Wills, Trusts & Estates Prof Blog

Happy New Year!!

Happy New Year and Best Wishes for 2014!!!

New Retirement Home Trend

A new trend appears to be growing in continuing care and retirement communities.

Retirees may need to consider if their retirement home has a liquor license.  Surveys show that those aged 60 and older like to drink.  50% of men and 39% of women polled were almost daily drinkers while 5.9% of men and 0.9% of women reported binge drinking at least once a month.

With some retirement communities now serving beer, wine, and even top-shelf liquor, retirees who like to drink likely have one more question to ask themselves when deciding where to live.

See Robert Laura, Will Your Retirement Home Have a Liquor License?, Forbes, Dec. 26, 2013.

New Year's Money Resolutions

Here a few New Year’s money resolutions to consider in 2014:

•  Stick to your budget.  Make a budget by compiling a spreadsheet of your expected costs.  If you think it will be hard to stay on target, institute a reward system and have someone close monitor your progress.
• Get rid of debt.  Pay off the debt you find most unsettling and then work your way down from there.
• Prepare your estate plan.  Make a will, select an executor, assign a durable general power of attorney, designate backups, and find a way to give your passwords to someone you trust.
• Get serious about your retirement.  Make funding your 401(k) a priority.
• Reconsider your insurance.  You may be able to save money on premiums if you package your insurance coverage under one carrier.
• Review your portfolio.  Review your asset allocation by taking your age, risk aversion, and personal goals into account.
• Create that emergency fund.  Build up an emergency fund equal to three months of living expenses.

See Daniel Lippman, New Year’s Money Resolutions to Think About, The Wall Street Journal, Dec. 29, 2013.

Caramadre Appealing

Cranston estate planner Joseph Caramadre has filed notice that he will appeal his conviction and six-year sentence for his role in a scheme targeting the terminally ill.

Caramadre is thought to have caused insurance companies and brokerage houses losses of about $46 million.

See Katie Mulvaney, Cranston Estate Planner Caramadre to Appeal Conviction, Providence Journal, Dec. 27, 2013.

10 Reasons to Consider a Roth IRA

Here are 10 reasons you should convert to a Roth IRA:

1. You’ll be taxed at a higher federal marginal tax rate in the future.
2. You’re going to move to a high tax state.
3. You won’t need your IRA when you’re 70 1/2.
4. You want to leave money to grandkids.
5. You’re expecting a taxable estate.
6. Your IRA investments have tanked.
7. You plan on using non-IRA cash to pay tax.
8. You have special tax items.
9. You’ve lost a spouse.
10. Your Social Security could be taxed.

See 10 Reasons to Convert to a Roth IRA, Forbes.

There's Still Time for Those Annual Exclusion Gifts

Clients who have waited until the last minute need to make their “annual exclusion” gifts now.

Under Section 2503(b), a donor can use the annual exclusion to gift up to $14,000 per donee in 2013 and 2014 to as many donees as the donor wishes.  Many of these gifts are made in January so the gift can begin appreciating as soon as possible.  However, if a client were to gift her child on December 31, 2013, and then again on January 1, 2014, then the $14,000 annual exclusion could apply to both gifts.

See Jay E. Rivlin & Christiana M. Lazo, Clients Can Minimize Fees on ‘Annual Exclusion’ Gifts, Financial Advisor, Nov. 26, 2013.

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

Life Support or Death Support?

As I have previously discussed here and here, life support can be quite controversial.  In one case, Jahi McMath’s family wants to keep the 13-year-old on life support despite her diagnosis as brain dead.  In the other case, Marlise Munoz’s husband wants his pregnant wife off life support but Texas law prevents it.

Arthur Caplan, the director for the Division of Medical Ethics at NYU Langone Medical Center, thinks there is a need for a national conversation on brain death and the levels of brain functioning.  In Jahi’s case, Caplan believes doctors need to be more transparent about the finality of brain death.  By asking Jahi’s parents about mechanically continuing biological function, doctors created a terrible scenario where the parents resist any removal of machines because they want to hope that this awful thing did not happen. 

In Munoz’s case, Texas law states that “life-sustaining treatment” cannot be withheld from a pregnant patient, but if Munoz is truly brain dead, then she is not really receiving “life-sustaining treatment.” 

See Elizabeth Landau, When ‘Life Support’ Is Really ‘Death Support’, CNN, Dec. 28, 2013.

Year-End Estate Planning Review

At the year-end, people with estate plans should review their health care advance directives, update their beneficiary forms, and tell their children regarding disposition of their personal belongings. Also, individuals over seventy who need to meet their required minimum IRA distributions can consider the recently reinstated qualified charitable distribution rule ("QCD") to make tax-free donations. Regarding beneficiary forms, people should ensure that the forms are proper to avoid probate, beneficiary designations are named, and any designations are not of a minor child.

See Kristin Matsko, 3 Year-End Estate Planning Action Items Most People Should Consider (But Usually Don't), JD Supra, Dec. 16, 2013.

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

Death of Frugal Maharaja Reveals Unbelievable Treasures

The death of the head of the Indian family that once ruled the south kingdom of Travancore has revealed a temple of untold treasures.

Sree Uthradom Thirunal Marthanda Varma died at age 91 and was known for his frugality.  So upon his death, no one expected the fabulous wealth he had kept stored away in the vaults of the ancient Sri Padmanabhaswamy temple.

After the Indian Supreme Court ruled that the vaults should be opened, treasures worth an estimated £26 billion were discovered.  The antiques include gold ornaments, weapons, crowns, statutes of Hindu deities, East India Company coins, and bagfuls of precious stones.

See Sree Uthradom Thirunal Marthanda Varma – Obituary, The Telegraph, Dec. 19, 2013.

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

Teen Loses Battle for Share of Estate

An intellectually disabled 17-year-old lost a New Zealand Supreme Court battle for a share of his stepfather’s $2.2 million estate because he was still in his mother’s womb when his mother married.

The Family Protection Act does not recognize unborn children as stepchildren.  Alyxe Wood-Luxford was 4 years old when his mother and stepfather were killed in a car crash.  He was not included in their wills because they were executed the day after the wedding, six months before his birth.

See Morgan Tait, Teen Loses Battle for Share of $2.2M Estate, The New Zealand Herald, Dec. 19, 2013.