Wills, Trusts & Estates Prof Blog

Article on The Future of Clean Hands [UK]

Nicholas McBride recently published an Article entitled, The Future of Clean Hands, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

This paper introduces the concept of a supererogatory remedy (a remedy which no one has a right to, and which it is not necessary to award) and seeks to argue that the equitable defence of clean hands has a distinctive role to play in determining whether such a remedy will be granted. As such, the defence of clean hands can be distinguished from the defence of illegality, with which it is often confused.

CLE on Inherited IRAs in Estate Planning

The National Business Institute is holding a teleconference entitled, Inherited IRAs in Estate Planning, on Wednesday, November 28, 2018 at 9:00 a.m. to 10:30 a.m. Central. Provided below is a description of the event.

Program Description

Make the Best Use of Inherited IRAs

Clarify IRA rollover and minimum distribution rules to help your clients maximize the benefit of inherited IRAs after the Clark decision. Get practical solutions to new and common problems and learn why and how to draft an IRA trust. Register today!

• Clarify required minimum distribution rules and find the best ways to comply.
• Determine whether an IRA trust is a wise choice for your clients.
• Find out how to resolve multiple beneficiary challenges.

Who Should Attend

This legal guide is designed for attorneys. It will also benefit accountants, CPAs, trust officers, and paralegals looking to increase their knowledge of IRA rollover rules.

Course Content

• SCOTUS Clark v. Rameker Decision on Inherited IRAs
• Implications for Inherited IRAs in Non-Bankruptcy Cases
• Rollover Rules and Tactics
• Recent IRA Guidance on Inherited IRAs
• IRA Required Minimum Distribution Rules
• Multiple Beneficiaries: Problems and Solutions
• IRA Trusts

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 1.50 -  AK
CLE 1.50 -  AL
CLE 1.50 -  AR
CLE 1.50 -  AZ
CLE 1.50 -  CA
CLE 2.00 -  CO
CLE 1.50 -  CT
CLE 1.50 -  DE
CLE 2.00 -  FL
CLE 1.50 -  GA
CLE 1.50 -  HI
CLE 1.50 -  IA
CLE 1.50 -  ID
CLE 1.50 -  IL
CLE 1.50 -  IN
CLE 1.50 -  KS
CLE 1.50 -  KY
CLE 1.50 -  LA
CLE 1.50 -  ME
CLE 1.50 -  MN
CLE 1.80 -  MO
CLE 1.50 -  MP
CLE 1.50 -  MS
CLE 1.50 -  MT
CLE 1.50 -  NC*
CLE 1.50 -  ND
CLE 1.50 -  NE
CLE 1.50 -  NH
CLE 1.80 -  NJ
CLE 1.50 -  NM
CLE 1.50 -  NV
CLE 1.50 -  NY*
CLE 1.50 -  OH
CLE 2.00 -  OK
CLE 1.50 -  OR
CLE 1.50 -  PA
CLE 1.50 -  RI
CLE 1.50 -  SC
CLE 1.50 -  TN
CLE 1.50 -  TX*
CLE 1.50 -  UT
CLE 1.50 -  VA
CLE 1.50 -  VT
CLE 1.50 -  WA
CLE 1.50 -  WI
CLE 1.80 -  WV
CLE 1.50 -  WY

Continuing Professional Education for Accountants

Credit Hrs State
CPE for Accountants 1.50 -  AZ
CPE for Accountants 1.50 -  NY*
CPE for Accountants 1.50 -  WA
CPE for Accountants 1.00 -  WI

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 1.50 *

* denotes specialty credits

South Africa: What’s Yours is Mine and What’s Mine is Mine

In Naidoo v Discovery Life Limited & others the Supreme Court of Appeal was faced with the main task of determining whether a risk-only policy with a beneficiary clause constitutes an asset in the joint-estate. This case deals with two areas of law, insurance and matrimonial law, and illustrates the interplay between the two.

The concept of marriage in community of property is that spouses are in a "universal economic" partnership and all their assets and liabilities are combined in a joint estate in which they hold equal shares, no matter their financial contributions to the joint estate.

The appellant in the case had been married to the deceased, who had purchased a joint life assurance policy by the first respondent. The material terms of the policy included: the deceased was the owner of the policy, that he was also the principal life insured, he could at any time direct Discovery in writing to change the nominated beneficiary and that he could also, at any time, revoke the appointment of a beneficiary. Originally the appellant had been named as beneficiary, but later changed it to that of his parents, brother and sister as the new beneficiaries.

