Wills, Trusts & Estates Prof Blog

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

Thursday, August 30, 2012

Buffet Celebrates His 82nd Birthday By Making Donations

CharityWarren Buffet celebrated his 82nd today, on August 30, 2012. To mark his birthday, the multi-billionaire and philanthropist donated billions of dollars in shares to the charities that his children, Susan, Howie, and Peter own. While the value of Class A and B shares has recently decreased, the amount that he donated still totaled in the billions. The letter he wrote to his children is provided below:

Dear Susie, Howie and Peter:

It’s been six years since my pledge of 17,500,000 Berkshire B shares (adjusted for a 50 for 1 split) to each of your foundations.  I knew you would apply your considerable brains and energies in order to make the most of the funds from my gift. However, you have exceeded my high expectations. Your mother would be as proud of you as I am. I see her influence in what you are accomplishing.

I’ve decided, therefore, to double the original pledge that now stands at 12,220,852 B shares. On the new base of 24,441,704 pledged shares, I will distribute 1,222,085 shares to each of the three foundations next July with that amount decreasing at 5% per year subsequently.

Over time, I would expect the value of the annual distribution to average more than $100 million, though it will vary substantially from year to year. I’m confident you will use the money wisely, each in your own way.



See Sue Chang, Warren Buffet Celebrates 82nd Birthday With Billion Dollar Donations, The Wall Street Journal, Aug. 30, 2012.

Special Thanks to Brian J. Cohan for bringing this article to my attention.

August 30, 2012 in Gift Tax | Permalink | Comments (0) | TrackBack (0)

Article on ERISA

Brian NeulanderBrian S. Neulander (Associate Attorney, Louisiana) recently published an article entitled A Flaw in ERISA's Remedial Scheme: How Do Benefit Plans Recoup Money From Overpaid Participants?, Proskauer Rose LLP (July 27, 2012).  The abstract on SSRN is provided below:

Consider the following scenario: an ERISA plan erroneously distributes greater retirement benefits to its members than the participants and beneficiaries are actually entitled to receive — either because the plan errs when calculating benefits, or a participant induces the plan to distribute non-vested funds through misrepresentation. This article investigates the remedies available to plaintiff-plans seeking recovery for overpayments to participants. Based on the Supreme Court's recent ERISA remedies rulings, the article discusses whether the statute contains a viable cause of action for fiduciaries to recover mistaken overpayments from participants. 

Following a brief history of ERISA, including the statute's purpose and foundation in trust law, this article examines the Supreme Court’s construction of Section 502(a) and its test for "appropriate equitable relief." The article then analyzes and compares recent cases denying monetary recovery to plan fiduciaries to those cases allowing fiduciaries to recoup overpayments to participants. Ultimately, the article's analysis illustrates that the Supreme Court's overly-narrow interpretation of ERISA’s remedial provisions frustrates the purpose of the statute.

August 30, 2012 in Articles, Elder Law | Permalink | Comments (0) | TrackBack (0)

Roth IRAs

IRAUnlike a normal IRA, when the owner of a Roth IRA dies the person that he or she has listed as the primary beneficiary must begin to take required minimum distributions. The good news is that these distributions are generally tax free. The beneficiary of the IRA has, generally, only two options for taking distributions: a five-year rule or a single-life rule. Under the first option, the beneficiary must take the total amount of the IRA within five years after the owner's death. If a beneficiary chooses the second option, the beneficiary can take the distributions over the course of his or her life. Here, a surviving spouse does not have to take from the IRA until the person reaches the age of 70 1/2. This allows the IRA to grow tax free. A surviving spouse and a non-spouse beneficiary can choose either option. There is a third option but it only applies to a surviving spouse. The spouse can choose to take the IRA and make it his or her own IRA. That gives the spouse the ability to forgo taking distributions.

Remember, even if the contributions that were made to IRA were not tax deductible, a beneficiary that withdraws from can take those distributions without incurring a tax.

See Joe Cicchinelli & Jared Trexler, What You Need To Know About Inherited Roth IRAs, The Slott Report, Aug. 29, 2012.

Special Thanks to Brian J. Cohan for bringing this article to my attention.

August 30, 2012 in Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Fourth Edition of "Wills, Trusts, and Estates for Legal Assistants" Published

Cover_Legal_WTE_Legal_AssistantsThe Fourth Edition of Gerry W. Beyer (Governor Preston E. Smith Regents Professor of Law, Texas Tech University) and John K. Hanft (San Francisco State University College of Extended Learning, Paralegal Studies Program), Wills, Trusts, and Estates for Legal Assistants has just been released.

This book is designed for legal assistants and paralegals to use during their legal training as well as a reference for individuals who assist attorneys in their estate planning practice.  The book focuses on intestate succession, wills, trusts, estate administration, non-probate assets, wealth transfer taxation, disability and death planning, and malpractice and professional responsibility.

