Wills, Trusts & Estates Prof Blog

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

Saturday, November 17, 2012

Son Passes Away Before Parents Could Harvest Sperm

Unknown-5I previously blogged about two Roanoke parents who wanted to harvest their son's sperm so they could have grandchildren in the future if his condition did not improve.  

After their 19-year old son, Rufus Arthur McGill, was in a car accident that landed him in critical condition, parents Jerri and Rufus McGill were faced with deciding whether to end life support for their son.  They were also fighting against the law when they wanted to collect and harvest their son's sperm to keep his legacy going.  Since Rufus Arthur is considered an adult, his parents could not legally collect his sperm without his express consent, which he was unable to give in his condition.

Sadly, Mr. And Mrs. McGill's tough decisions and their legal battle were concluded last Thursday when Rufus Arthur McGill passed away. 

See Critically Injured Virginia Teen Dies Before Parents Can Harvest Sperm, Foxnews.com, Nov. 8, 2012.

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

November 17, 2012 | Permalink | Comments (0) | TrackBack (0)

Lottery Winner That Was Scammed Filed For Bankruptcy

LotteryA maintenance worker, Robert Miles, and his wife recently won a $5 million scratch-off lottery ticket. Unfortunately, two brothers, Andy and Nayel Askhar from Syracuse, scammed them out of the ticket. When Miles won the jackpot, he took it to the market and was lied to by Andy Ashkar after he scanned the ticket. Ashkar told Miles that the ticket's true value was $5,000, and gave him $4,000 after assessing a $1,000 cash-in fee. Reportedly, Ashkar then took the ticket and immediately bolted out the door to cash the winning. Miles was confused about the tickets true value and failed to give chase. Furthermore, Miles admitted that he had used crack cocaine the night prior and did not feel well enough to chase after Ashkar. 

Even though he had a legitimate claim, Miles refused to go to the authorities because he claimed that would be his word against Askhar's word. He finally came forward after being persuaded by a police officer. Now, both Askhar brothers are charged with "attempted grand larceny and possession of stolen property." The Lottery Division has also taken measures against the store where the brother's worked. The store happened to belong to the brothers' parents. The Division has prohibited them from selling lottery tickets, at least until the investigation is completed.

See Associated Press, NY Man Who Claims $5M Lottery Scam Faced Debts, Yahoo!, Nov. 16, 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.

November 17, 2012 in Current Events | Permalink | Comments (0) | TrackBack (0)

Annual Gift Tax Exemption Rises

IRS 2At the beginning of 2013, the annual gift tax exemption will increase from $13,000 to $14,000. This is good news for spouses because they can combine their individual gift tax exemptions to double the amount that they can give tax-free. If a person makes a gift that exceeds the annual gift tax exemption then the exceeded amount goes towards the lifetime gift tax exemption. If a person exceeds both limitations, a person could be taxed up to 35% on the amount that exceeds both exemptions.

The easiest way that a person can take advantage of the annual tax exemption "is to give cash or other assets each year to each of as many individuals as you want." Another option that a taxpayer might want to use is to place the the annual amount in a Section 529 education savings plan. Under this option, a taxpayer can establish several different accounts for several different people. There is a benefit to this action. Any money placed within the accounts can appreciate and be withdrawn tax-free on the assumption that it is withdrawn for an educational puropse. 

See Deborah L. Jacobs, IRS Raises Yearly Limit For Tax-Free Gifts, Forbes, Oct. 18, 2012.

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

November 17, 2012 in Gift Tax | Permalink | Comments (0) | TrackBack (0)

Friday, November 16, 2012

The ABLE Act

Unknown-4Disability advocates are pushing Congress to pass legislation before the year ends that would offer a new way to save money without jeopardizing government benefits. Currently, disabled individuals cannot have more than $2,000 to their name without sacrificing government benefits. The ABLE Act aims to change this  by allowing disabled individuals to create a special savings account where they can accrue up to $100,000 without losing access to social security or Medicaid. Three dozen national organizations are backing the effort to support the ABLE Act legislation. 

See Michelle Diament, Congress Urged To Create Tax-Free Disability Savings Accounts, disability scoop, Nov. 13, 2012.

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

November 16, 2012 in Current Events, Disability Planning - Health Care | Permalink | Comments (0) | TrackBack (0)

Sherman Hemsley's Military Funeral

Unknown-3Sherman Hemsley was on ice in an El Paso funeral home for months while a man claiming to be his half-brother came forward to challenge the validity of his will. Now that a judge has ruled on the Sherman Hemsley case, he can finally be buried in a proper funeral.  Lawyers for Flora Enchinton have confirmed that a military funeral is now being planned for Hemsley, who served in the United States Air Force for four years before he began acting. The funeral should be held at Fort Bliss National Cemetary in El Paso.

See Hollie McKay, Military Funeral Planned for Sherman Hemsley, Months After Death, FoxNews.com, Nov. 14, 2012. 

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

November 16, 2012 in Current Events, Death Event Planning | Permalink | Comments (0) | TrackBack (0)

Harvard Law Professor Writes Book about Same-Sex Marriage and the Courts

Klarman2Michael Klarman wrote a new book entitled From the Closet to the Altar: Courts, Backlash, and the Struggle For Same-Sex Marriage.  In his latest book, the Harvard Law School professor explores his idea that political backlash follows when courts when courts get ahead of public opinion as it is applied to same-sex marriage.

Within the book, he also details the history of the gay rights movement, how gay marriage became a legal issue and the costs and benefits of related litigation over the past 20 years. Please click here for a more in depth coverage of the book.

