Wills, Trusts & Estates Prof Blog

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

Friday, August 29, 2014

Brokerage Windows Questioned By DOL


A brokerage window, also known as a self-directed brokerage account, allows you to invest in almost anything in your 401(k) retirement account.  While this may seem obvious, the Department of Labor is questioning whether it is helpful or harmful to investors saving for retirement and whether employers should be liable for employee’s actions. 

Some 401(k) plans allow participants access to brokerage windows in addition to basic investment choices.  Yet, the nanny state position is that employees will make careless mistakes if given free reign to invest their 401(k) money.  Alternatively, it is argued that brokerage windows provide investors the ability to build a better retirement nest egg. 

So, are new safeguards needed?  This is what the DOL wants commentators to decide this fall.  The DOL wants to ensure employees are not exposed to undue risks from brokerage windows and employers properly understand the scope of their ongoing responsibility with respect to the windows. 

See Ashlea Ebeling, DOL Questions 401(k) Brokerage Windows, Forbes, Aug. 28, 2014. 

August 29, 2014 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Retirement Made Easy By 'Unretirement'


In his new book entitled, Unretirement, Chris Farrell asserts that developing skills can help you earn income past traditional retirement age offers a better return on investment than any other financial instrument. 

Farrell defines “unretirement” as the financial impact of working longer.  If people can work into their 60s, they will make much more in the course of a year than they could from saving.  This changes the financial landscape, as people will no longer need to tap into their retirement nest egg during these years. 

The first place to being is by asking yourself what kind of work you want to be doing.  “Don’t romanticize any particular idea—research it.  Think about how you can take your existing skills and move into a different sector of the economy with those.” 

The notion of “unretirement” further suggests that you can wait to claim social security, which in turn creates a wealthier society, healing the economic crisis.

See Mark Miller, Why ‘Unretirement’ Might Be Your Best Retirement Strategy, Reuters, Aug. 28, 2014. 

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

August 29, 2014 in Books, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Pitfalls of Standardized Trust Forms

FormFilling out a standard form at a bank to create a revocable trust can save time and money, but can also cause unexpected problems down the line. An individual may believe that everything is in order and the trust is ready to go when they sign on the dotted line. However, standard forms do not account for individual life circumstances, such as multiple marriages and children with special needs. The trust also may shockingly have nothing in it, which will create serious problems if the empty trust is discovered only after its use becomes a necessity.

See George M. Fox, The Black Hole Revocable Trust, Smoke Signals, 2014.

August 29, 2014 in Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

The Most Litigated Will in History

Girard CollegeA Philadelphia Court of Common Pleas recently considered a request from the trustees of the Stephen Girard Trust, a charitable trust that created Girard College, to end the school’s residential and high school programs. Girard College was originally created through the detailed will of Stephen Girard to educate, house, clothe, and feed orphan boys. Over the years, the school has developed and changed away from Girard’s original intent for the school. The school now allows minority and female students. However, the Philadelphia court’s decision denied the trustees' request to cut the requested programs due to how inconsistent the changes would be to the intent reflected in what the court described as “the most litigated will in history.”

See Katherine C. Pearson, The Latest Ruling on “The Most Litigated Will in History,” Elder Law Prof Blog, Aug. 28, 2014; Neil E. Hendershot, Philadelphia Court Upholds Stephen Girard’s Intentions, PA Elder, Estate & Fiduciary Law Blog, Aug. 27, 2014.

August 29, 2014 in Estate Planning - Generally, New Cases, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0) | TrackBack (0)

CLE on Domestic Asset Protection Trust Planning

CLEThe ABA Section of Real Property, Trust and Estate Law is presenting an eCLE series entitled, Domestic Asset Protection Trust Planning: Jurisdiction Selection Series. The series includes five webinars, each focusing on asset protection laws in a group of states. The first of the series is Tuesday, October 14, 2014, 12:00 – 1:30 p.m. CT.  Here is why you should attend:

There's No Place Like Home - Domestic Self-Settled Asset Protection Trusts and Inter Vivos QTIP Trusts: Why Do Them and Where To Go When You Do

