Wills, Trusts & Estates Prof Blog

Mom Heartbroken After Finding 6-Month-Old Son's Casket Floating in Water

Ashton Mackey’s family was horrified when they visited the toddler’s resting place at New Park Cemetery in Memphis, Tennessee. The casket in which the child had been buried was floating on water outside of the burial plot. Alicia Mackey, Ashton’s mother, says the nightmarish experience has left her sleepless. The cemetery was closed for the holiday, so family members took dry dirt from a nearby field to cover the casket. Despite the turmoil, a flower now rests on the newly dug grave to symbolize a body at peace.

See Marius Payton, Mom Heartbroken After Finding 6-Month-Old Son's Casket Floating in Water, Fox 13, May 30, 2017.

Stranger Than Strangi and Partially Fiction

The U.S. Tax Court, in Estate of Powell, recently held that cash and marketable securities transferred into a family limited partnership (FLP) under a power of attorney were includable in the decedent’s gross estate. The transfer was made about one week prior to death. There were unusual circumstances that made the decision less surprising, but the decision remains notable. In their discussion, the majority outlined a new analytical framework to prevent double taxation on an FLP interest and its underlying assets when there is an inclusion under Internal Revenue Code Section 2036(a). Practitioners advising clients regarding new or existing FLPs should be cognizant of Powell and engage in a pointedly holistic analysis of the FLP and the estate plan.

See N. Todd Angkatavanich, James Dougherty & Eric Fischer, Estate of Powell: Stranger than Strangi and Partially Fiction, Wealth Management.com, May 25, 2017.

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

Asset Protection Measures

An unfortunate characteristic of American society is a proclivity for litigation. This inclination makes asset protection planning a key component of any estate plan. Under federal law and in some states, there are certain asset classes that are protected from claims by creditors. These include retirement accounts, some real property, life insurance policies, and 529 plans. This list is not all-inclusive, but its limited nature reveals that few exceptions exist for protection from creditors.

There are some simple defensive means for an estate planner to suggest or a client to use to protect their assets. First, buy insurance. Making sure to have adequate insurance protection is an important means to shield assets. Another simple step is to transfer valuable assets to a less risky spouse. This rests on the foundational premise of there being a solid marriage, as this arrangement may be problematic in a divorce. Planners might also suggest the use of an LLC, spendthrift trust, domestic asset protection trust, or an offshore asset protection trust. While there a number of methods to protect personal assets from litigation, the important point is to get it done now as opposed to scrambling for advice after a suit has been filed.

See Virginia S. Carter, Asset Protection Planning Steps You Should Consider Now, Ward and Smith, P.A., May 26, 2017.

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

Pets in Estate Planning

Many pets find themselves without a home when their owners pass away. Without a plan in place, these furry friends may find themselves facing a dire situation in a local animal shelter after their owner’s death. In states like Maine, it is possible for owners to include pets in their wills in order to set up a trust for their care. Carol and Dave Santora, Maine residents and animal lovers, hired an attorney to accomplish this task. Biscuit and Dixie, the Santora’s dogs, will be given to the Animal Welfare Society upon the Santoras’ demise. Funds will be set aside for the shelter to care for the dogs and they may also be used to provide support for any family that adopts the dogs. Working with an attorney to plan for their animals’ welfare provides peace-of-mind for the Santoras so they can concentrate on enjoying their pets now.

See Julia Bayly, A Trust Fund for a Pooch? How Some Mainers Are Including Their Pets in Estate Planning, BDN Maine, May 28, 2017.

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

AALS Call for Papers -- Historical and Empirical Evidence and the Law of Trusts and Estates: What Really Happened?

Trusts & Estates is a far-reaching and broad-based discipline of law that impacts private citizens’ decisions about mortality, property, and personal relationships. Many aspects of this legal discipline, however, are based on legislators’, judges’, and law reformers’ speculations about donors and their preferred intentions. And yet estate planning documents, whether created by lawyers or by the donors themselves, provide a window into history, society, and human interaction.  Although there are a handful of decades-old and oft-cited studies describing evidence derived from will vaults about what ordinary people had decided to do with their belongings and wealth, until recently relatively few trusts and estates scholars had explored empirical evidence in this field.  Over the past few years, however, there has been a renewed interest in analyzing historical and empirical evidence derived from court files, will vaults, tax and other records, and surveys of individuals and institutions.  Scholars have used this material to revisit some of long accepted assumptions and unanswered questions that underlie trusts and estates theory, doctrine, values, and practice. This panel will explore this ongoing historical and empirical research as it interrogates existing ideas about preferred default rules, interpretation standards, donor and beneficiary preferences, fiduciary norms, and wealth accumulation and transmission more generally.   

