Wills, Trusts & Estates Prof Blog

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

Wednesday, December 30, 2015

Congress Passes Legislation That Rewards Angel Investors

New legislation2Congress has recently passed legislation that will make the 100% exclusion for Qualified Small Business Stock permanent and retroactive for the year 2015. The purpose of Qualified Small Business Stock, also known as IRC Section 1202, is to encourage investment in and development of startups and small businesses. This article lists some of the important criteria that has to be met in order for the successful angel investor to be able to qualify for the 100% exclusion. There is considerable paperwork as well as other requirements involved, but according to this article it is worth the effort. This is one of the tax benefits that were made permanent in the Protecting Americans from Tax Hikes Act that was recently passed by Congress. Because of the complexities involved with angel investing, people should make sure that they consult with a professional who is familiar with the regulations.

See Marianne Hudson, Angel Investors Receive Tax Gift – From Congress, Forbes, December 29, 2015.

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

December 30, 2015 in Current Affairs, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Report On Securities Helpline For Seniors Released By FINRA

HotlineA year-end report was released by the Financial Industry Regulatory Authority (FINRA) about the securities helpline for senior citizens. This helpline fields many calls and assists investors with recovering voluntary reimbursements from firms. There are many lessons that investors can take from this report to be able to better work with senior citizen clients. Because of their vulnerability senior citizens are often targets for fraudsters and scam artists. More than 20% of adults over the age of 70 suffer from some type of cognitive impairment and that can make them vulnerable to scams. Calls to the helpline make it easier for FINRA to identify emerging scams to better protect seniors. The report outlines improvements that can be made to improve in the fight against elder financial abuse.

See FINRA Releases Report on its Securities Helpline for Seniors, Business Wire, December 30, 2015.

December 30, 2015 in Elder Law, Estate Planning - Generally, Guardianship | Permalink | Comments (0)

Original Will Of E.T. Scribe Unable To Be Located Says Business Manager

ArticlePictureMelissa Mathison is best know for being the screenwriter of the instant classic E.T. but she sadly passed away in November. With an estate estimated at $22 million, she has taken to proper steps to prepare for her eventual death but thing is no one can find her will. This, under normal circumstances, would pose a major hurdle to an estate of that size but thankfully it appears that no challenges appear on the horizon. Her ex-husband and father of her children is Harrison Ford who in unlikely to make a play on the money and her two children do not appear to at loggerheads with each other or their mother. On top of that, California allows a copy of the will to be used which makes this situation unlikely to lead to inheritance drama. However, this is an excellent example of how mistakes can occur even with the best planned estate. Being unable to locate the original will can undo the best of estate plans so always make sure that it can be found if needed. While it appears there will be no fallout in this instance, keep in mind that many similar cases lead to much heartache for all involved save, perhaps, the lawyers.

See Peter Sblendorio, Will for Melissa Mathison, ‘E.T.’ screenwriter and ex-wife of Harrison Ford, is missing, New York Daily News, December 29, 2015.

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

December 30, 2015 in Current Affairs, Wills | Permalink | Comments (0)

Will Of Couple Killed In Tornado Found 50 Miles Away

WillsSevere weather has been an unfortunate reality for many throughout the US in the last week and among the victims was a married couple in Tennessee. When the couple's family went looking for their will however, there was nothing to be found. But 55 miles away, in a neighboring county, at a home completely untouched by any storm Sharon Thompson found pieces of paper that seemed important but was unknown to her. But it was when she saw the names of the couple in a news article that she made the connection and got in touch with the sheriff's office to report the find and get the document to those that were searching for it. While finding the will won't bring back the makers, allowing the testator to have their intended final words revealed cannot but help warm the cockles of the heart after the terrible destruction that has been inflicted on so many during this holiday season.

See, Couple's will found miles away after deadly tornado, WBIR.com, December 29, 2015.

December 30, 2015 in Current Affairs, Current Events | Permalink | Comments (0)

Periodic Review Of Trust Terms Best Practice

TrustTrusts come in all varieties and are used for all imaginable purposes with one of the common aspects between any type of trust being that there are terms that are set to direct and restrict the actions of the trustee and sometimes beneficiary. However, over time, these terms may become outdated for reasons ranging from the imposition of certain investment methods that are now obsolete to restrictions on beneficiaries that are now against public policy. Whatever the change that is needed, many states have been active in creating new laws which allow for irrevocable trusts to be altered often with the consent of the beneficiaries and trustee. As a result, it is now recommended that the terms of a trust are periodically reviewed to make sure that they still make sense under the circumstances. An excellent example of this situation is the once common requirement that trusts invest in railroad stocks as they were once considered safe investments with reasonable growth potential before the age of the plane and automobile. When faced with a situation where a trust needs reformation, the first step should always to check what alterations are allowed by the trust instrument itself. If the trust cannot be altered, then look to the law of the situs of the trust to see if reformation is allowed and what steps should be taken. While reformation can be tough, it is still a better option than to allow the trust to suffer because the settlor was unable to predict the future.