Effective July 1, 2014, Mississippi became the 15th state to permit the creation of full blown self-settled asset protection trusts. Besides the 15, at least 10 other states allow some form of an asset protection trust, including inter vivos QTIP trusts. The proliferation of domestic asset protection trusts leaves attorneys inquiring about the laws in each asset protection state and the benefits of creating such a trust in one state versus another. Other frequently asked questions include:

  • What is an inter vivos QTIP trust and how can it help my clients?
  • Will domestic self-settled asset protection trusts benefit my clients?
  • Do the costs of creating a trust in one state for creditor protection or taxation benefits really outweigh the creation of such a trust in another?
  • Is the trust really protected from creditors?
  • Can the trust be used to avoid the income tax in the grantor's state of residence?
  • Can a same sex couple benefit from the use of these trusts?
  • Is using an offshore trust better?

These are just some of the questions that will be answered over the course of five eCLE webinars addressing some of the full blown domestic self-settled asset protection trust statutes and inter vivos QTIP trust statutes.

Session 1:

Delaware, Ohio, Mississippi, North Carolina

Tuesday, October 14, 2014

Speakers: Michael Gordon, J. Aaron Byrd, Michael Stegman, Gray Edmondson, and Scott “Rust” Trippett

Session 2:

Florida, Texas, Tennessee

Tuesday, December 9, 2014

Speakers: Jonathan Gopman, Michael Sneeringer, Elizabeth Morgan, Rick Travis, and Wick Ruling

 Session 3:

Alaska, South Carolina, Wyoming, Oklahoma

Tuesday, February 10, 2015

Speakers: Brandon Cintula, Doug Blattmachr, Dan Collins, Greg Dyekman, and Rod Yancy

 Session 4:

Arizona, Maryland, Nevada, New Hampshire

Tuesday, April 14, 2015

Speakers: Philip R. Rupprecht, Fred Franke, Julia Gold, and Todd Mayo

 Session 5:

South Dakota, Utah, Kentucky

Tuesday, June 9, 2015

Speakers: Al King, Rust Tippett, Mary Beth Anderson, and Walter Morris

August 29, 2014 in Conferences & CLE, Estate Planning - Generally, Non-Probate Assets, Trusts | Permalink | Comments (0) | TrackBack (0)

Article on How Creating Trusts for Student-Athletes Can Save the NCAA From Itself

Jonathan StromJonathan Strom (J.D./M.B.A. Candidate, Texas Tech University School of Law, May 2015) recently published a comment entitled, Putting Our Trust in the National Collegiate Athletic Association (NCAA): How Creating Trusts for Student-Athletes Can Save the NCAA From Itself, Estate Planning and Community Property Law Journal, Vol. 6 Bk. 2, Summer 2014. Provided below is an excerpt from the introduction of the comment:

“[A]mateurism is not a moral issue; [rather,] it is an economic camouflage for monopoly practice.” This is a harsh reality for the current state of college athletics. Finding the proper balance between maintaining amateurism status and compensating student-athletes is becoming a more controversial issue, with players like Johnny Manziel and Jadeveon Clowney brining in millions of dollars in revenue for their respective schools. Recent lawsuits have forces the National Collegiate Athletic Association (NCAA) to go into full defense mode, in hopes to maintain its current status quo.

This Comment addresses the recent issues facing the NCAA; specifically, it discusses the concern surrounding the O’Bannon lawsuit and its impact on player compensation. The O’Bannon lawsuit pertains to the use of student-athletes’ likeness in video games and massive television contracts for profit. Pulitzer Prize winner Taylor Branch ardently argues for compensating student-athletes. Branch asserts that student-athletes deserve compensation apart from college scholarships. Clearly, NCAA change is imminent whether it comes through restructuring or through the court system.

This comment presents a proposal for implementing trusts for student-athletes that will address the issue of compensation. The proposal for the creation of trusts for student-athletes allows the NCAA to address the issue of compensation and still maintain its core objectives. . . .

