Wills, Trusts & Estates Prof Blog

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

Wednesday, June 27, 2018

Artist Uses Human Ashes in Art Projects

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-06-27/c1a208f6-4c98-4bf1-bb92-a978dcce2c51.pngShellena Carter is an artist in Tennessee that commonly uses materials into her paintings that are atypical, such as sand and seashells. But it wasn't until a friend passed away that she was presented with idea to use human cremations as a medium. When requested by the friend's family, she did not hesitate to find a way to incorporate the man's ashes into a painting of pristine beach - something the family could cherish and remember their loved one by. The remains were able to be part of the painting by mixing them with resin gloss.

Carter says that now she has ten other clients desiring to use a person's ashes into artwork.

See Ellie Romano, Tennessee Artist Turns Loved Ones' Ashes Into Works of Art, KLEW.tv.com, June 24, 2018.

June 27, 2018 in Current Events, Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Article on Nothing is Certain Except Death and Taxes: The Lack of Policy Uncertainty from Expiring 'Temporary' Taxes

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-06-27/59c40bd3-ced8-42e6-803b-2b3b8dc7ff6d.pngAndrew Chang recently published an Article entitled, Nothing is Certain Except Death and Taxes: The Lack of Policy Uncertainty from Expiring 'Temporary' Taxes, Tax Law: Tax Law & Policy eJournal. Provided below is an abstract of the Article.

What is the policy uncertainty surrounding expiring taxes? How uncertain are the approvals of routine extensions of temporary tax policies? To answer these questions, I use event studies to measure cumulative abnormal returns (CARs) for firms that claimed the U.S. research and development (R&D) tax credit from 1996-2015. In 1996, the U.S. R&D tax credit was statutorily temporary but was routinely extended ten times until 2015, when it was made permanent. I take the event dates as both when these ten extensions of the R&D tax credit were introduced into committee and when the extensions were signed by the U.S. president into law. On average, I find no statistically significant CARs on these dates, which suggests that the market anticipated these extensions to become law. My results support the fact that a routine extension of a temporary tax policy is not a generator of policy uncertainty and, therefore, that a routine extension of temporary tax policy is not a fiscal shock.

June 27, 2018 in Articles, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

SALT-Free Alchemy? Converting State Taxes to Charitable Deductions [New York]

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-06-27/ce2ac9ea-6475-4cee-a97e-dfa109116ec9.pngWhen President Trump passed the Tax Cuts and Jobs Act, an individual's deduction for state and local taxes (SALT) is now limited to $10,000 for a married couple or $5,000 for those filing separate returns. This limitation is for taxable years from after December 31, 2017 to before January 1, 2026.

Some states with high income rates and higher property taxes such as Connecticut, New Jersey, and New York have created government funds that allow charitable transfers to them count as credits towards property taxes. "These laws allow the state’s taxpayers to characterize those transfers as fully deductible charitable contributions for federal income tax purposes, while using the same transfers to satisfy state and local tax liabilities."

These programs may not last very long if the federal government has anything to do with it. The IRS is aware of the scheme and some members in Congress have already deemed them as a form of tax evasion. According to IRS Notice 2018-59: “Despite … state efforts to circumvent the new statutory limitation on state and local tax deductions, taxpayers should be mindful that federal law controls the proper characterization of payments for federal income tax purposes.”

See Conrad Teitell, SALT-Free Alchemy? Converting State Taxes to Charitable Deductions, New York Law Journal, June 22, 2018.

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

June 27, 2018 in Current Affairs, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

There is no Cause of Action in Texas for Intentional Interference with an Inheritance.

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-06-27/46d23c71-cffe-401e-8469-873ce1167cf4.pngOn June 22, 2018, the Texas Supreme Court ruled on Archer v Anderson, No. 16-0256, 2018 Tex. LEXIS 611. Provided below is a summary of the case.

Richard Archer and Richard’s six children (the Archers) brought this action against Ted Anderson’s estate for intentional interference with their inheritance, alleging that Anderson influenced Jack Archer to disinherit them. The jury found in favor of the Archers. On appeal, the court of appeals concluded that the Supreme Court has never recognized tortious interference with inheritance as a cause of action in Texas and deferred to the Supreme Court to decide whether to do so. The court then reversed and rendered judgment for Anderson. The Supreme Court affirmed, holding that the tort of interference with inheritance is not recognized in Texas.


June 27, 2018 in Estate Planning - Generally, New Cases, Wills | Permalink | Comments (0)

Tuesday, June 26, 2018

Astronaut Buzz Aldrin Lashes Back at Children Who Say He is not Competent

BuzzBuzz Aldrin, 88, was the second person to step foot on the moon, preceded only by fellow astronaut Neil Armstrong. Aldrin graduated 3rd in his class from West Point before heading off to the Massachusetts Institute of Technology to attain his PhD in astronautics. During Gemini 12, the astronaut spent a total of five hours outside of the space craft performing extravehicular activity.

