Wills, Trusts & Estates Prof Blog

Article on Healthcare Promises for Public Employees

Natalya Shnitser recently published an Article entitled, Healthcare Promises for Public Employees, Elder Law eJournal (2018). Provided below is an abstract of the Article.

State and local governments have promised nearly $1 trillion in retiree healthcare benefits to public employees. Although retiree healthcare benefits represent a form of compensation, historically, state and local governments have not set aside any money to pay for the promised benefits. Compensating employees with promises of future benefits has enabled state legislatures to use public dollars for other priorities, while ignoring the growing liabilities associated with the healthcare promises. As these liabilities have come due, they have strained state and local budgets. Some public employers have simply cut the benefits, and public employees have had limited recourse to hold cities and states to their original deal.

At the same time, many public employers have actually begun to pay down their unfunded liabilities for retiree healthcare. In 2004, new disclosure requirements forced state and local governments to acknowledge the full scope of their commitments for post-employment benefits. By 2015, some 35 state legislatures had created irrevocable trusts to set aside assets for benefits due in future years. However, while some of the trusts — most notably some that cover state legislators and judges — have accumulated assets to cover the liabilities, other trusts have remained glaringly empty. Using newly collected data on over 100 state-administered retiree healthcare plans, this Article shows that stronger constraints on legislative control over funding decisions, as well as stronger measures of fiscal health at the state level, have been associated with better funding progress. Ultimately, this Article contends that although the trend toward prefunding is encouraging, the current legal framework regulating retiree healthcare benefits impedes serious funding efforts. Disclosure requirements and governance reforms can promote funding discipline and mitigate uncertainty in the short term. In the long term, any significant resolution requires a deeper rethinking of employer promises for post-employment healthcare benefits and of the institutions best suited to manage such promises for decades to come.

Advisors Fail to Cover These Key Topics with Clients

Advisors are bringing a new holistic approach to the table, but high-net worth clients say that they would like to speak more with their financial advisors on a couple of topics they find important. Only 48% of clients said they’re currently discussing estate planning with their advisor and only 16 percent were discussing strategic philanthropy according to the recent U.S. Trust’s 2018 Insights on Wealth and Worth study.

Digital personal archival service Everplans has now followed in the footsteps of social media sites and implemented a feature that allows users to designate certain sections of the plan to be shared only upon Everplans’ receiving a notification of death. The user would designate an "unlocker" who would not be required to provide a Social Security notice or a death certificate. Financial records, wills, and other accounts passwords are a few sections that can be chosen to remain locked until other notice.

See Advisors Fail to Cover These Key Topics with Clients, Wealth Management, June 26, 2018.

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

What the Living Can Learn by Looking Death Straight in the Eye

There are several books currently on the market that explain the possibilities to die with dignity, whether it be from terminal illness or simply a longed lived life. This book, Advice for Future Corpses (and Those Who Love Them), by Buddhist practitioner Sallie Tisdale is different; it speaks about the sensitive subject of dying but with a refreshing realistic attitude. "But in its loving, fierce specificity, this book on how to die is also a blessedly saccharine-free guide for how to live."

Dying is not always done alone, and those around the person nearing the end of their lives may also need some guidance. To the caretaker, she writes: “You are the defender of modesty, privacy, silence, laughter and many other things that can be lost in the daily tasks. You are the guardian of that person’s desires.”

The book also recites a brief history of death as it pertains to different cultures and rituals around the world, up to the numerous options available in the present day.

See Parul Sehgal, What the Living Can Learn by Looking Death Straight in the Eye, New York Times, June 26, 2018.

Special thanks to Lewis Saret (Attorney, Washington, D.C.) 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.

