Wills, Trusts & Estates Prof Blog

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

Monday, September 29, 2014

Undertaking Student Debt

Student loan

If you think college savings years flew by fast, just wait until school begins.  One minute, parents are helping their children move into their freshmen dorm, and before they know it, their kids are walking down the isle at graduation and the college loans are due. 

According to a Wall Street Journal analysis of data from the latest-available Federal Reserve “Survey of Consumer Finances,” the ranks of those with student loan debt rose the most among upper-middle-income families—those earning $94,535 to $205,335 a year—jumping from 19.5% in 2007 to 25.6% in 2010. They owed an average of $32,869 in 2010, up from $26,639 in 2007, after inflation was taken into account.

So what is the best way to tackle student debt while simultaneously saving for retirement?  Getting organized is the most important step. “Saving for retirement and keeping kids afloat is a balancing act for every family to do on its own, and advisors can help. Since loans are paid over time, families can adjust the portion they will pay as their children become more financially secure. A lot also depends on whether a family has other children to put through college.” 

To stay on top of payments, experts suggest that borrowers set reminders two weeks before due dates.  Signing up for automatic debit from a bank account can reduce late payments, and many lenders offer interest rate reductions.  Making extra payments can be helpful, since neither federal nor private student loans carry prepayment penalties.  Avoid loan deferment and forbearance as it not only delays the problem but makes it worse.  “Borrowers facing long-term payment difficulties can consider plans that offer extended, graduated or income-driven repayments.”

See Jerilyn Klein Bier, Tackling Diploma Debt, Financial Advisor, Sept. 2, 2014.

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

September 29, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Estate Planning Documents: Location, Location, Location

Location, location, location

“Location, location, location” are three words we often associate with real estate; however, location very much surrounds the realm of estate planning. 

Besides drafting a will, it is critical that family members and close friends know where they can locate documentation after a loved one’s passing.  A will establishes directives for disposing of a deceased’s assets, but it may not disclose where those assets can be found.  Additionally, a will may be silent on a deceased’s wishes involving funeral arrangements or other important details.  If these documents cannot be found, you run the risk of having your wishes go unfulfilled.  Hence, it is crucial to not only have an estate plan in place, but to have it where it can be found. 

Although planning out the details of your after-life wishes may seem uncomfortable, think of it as planning for loved ones’ peace of mind.  When thinking of where to place this information for others’ future use, remember, “location, location, location!”

See Margaret S. Barr, Location, Location, Location re: Estate Planning Documents, The National Law Review, Sept. 28, 2014.

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

September 29, 2014 in Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Pet Prenuptial Agreements

KittenAfter seeing over 1,000 abandoned pets in five years come through their doors due to the owners ending their relationship, the Blue Cross animal charity in England wanted to address the issue. The animal charity dedicated to finding new homes for pets, worked with divorce attorneys to create a pet prenuptial agreement so that pets will be provided for after a divorce.

See, Animal Charity Creates Pet Pre-Nup, ITV, Sept. 28, 2014.

September 29, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Changing Trends on Trustee Removal

TrustIt is often more difficult to remove and replace a trustee than to make the difficult decision of who to choose in the first place. However, a trend is being seen of lessening difficulty in removing trustees. The Uniform Trust Code includes a “no fault” provision for removing trustees in the states that have adopted the uniform law. The Superior Court of Pennsylvania removed a trustee in a case last year, on the showing of changed circumstances rather than requiring a showing of negligence or bias on the part of the trustee. In addition, recently created trusts tend to have provisions included that provide for trustee replacement.

See Amy Feldman, Dumping a Trustee, Barrons, Sept. 27, 2014.

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

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

Plans to End 'Death Tax' on British Pension Inheritance

Tax CutIt is expected that George Osborne, British politician and Chancellor of the Exchequer, will announce in April an end to the “death tax” for drawdown pensions passed on as inheritance after the accountholder dies. The new plan will abolish the current marginal rate tax if the accountholder dies before reaching age 75 and will reduce the taxes from 55% to the marginal income tax rate if the accountholder is over 75-years-old at death. The new plan, which is intended to assist with economic growth, is planned to be announced at the Conservative Party conference in Birmingham prior to May elections.

See Peter Dominiczak, George Osborne Scraps the 'Death Tax', The Telegraph, Sept. 28, 2014.