Now, his cognitive ability is being questioned. Aldrin’s children, Andrew and Janice, filed to be named co-guardians of their father because they say "he is being influenced by outsiders and is in cognitive decline and experiencing paranoia and confusion." If successful, they will be in control of his finances as well as his foundation, ShareSpace Foundation.

Aldrin is fighting the allegations, claiming that his business manager, Christina Korp, and his son have been using his money for themselves and this his daughter is an active member of the conspiracy. Andrew and Janice oversee his private company, Buzz Aldrin Enterpirses, and the operations of the Foundation. Korp is a board member of the Foundation. Aldrin will be seen this week by a nurse, social worker, and a doctor to determine his mental and physical condition.

A third child of Aldrin's is not named in either suit.

See Karen Demasters, Astronaut Buzz Aldrin Lashes Back at Children Who Say He is not Competent, Financial Advisor, June 26, 2018.

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

June 26, 2018 in Current Events, Elder Law, Estate Planning - Generally, New Cases, Science, Technology | Permalink | Comments (0)

Long Term Care Insurance Isn’t Dead. It’s Now an Estate-Planning Tool

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-06-26/0ae6baa4-625c-49aa-b685-8fb503864f4c.pngLong term care insurance policies started to see a rise in sells in the 1990's mostly in the middle American income bracket. These consumers were those that were at risk of draining their savings accounts, leaning on their children, or figuring out a way to qualify for Medicaid if they were hit with dementia or a high-cost medical condition in their later years.

The sales pitch has changed, however, to reach wealthy Americans who want to use long term care insurance policies to protect their larger estates from having to be in any way depleted because of failing health. Even 7-digit nest eggs can be hit hard by the astronomical costs of medical expenses.

"According to federal government projects, about a quarter of Americans turning 65 between 2015 and 2019 will need up to two years of long term care. 12% will need two to five years, and 14% will need more than five years." These costs could increase exponentially if the patient needs round the clock care by an in-home provider or decides to reside in a nursing home facility.

Insurance companies have also implement hybrid policies that will pay out death benefits if the long term care is not used or not completely expended. Some policies have also introduced a "return of premium" feature, which allows buyers to recoup much of the money they have paid into the plan, albeit without interest.

See Leslie Scism, Long-Term-Care Insurance Isn’t Dead. It’s Now an Estate-Planning Tool, Wall Street Journal, June 9, 2018.

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

June 26, 2018 in Current Affairs, Disability Planning - Health Care, Estate Planning - Generally, Technology | Permalink | Comments (0)

Sveen v. Melin: The Retro View of Revocation on Divorce Statutes

CahnThe George Washington Law Review is pleased to announce the publication of a response by Professor Naomi Cahn to the Court's recent decision in Sveen v. Melin, No. 16-1432, slip op. (U.S. June 11, 2018).

The Supreme Court rarely considers domestic relations or probate cases; nonetheless, when state statutes regulating insurance benefits and retirement designations upon divorce conflict with federal statutes, the Court has repeatedly held the state statutes preempted. Sveen v. Melin similarly presented issues concerning a state statute affecting beneficiary designations upon divorce and federal law, but the case concerned a potential conflict between the Constitution’s Contracts Clause and a state revocation-upon-divorce statute.

In 1997, Mark Sveen purchased a life insurance policy, and later that year, he married Kaye Melin. The following year, he named her as the primary beneficiary and his two adult children from a prior marriage, Ashley and Antone Sveen, as contingent beneficiaries. Sveen also had additional life insurance, which listed his children as primary beneficiaries. In 2002, years after Sveen had purchased the policy, Minnesota enacted the statute at issue in the case, which states: “[T]he dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual’s former spouse.”

Sveen and Melin divorced in 2007. Their divorce decree did not mention the insurance policy, and Sveen never changed the beneficiary designation. According to Melin, the two of them agreed to keep the other as the primary beneficiary, even after the divorce. In 2011, Sveen died.

Following Sveen’s death, the insurance company filed an interpleader to determine whether the Minnesota statute revoked the beneficiary designation. Sveen’s children, who were the contingent beneficiaries, and Melin crossclaimed for the proceeds. The district court found in favor of the children, but the Eighth Circuit, relying on a case it had decided in 1991 presenting a Contracts Clause challenge to the Oklahoma revocation-upon-divorce statute, reversed, finding in favor of Melin. As in the 1991 case, the Eighth Circuit found that the statute disrupted the expectations of the policyholder, who was entitled to “rely on the law governing insurance contracts as it existed when the contracts were made.” Other circuits, however, had reached the opposite conclusion. The Supreme Court, 8–1, in an opinion authored by Justice Kagan, resolved the issue by finding no Contracts Clause violation.

