Wills, Trusts & Estates Prof Blog

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

Thursday, June 26, 2014

Moving for Retirement is Back

BeachThe amount of people moving locations for retirement is skyrocketing, and so are the tax bills for those moving to in-demand locations like Florida. Moving rates for retirees saw a downturn after the market crash in 2008, but now as portfolios are recovering, more retirees are moving. However, with this boom for retirement communities causing cost-of-living to go up, many are choosing to move away from the most popular retirement communities to newer retiree targets, such as South Carolina and Texas. Many retirees moving are from colder climate states trying to find a relaxing warm place for retirement, and when the cost is too high they are finding lower cost options that are still warm.

See Tim Henderson, Retirement Moves Make a Comeback, USA Today, June 16, 2014.

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

June 26, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

New Requirements for Marital Agreements in Colorado

Marital FundsMarital and premarital agreements can be useful for couples of all ages and can be narrow or broad to accommodate the couples’ situation to protect previously acquired wealth or help plan for future inheritance. Colorado had enacted its version of the Uniform Premarital and Marital Agreement Act, which will affect marital agreements and amendments to existing agreements created after July 1, 2014. Key requirements under the new law include that the agreement must be in writing, each party must have access to legal representation, and each party must adequately disclose to the other their financial situation. The new law also prohibits certain provisions from being including in marital agreements, such as those that limit support to a child or create a penalty for initiating divorce proceedings.

See Megan Meyers, Colorado’s New Uniform Premarital and Marital Agreements Act, Fiduciary Law Blog, June 16, 2014.

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

June 26, 2014 in Estate Planning - Generally, New Legislation | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 25, 2014

Donald Sterling Dispute Continues

Sterling

A judge recently ruled that the terms of the Sterling family trust are clear enough to remove Donald Sterling as a trustee and allow his estranged wife to sell the team without his consent.  The trust agreement provides that if two doctors examined Sterling and found he lacked the capacity to manage his own affairs, he would be removed as a trustee, and there is no provision to contest this decision.    

Three doctors examined Donald Sterling and found he exhibited symptoms of early Alzheimer’s disease and dementia.  His lawyers argue he should be able to call his own experts at a trial set for July 7th.  However, Sterling’s lawyers insisted they needed a substantial delay in the trial because their expert is going to be gone for weeks speaking at a conference.  

Sterling’s wife, Shelly, is currently trying to sell the team to former Microsoft executive Steve Ballmer, whose offer will expire on September 15th.  NBA owners are to meet on July 15th to vote on the deal. Shelly’s lawyers say that any delays by Sterling are a ploy to halt the deal, “Delay is the enemy of this deal . . . Mr. Sterling wants to kill the deal.”

See Linda Deutsch, Judge: Family Trust Clear About Removing Sterling, The Olympian, June 23, 2014. 

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

June 25, 2014 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

New Bill Could Lend Excuses To Taxpayers For Lost Receipts

Dog ate homework

Texas Representative Steve Stockman has introduced a new bill titled, “The Dog Ate My Tax Receipts Act.”  A clever pun on the IRS’s inability to produce emails, this bill seeks to allow taxpayers to “offer the same flimsy, obviously made-up excuses the Obama administration uses.”  For taxpayers who fail to provide documents requested by the IRS, the bill would allow them to claim reasons such as: the dog ate my tax receipts; received water damage in the trunk of Ted Kennedy’s car; was short on toilet paper while camping; among others. 

While this is most likely not serious, keeping receipts is critical. If you cannot find one, remember the Cohan Rule, from Cohan v. Commissioner.  Here, the Second Circuit ruled that taxpayers could prove “by other credible evidence” they actually incurred deductible expenses.  While the Cohan Rule may not always be applicable, oral or written statements coupled with a reasonable approximation could make up for lack of documentation. 

See Robert Wood, Lois Lerner’s Law Makes ‘I Lost My Receipts’ Legal With IRS!, Forbes, June 24, 2014. 

June 25, 2014 in Current Affairs, Estate Planning - Generally, Humor, Income Tax | Permalink | Comments (0) | TrackBack (0)

When Wills Divide Families

Will

Although Kate’s father died when she was in college, she stayed very close to his side of the family.  Yet this all changed when Kate learned that her grandmother’s estate had been split among her aunts with nothing left to her or her siblings.  Confused, Kate requested a copy of the will and discovered that her grandmother, who was suffering from Alzheimer’s, signed a will disinheriting her son’s children a week before she passed away. 

