Wills, Trusts & Estates Prof Blog

How Financial Advisors Benefit From People Protecting Their Inherited IRAs

The recent decision by the United States Supreme Court that inherited IRAs are not protected from bankruptcy creditors creates a risk for clients but an opportunity for financial advisors. This article discusses some of the main reasons why protecting inherited IRAs benefit financial advisors. It also lists out some of the important steps people can take to protect their inherited IRAs from creditors. As this column explains one of the best options for protecting a retirement account involves creating a Standalone Retirement Trust (SRT). The changes in the laws have amplified the need for beneficiaries of retirement accounts to stay informed about the current rules and regulations. It is a good idea to meet with a trusted estate planning professional who has expert knowledge on this subject and can provide clients with individualized guidance.

See How Protecting Inherited IRAs Benefits Financial Advisors, Wealth Management, January 29, 2016.

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

Pinter Estate Bars Theater Troupe From Performing Popular Play

For many decades a New York theater troupe known as the Wooster Group performed Harold Pinter’s “The Room.” Recently the Pinter Estate has stated that the Wooster Group did not properly secure the rights to produce the play and has indicated that it would not allow the company to conduct performances of the play in New York and Paris. “When the company announced its New York production, it mentioned plans to take the show to Los Angeles; Samuel French Inc., the licensing agent representing the Pinter estate, said it was surprised by that plan.” The Wooster Group has also been ordered by the Pinter Estate to bar critics from reviewing the upcoming Las Angeles staging of the play. It is currently not clear how critics in Las Angeles are going to react to this requirement.

See Michael Paulson, Pinter Estate Shuts Door On ‘The Room’, The New York Times, January 29, 2016.

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

Article On The Secret Economy of Charitable Giving

Allison Anna Tait (Professor of Law, University of Richmond - School of Law) recently published an article entitled, The Secret Economy of Charitable Giving, 95 B.U. L. Rev. 1663-1717 (2015). Provided below is an abstract of the article:

Charitable giving is big business. In 2009, the Internal Revenue Service reported close to 100,000 private foundations, almost double the number from fifteen years earlier. Some of these charitable trusts, like the Gates Foundation, are multi-billion dollar enterprises. Trust instruments and other governing documents set forth the terms that control these gifts. Because charitable trusts can exist in perpetuity, however, changing circumstances sometimes render the terms difficult to fulfill. Courts can apply cy pres, a doctrine that allows for the modification of gift restrictions, but in the past courts have tended to apply cy pres narrowly and privilege donor intent above all other considerations. Recent reforms, however, have moved courts toward a more flexible application of the doctrine. In this Article, I analyze certain high-profile cases that have driven these reforms — including the presumption of general charitable intent, the recognition of “wasteful” as a criterion, and the deployment of deviation — and explain how these reforms represent positive change. Moreover, I provide a theoretical grounding to account for the correctness of these reforms. I argue that charitable giving should be understood as embedded in a nexus of material and social exchanges — part of the “charitable gift economy.” I describe how charitable giving provides a range of benefits to donors, including both tangible tax benefits and intangible benefits such as status, social identity, and “warm glow.” Based on this understanding of the charitable gift economy, courts and charities alike should embrace current reforms and seek to expand them further.

Article On The Affect Of Biomarkers For Alzheimer's On End-Of-Life Choices

Rebecca Dresser (Professor of Law, Washington University) recently published an article entitled, A fate worse than death? How biomarkers for Alzheimer's disease could affect end-of-life choices, 12 Ind. Health L. Rev. 651-669 (2015).

For many years, scientists have searched for biological markers of the brain deterioration associated with the cognitive impairments characterizing Alzheimer’s disease (AD). Although the search for useful biomarkers is ongoing, there is increasing evidence that certain brain changes indicate that a person is at relatively high risk of developing full-blown AD. Much of the research on AD biomarkers is motivated by the belief that successful treatment will require very early intervention in the disease process. Unfortunately, by the time people develop the memory and other behavioral problems that are associated with AD, significant brain damage has already occurred. Biomarker tests could give patients and clinicians the opportunity to start drug and other treatments early, with the goal of slowing or stopping the deterioration that can eventually produce the clinical symptoms of AD. We can all hope that the medical promise of AD
biomarkers becomes a reality. But it will take years to determine whether biomarker testing and early intervention produce clear health benefits. Currently available AD treatments are largely ineffective, and early therapeutic intervention remains unproven. Before effective treatment becomes available, many people tested for biomarkers could learn that they are at higher-than average risk of developing AD. Some people will appreciate this early warning, for it will give them an opportunity to get their affairs in order, take a long-desired vacation, and “have the kind of heartfelt talks with their children that that people often put off.”