The appellant's contention was that the rights and obligations under the policy vested in the joint estate, including the right to designate beneficiaries of the policy. Thus, the deceased should not have been able to alter the beneficiaries without her written approval. The court found that a risk-only life insurance policy taken out on the life of the policyholder is not an asset and is thus not an asset in the joint estate and the right to nominate a beneficiary or to change a nominated beneficiary does not amount to an alienation of a right to the asset in the joint estate.

See Hogan Levell, South Africa: What’s Yours is Mine and What’s Mine is Mine, Lexology, September 20, 2018.

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

There's Still Time to Live Like a Rockefeller

Another Rockefeller's estate is coming up for auction, and famous auction house Christie's New York is hoping to cash in again from the allure of the prestigious American family. Starting on November 13, the auction house will sell hundreds of pieces of furniture, art, decorations, and jewelry from Nelson and Happy Rockefeller’s estate. Nelson was a former vice president and governor of New York who passed away in 1979 and his widow, Happy, died in 2015.

The 450+ items have been divided to be sold in three segments: art from the couple’s Fifth Avenue apartment in the first, Happy's jewelry will be included in the auction house's "Magnificent Jewels" auction December 4, and the remainder of the items - including furniture - will be integrated into Sotheby’s American Week auctions in January 2019.

Estimated total of the items are in "excess of $8 million," which some may deem modest. However, because previous Rockefeller items sold at Christie's earlier this year for more than four times their estimated value, the auction house is undoubtedly optimistic. The works that did make it onto the auction block are varied, to say the least. There are 18 pieces of jewelry, about 14 pieces of 18th century Meissen porcelain, million-dollar artworks, and some lots that are estimated as low as $500.

See James Tarmy, There's Still Time to Live Like a Rockefeller, Financial Advisor, September 28, 2o18.

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

 

What 'Succession' and Sumner Redstone can Teach us About Planning Ahead for Senior Care

Former executive chairman of  Viaciom's Sumner Redstone,’s story was a key influence on the HBO hit series Succession, riveting the country with the litigious financial power struggle that has embroiled his family. Though the majority of clients may not have to worry about billions of dollars in assets, disagreements over money can and often do prevent families from making the appropriate choices about care.

Medicare, the primary insurer for 55 million older adults and people with disabilities, does not typically pay for long-term care services including nursing homes and in-home care. The majority of people don't have the financial resources to pay for the staggering costs senior care, but make "too much" to qualify for Medicaid assistance. If you are among the “in-betweeners,” you’ll need to be resourceful because care is expensive.

Baby boomers are turning 65 at an amazing rate of 10,000 per day, and 70% of Americans over that age will need long-term care at some point in their lives. Planning ahead for this type of care is becoming increasingly vital, especially if you would rather age in-place rather than in a nursing home. Because in-home caregivers average $22 per days, many elderly citizens depend on care from family members, and the majority of them are dipping into their own pockets to do so.

See Jody Gastfriend, What 'Succession' and Sumner Redstone can Teach us About Planning Ahead for Senior Care, Forbes, September 27, 2018.

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

Article on Time is Ticking for Deathbed Tax Planning: An Analysis of its Effectiveness

Alexander Evelson recently published an Article entitled, Time is Ticking for Deathbed Tax Planning: An Analysis of its Effectiveness, 10 Tex. Tech Est. Plan. & Cmty. Prop. L. J. 207-224 (Summer 2018). Provided below is an abstract of the Article:

Death - no matter who it happens to - always results in a tumultuous and awful situation. One minute, an individual could be laughing with a loved one, and the next, they are gone. In addition to the costs of funeral or similar arrangements and other associated costs, such as caskets and tombstones, in recent years, deathbed taxes have become more prominent. A person's estate is still subject to taxation, even when the person passes. Ordinarily, deathbed taxation should be a relatively smooth process. However, complications may arise when there are many different players and interested parties involved, such as children from other marriages.

This Article will address what constitutes deathbed planning in light of recent decisions, such as Estate of Powell. Additionally, it will provide the reader with the estate planning steps one might want to follow at the end of his or her life, and the person not previously planned for the future of his or her heirs. The following is an insight into deathbed tax planning and what the process entails.

Navy Veteran Holds Garage Sale to Pay for Own Funeral

Willie Davis, a Navy veteran living in Cambria County, Pennsylvania, that is suffering from stage 4 squamous cell carcinoma has found a way to pay for his last expenses: a garage sale of the majority of his belongings. His hope is to be able to be buried next to his parents in Culpepper, Virginia, which would approximately cost $15,000

Two men that visited the garage sale, Ed Sheets and David Dunkleberger, were saddened by the idea that Davis was selling his items just to fund his funeral. They took it upon themselves to help out the aging veteran by starting a GoFundMe page. "It broke your heart, hearing the story, and we just decided we had to do something to try and help him, try to make his life a little bit easier," Sheets said.

