Wills, Trusts & Estates Prof Blog

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

Monday, September 26, 2011

Top SSRN Downloads

Ssrn_2 Here are the top downloads from July 24, 2011 to September 22, 2011 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank Downloads Paper Title
1 327 Rewards from the Grave: Keeping Loyalty Program Benefits in the Family
Gerry W. Beyer, Mikela Bryant,
Texas Tech University School of Law, Estate Planning and Community Property Law Journal,
Date posted to database: July 8, 2011
Last Revised: July 8, 2011
2 300 2010 Developments in Connecticut Estate and Probate Law
Jeffrey A. Cooper, John R. Ivimey,
Quinnipiac University School of Law, Reid and Riege, P.C.,
Date posted to database: August 2, 2011
Last Revised: August 6, 2011
3 155 An Introduction to Lesser-Known but Useful Trusts – Part 1
Wendy S. Goffe,
Graham & Dunn PC,
Date posted to database: April 27, 2011
Last Revised: April 27, 2011
4 143 I Dig It, But Congress Shouldn't Let Me: Closing the IDGT Loophole
Daniel Ricks,
Unaffiliated Authors - affiliation not provided to SSRN,
Date posted to database: August 11, 2011
Last Revised: August 27, 2011
5 104 Federal Income Tax - Gifts and Inheritances
Douglas A. Kahn, Jeffrey H. Kahn,
University of Michigan at Ann Arbor - Law School - Faculty, Florida State University - College of Law,
Date posted to database: August 11, 2011
Last Revised: September 15, 2011
6 100 An Introduction to Lesser Known But Useful Trusts – Part 2
Wendy S. Goffe,
Graham & Dunn PC,
Date posted to database: April 27, 2011
Last Revised: April 27, 2011
7 94 Changing the Estate Planning Malpractice Landscape: Applying the Constructive Trust to Cure Testamentary Mistake
Victoria J. Haneman,
University of La Verne College of Law,
Date posted to database: March 28, 2011
Last Revised: August 1, 2011
8 88 CIGNA v. Amara: Supreme Court Unconvincingly Rejects Use of ERISA §502(a)(1)(B) to Enforce Benefit Terms Used in SPD
Albert Feuer,
Law Offices of Albert Feuer,
Date posted to database: July 21, 2011
Last Revised: September 3, 2011
9 83 Mortgages and Conservation Easements: Not a Good Mix
Wendy C. Gerzog,
University of Baltimore - School of Law,
Date posted to database: July 25, 2011
Last Revised: July 25, 2011
10 64 To Own or not Own Your Life Insurance Policy?
David Joulfaian,
U.S. Department of the Treasury,
Date posted to database: August 28, 2011
Last Revised: August 30, 2011

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

Dead Federal Workers Received $600 Million in Benefits

Money stack Over the past five years, the federal government has given out over $600 million in benefits payments to deceased individuals. The payments, which are intended for retired or disabled federal workers, continue to go to the deceased worker’s family if his or her death is not reported.

A 2005 inspector general’s report brought the government’s attention to the defects in the Civil Service and Disability Fund, but improper payments still continue. The agency has already implement ten of the fourteen recommendations provided by the inspector general, and it claims it is working to recoup its losses.

See Sam Hananel, Gov’t Paid $600 Million in Benefits to Dead People, The Associated Press, Sep. 23, 2011.

September 26, 2011 in Current Events, Disability Planning - Health Care | Permalink | Comments (0) | TrackBack (0)

Sunday, September 25, 2011

Settlement for Nursing Home Patients

Home Access Living filed a class-action discrimination lawsuit on behalf of almost 20,000 people with physical disabilities or mental illness living in Cook County nursing homes against the state of Illinois. The suit addressed the state’s practice of forcing Medicaid-eligible people with disabilities to live in nursing homes.

A settlement of the case was announced last month, and now Medicaid-eligible people with disabilities living in Cook County will have the option of living and receiving support services at home. Attorneys expect counties nationwide will soon follow suit.

Marca Bristo, president and CEO of Access Living, said, “This is a historic day for people with disabilities, not just for Illinois, but around the country. To our community, it’s the Brown v. Board of Education or the Roe v. Wade.”

See Jamie Sotonoff, “Historic” settlement for nursing home patients, Daily Herald, Aug. 30, 2011.

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

September 25, 2011 in Disability Planning - Health Care, Elder Law | Permalink | Comments (0) | TrackBack (0)

Stockbroker Brings Client Back to Life

SigningJason Pedigo, a licensed stockbroker, obtained a customer named WL. In mid-August, WL decided to buy a fixed annuity, and the customer instructed Pedigo to purchase a fixed annuity on August 31, 2009. That same day, Pedigo submitted a fixed annuity contract with Pacific Life Insurance Company, and Pacific Life issued the contract and sent it to Pedigo in accordance with its selling agreement.