 

CLE on PROBATE: Everything You Need to Know

The National Business Institute is holding a conference entitled PROBATE: Everything You Need to Know, on Wednesday, July 25, 2018 - Thursday, July 26, 2018 at Holiday Inn Cleveland Clinic in Cleveland, Ohio. Provided below is a description of the event:

Top Mistakes, Do's, Don'ts, Tips and Tricks

Is probate really necessary? How do you distinguish between probate and non probate assets? What are the top mistakes executors commonly make and how can you keep them from happening? How do you handle difficult, non-divisible, joint, hidden and unusual assets? In this comprehensive, all-inclusive guide to everything probate, you'll get answers to these questions and so much more. Whether you are new to the probate process, or are just needing a refresher, this course is for you. From petition to inventory to creditors to closing - this program walks you step by step through the process and procedures, while addressing sticking points along the way. Register today!

• Get the probate process and procedure - clarified.
• Find out top alternatives to (and ways to get out of) probate.
• Get effective tips for proving the validity of the will and petitioning it, as well as how to handle lost wills.
• Should there be early distribution of assets? Learn how to quickly identify and decide how to handle this potentially problematic procedure.
• Review procedures for locating and marshalling assets, with sample forms and documents.
• Discover which valuation method is best and how to ensure accurate appraisals.
• Get proven tactics for handling 401ks, IRAs, pensions, stocks and retirement plans.
• Gain tips for handling Medicaid estate recovery and VA liens.
• Tackle top trust traps in probate and walk through the final accounting process.
• Identify key tax deadlines and get techniques for preparing, coordinating and filing returns.

Who Should Attend

This basic-to-intermediate level program is designed for attorneys. Accountants and paralegals will also benefit.

Course Content

Day 1: Process, Initial Steps, Executor Mistakes, Assets, Wills and Probate Problems

1. Probate Process and Procedure - Clarified
2. PROBATE VS. NON PROBATE ASSETS - Which Ones Can Pass Outside of Probate?
3. ESTATE ADMINISTRATION: Ensuring Executors Know Their Duties
4. INITIAL CONFERENCE and Hearing - Timeline, Documents, Statements and Complications
5. WILLS: Proving Validity, Petitioning and Top Problems
6. Is Probate Necessary? Alternatives and Avoidance
7. Top PROBLEMS in Probate

Day 2: Disputes, Insolvent Estates, Creditor Issues, Trusts, Taxes and Final Accounting

8. When the Love is Gone... Tips for Resolving FAMILY DISPUTES in Probate
9. CREDITOR CLAIM Conundrums
10. MEDICAID Estate Recovery
11. TRUST Traps in Probate
12. TAX Deadlines, Preparation, Coordination, Filing Returns - AND Top IRS Pitfalls!
13. Handling DISTRIBUTIONS and Closing the Estate Without a Hitch
14. Ethical Practice Considerations and Concerns in Probate

Continuing Education Credit

Continuing Legal Education – CLE: 13.25 *

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 16.00 *

* denotes specialty credits

Article on New Frontiers in Private Fiduciary Law

Evan J. Criddle, Paul B. Miller, and Robert H. Sitkoff published an Article entitled, New Frontiers in Private Fiduciary Law, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article:

This chapter in the forthcoming Oxford Handbook of Fiduciary Law charts new frontiers of scholarly inquiry in fiduciary law. The chapter first orients the reader by taking stock of the current state of play in fiduciary law scholarship. The chapter then identifies a range of important questions that should inspire future work in the field. More specifically, it identifies pressing questions of legal theory (conceptual and normative analysis), economic and empirical legal studies (including classical and behavioral economic analysis), and historical and sociological inquiry. The chapter also raises questions of interest to private law theorists and scholars interested in exploring the significance of fiduciary principles within various sub-fields, from trust and corporate law to health law and legal ethics.

Tattoos can be a Keepsake After Death

After a discussion of possible keepsakes after a loved one's death, a group of funeral directors came up with the idea to remove and preserve tattoos of the deceased. Their belief was that if the owner of the tattoo had great affection for the ink, then a family member would also like to cherish it as a piece of artwork.

The company Save My Ink provider recommends having them remove the tattoo within 48 hours of the person's death, and then they place the tattoo onto a frame behind a piece of UV protective glass. They have yet to reveal their full process to preserve the tattooed skin.