See Steve Parrish, Trust Me, You Should Review Your Trusts, Forbes, December 14, 2015

December 30, 2015 in Estate Administration, Trusts | Permalink | Comments (0)

Elderly Couple Agree To Murder Suicide Because Insurance Running Out

Weding RingsMarried, in love, and growing old together is the stuff of romantics but can sometimes take an unfortunate turn as in the case of an Ohio couple. Carol Johnson had been confined to a care facility for a month and a half but was soon set to be discharged due to her insurance running out. George, her husband, was distraught over the discharge and doubted about his ability to care for his wife which lead the two to agree to a plan that would solve their problem. It turns out that plan was a murder suicide which saw George shoot his wife and turn the gun on himself. Let us hope both of them can find the peace in death that they lost at the end of their lives.

See Emily Mongan, Resident, husband dead in nursing home murder-suicide, McKinghts, December 21, 2015.

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

December 30, 2015 in Current Affairs, Current Events | Permalink | Comments (0)

Tuesday, December 29, 2015

Steps People Should Take To Avoid Charity Scams

Charity scamAmericans are very generous and donate up to around $300 billion to charities each year. Most of the charitable organizations are trustworthy and reputable, but with a vast number of organizations to choose from there is always the danger of fraud. This article provides a list of rules that people should follow when it comes to selecting a charity to donate money towards. Some of the advice is common sense like making sure that personal information is secure or doing research on the charity. People should avoid sound alike charities and should not give to cold callers. It is also important not to cave into pressure from people that are being intimidating or not to fall for certain sob stories. This article provides links to many review sites that people can look to if they want to conduct research on any charitable organization that they are considering donating money to.

See Kristen Sturt, How to Avoid Charity Scams, Next Avenue, December 23, 2015.

December 29, 2015 in Estate Planning - Generally, Trusts | Permalink | Comments (0)

How Tax Policies Impact Charitable Giving

Charitable trustResearchers have been studying the relationship between tax policies and charitable giving. This relationship between taxation and charity can be nuanced because there are many different factors that go into a person’s decision to give to charity. The brain reacts more positively when people paying taxes or giving to charities feel like their money is being used for a good cause. When gathering information, the researchers studied what people did instead of what they said. Deductions may not be the best way to spur giving according to this research, and it also found that government grants can hurt giving. This research also found that people will even be willing to give more money to the government under the right circumstances. When people perceive that there is a lot of waste that will drive down donations. Paying taxes can actually feel like giving for many people and might even improve mental health if people feel like their money is being used for a good cause.

See Andrew Blackman, The Surprising Relationship Between Taxes and Charitable Giving, The Wall Street Journal, December 12, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

December 29, 2015 in Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Rising Obesity Rates Putting Pressure On Nursing Homes

ObesityNursing homes in the United States have been put under an increasing amount of strain because of the rising number of obese patients. “The percentage of those entering American nursing homes who are moderate and severely obese — with a body mass index of 35 or greater — has risen sharply, to nearly 25 percent in 2010 from 14.7 percent in 2000, according to a recent study, and many signs suggest the upward trend is continuing.” Nursing homes are struggling to care for these patients because Medicaid does not reimburse them for the type of specialized equipment needed to care for heavier patients. There are many nursing homes across the country that routinely decline referrals for obese patients. Whether denying a patient admission into a nursing home because of obesity violates the Americans With Disabilities Act is an unsettled legal question. This issue is going to remain prevalent in the future as the number of obese senior citizens continues to rise.

See Sarah Varney, Rising Obesity Rates Put Strain on Nursing Homes, The New York Times, December 14, 2015.

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

December 29, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Technology | Permalink | Comments (0)

Estate Planning For People With Special Needs

AnnuitiesEstate planning for a person with special needs can be a difficult task. It is important to make sure that all essential estate planning documents are kept up-to-date. Consider creating a special needs trust which will permit a disabled beneficiary to inherit assets without jeopardizing their eligibility for government benefits. The policies for drafting and administering SNTs as well as the eligibility requirements are different in each state. It is a good idea to appoint both a corporate and family trustee to administer the funds of the trust. The SNT needs to be named as the beneficiary of the inheritance. Make sure that the legal documents dealing with advanced directives and guardianship issues are kept current. Policies are different in each state so it is a good idea to speak with an experienced estate planner for personalized advice.

See Lauren I. Mechaly, Robert M. Freedman, and Barry I. Lutzky, How to Plan for a Loved One with Special Needs, The National Law Review, December 29, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

December 29, 2015 in Estate Planning - Generally, Guardianship, Trusts, Wills | Permalink | Comments (0)