August 30, 2012 in Books - For the Classroom, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

CLE on Off-Shore Tax Issues

CLE ImageThe ALI CLE is sponsoring a MP3 CD-ROM program/video webcast entitled, Recent Developments in Off-Shore Tax Compliance Including Criminal Tax Investigations, on Wednesday, September 19, 2012 from 12:00-2:45 pm Eastern. Participants will be able to earn 2.5 CLE Credit Hours. A description of this program is provided below:

Compliance with off-shore tax laws has always been complex. In recent years, however, criminal tax investigations have added to this complexity, raising the possibility that lawyers-and their legal fees-may be vulnerable. This all-new video webcast will explore the intricacies of off-shore tax compliance for lawyers and accountants who have clients with interests in foreign bank accounts or other foreign-based entities. It will also be useful to estate planners and business lawyers whose clients reside in multiple jurisdictions or otherwise have investments both within and outside of the United States.

The first part of the presentation, "Required Foreign Financial Reporting," will be led by Jerald August of Fox Rothschild LLP. He will provide an overview of the current foreign bank and financial account reporting rules under the Financial Crimes Enforcement Network (FinCEN), as well as under new section 6038D regulations and Form 8938 "Statement of Specified Foreign Financial Assets" under the Foreign Account Tax Compliance Act (FATCA). Mr. August will also cover filing obligations of foreign financial institutions or foreign entities in which U.S. taxpayers hold a substantial ownership interest due to FATCA.

The second part of this program, "Government's Increasing Use of Money-Laundering Offenses as a Prosecutorial Tool For Tax Evasion," will be led by Ian Comisky of Blank Rome LLP. He will report on recent cases-including the Wegelin Bank asset proceeding in New York-that have raised the specter of a government charging traditional tax offenses as money laundering and seeking the forfeiture of assets. Mr. Comisky will also discuss how the legal landscape now considers as money laundering offenses that were formerly traditional tax charges. He will further investigate the availability of asset forfeiture for violations of these offenses and whether counsel, as well as their fees, are at risk.

August 30, 2012 in Conferences & CLE, Income Tax | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 29, 2012

Article on Autism and Special Needs Trusts

R00469029Katherine Owens (Comment Editor, Estate Planning and Community Property Journal; JD anticipated 2013, Texas Tech University School of Law) recently published her article entitled One Piece of the Puzzle: A Practitioner's Guide to Autism-Specific Special Needs Trusts, 4 EPJ 343 (2012).  The introduction to the article is below: 

Autism diagnosis rates are rising. While it is difficult to ascertain the exact percentage of individuals who will be diagnosed with the disorder, one thing is for certain: With chances as high as 1 in 110, Autism Spectrum Disorders (ASD) will affect all of us in some way or another. However, what does the rise in ASD cases mean for the estate planning community? 

There is a rapidly growing need for experienced and caring attorneys and financial professionals who can assemble a comprehensive estate and financial plan for individuals with disabilities. The need in this area stems from several factors, including the move [a]way from institutional placements, advances in medicine which have increased the life expectancy of people with disabilities and the alarming rise in autism, a pervasive life-long disability.

With a rise in ASD diagnoses, it is likely that all practitioners within this community will be asked to execute a will or trust with an autistic individual in mind. As statistics show a rapid increase in autism, lawyers must be aware that they will be planning for families where ASD impairs a family member more and more. As attorneys, what issues must be kept in mind when planning for the future of someone with ASD? Very little is known about ASD and the lack of potential causes or cures presents several interesting challenges for practitioners creating trusts for families or individuals affected by ASD. 

This article will address some of the issues associated with a broad-spectrum disorder like ASD. First, background information will be presented in order to develop a strong foundation of what ASD is, what other disorders are associated with it, and other issues families with ASD children face. Next, a brief overview of Special Needs Trusts (SNT) will be tied into the previously discussed ASD information in order to develop an inclusive and ASD-specific SNT framework. Lastly, this article will address some of the questions that parents or grandparents of ASD individuals will likely ask legal professionals when planning for the future of their child. A solution is needed, and the research and assertions within this article will hopefully bring ASD awareness, as well as provide practitioners with helpful guidelines to creating trusts for clients with ASD. 

August 29, 2012 in Articles, Trusts | Permalink | Comments (1) | TrackBack (0)

'Sleeping Beauty' Exhibit in Ukrainian Art Museum

Images-11Ukraine’s National Art museum is hosting an interactive art exhibit where five women are placed atop raised platforms in a bed for three days, and men are invited to come and kiss them.  Before the men can kiss the women however, each one has to sign a contract that says, if the woman awakes in response to his kiss he has to marry her.  One of the ‘sleeping beauties’ said that she believes she will feel a difference if her future boyfriend kisses her and she will awake in response to this special feeling.