See https://www.facebook.com/InTheKnowInnovationAOL/videos/1919651414994179/; see also http://www.savemyink.tattoo/

Can You Inherit a TFSA Tax-Free? [Canada]

A TFSA is a Tax Free Savings Account in which investment income, capital gains or other earnings are completely tax-free for a taxpayer as well as withdrawals from the account. Upon the death of the taxpayer there are other consideration.

If the taxpayer was your spouse and named you their "successor holder" the account transfers seamlessly and becomes your account without going through probate. If your spouse on the other hand named you as their beneficiary of the account, the value of the account as of their date of death can be paid to you or to your TFSA tax-free. If the value of the account rose in value after their death, you must include it in your income in the year of receipt; but as long as you claim it before December 31 of the year your spouse died you are able to file it as an "exempt amount." The account will also not be a part of their estate and there will be no need for probate fees.

If the estate is simply named as the beneficiary of the TFSA, probate taxes must be paid to the province of the deceased residence to validate their will.

See Jason Heath, Can You Inherit a TFSA Tax-Free?, Money Sense, June 27, 2018.

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

Cahill Ruling Makes Split-Dollar Arrangements Less Attractive

In the Estate of Richard E. Cahill, et al. v. Commissioner, the Tax Court denied partial summary judgment to an estate that contested a deficiency notice in which the Internal Revenue Service adjusted the value of the decedent’s rights in three split-dollar life insurance arrangements from $183,700 to more than $9.61 million. The court declined to grant partial summary judgment on the estate’s arguments that Internal Revenue Code Sections 2036, 2038 and 2703 didn’t apply to the split-dollar arrangement and that Treasury Regulations Section 1.61-22 did apply in valuing the decedent’s interest in the split-dollar arrangements for estate tax purposes. The court’s decision will make the use of split-dollar policies less attractive as a way to shift wealth from one generation to the next and potentially may impact other estate planning vehicles.

See Justin Ransome & N. Todd Angkatavanich, Cahill Ruling Majes Split-Dolllar Arrangements Less Attractive, Wealth Management, June 26, 2018.

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

 

Probate for Paddington: Michael Bond, CBE (1926-2017)

Michael Bond, CBE was an author and creator of the beloved children's character Paddington Bear. Bond passed away last year in London at the age of 91. Bond was survived by his second spouse and two children.

Bond updated his will in 2014, and considering that he was still writing books until April of last year, he was certainly of sound mind to do so.  He divorced from his first wife in 1981, but  remained on amicable terms: they shared custody of the stuffed bear who inspired Paddington, which Bond had purchased as a stocking stuffer for his first wife in 1956.  "As a testament to Bond’s character and the ongoing relationship with his former wife, he named her as a beneficiary of his estate together with his current spouse, two children and grandchildren."

According to certain news articles, an interesting wish of Bond's was to prevent sequels of the Paddington movies after his death.  He went so far as to see a lawyer specializing in estate matters to ensure his intentions were properly documented in his updated will.

See Predrag Tomic, Probate for Paddington: Michael Bond, CBE (1926-2017), FieldLaw.com, June 27, 2018.

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

"Coerced Cremation" and a Lawsuit

The widow of 64-year-old Robert Yeager, Enid, was in great mourning when she was faced with a difficult dilemma - her husband had died of heart and liver disease in October, 2012, causing his body to swell beyond what was appropriate for a normal casket. An oversized casket was a costlier option, but Yeager claimed that the funeral home pushed her to have her husband's body cremated against his written last wishes.

Yeager sued Miser Mortuaries in Conrad, Montana for $1 million in damages in 2015 for severe emotional distress. After a 4-day long trial the jury found that the funeral home negligent and was liable for coercing the widow into cremating her husband. The jury drastically lowered the award for Yeager, however, to $50,000.

Communication between the widow and the funeral home appear to be more to blame than out-right malicious intent.

See Caleb Wilde, An 'Exploding Dead Body,' a 'Coerced Cremation' and a Lawsuit, CalebWilde.com, June 23, 2018; see also Seaborn Larson, Jury: Mortuary Business Negligent for Cremating Man Against his Wishes, Awards Widow $50,000, Great Falls Tribune, June 15, 2018.