The problem was that WL died on August 20, 2009. Since WL was dead, Pacific Life never received an executed “Annuity Contract Confiramtion” from WL. Pacific Life mailed eleven letters to Pedigo asking for the return of WL’s signed ACC. Finally, in March 2010, Pedigo informed Pacific Life that WL was deceased and requested paperwork to submit a death claim. Pacific Life maintains it never received the death claim paperwork.

In August of 2010, Pedigo sent a surrender request form to Pacific Life, and the company informed Pedigo that it could not process a full surrender because WL was dead. So, Pedigo faxed Pacific Life an ACC purportedly signed by WL on September 8, 2009 (twenty days after WL died). Pedigo was subsequently barred from the industry for violating FINRA’s Rule 2010.

See Bill Singer, Zombie Client Signed Annuity Document 20 Days After His Death, Forbes, Sep. 23, 2011.

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

September 25, 2011 in Current Events, Malpractice, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Saturday, September 24, 2011

Decrease in Antipsychotic Drugs for Dementia Patients

Old man and catMany doctors of elderly nursing home residents prescribe antipsychotics to their patients to help pacify aggression and paranoia related to dementia. However, this off label purpose for antipsychotics can limit the patient’s ability to socialize, communicate, and participate in everyday life.

According to a government audit, close to one in seven nursing home patients sixty-five or older had a prescription for antipsychotics during a six month span in 2007. During this time, eighty-three percent of Medicare claims for these prescriptions were for off-label purposes.

“Awakenings,” a three year old program aimed at reducing this off label use of antipsychotics, incorporates exercise, aromatherapy, pets, and other methods as ways of helping elderly patients with dementia. Nursing homes across the country have implemented similar programs aimed at reducing off-label uses of antipsychotics.

These new programs, coupled with the FDA’s warnings on the off-label use of these drugs, has lead to a decrease in the number of antipsychotic prescriptions for elderly patients. In 2006, Medicaid’s antipsychotics drug bills totaled around $7.9 billion. That number dropped to close to $4.9 billion in 2007, and $3.7 billion in 2008.

SeeMatt Sedensky, Push Underway to Cut Drugs for Dementia Patients, The Associated Press, Sep. 14, 2011.

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

September 24, 2011 in Disability Planning - Health Care, Elder Law | Permalink | Comments (2) | TrackBack (0)

More on Estate of Turner v. Comm’r

Gavel and money I recently blogged about Estate of Turner v. Comm’r, T.C. Memo 2011-209 (2011) and the court’s holding that transferred FLP assets were included in the decedent’s gross estate. The court also addressed the issue of whether the decedent’s payment of life insurance policy premiums were subject to the annual exclusion under Section 2503(b).

The decedent was a grantor of an irrevocable life insurance trust that had purchased three separate life insurance policies. In 2000-2003, the decedent paid the insurance premiums directly from a joint checking account instead of transferring money to the trustees to pay the premiums. The IRS included the premiums paid on the life insurance policies in the estate’s total adjusted taxable gifts. On appeal, the court held that the premium payments were a gift of a present interest and were subject to the annual exclusion under Section 2503(b).

The Tax Court in Turner agreed, holding that the present interest exclusion applied to the premium payments because the beneficiaries had the “right to demand withdrawals from the trust.”

See William Alan Nelson II, Tax Court Ruling on Crummey Withdrawal Procedures, Wealth Strategies Journal 2.0, Sep. 20, 2011.

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

September 24, 2011 in Estate Tax, New Cases | Permalink | Comments (0) | TrackBack (0)

Friday, September 23, 2011

Stealth Pre-Nuptial Agreements

Divorce Leonard J. Adler (attorney, Bassemer Trust) and Mark R. Parthemer (attorney, Bassemer Trust) address the use of "stealth pre-nuptial agreements” in their article, A New Twist on an Established Idea: The ‘Stealth Pre-Nup’, Palm Beach Daily News, Jan. 7, 2011. The introduction to the article is below:

It is a classic dilemma. Your child has found true love. You are overjoyed or maybe you are unsure it will last. Regardless, as you reflect on this family-changing event, you determine to be a good steward of your family’s wealth, particularly in light of the alarming divorce rate.

The first thing that springs to mind is a pre-nuptial agreement (a “pre-nup”). Pre-nups govern property distribution at the dissolution of a marriage, whether by divorce or death.

In most jurisdictions, however, each party must have his or her own attorney and make full disclosure about his or her assets and expectancies. Discussions of such matters are awkward at best, especially for a young couple. Often, the process remains incomplete or, if completed, leaves a lingering bad taste — and there remains the risk of the pre-nup being contested years later.