See ‘Sleeping Beauties’ Seek Fairytale Love, CNN, Aug. 23, 2012. 

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.

August 29, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

"The Onion" Claims Creator of Fear Factor Leaves Interesting Will

Unknown-2The Onion "reported" that the will of John de Mol, creator of Fear Factor, has included some interesting options in his will. True to form, he bequeathed his estate to his wife and children on the condition that they fully consume the ashes from his freshly cremated corpse. If they complete the task, they will receive $10 million and a Caribbean vacation.  If they do not complete the task, they will not receive the inheritance unless they spend one hour locked in a coffin filled with maggots.  

See Fear Factor Creator's Will: 'Heirs Must Eat My Ashes To Collect Inheritance,' The Onion, May 11, 2005.

Please note the source of this material is The Onion which is known for publishing parodies so don't take this as fact!

Special thanks to Laura Galvan (attorney, San Antonio, Texas) for bringing this article to my attention.

August 29, 2012 in Humor, Wills | Permalink | Comments (3) | TrackBack (0)

Other Wills, Trusts, and Estates Blogs -- Updated 8/29/2012

August 29, 2012 in Resource Links | Permalink | Comments (3) | TrackBack (0)

Book on Asset Protection Trusts

Duncan Osborne Fred TansillFrederick J. Tansill (Attorney, Virginia) & Duncan E. Osborne (Partner, Texas) recently published a book entitled, Asset Protection Trusts and Agreements, (2011). A description of the book is below:

Although it may be legal malpractice not to recommend asset protection planning to clients for whom it is obviously appropriate, asset protection planning often involves difficult fact situations—and difficult clients.

In Asset Protection Trusts & Agreements, Frederick J. Tansill and Duncan E. Osborne help practitioners avoid these Seven Deadly Sins of asset protection and many other traps:


Make sure the transferors retain post-transfer solvency, disclose transfers whenever possible, and avoid making transfers immediately before increasing their risk exposure. An attorney who allegedly assists an insolvent client in shielding assets from creditors may find himself or herself a defendant in collateral litigation with creditors. Banco Popular North America v. Gandi,876 A.2d 253 (N.J. 2005) (refusing to dismiss negligence claim alleging that attorney misrepresented the debtor’s finances). To help avoid this trap, the book includes a sample Affidavit of Solvency that practitioners can customize to meet particular client needs. Both Tansill and Osborne discuss this topic in detail.


Plan ahead: Remember that for Medicaid asset protection purposes any assets added to the trust will be subject to a five-year look-back period. Allow trustees and others to add additional assets to the asset protection trust, so that initial assets may be granted protection. Attorney who fails to explain the limits of Medicaid asset protection to clients may get into trouble if a client’s asset protection trusts are considered “available assets” for Medicaid qualification purposes.


Choose trustees and successor trustees who will exercise their discretion (without considering their personal interests) in order to preserve assets, but be sure to avoid any collusion or advance agreements or “side agreements” between settlors and beneficiaries. Attorney may be subject to liability to creditors for helping debtors conceal assets.

Unlimited Powers

Perhaps permit the Trustee to exercise a limited—not unlimited—power of appointment to provide maximum flexibility in naming contingent beneficiaries. Ahern v. Thomas, 248 Conn. 708, 739, 733 A.2d 756, 775 (1999) (trustees did not have a general power to distribute trust principal; the trust was not an available resource).


Allow the trustee flexibility in determining investment strategies, including the ability to invest for capital appreciation or income. Depending on the needs of the beneficiaries, the settlor may wish to choose investments that yield little or no income (if he or she is likely to apply for Medicaid in the future) or substantial income if the asset protection trust is designed to cover the beneficiary’s living expenses.


Determine if the client needs an income-only trust. If so, prohibit the trustee from (1) treating capital gains as income, (2) adjusting between income and principal, or (3) converting principal and income to a unitrust amount. If not, permit the trustee to invest for total return without regard to distinctions between income and principal. The trust may need to prohibit reliance on any state law statute or doctrine that would otherwise give the trustee the power to convert any part of a trust into a total return unitrust.

Disrespecting Elders

Allow distributions to children or others who might then choose to pay privately for an elder's care. For example, the trust might give the settlor a special limited power of appointment over the trust corpus in favor of the settlor’s children or other relatives—who may be inclined to provide the settlor with personal, financial, or emotional care and assistance.

Osborne and Tansill help readers understand the limits of asset protection. The book includes many invaluable suggestions for attorneys, such as: Document the matters that you decline to undertake.

August 29, 2012 in Books - For Practitioners | Permalink | Comments (1) | TrackBack (0)