 3 of DOMA is indefensible. I believe that this gives same sex married couples (although not RDP’s) a reasonable basis for filing jointly. At the very least, if joint status would be advantageous, they should be protecting their rights for open years by filing timely refund claims. As RDP’s, Robin and Terry do not have skin in this particular game. If they had married in 2008, they might.

Peter J. Reilly, Registered Domestic Partners and Same-Sex Spouses in California—More Questions Than Answers, Forbes, Sep. 24, 2011.

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

September 27, 2011 in Articles, Income Tax | Permalink | Comments (0) | TrackBack (0)

Planning For Incapacitation

Power-of-attorney Alzheimer’s will affect one in eight baby boomers after they turn sixty-five, and incapacitation can lead to costly and lengthy court hearings if proper estate planning documents have not been created. Four of the most widely used legal documents for incapacitation planning are below:

  1. Health care proxy (also known as a health agent or health care power of attorney)—allows someone to make medical decisions in the event of an individual’s incapacitation
  2. Living will—addresses end-of-life care, covers pain relief, and details resuscitation wishes
  3. Durable power of attorney—authorizes a trusted individual to act as an agent in a number of legal and financial matters
  4. Living trust (revocable trust)—a trustee will manage the trust funds and distribute money for the beneficiary’s care

For more information on incapacitation planning, see, Deborah L. Jacobs, Sign a Healthcare Proxy, Living Will and Power of Attorney, Forbes, Sep. 26, 2011.

September 27, 2011 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law | Permalink | Comments (0) | TrackBack (0)

Protecting Elderly Loved Ones From Illegitimate Financial Services

Sad-old-man According to a 2010 study by the Investor Protection Trust, one of five elderly Americans has been a victim of fraud, paid excessive fees for financial services or products, or been sold inappropriate investments. The average household led by individuals who are seventy-five and older has a net-worth of $638,000, so it is no wonder that this class of people is often targeted by both legitimate and illegitimate distributors of financial products.

Distributors use a number of tactics to convince elderly people to invest with them, but loved ones can use the following approaches to help ensure that an elderly relative or friend does not succumb to a bad or fraudulent investment deal:

  • Address future financial concerns and solutions before a scheming distributor has the opportunity to addresses them first
  • Go with an elderly loved one to seminars or programs that deal with investing
  • Put older individuals on the Do Not Call list (donotcall.gov or 88-382-1222) and stop junk mail at dmachoice.org
  • Practice a way to end phone calls pitches (“No, I’m not interested”)
  • Keep a close watch on new activities and any new friends to ensure that scam artists have not befriended and begun influencing elderly loved ones

For more information on persuasive tactics used and ways to address them, see Ismat Sarah Mangla, Protecting Your Parents: Keep the Sharks at Bay, CNN Money, Aug. 10, 2011.

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

September 27, 2011 in Elder Law | Permalink | Comments (0) | TrackBack (0)

Religious Discussions in a Business Setting

ReligionReligion can be a taboo topic in business, but some financial advisors find that discussing religion is a crucial means of understanding their clients’ financial goals. Some financial advisors have clients address their spiritual beliefs in a mission statement, while others broach the topic by first discussing their own religious views.

Some financial advisors have found that even a casual conversation can lead the way to a more in-depth religious discussion. However, some situations may call for a more formal discussion of a client’s religious beliefs and personal values.

Not all advisors agree that discussing religious views should be part of business communications. If an advisor does decide to have a religious based discussion with a client, he or she may want to address the topic carefully.

See Veronica Dagher, Where Religion and Business Do Mix, The Wall Street Journal, Sep. 23, 2011.

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

September 27, 2011 in Religion | Permalink | Comments (0) | TrackBack (0)

Monday, September 26, 2011

Scientists Create Digital Video by Reconstructing Brains’ Visions

Brain functionScientists at UC Berkeley have developed a system that can capture a person’s visual brain activity and reconstruct it as digital video clips. Scientists recently used this system on three different subjects. The subjects were placed inside a Magnetic Resonance Imaging system and watched two different groups of Hollywood movie trailers. As the subjects watched the trailers, the fMRI system recorded the subjects’ blood flow through the visual cortex.