Submissions, due dates and method:

Submissions should be of abstracts between 250 and 1000 words, inclusive of any footnotes. Scholarship may be at any stage of the publication process from work-in-progress to completed article, but if already published, scholarship may not be published any earlier than 2016. Each potential speaker may submit only one abstract for consideration.

There are two submission due dates.  The Section seeks detailed abstracts in late summer, with final papers due in late fall.

• The due date for detailed abstracts is August 25, 2017.
• The due date for final papers is November 17, 2017.

Abstracts and papers should be submitted electronically to:  Deborah S. Gordon at [email protected] 

Submission review, selection, conference attendance:

Abstracts and papers will be reviewed by members of the Section’s Executive Committee.  Selected presenters will be announced in the fall of 2017.  The Call for Paper presenters will be responsible for paying their registration fee and hotel and travel expenses. 

Inquiries or questions:

Any inquiries about the Call for Papers should be directed to Professor Deborah Gordon at [email protected] , (215) 571-4811(w) or (610) 710-9322 (c). 

Common Estate-Planning Mistakes

Death is always a difficult topic to discuss, especially when it comes to your own. But, regardless of pomp, power, or prestige, we are all going to die. It is this inevitability that creates a need for a discussion about estate planning. Unfortunately, reticence regarding this topic many times leads to mistakes. One common mistake in estate planning is the lack of a see-through provision in a trust. This failure may expose a trust to higher taxes than necessary upon death. Also, schedules that are left blank or incomplete may create ambiguities in what assets do, or do not, belong to the trust. Another issue arises from a failure to use payable on death (POD) and transfer on death (TOD) accounts. This oversight may force some assets through probate; a process involving attorneys that will charge fees. Finally, having too many accounts creates problems at death by making the estate distribution unnecessarily complicated. While this does not represent an exhaustive list, it is indicative of the importance of examining and updating estate plans to make sure they remain the best for you and your beneficiaries.

See Andrew McNair, Some of the Biggest Estate-Planning Mistakes People Make, Kiplinger, May 2017.

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

Dementia Taxes

It seems as though it is becoming something of a social faux pas to admit to wanting to leave an inheritance to children. The newest mantra taken up by liberal economists and policy makers is the idea that passing on hard-earned and already-taxed assets to loved ones is among the great inequities of the day. This ideal is embodied in the recent “dementia tax.” Proponents advocate for a policy that would require a tax on those selfish individuals who did not have the decency to expire through an equitable and timely method. Such polices are fresh examples of a government failing to recognize the motivation of voters. The instinct to benefit loved ones after death is felt by rich and poor alike, and it is the part of the engine that drives continued social progress.

See Robert Shrimsley, Dementia Taxes and the Cursed Cult of Inheritance, Financial Times, May 24, 2017.

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

Planning for Pets

While a pet can be as close as family to some, this does not mean they warm the depths of anyone else’s heart. Because of the legal status of these furry companions, it is important to plan for their care in case you become unable to provide for them. Some simple advice includes filing an advance veterinary directive. These forms can usually be found online or at the local vet. In case a move is required to a retirement facility, make sure the facility accepts pets; many currently do. It may also be prudent to consider placing specific provisions in a will detailing beneficiaries or creating a trust for the care of the pet after death. And in all of these cases, make sure to consider the impact inflation will have on money set aside for pet care.

See Hilary Kramer, Pooch Planning, AARP, May 18, 2017.

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

Updating Wills After Tax Changes

Changes in tax laws may very well affect the suitability of various provisions in a will. When state and federal tax laws are amended, added, or repealed, intelligent and forward-looking will provisions may no longer be effective to shield a decedent’s estate from heavy taxes. In some jurisdictions, New York for example, reformation of a will is sometimes possible after death. New York precedent allows (rarely) changes to a will if the reformation is consistent with the decedent’s intent to maximize tax savings. While reformation is a possible avenue to fix will provisions, it is usually best practice to revisit clients’ estate plans immediately after changes in tax laws to ensure tax-avoidance provisions remain effective.

See Carole M. Bass, Reforming a Will for Tax Savings, Wealth Management.com, May 19, 2017.

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

Wealther Transfers

Intergenerational wealth is among the key ingredients for retirement security. A recent study shows that loans and gifts received from relatives as an adult are usually a precursor to an inheritance later in life. Those individuals who receive these transfers tend to be better prepared for retirement and enjoy much more flexibility in their retirement decision-making. 

See Christopher Robbins, Wealth Transfers Boost Retirement Readiness, Social Inequality, Financial Advisor, May 19, 2017. 

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