The GoFundMe page originally had a goal $5,000. Since then it has been increased to $40,000 after the initial objective was passed.

See Stephen Source, Navy Veteran, 66, With Terminal Cancer Holds Yard Sales to Raise Money for Funeral, Fox News, September 26, 2018.

 

Retirement Planning: Should an FLP be Dissolved Due to Changes in Estate Taxes?

The increased estate tax exemption of 2018 to $11.8 million for married couples has caused the estimated number of estates that are will be liable for the tax to plummet to 1,500 from 5,000 in 2017, according to Forbes’ Ashlea Ebeling, sourcing the Joint Committee on Taxation. So what about wealthy families that may now be exempted from paying estate taxes that previously created a family limited partnership, or FLP?

It made sense to gift certain assets or property to FLPs years ago so that the tax burden to the estate would be lessened, but now the administrative costs and duties could seem too tedious. “This is a complicated area of the law, not for a practitioner new to FLPs,” explained tax attorney Marissa Dungey, partner with Withers Bergman LLP. “There are pitfalls if you move forward without proper advice.”

It’s not hard to dissolve an FLP. What’s hard is to consider all the consequences and plan for alternatives.

See Julie Jason, Retirement Planning: Should an FLP be Dissolved Due to Changes in Estate Taxes?, Tuscon.com, September 20, 2018.

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

Article on U.S. Conflict of Laws Involving International Estates and Marital Property: A Critical Analysis of Estate of Charania v. Shulman

Jeffrey Schoenblum recently published an Article entitled, U.S. Conflict of Laws Involving International Estates and Marital Property: A Critical Analysis of Estate of Charania v. Shulman, 103 Iowa L. Rev. 2119 (2018). Provided below is an abstract of the Article:

A number of states, as well as foreign jurisdictions, impose a community property regime. Under this regime, regardless of the title to property, each spouse is deemed to own a fifty percent interest in assets. When a spouse dies owning property in his own name, the tendency is to treat him as the owner of the asset in full for purposes of the power to dispose of the asset and for transfer tax purposes. However, if the property is community property, then the decedent’s power to dispose of it, and the portion of the property subject to taxation, is only fifty percent. In light of the foregoing, a critical conflict of laws question must be confronted : Which jurisdiction’s laws should determine whether the property is community property? In the United States, the conflict of laws issue is not too problematic because all the states essentially follow the same choice of law principle in deciding which state’s law is determinative. However, when foreign jurisdictions are involved, the question of which law determines spousal property rights can become incredibly complicated. In large part, this is because foreign jurisdictions may apply very different conflict of laws principles than those adhered to in the United States when it comes to the question of marital property rights. Compounding the problem is the dearth of case law addressing the matter. A 2010 decision by the First Circuit Court of Appeals, Estate of Charania v. Shulman, does address the matter. However, it does so in an opinion that is noteworthy for its striking analytical flaws. This Article delves into the opinion, which is starting to garner ill -deserved precedential value. The Article reveals the opinion’s deep flaws and proposes a far more restrained and workable approach for mediating the different conflict of laws approaches that are often at play when an international estate is at issue.

Arab Women Left in Inheritance Trap by Delayed Reforms

Tunisia’s president, Beji Caid Sebsi, has backed culturally controversial legislation that would allow Arab women to have equal inheritance rights, completely eroding Islamic law in the area. The Koran is very specific, stating that daughters are only allowed to inherit half of what their brothers receive. If the law passed it would be the first of its kind in the Arab world.

Muslim clerics decry the proposed legislation as an attack on Islam, and they are backed by the country's conservative party, Nahda. “No political party can make this gamble, particularly with elections next year.” The debate now has engulfed other Arab countries and has underlined the difficulty of upending a centuries-old status quo that shapes the contours of power and wealth across the Arab world.

But for millions of Arab women from Saudi Arabia to Morocco, there is a more modest goal: getting the limited assets to which they are currently entitled. Many women, many of them from rural areas, are denied their legal share of inherited assets, especially land. Male relatives can make it expensive and troublesome for daughters and sisters to receive any portion of their inheritances.

Inheritance laws are part of a broader web of legal and social barriers that perpetuate gender inequality in the Arab world. In many Arab countries only 1 in 4 women are employed or looking for work, and close to that number of Middle Eastern women have bank accounts.

See Heba Saleh, Arab Women Left in Inheritance Trap by Delayed Reforms, Financial Times, September 27, 2018.

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