The data was fed into a computer program that divided the information into three-dimension pixels units called voxels. As the session continued, the computer gathered more information about how the subjects’ brain activity corresponded with the visual activity of the movie trailers.

Another group of video clips was used to reconstruct the videos shown to the subjects, and the computer built a database of potential brain activity for each clip. The computer then picked the one hundred clips that caused the subjects’ brain activity to act more similar to when the subjects’ watched the movie trailers. The computer then combined the clips into one final movie. The movie’s resolution is blurry, but it clearly matches the clips viewed by the subjects.

To watch the video clip created by the computer program, seeJesus Diaz, Scientists Reconstruct Brains’ Visions Into Digital Video In Historic Experiment, Gizmodo, Sep. 22, 2011.

September 26, 2011 in Science, Technology | Permalink | Comments (0) | TrackBack (0)

Expert Valuation Testimony


Wendy C. Gerzog (Professor of Law, University of Baltimore School of Law) recently published her article entitled  Excluding Expert Valuation Testimony, 132 Tax Note 1423, Sep. 26, 2011. An excerpt from the article is below:

In its 2003 partnership return, Boltar claimed a charitable deduction for a conservation easement on property it owned in Lake County, Ind.1 The company valued the easement at $3.245 million.2 The government reduced that figure to $42,000 in its notice of final partnership administrative adjustment (FPAA). The government also filed a pretrial motion to exclude the taxpayer’s expert report and testimony under the Federal Rules of Evidence (FRE) and Daubert.3 The court ruled favorably on the government’s motion and held that the amount of the taxpayer’s deduction was limited to that allowed in the FPAA.

At the end of 1996, Laura Lake Development Co. LLC purchased two parcels (northern and southern parcels) of approximately 10 acres each for $10,000 an acre. On October 1, 1999, it transferred those parcels to Boltar.4 On November 8, 2002, Shirley Heinz Land Trust Inc. (Land Trust) quitclaimed approximately 10.3 acres (eastern parcel) just east of the southern parcel to Boltar.5 At all relevant times, the southern parcel was encumbered by a pipeline utility easement. Also, as of December 29, 2003, the date of the taxpayer’s donation, both the northern and southern parcels were subject to an access (golf cart) easement.

On December 29, 2003, the taxpayer granted a conservation easement to the Land Trust on approximately eight acres of the eastern side of the southern parcel. Of that easement, approximately 2.82 acres of the southern parcel (plus additional land in the northern parcel as well as all the acreage in the eastern parcel) is forested wetland under the U.S. Corps of Army Engineers’ jurisdiction. The discharge of fill material in those wetlands was subject to permit application and mitigation for lost resources.

September 26, 2011 in Articles, Estate Tax, New Cases | Permalink | Comments (0) | TrackBack (0)

Do Loved Ones Say Goodbye After Death?

Goodbye Some people believe that their deceased loved ones have contacted them from beyond the grave during a paranormal event called a “crisis apparition.” A beauty shop owner in New Jersey claims she had a conversation with a customer, hours after his dead body was found. A grandson asserts that his grandfather gave him a farewell message just moments after he died from lung cancer.

Theories for these strange events range from telepathic transmissions, to a trick of the brain. Though skeptics abound, believers claim these apparitions appear as a way to give comfort to those left behind. One woman who experienced a “crisis apparition” gave the following explanation for her inexplicable experience, “these experiences have made me believe that those we love are really not that far away at all and know when we are not doing as well as we could. Just as they did in life, they offer comfort during crisis.”

See John Blake, Do Loved Ones Bid Farewell From Beyond the Grave?, CNN Living, Sep. 23, 2011.

September 26, 2011 in Religion | Permalink | Comments (1) | TrackBack (0)