Wills, Trusts & Estates Prof Blog

Donor-Advised Funds Become Popular Philanthropic Tools

Donor-advised funds (DAFs) are investment vehicles established by non-profit organizations that allow individuals to make an irrevocable, tax-deductible grant. These funds have experienced a veritable explosion in popularity fueled primarily by the charitably inclined. Part of the cause for this phenomenon is the developing ability of major funds to handle complex assets like real estate, stock, or even cryptocurrency. In 2017 alone, Fidelity Charitable converted over $900 million in “non-cash” assets into funds ready to donate to charities via its DAF. The year prior, Fidelity received just under $800 million in these assets. Carol Kroch, national director at Wilmington Trust, notes that because individuals are allowed to donate their non-cash assets to a DAF and avoid taxes, unlike gifts provided directly to a charity of a private foundation, “donor-advised funds have been a nice place to deal with the charitable gift of complex assets.”

See Abby Schultz, Donor-Advised Funds Become Popular Philanthropic Tools, Barron’s, February 15, 2018.

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

Nikolas Cruz Tried to Access $800,000 Inheritance Before Shooting: Report

Nikolas Cruz, the teenager who recently gunned down 17 people in a Florida high school, reportedly employed an attorney two months prior to his rampage in an effort to receive an $800,000 inheritance. Cruz's mother, Lynda Cruz, suffered from pneumonia and passed away last November. Audra Simovitch, Cruz's lawyer, was working to get him his share of the estate. Simovitch has commented that she has not yet been able to meet with her client but hopes to visit him before March. Part of the reason she wishes to see Cruz is to find out if he still has an interest in his share of the inheritance. 

See Nikolas Cruz Tried to Access $800,000 Inheritance Before Shooting: Report, Fox News, February 27, 2018.

CLE on 42nd Annual Course: Advanced Estate Planning & Probate

The TexasBarCLE and the Real Estate, Probate and Trust Law Section of the State Bar of Texas are co-hosting a conference entitled, 42nd Annual Course: Advanced Estate Planning & Probate, which will take place from June 13 through 15, 2018, at the Sheraton Dallas Hotel in Dallas, TX. Provided below is a description of the event:

Tentative Program: Hours and topics are subject to change. Check back in March for more complete information.

Tentative Topics

• Case Law Update
• Estate Planning Gems
• The View from Washington
• The Largest Probate Damage Award in Texas History
• Property Characterization of Trust/Partnership Distributions
• Management Trusts from Start to Finish
• Planning with Retirement Accounts in 2018 and Beyond
• Divorce-Proofing the Estate Plan
• Recent Developments in Estate Planning
• Tips on How to Prepare for the TBLS Estate Planning & Probate Exam
• Of Mice and Metadata - Ethics, Client Confidentiality, and the Duty of Competence in the Digital Age
• What’s the Meaning of All This? “Supports and Services” and Alternatives to Guardianship
• Probate Matters: A View from Both Sides of the Bench
• Fiduciary Duties in Limited Partnerships
• Highlights of the New and Improved Texas Durable Power of Attorney Act: A Panel Discussion
• Planning for the Quality of Life in the Last Quarter of Life
• What Every Estate Planner Needs to Know About International Law
• Planning and Administration Issues Associated with Private Foundations and Other Charitable Vehicles
• How to Document Charitable Gifts to Make Sure Donor Intent Is Carried Out
• Fiduciary Compensation
• Ethical Issues in the Transition of a Law Practice in Life or Death
• Will Contests Update
• How to Read Appraisals for Estate & Gift Tax Purposes
• What Planners Need to Know About Defending the Estate Plan

Tax Breakout:
• How to Blow It and Not Know It: Inadvertent Termination of a Corporation’s S Election by Ineligible Shareholders
• BDIT/678, Grantor, QSST
• Representing Fiduciaries After Death
• Basis for Comparison: How Income Tax Management Is Changing the Face of Estate Planning

Litigation Breakout:
• Standing, Capacity and Necessary Parties in Trust Litigation
• Caught Between a Rock and a Hard Place: Fiduciaries Caught Between Conflicting Beneficiaries
• Duties of Guardian/Attorney Ad Litem in Non-Guardianship Litigation
• Temporary Relief Options in Trust Litigation

The Professional Mourners of Mani, Greece

The center-most peninsula of Greece, Mani, is best known for its quaint coastal villages and breathtaking cliffs. Unknown to many though, is its continuing practice of a traditional lament for the dead that dates to ancient times. The moirologia, considered an art form, traces its roots to the choirs of Greek tragedies. In these tragedies, the lead singer would start the mourning and the chorus would follow.

In practice, the sounds emanating from these moirologists, or professional mourners, are nearly indescribable. It is an animalistic primal howl, a wailing that permeates the very soul. These women are not large, but their presence looms over the military men that stand beside them.

During the memorial rites, the moirologists and relatives make various offerings: oil, perfume, honey, wine, garlands,          and locks of hair. The mourning period lasts three years, after which the body is exhumed and placed in a family mausoleum or village ossuary. It is not until the body is settled in its final resting place that the soul is believed to be released into the afterlife.

While these laments were designed to help the dead move to their next life, seeing these women weeping and mourning so openly aids mourning friends and family transition toward accepting the final passage of the deceased.

See Ro Kolanaros, The Professional Mourners of Mani, Greece, Atlas Obscura, February 14, 2018.