With more than a century of experience, we have seen this situation many times. One of our favorite alternatives is what we call a “stealth pre-nup.” Ironically, a stealth pre-nup is not a pre-nup at all, but rather a thoughtful use of trusts and family investment vehicles, such as limited partnerships or LLCs.

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

September 23, 2011 in Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Adult Adoption for Spouses with Alzheimer’s

Marriage A man called in to TV Evangelist Pat Robertson’s broadcast last week seeking advice on a man who became romantically involved with another woman after his wife was diagnosed with Alzheimer’s. Surprisingly, Robertson said that divorcing the wife would be ok because Alzheimer’s is “a kind of death.” Robertson explained, “I know it sounds cruel, but if he’s going to do something, he should divorce her and start all over again, but make sure she has custodial care and somebody looking after her.”

One way to provide for an ex-spouse with Alzheimer’s is through adult adoption. This option is expensive, but some of the expenses can be offset with a tax break. Currently, a refundable tax credit is available for qualified expenses the taxpayer pays to an adopt individual who is physically or mentally incapable of care for himself.

For federal income tax purposes, the ex-spouse will be treated as the taxpayer’ own child. However, as the taxpayer’s child, the adopted ex-spouse will not be eligible for the federal unlimited marital deduction. Instead, under current tax laws, the taxpayer can only make a $13,000 gift to the adopted ex-spouse without incurring federal gift tax consequences.

For more information on adult adoption of a spouse with Alzheimer's, see Kelly Phillips Erb, “Death", Alzheimer's and Taxes: When "I Do" Turns Complicated, Forbes, Sep. 9, 2011.

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

September 23, 2011 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law | Permalink | Comments (1) | TrackBack (0)

FLP Assets Part of Decedent’s Estate

Gavel and money During their marriage, Jewell and Clyde Turner acquired 170,000 shares of bank stock. The couple’s estate planning attorney drafted a family limited partnership to hold the Turners’ stock and cash. Under the Georgia limited liability partnership’s partnership agreement, Clyde and Jewell each owned a 49.5% limited partnership interest and a 0.5% general partnership interest. 

The partnership agreement stated that the FLP had three general purposes, “(1) to make a profit, (2) to increase the family’s wealth, and (3) to provide a means whereby the family members can become more knowledgeable about the management and preservation of the family’s assets.”

The Turners gave their three children and two of Jewell’s children limited partnership interests in the FLP on December 31, 2002 and January 1, 2003. The total fair market value of the partnership interest transferred at these times was $1,652,315 and $474,315, respectively.

Clyde died in February of 2004, and his estate filed a gift tax return in October of the same year. The estate characterized the FLP assets as being outside of the estate, the IRS challenged this characterization, and the case was sent to the Tax Court.

The Tax Court in Estate of Turner v. Commissioner, T.C. Memo. 2011-209 (2011), held that a decedent’s gross estate includes the value of any interest property he or she held at the time of death. The court specifically referenced Section 2036(a) when making its determination. Generally, when an individual transfers assets to an FLP, the individual must establish a “legitimate and significant nontax reason” for the transfer.

The court dismissed the three general purposes for creating the FLP under the partnership agreement, stating that the listed purposes did not necessary reflect the couple’s actual reason for making the transfers to the FLP. The court also stated that consolidated asset management can be a legitimate nontax purpose for an FLP formation, but not where an FLP is “a mere asset container.”

See William Byrnes and Robert Bloink, How to Build a Foolproof Family Limited Partnership, Advisor One, Sep. 17, 2011.

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

September 23, 2011 in Estate Planning - Generally, Estate Tax, New Cases | Permalink | Comments (0) | TrackBack (0)

Woman Sues Research Institute For Removing Husband’s Brain

Brain Ann Mozingo’s husband died of a brain aneurysm in 2000. Following her husband’s death, Mozingo agreed to donate samples of his brain tissue to the Stanley Medical Research Institute.

Five years later, Mozingo learned that an employee of the institute had actually removed her husband’s entire brain, brain lining, liver, spleen, and pituitary gland. Mozingo filed suit against the institute in 2005, alleging infliction of emotional distress, fraud, and negligent misrepresentation.

Mozingo is one of over a dozen families to have filed suits accusing the  institute of orchestrating the removal of a family member’s brain without the family’s consent. Of these numerous suits, only three (including Mozingo’s) have gone to court.

The jury heard opening statements in Mozingo’s case this week in Maine’s York County Superior Court.

SeeClark Canfield, Wife Sues After Husband’s Brain is Removed, The Associated Press, Sep. 22, 2011.

September 23, 2011 in Death Event Planning, Science | Permalink | Comments (0) | TrackBack (0)