Wills, Trusts & Estates Prof Blog

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

Friday, September 30, 2016

Article on Privatizing Religious Matters in Divorce and Inheritance

Family religionRobin Fretwell Wilson published an Article entitled, Privatizing Family Law in the Name of Religion, 18 Wm. & Mary Bill of Rts. J. 925 (2010). Provided below is an abstract of the Article:

This Essay examines a movement across the world to allow fundamentalist religious norms, rather than state law, to govern family matters associated with divorce and inheritance. Such religious norms often depart significantly from the state’s protections for vulnerable dependents at two significant points: in divorce and in death. 

This Essay explores the risks to women and children, two particularly vulnerable groups, when religious couples enter into marriages that are recognized religiously, but not civilly, leaving little opportunity for state oversight. Without state oversight, women are bound by a religious community’s norms, a phenomenon now occurring in the Sharia courts that operate in Great Britain. These courts apply Islamic, not British, law to divorce and inheritance. The Essay also examines the system of shared jurisdiction in Western Thrace, where three Mufti decide family disputes for a Muslim minority. In both systems, the fundamentalist religious norms provide considerably less protection to individuals in two periods of great need, upon divorce and the death of a spouse. 

The Essay contends that the state plays a crucial role in protecting traditionally vulnerable groups. It shows that if certain schools of Islamic law govern divorce proceedings, women face the loss of custody or their adolescent children and near certain poverty. The operation of religions norms undercuts a woman’s ability to exit marital relationships, especially violent ones. Under Islamic law, women are left financially at risk upon their husband’s death. Therefore, policymakers should proceed cautiously before expanding the opportunity for the application of religious norms in instances that may leave women and children trapped in poverty or abusive relationships.


September 30, 2016 in Articles, Estate Planning - Generally, Religion | Permalink | Comments (0)

Avoiding Ademption

Update willFailing to maintain and update your will can cause major problems with ademption. Ademption occurs when a specific bequest is no longer present in the testator’s estate at death. There are two types of ademption—by satisfaction or extinction. Ademption by extinction is oftentimes the only one that causes a problem when the item has been sold, transferred, changed, or destroyed. New York maintains certain pieces of legislation that govern ademption, but it is not safe to rely on them as they are very scant on the subject. The best way to avoid ademption is to make sure your will accurately reflects all current assets in your estate, so that your family benefits just as you had planned. 

See Ettinger Law Firm, Ademption: A Stumbling Black to Your Estate Plan, NY Estate Planning Attorney Blog, September 20, 2016. 


September 30, 2016 in Estate Planning - Generally, Wills | Permalink | Comments (0)

How to Best Incorporate Religion into Estate Planning

ReligionEstate planners combine several aspects when working with clients, and showing sensitivity to a client’s religious concerns should be incorporated when necessary. When selecting fiduciaries, clients who seek to implement religious values into their choice often will not find the individual who best fits the fiduciary criteria. A viable solution might be to recommend an institutional co-fiduciary that will be able to fulfill those duties. Additionally, many religious clients will want to make distributions and give to charity based on their religious beliefs; it is important to understand the values that are tied to these instances of giving. The Article further discusses several other religious considerations and how they are implemented into estate planning.  

See Martin M. Shenkman, Religion and Estate Planning, Wealth Management, September 27, 2016. 

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


September 30, 2016 in Estate Administration, Estate Planning - Generally, Religion | Permalink | Comments (0)

Estate Allowed Theft Loss Deduction for Property Held by LLC

Tax courtThe Tax Court decided a case of first impression with the issue of whether an estate could take a theft loss deduction for a property held by an LLC. The decedent owned a 99% interest in a LLC, but the LLC’s only asset was an account involved in the Ponzi scheme. Accordingly, the estate claimed a theft loss deduction. The IRS, however, issued a notice of deficiency, claiming the estate did not incur a theft loss. Further, the IRS argued that the LLC suffered the loss and not the estate. The court ultimately concluded that the estate is “entitled to a deduction if there is a sufficient nexus between the theft and the estate’s loss.” Specifically, the court found that the nexus between the theft and the LLC interest was “direct and indisputable.” 

See Timothy M. Todd, Tax Court Allows Estate a Theft Loss Deduction for Property Held by LLC, Forbes, September 27, 2016. 

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


September 30, 2016 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Thursday, September 29, 2016

Spousal Lifetime Access Trusts

SLATModest net worth individuals need to balance their desire to make lifetime gifts with the need to maintain adequate funds to support their future. For married couples, a spousal lifetime access trust (SLAT) provides a solution. One spouse (donor-spouse) places assets into an irrevocable trust using their gift tax exemption. The SLAT names the non-donor spouse (beneficiary-spouse) as the beneficiary, allowing the trustee to make distributions to the beneficiary-spouse during life. SLATs provide several benefits, including the ability of the trust to benefit multiple generations without incurring additional estate or generation-skipping transfer taxes. 

See Spousal Lifetime Access Trusts (SLATs), Lexology, August 3, 2016. 