John Heard Had Multiple Narcotics in System at Time of Death, Report Says

John Heard, best known for his role as the father in “Home Alone,” died last year in July at the age of 71. A recent report revealed the actor had narcotics in his system that included the following: Hydromorphone, Fentanyl, Xanax, Oxymorphone, Oxycodone, and Tramadol. Before he passed away, Heard had undergone a back surgery and had been prescribed pain medication. At the time of his death, a Palo Alto Police Department spokesperson reported: “I can confirm that our officers responded with the fire department to a hotel in our city yesterday on a report of a person in need of medical aid. The person was determined to be deceased. While still under investigation, the death is not considered suspicious at this time.”

See Diana Falzone, John Heard Had Multiple Narcotics in System at Time of Death, Report Says, Fox News, January 6, 2018.

Article on GST in India: Impact and Challenges

Subhamoy Banik & Advocate Arundhuti Dasrecently published an Article entitled, GST in India: Impact and Challenges, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article:

GST or Goods and Services Tax, the greatest tax reform in India since independence which has been long pending. GST is meant to simplify the indirect tax regime of India by replacing a host of taxes by a single unified tax. GST is the only indirect tax that directly connects all the sector of Indian economy thus enhancing the economic growth of the country by creating a single unified market. More than 160 countries of the world have implemented GST so far followed by France. The idea of GST in India was proposed by AtalBihari Vajpayee in 1999 and a committee was set up under the leadership of Asim Das Gupta the then finance minister of West Bengal. It was supposed to be implemented from 1st April 2010 under flagship of P Chidambaram the then finance minister of UPA government but due to political issues and conflicting interests of various stakeholders it did not came into force. In May 2016 the constitutional amendment bill for GST was passed by LokSabha and deadline of 1st April 2017 to implement GST was set by ArunJaitley the finance minister of India. However, there is a huge outcry against its implementation. This paper presents an overview of GST concept, advantages and explains its features along with focused in challenges faced by India in execution.

Two Court Rulings Highlight Divorce Planning Loopholes

Careful drafting and continual monitoring of estate documents are critical to avoiding future pitfalls, especially in cases involving divorce. Two recent court cases serve as a paradigm for this need. In the first case, the Connecticut Supreme Court held that decanting was authorized in a divorce action. This effectively allowed the husband, who was the beneficiary of a 1983 trust established by his father, to transfer the trust assets into a new trust that prevented his wife from reaching them. In a New York case, the decedent named her ex-husband as executor and beneficiary of her estate. The alternate for both positions was the ex-husband’s father. Under New York law, an ex-spouse may not serve as an executor or beneficiary. The New York court held that this disqualification did not apply to the ex-husband’s father.

See Michael S. Fischer, Two Court Rulings Highlight Divorce Planning Loopholes, Financial Advisor, November 27, 2017.

4 Estate Litigation Predictions For 2018

The start of a new year is a great time to look forward and predict upcoming trends in estate litigation for 2018. First, it is incredibly likely that the overall volume of estate litigation will increase. As our society ages and passes down more wealth than any other time in human history, the potential for lawsuits continues to grow. Second, the continual inclusion of arbitration clauses in wills and trusts will increasingly serve as the basis of litigation as executors and trustees invoke them to compel binding arbitration. Those opposing these clauses argue that they are void under the Uniform Trust Code, void against public policy, and should not have the power to bind beneficiaries who were never in a position to agree to the arbitration terms. Third, in terrorem, or no-contest clauses, will expand in both breadth and scope. Over the past decade, estate planning attorneys have included broader no-contest clauses in an effort to prevent contests involving beneficiary designations, claims against an executor or trustee for breach of fiduciary duty, and actions that retard the administration of an estate or trust. Finally, the mandatory and default rules under the Uniform Trust Code will be expounded as estate planning attorney’s attempts to limit certain fiduciary duties infringe upon state laws.

See Will Sleeth, 4 Estate Litigation Predictions For 2018, Financial Advisor, February 14, 2018.

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

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

Article on Fiduciary Compensation in Georgia

Kimberly E. Civins & Melissa Sprinkle recently published an Article entitled, Fiduciary Compensation in Georgia, Wealth Strategies Journal (2018). Provided below is an abstract of the Article:

Historically, trustees and executors served without any compensation.¹ In recognition of the fact that technological advancements have increased the complexity of dealing with assets in a trust or estate, modern legislation allows fiduciaries to collect commissions for their service. The character of fiduciary compensation varies from state to state, and this article deals specifically with Georgia’s payment regime, which awards fees based on the value of the trust or estate. There are certainly advantages to using this type of system; however, there are various shortcomings, some of which are unique to an asset-based compensation system, while others mirror those found in states with different types of compensation rules.

2018 Changes to Federal, Maryland and D.C. Estate Tax Laws

The Tax Cuts and Jobs Act markedly altered prior law relating to the taxation of corporations and individuals. This includes changes to the gift, estate, and generations-skipping tax (GST) provisions. Under the federal law, unmarried individuals may exempt up to $11.2 million from federal gift and estate tax. Married couples may exclude double this amount, as long as the surviving spouse files a timely estate tax return electing portability. The marginal tax rate for estates that exceed the threshold exclusion amounts remains at 40%.

In Maryland, the estate tax exemption increases to $4 million in 2018. The marks a massive jump from the $1 million exclusion allowed in 2017. After 2019, Maryland’s exclusion thresholds will mirror the federal limits. Until 2019, the portability election for spouses is not available. In 2007, Virginia repealed its estate tax and continues to have neither a gift nor the estate tax. The District of Columbia’s (DC) estate tax exemption now matches the federal exemptions except for the portability election for spouses. Like Virginia and Maryland, DC has no gift tax.

See 2018 Changes to Federal, Maryland and D.C. Estate Tax Laws, Whiteford, Taylor, & Preston, LLP, January 9, 2018.

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