August 29, 2014 in Articles, Estate Planning - Generally, Non-Probate Assets, Sports, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, August 28, 2014

UK Infographic Signifies Importance of a Valid Will

Last will and testament

While many people forego creating a will during their lifetime, this is especially true in the UK where almost 56 percent of the adult population does not possess a valid will. 

This shocking statistic caught the attention of Whitehead Monckton, a Kent law firm who subsequently teamed up with Reflect digital to create an infographic outlining the importance to UK citizens of having a will. 

The infographic, entitled, Do You Hold a Valid Will?, conveys a powerful message regarding the significance of obtaining a will.  Through numbers, questions, and omnipotent realities, the infographic poses thought provoking concepts including the repercussions of passing away without a will.  This infographic is a positive step towards educating individuals about the positive and negative implications of estate planning.

Special thanks to Aedan Kiernan (Reflect Digital) for bringing this article to my attention.

August 28, 2014 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Article on Inheritances and Promised Lands

Patricia a. cain

Patricia A. Cain (Santa Clara University School of Law) recently published an article entitled, Family Drama: Dangling Inheritances and Promised Lands (2014). Tulsa Law Review, Vol. 49 (2013); Santa Clara Univ. Legal Studies Research Paper No. 10-14.  Provided below is the abstract from SSRN:

This paper reviews Hartog’s 2012 book, Someday All this will be Yours: A History of Inheritance and Old Age. Relying on case documents from trial courts in New Jersey in the early twentieth century, Hartog tells the rich stories behind these cases. The cases involve claims by family members, usually sons or daughters, who were promised inheritances in exchange for taking care of an aged parent. Sometimes those promises are enforced and sometimes not. The stories behind the cases, and Hartog’s observations about them. should be of interest to teachers and scholars of wills, trusts, and estates.

August 28, 2014 in Articles, Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Beyond the Five-Star Nursing Home Rating System

Nursing home

I previously discussed the recent New York Times investigative report on Medicare’s deceiving five-star rating system for nursing home systems. 

The real problem is that nursing homes are measuring the incorrect things; a wise consumer should view the five-star system as only one tool in the search for the best possible facility.  While the five-star system may be a good reference, do not stop there.  Visit facilities and look beyond the lobby.  Talk to residents and their families.  Talk to nurses and aides. 

It is also important to keep in mind that Medicare is mostly rating safety rather than quality.  Medicare says very little about whether a facility provides high-quality, person-centered care that responds to individual needs of its patients and residents. 

The Medicare rating system may be best used as an initial screen to help which facilities to look at more closely.  While it is easy for facilities to game numbers, Medicare is measuring the wrong things.

See Howard Gleckman, Looking Beyond Medicare’s Nursing Home Ratings: What to Know Before Picking a Facility, Forbes, Aug. 27, 2014.

August 28, 2014 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Benefits to Inheriting in Trust


Inheriting in trust can be a difficult concept to decipher.  To break it down, beneficiaries can inherit in one of several ways.  The first way, and most common, is to inherit assets outright, where the assets are distributed free and clear from all oversight and directly to the beneficiary.

Alternatively, a beneficiary can inherit in trust.  While this can mean many different things, oftentimes it means that when the deceased created an estate plan, it was established so that the beneficiaries did not inherit outright, but rather in trust.  Thus, the assets that are inherited are titled in the name of a trust instead of the beneficiary’s name.  The structures of these trusts vary widely. 

Some trusts are designed to protect assets for the beneficiary from things such as divorce, creditors, lawsuits, and bankruptcy.  The assets are for the use of the beneficiary, and distributions can often be made to the beneficiary for health, education, maintenance and support. 

Sometimes a trust will prohibit distributions for specific items, or allow distributions only for specific purposes.  If a beneficiary has any state or federal benefits, a special needs trust should be created to prohibit distributions for anything that the beneficiary’s benefits would otherwise cover. 

See Carissa Giebel, Inheriting in Trust Can Protect Beneficiary, Green Bay Press Gazette, Aug. 25, 2014. 

August 28, 2014 in Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)