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

September 29, 2014 in Current Affairs, Current Events, Estate Planning - Generally, Estate Tax, New Legislation | Permalink | Comments (0) | TrackBack (0)

Reducing Conflicts Over Inheritance

RefereeThe devastating emotional, social, and financial affects of heirs fighting over inheritance can be seen in famous cases of the public feuds of families of deceased celebrities, such as the eight years and running feud that resulted after James Brown's wife was left out of his will. Here are some tips for using estate planning to prevent or diminish the potential of family feuds over inheritance:

  • Treating equal heirs equally can reduce conflict, such as gifting assets of equal value to all children.
  • Remember to consider sentimental value and individual preferences when considering the value of assets being passed on.
  • Consider giving potential heirs some decision making ability by giving them a chance to voice their desires or creating a system where they can choose what they will receive.
  • Consider carefully the impact of the chosen executor and whether that decision will create conflict.

See Liz Moyer, When Heirs Collide, The Wall Street Journal, Sept. 26, 2014.

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

September 29, 2014 in Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Sunday, September 28, 2014

Estate Planning for Today's Modern Family

Family

Today, non-traditional family households outnumber the so-called, “traditional,” husband-and-wife households.  According to U.S. Census Bureau data, married husband-and-wife couples represented 48 percent of American households in 2010, down from 52 percent in 2000 and 78 percent in 1978 percent in 1950. 

While shifting families seem to be the new norm, laws and policies across the U.S. have largely failed to keep pace.  This means that advisors who work with non-traditional families must take extra care when it comes to key estate planning matters.  “Estate planning for what I call a modern family, one that’s blended or has unmarried partners, for example, might require you to handle things like the will, powers of attorney and beneficiary designations differently than you otherwise would.” 

Discrepancies as to how federal and state laws treat couples based on marital status are one reason estate planning for non-traditional families “may require a lot of work-around strategies.” 

For example, it is crucial that estate planning legal documents explicitly specify the rights and powers a surviving partner will have in the event the other partner dies.  Otherwise, unmarried partners are effectively strangers in the eyes of the law, regardless if they have been together for years. 

See David Port, Estate Planning for the Modern Family, Life Health Pro, Sept. 25, 2014.

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

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

Senator Proposes 65% Estate Tax

Estate tax

As Republicans work to reduce federal estate tax rates, Senator Bernie Saunders counters with a completely opposite approach: an estate tax with rates ranging from 40 percent (for estates of $3.5-$10 million) to 65% (for estates over $1 billion). 

“It’s one thing to ask rich people to pay more of the cost of government.  It’s another thing entirely to tell those rich people that they are just too damn rich,” Joseph Thorndike commented about the new proposal. 

Only time will tell if this seemingly extreme proposal will become a reality. 

See A 65% Estate Tax For Billionaires? Trust and Wealth Management Marketing, Sept. 25, 2014.

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

September 28, 2014 in Estate Planning - Generally, Estate Tax | Permalink | Comments (0) | TrackBack (0)

Same-Sex Divorce Denied in Fort Worth

DivorceTwo women, Brooke Powell and Cori Jo Long, who were legally married in New Hampshire were denied their requests for either a divorce or a ruling that their marriage was void. Tarrant County District Court Judge William Harris based his ruling on Texas' ban on gay marriage. An appeal of the decision is expected.

See David Lee, Texas Judge Says Hands Are Tied on Gay Divorce, Courthouse News Service, Sept. 22, 2014.

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

September 28, 2014 in Current Affairs, Current Events, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Saturday, September 27, 2014

Article on Iowans' Right to Direct Disposition of their Bodily Remains

Iowa legislature

Timothy J. Farmer (University of Iowa College of Law) recently published an article entitled, Don’t Die in Iowa: Restoring Iowans’ Right to Direct Final Disposition of their Bodily Remains (Sept. 2, 2014), Iowa Law Review, Forthcoming.  Provided below is the abstract from SSRN:

Iowa has long been a bastion of support for a decedent’s right to control disposition of her remains. In early 2013, the Iowa Supreme Court made an unprecedented move when it interpreted Iowa’s Final Disposition Act as entirely eliminating that right — even when a decedent repeatedly and incontrovertibly expresses her wishes. This Note argues that the Iowa Legislature did not intend this result, and proposes two modifications to the Act that can both facilitate the Act’s purpose and restore the decedent’s right to direct disposition of her remains. First, this Note proposes that the Iowa Legislature modify the Act to require funeral directors to provide their clients with resources that will help them ensure that survivors honor the client’s wishes regarding final disposition. Second, this Note proposes that the Iowa Legislature modify the Act to include a presumption, rebuttable by clear and convincing evidence, that the person entitled to control disposition of a decedent’s remains acts in accordance with the decedent’s wishes.

September 27, 2014 in Articles, Death Event Planning, Estate Administration, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)