See Emily Newburger, The Courts and Public Opinion: Klarman Examines Legal Fight for Same-Sex Marriage, Harvard Law School, Nov. 14, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

November 16, 2012 in Books, Current Events | Permalink | Comments (0) | TrackBack (0)

Article on Professionals and Their Contribution to the Legislative Process

HofriAdam S. Hofri-Winogradow (Faculty of Law, Hebrew University of Jerusalem) recently published his article entitled, Professionals' Contribution to the Legislative Process: Between Self, Client and the Public, Law and Social Inquiry (2013). The abstract available on SSRN is below: 

How may professionals be made to contribute to legislative processes so that their expertise redounds to the public interest, despite the legislative product being likely to have a negative impact on their clients’ wealth? Drawing on a case study of the legislative process which gave birth to Israel’s recent (2002-8) trusts taxation regime, based on five years of participant-observation among the trust professional community, I find that to obtain the benefit of private sector professionals' expertise under such circumstances, government should have legislation drafted in a dispassionate, exclusive environment of experts rather than in the political arena; it should build professionals’ trust in government by adopting an explicitly collegial approach; it should focus reform efforts on elements of the existing law so clearly inequitable as to make a refusal to contribute difficult to justify; and take care that the new regime creates a compliance practice lucrative enough to compensate for any loss to professionals consequent on its enactment. Once professionals’ interests are suitably safeguarded, their loyalty to clients appears surprisingly brittle, and government can successfully combine with them in the public interest.

November 16, 2012 in Articles, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Taxpayer Does Not Meet Early Distribution Rule

IRS 2A tax court recently addressed whether a taxpayer should be subject to the 10% penalty on distributions he received from his qualified retirement plan.The taxpayer in that case owned several qualified retirement accounts. In 2009, he withdrew $52,600 from his retirement plans. For that tax year, he reported the income as he was required to do so, but the IRS still determined that he had a deficiency for that year. The IRS argued that the taxpayer was subject to the 10% penalty subject to IRC Section 72(t)(1), which created the deficiency. 

In Hartley v. Commissioner, the taxpayer tried to argued that he was not subject to the additional 10% penalty because his actions fell under the exception provided in IRC Section 72(t)(2)(c). In other words, the taxpayer alleged that he should not be subject to penalty because a court ordered him withdraw funds from his qualified retirement to pay alimony to his ex-wife. Under the exception, the taxpayer does not incur a penalty if the distribution is made to an "'alternative payee' pursuant to a qualified domestic relations order, as provided by IRC Section 414(p)." Section 414(p) does define that person to be a former spouse. The tax court rejected the taxpayers argument, claiming that he received the distribution directly and not the "alternative payee." The court further remarked that the provisions cited above did not apply because there was no formal domestic relations order. The court ordered the taxpayer to pay the additional 10% penalty.

See Andrea Zakko, Taxpayer Runs Afound of Early Distribution Rule, Wealth Management, Nov. 14, 2012.

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

November 16, 2012 in Income Tax, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Suicide Note Declared To Be A Valid Will

WillsIn Sydney, Australia, the Supreme Court heard a case where the testator made his mother the sole beneficiary of his estate through a note that he wrote before he committed suicide. Bradley John MacDonald wrote a note that apparently changed the will that he wrote two years earlier. Because of the sudden change, "his family had to go to a court for a ruling before his estate could be finalised." 

In its ruling, Judge Richard White held that probate could move forward because the note sufficiency showed that MacDonald intended several part of his suicide note to change his will. Judge White noted that MacDonald placed the paragraphs that were to form his will under the heading, "Instructions for distribution of my goods." It is important to note that suicide notes are not automatically considered valid wills, unless they are a clear expression of the testator's final wishes, signed by the testator, and witnessed. This ruling is important because had the court ruled against admission of note to probate, MacDonald would have died intestate and his estranged wife, Amy, would have received his estate. Luckily for the estate, Amy agreed with MacDonald's mother to forgo making a claim on the estate. 

See Vanda Carson, Suicide Note Declared A Valid Will By Court, The Telegraph, Nov. 15, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

November 16, 2012 in Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Ponzi Schemer Might Get Five Years In Federal Prison

Court FightRobert Telthorst, a Kansas attorney, pleaded guilty to wire fraud and money laundering. The attorney was accused of "stealing more than $460,000 from client trust funds in a Ponzi scheme." Telthorst admitted that he took money to cover up the fact that he was taking money from other clients' trust accounts. Telthorst began to take money from the clients' accounts after he was appointed to become the administrator the trusts. In one instance, he was appointed to administer the trust of man named "Otto K." Otto K. had a trust that was worth $463,344 for the benefit of his two daughters. The trust stated that he wanted to give his first daughter, Sherri T., a lump sum of money, while he wanted his second daughter, Marlene O., to receive monthly payments. Before he granted the lump sum to Sherri. T, Telthorst took $22,000 from the lump sum. In the case of the second daughter, Telthorst took more than $200,000 from her trust. He also took from the educational trusts of another client. There he depleted the three trusts that worth $10,000 each. He also drained the charitable trusts of two other clients worth $80,000. 

A court is ready to sentence Telthorst. The court will likely give him five years in federal prison, and order restitution in the amount of $460,000. 

See David Lee, Admitted Ponzi Schemer Could Get Five Years, Courthouse News Service, Nov. 14, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention

November 16, 2012 in Estate Planning - Generally, Malpractice, Trusts | Permalink | Comments (0) | TrackBack (0)