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


September 29, 2016 in Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Trusts | Permalink | Comments (0)

New Rev. Proc. Allows QTIP Election with Portability Election

Qtip elecitonThe 2010 amendment of IRC § 2010(c) allowed an estate executor to make a portability election; therefore, influencing the decision to make a qualified terminable interest property (QTIP) election. A QTIP election reduces the decedent’s taxable estate, further maximizing the amount of unused exclusion available for the decedent’s surviving spouse. Accordingly, the executor electing portability of the decedent’s unused applicable exclusion amount may wish to make a QTIP election, regardless of whether the QTIP election reduces the estate tax liability to zero.  

Rev. Proc. 2001-38, 2001-24 I.R.B. 1335 details a procedure for which the IRS will disregard and nullify federal estate, gift, and generation-skipping transfer tax for purposes of a QTIP election made when the election was unnecessary to reduce the estate tax liability to zero. With the use of portability elections, the ability to void and nullify QTIP elections in Rev. Proc. 2001-38 may bring questions over the ability of the decedent’s estate to make an unnecessary QTIP election for the sake of maximizing the available unused exclusion amount. Subsequently, this revenue procedure modifies and supersedes Rev. Proc. 2001-38. It confirms the IRS procedures for disregarding a QTIP election, but excludes those estates that made a portability election in accordance with § 2010(c). 

See 26 CFR 601.201: Rulings and Determination Letters; Rev. Proc. 2016-49.


September 29, 2016 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, New Legislation | Permalink | Comments (0)

How an ILIT Can Help Preserve Your Assets

ILITAn irrevocable life insurance trust (ILIT) can help provide liquidity to pay estate taxes, safeguarding your assets for your family. When you set up an ILIT, the trust is a holding vehicle for life insurance that removes the policy death proceeds from your estate when you pass. These trust held assets are immune from probate and estate taxes, making them a valuable estate-planning tool. There are some important considerations to keep in mind when deciding to create an ILIT. 

First, you must clearly define your wishes as to how the trust assets will be distributed at death. Next, it is important to remember that the trust increases your liquidity without having to add other assets, like stocks and investment property, allowing you to maintain control over those assets while the ILIT builds value. Finally, you should put forth diligent consideration on who will be the trustee for your ILIT because they must have the willingness and ability to carry out the terms you set forth. 

See 3 Considerations for an Irrevocable Life Insurance Trust, Forbes, September 19, 2016. 

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


September 29, 2016 in Estate Administration, Estate Planning - Generally, Estate Tax, Non-Probate Assets, Trusts | Permalink | Comments (0)

New York Utility Companies Cannot Charge Termination Fee After Death

Utility feesNew York phone, cable, and utility companies can no longer charge for early termination fees if service has been discontinued due to the customer’s death. On Tuesday, Governor Andrew Cuomo, who noted that the practice of charging fees to deceased customers was “heartless and inappropriate” and further created burdens for loved ones, signed the law. Any violator of this law is subject to a fine of up to $1,000. 

See NY: Utilities Can’t Charge Termination Fees After Death, Fox 5 NY, September 28, 2016. 


September 29, 2016 in Current Events, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Wednesday, September 28, 2016

Article on "Medi-Cal"

Medi calJohn A. Miller & Vanessa S. Stroud recently published an Article entitled, Medicaid Planning for Long-Term Care: California Style, 41 Am. C. Tr. & Est. Couns. 331 (Fall 2015/Winter 2016). Provided below is an abstract of the Article:

In this article, we explain both the federal and state structure of Medicaid and illustrate planning opportunities for disabled seniors and their families in California. Every state Medicaid program is unique, but in its current form, California’s program, “Medi-Cal,” is substantially different from the others. These differences create challenges for practitioners, and also afford practitioners significant planning opportunities unavailable elsewhere. Practitioners should note, using California techniques in other states could lead to disastrous results. We will delineate the major differences between Medi-Cal and Medicaid in most other states along the way. We also examine the ways in which California law is likely to change over the coming years. Thus, this article serves two purposes: first to explain current law and planning practices in California on a comparative basis and, second, to educate about the important changes that are on the horizon. 


September 28, 2016 in Articles, Estate Planning - Generally | Permalink | Comments (0)

CLE on Working with Appraisers and Valuation Experts for Your Estate

CLEThe American Law Institute is hosting a CLE entitled, My Estate Is Worth What? Best Practices and Pitfalls of Working with Appraisers and Valuation Experts, which will take place on October 19, 2016, 1:00–2:00 PM Eastern. Provided below is a description of the event:

Is your estate planning client going through a divorce? Looking to establish a buy-sell agreement for its business interests? Anxious to transfer hard-to-value assets before the end of the year in light of the proposed section 2704 regulations? Then you are likely going to need to hire an appraiser or valuation expert. Do you know how to get the best appraisal for your client?

In just 60 minutes, this program will teach you not only how to protect your client’s interests in these critical times, but also to ensure that the appraisal passes IRS scrutiny!

Topics include:

  • Determining when a valuation expert is needed
  • Deciding whom to hire as an appraiser and the type of appraisal required
  • Best practices for engaging the appraiser to maintain evidentiary privilege
  • Best practices for reviewing and revising draft appraisals
  • Select valuation issues to consider

Register today for this important program! Or register two or more from your organization and save!


September 28, 2016 in Conferences & CLE, Current Events, Estate Planning - Generally | Permalink | Comments (0)