The Contracts Clause provides that “[n]o state shall . . . pass any . . . Law impairing the Obligation of Contracts.” By its terms, as the Court noted, the Contracts Clause does set limits on when states can enact laws that interfere with pre-existing contracts, that is, on the retroactivity of new legislation. Not all such laws are, however, unconstitutional, and Justice Kagan briefly reviewed the history of the Court’s Contracts Clause jurisprudence. She observed that the “Court has long applied” a two-part test for determining such a law’s validity. The first part asks whether the state law “operated as a substantial impairment of a contractual relationship.” A law operates as a substantial impairment if it: (1) “undermines the contractual bargain,” (2) “interferes with a party’s reasonable expectations,” and (3) “prevents the party from safeguarding or reinstating his [sic] rights.” Only if those factors reflect a substantial impairment does the Court turn to the second step to determine whether the law has been crafted in “an ‘appropriate’ and ‘reasonable’ way to advance ‘a significant and legitimate public purpose.’”

For more, please visit Sveen v. Melin: The Retro View of Revocation on Divorce Statutes.

June 26, 2018 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Estate Owners Should Plan for Their Furry Friends [Ohio]

PetsThe last 10 years have seen a swell in clients in Ohio leaving a bit of something in their estate plan for their furry companion. It is understandable as some people see their pet as a child, especially when they may not have children of their own or their children are older adults themselves. The State's laws have made that simpler by implementing pet trusts for estate owners.

Pet trusts are a separate entity from your will and can be created before or at the time of your death. They are more binding than simply bequeathing a beneficiary a certain amount of funds with a request that they care for your beloved animal. There can be consequences if the person named to use the trust for the pet is not taking their role seriously or misusing the trust. You may also provide what happens to the remaining balance in the trust after the pet's demise.

The most common type of animals that are benefited by pet trusts are horses, dogs, and cats, but any pet can be cared for through this type of trust.

See Becky Raspe, Estate Owners Should Plan for Their Furry Friends, Cleveland Jewish News, June 19, 2018.

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


June 26, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation, Travel, Wills | Permalink | Comments (0)

Monday, June 25, 2018

Planning Now for Later

LivingtrustEveryone hopes that they live a decently long life so many people put off planning for retirement and possible incapacity, reasoning that they have many more years to start that. Fortunately though some entry level jobs have retirement plans for younger workers that will carry with them to advanced careers and into their later years.

The author teaches Estates and Trusts as well as Elder Law, and is a strong advocate for early saving and planning for the twilight years. Proper and efficient planning can take many steps depending on the path that one chooses, and a plan may include many documents after all the steps. This may include a will, a trust, a financial power of attorney, a living trust, making sure there is a designated beneficiary for a life insurance policy, etc. Current times dictate that digital assets must also be accounted for, including online social media accounts and client lists.

One of the most overlooked planning steps for the younger generations may be an advance medical directive, which is a vital step in the entire process. Life is fragile and never promised, so having that document is a necessity for everyone, no matter their age or their health.

See Naomi Cahn, Planning Now for Later, Forbes, June 25, 2018.

June 25, 2018 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally, Technology, Trusts, Wills | Permalink | Comments (0)

How to Disinherit a Child: 5 Tips to do so Successfully

FightThe decision to disinherit can be a personal one and definitely should not be made lightly. If that fateful choice needs to be made due to irresponsibility, criminal activity, or another fitting reason, here are 5 tips that can used to guarantee that that it is successful.

  • Hire a Lawyer to Draft the Will or Trust Amendment
    • It is always a good idea to seek professional help when drafting a will or trust amendment, but in the case of something as drastic as disinheriting a child, the need is a certainty.
  • Establish a Paper Trail on Why You are Disinheriting the Child
    • Your executor or trustee will have an easier time if he or she has a trail of other evidence that you left that explains and corroborates your decision.
  • Be Careful About Stating a Reason in the Will for the Disinheritance
    • Saying "reasons that are personal to me" is a good idea if you would like to give a reason for the disinheriting. If a stated reason is found to not be 100%, the child could challenge your will.
  • Consider Not Telling the Child
    • This tip may not be good for everyone, but choosing to not tell the child could save some annoyance and aggravation of the child hassling you to put them back in the will.
  • Consider a Modest Bequest Coupled with a No Contest Clause
    • Bequeathing a smaller than expected amount with a no contest clause could serve your purpose while still giving something. It may deter a contest to the will by the child, and save the parent’s estate the hassle and legal fees in litigating to uphold the validity of the will.

See Will Sleeth, How to Disinherit a Child: 5 Tips to do so Successfully, Lexology, June 22, 2018.

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


June 25, 2018 in Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)