Kate began a prolonged legal battle against her family, which resulted in a financial settlement.  Kate’s case raises many issues, including the capacity needed to create a will and the bar to overturn a will.  “The capacity needed to make a will is very low, lower than to enter into a legal contract.  You could have someone who had dementia, but if they had moments of lucidity they could execute a fully valid will.” 

Disinheriting family members is a drastic step, one that many countries do not even permit.  “Whether it’s sharia in Muslim countries or the Napoleonic Code throughout Europe and parts of Latin America, what you give to your heirs is tightly prescribed.  Anglo-Saxon countries are the exception to this rule.” 

Kate said she was most bothered by the process itself, “It’s really unfortunate that this could take place at all.  There was no conversation with my grandmother about this.  There was no letter that she signed saying that this was what she wanted.  I wish we had asked my aunts more questions.”

See Paul Sullivan, When a Will Divides an Estate, and Also Divides a Family, The New York Times, June 20, 2014.

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

June 25, 2014 in Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Book Review: Marriage Markets

Marriage markets

Bradford Wilcox has written a review on June Carbone and Naomi Cahn’s book entitled, Marriage Markets.  Provided below is an introduction to the review:

Forget the gender gap. The fundamental divide in the United States today runs along the lines of class and marriage. College-educated Americans and their children reap the benefits of comparatively stable, happy marriages, while less-educated Americans—especially the poor and the working-class—are more likely to struggle with family lives marked by discord and marital instability. This two-tiered story, articulated powerfully by Charles Murray in his recent book, "Coming Apart," is also the one told by June Carbone and Naomi Cahn in "Marriage Markets: How Inequality Is Remaking the American Family."

Special thanks to Naomi Cahn (Harold H. Greene Professor of Law, George Washington University School of Law) for bringing this article to my attention.

June 25, 2014 in Books, Current Affairs, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

The Return of the CRT

U TurnThe 1980’s saw the “Golden Age” of charitable remainder trusts (CRTs), but the growth in CRTs came to an end in the late 1990’s. The end of the Golden Age for CRTs resulted from a combination of CRTs which resulted in little to no funds going to charitable causes and the restrictive legislation enacted to stop that occurance, lower birth rates, and market bursts. However, in the current climate of tax incentives for CRTs and less restrictive legislation, the “Golden Age” of the CRT may be making a comeback.  

 See Robert F. Sharpe Jr., A Resurgence in Charitable Trusts?, Wealth Management, June 24, 2014.

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

June 25, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Real Estate Heiress Shot and Killed, 23 Suspects Detained

JailHelene Pastor and her chauffeur died last month after being shot in what prosecutors believe was a planned plot to kill the real-estate heiress. Police have the two individuals that prosecutors believe attacked Pastor in custody, along with 21 others, including her daughter and son-in-law. Prosecutors have not released any theories on possible motives for the attack.

See Lori Hinnant, Associated Press, Heiress Death: Daughter, Son-in-Law Among 23 Held, ABC News, June 24, 2014.

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

June 25, 2014 in Current Events | Permalink | Comments (0) | TrackBack (0)

IRS Still Silent on Decanting and Income Tax Issues

SilentIn recent years there has been an increase in States proposing and enacting statutes that allow decanting. The IRS asked for comments on decanting related tax issues, received numerous comments, but has not yet released any guidance on how trustees should handle decanting trusts for tax purposes. This creates a significant dilemma for the trustee, who has to decide whether the trust should be handled as a new trust or if it is a continuation of the first.

See Chad Makuch, Income Tax Reporting for Decanting, JD Supra, June 23, 2014.

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

 

June 25, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Sherlock Holmes is Public Domain

HolmesAs I have previously discussed, author Lesli Klinger was granted a default judgment on his request for a declaratory judgment that much of the Sherlock Holmes story by Sir Arthur Conan Doyle is public domain due to the copyright expiring. After the judgment, the Doyle estate appealed  claiming that the character of Holmes is complex and developing over time, and argued that the copyright is still valid and Klinger needs a license to use the character in his book.  Judge Richard Posner of the 7th Circuit disagreed with the Doyle estate, comparing the developing character of Holmes to that of reoccurring characters in Shakespeare’s work and refusing to apply a rule that would allow copyright of a reoccurring character in works to live on forever.

See Eriq Gardner, Conan Doyle Estate Loses Appeal Over ‘Sherlock Holmes’ Rights, Hollywood Reporter, June 16, 2014.

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

June 25, 2014 in Current Affairs, New Cases | Permalink | Comments (0) | TrackBack (0)