The Idea Of Having On-Site Elder Care At Workplaces

There are many workplaces that have on-site day cares for employees who have small children, but what about employees who have elderly parents or grandparents that they are caring for? The growing senior citizen population is bringing the issue of long term care into sharp focus. More people are having to devote more time and energy to caring for an aging parent who might suffer from a health issue like Alzheimer’s. Innovative employers might want to consider providing on-site elder care facilities so that their employees can have a place to bring a parent that they might be taking care of. As society is changing employers are going to want to stay ahead of the curve and providing some type of on-site senior care could help relieve some of the stress placed on employees who are taking care of an elder parent.

See Josh Walker, Will We Soon See Workplaces With On-Site Elder Care?, Next Avenue, January 29, 2016.

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

David Bowie’s Will Filed In Surrogate’s Court In Manhattan

On Friday David Bowie’s 20-page Will was filed in Surrogate’s Court in Manhattan. The Will directed that David Bowie’s body be cremated and scattered in Bali where he vacationed in the 1980’s with Iggy Pop. There was no breakdown of David Bowie’s holdings, but his estate is said to be worth about $100 million. “Mr. Bowie left his SoHo apartment — two penthouses that he bought for $4 million in 1999 and combined — to his widow, Iman Abdulmajid Jones.” He also left portions of his estate to his daughter Alexandria Zahra Jones and son from a previous marriage Duncan Jones. The rock legend’s business manager William Zysblat is the sole executor of his estate after London lawyer Paddy Grafton Green stepped aside.

See James Barron, David Bowie’s Will Splits Estate Said to be Worth $100 Million, The New York Times, January 29, 2016.

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

Article On Why Planners Need To Know If Clients Have Had In-Vitro Fertilization

Igor A. Brusil (The Brusil Law Group, Ltd.) has recently published an article entitled, Fifty Shades of Gray Area, 30 Prob. & Prop. 58-63. Provided below is an excerpt from the article:

Whether estate planning clients have ever undergone or participated in an assisted reproduction treatment at an in-vitro fertilization (IVF) clinic is probably not an issue that is frequently raised by their attorneys. Most clients probably would not volunteer this information; after all, infertility and the need to resort to assisted reproduction technologies are still rather sensitive and intimate subjects. Some IVF patients do not disclose this issue even to their family members, fearing their disapproval on moral or religious grounds. Most estate planning attorneys probably do not inquire about their client's IVF treatments, because this information seemingly has nothing to do with the estate planning. Science has again outpaced the law, however, and in the context of assisted reproduction it has presented a question that most estate planning attorneys should address: how does one provide advice to and counsel an estate or testator who has cryopreserved embryos stored at an IVF clinic?

Move Over Switzerland, Cayman Islands, & Co., U.S. New Tax Haven King

In the popular imagination, the main tax havens of the world are in exotic locals like the Cayman Islands or the snow capped peaks of Switzerland. But an unexpected contender has become the new tax haven king for the modern day la noblesse, the United States. Lax reporting laws in the U.S. have spurred to move as the ultra wealthy seek anonymity not so much from their home country tax laws as the prying eyes of those who look to take advantage of the holders of the wealth. In addition, the United States offers a stable economy that offers unparalleled security for the assets combined with a variety of state laws that create a diverse ecosystem for those looking for specific vehicles to protect their wealth. However, some are crying foul over the shift as the U.S. has been the long time leader in bringing pressure to bear on countries that had lax reporting laws which allowed U.S. citizens to hide assets from taxation. In any event, the shift does not appear to be ending anytime soon as proposals to tighten reporting requirements have been defeated by the Republican controlled Congress which is not expected to be retaken by Democrats in the upcoming election.

See Jesse Drucker, The World’s Favorite New Tax Haven Is the United States, Bloomberg Business, January 26, 2016.

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

Medicare Considering Performance Based Pay For Doctors And Hospitals

Medicare is considering proposals to tie more of its compensation to the quality of services from health care providers. One of the difficulties that might come up is trying to find a fair way to measure the quality of the care provided by a doctor or hospital. Some critics argue that pay for performance might actually undermine the goal of providing quality healthcare. This column discusses many of the difficulties of creating a procedure to accurately measure the quality of a health care provider’s performance. Policy makers will need to be careful about how they go about making reforms to the Medicare payment system. It is important to make sure that crucial reforms that are made to the Medicare system are done right.

See Howard Gleckman, Medicare Wants to Pay Doctors and Hospitals for Performance, But Can It Really Be Measured?, Forbes, January 29, 2016.

Issue Of Long-Term Care Costs Not Getting Much Attention This Election Season

This has been an interesting campaign season, but one crucial issue that the media and the candidates have not focused much on is the growing costs of long-term health care. As the elderly population continues to grow more people are going to be experiencing health related issues that might require expensive labor intensive care. Public policy makers are going to need to develop a plan to address this ticking healthcare time bomb. “As 78 million baby boomers age – the oldest are now entering their 70s – with many of them caring for family members or adding to the population that needs care, and many lacking an affordable solution, you would think pressure would grow on politicians to speak out and act.” Presidential candidates should be questioned by members of the media about their plans for addressing these problems so that voters can be more informed.

See Richard Harris, Why Candidates Aren’t Talking About Long-Term Care, next avenue, January 29, 2016.