Wills, Trusts & Estates Prof Blog

CLE on 2018 Tax Updates for Trusts and Estates

The National Business Institute is holding a webinar entitled, 2018 Tax Updates for Trusts and Estates , on Monday, December 17, 2018, at 9:00 a.m. to 12:15 p.m. Central. Provided below is a description of the event:

Program Description

The Latest Information and Tools to Minimize Clients' Tax Burdens

This incisive course will get you up to speed on the year's developments in estate planning and asset protection tax laws so you can make tactical decisions and provide cutting-edge representation. Let our esteemed faculty guide you through ongoing legislative developments, key laws and rulings so you can enhance your tax planning strategy and ensure compliant returns - register today!

• Review the latest developments in federal estate, gift, GST and income tax laws and regulations.
• Gain summaries of the most important court rulings of the year - and understand how they impact your practice.
• Get ahead of the game: discover how you can prepare yourself for changes that are just on the horizon.

Who Should Attend

This essential update is for attorneys. Accountants, tax professionals, wealth managers, trust administrators/officers and paralegals will also benefit.

Course Content

1. TCJA Update: Unpacking Its Many Practical Implications
2. IRS Tax Forms and Procedures Updates
3. Current IRS Guidance and Enforcement Initiatives
4. Federal and State Case Rulings to Keep an Eye on
5. Looking Ahead

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 3.00 -  AK
CLE 3.00 -  AL
CLE 3.00 -  AR
CLE 3.00 -  AZ
CLE 3.00 -  CA
CLE 4.00 -  CO
CLE 3.00 -  CT
CLE 3.00 -  DE
CLE 3.50 -  FL*
CLE 3.00 -  GA
CLE 3.00 -  HI
CLE 3.00 -  IA
CLE 3.00 -  ID
CLE 3.00 -  IL
CLE 3.00 -  IN
CLE 3.50 -  KS
CLE 3.00 -  KY
CLE 3.00 -  LA
CLE 3.00 -  ME
CLE 3.00 -  MN
CLE 3.60 -  MO
CLE 3.00 -  MP
CLE 3.00 -  MS
CLE 3.00 -  MT
CLE 3.00 -  NC
CLE 3.00 -  ND
CLE 3.00 -  NE
CLE 3.00 -  NH
CLE 3.60 -  NJ
CLE 3.00 -  NM
CLE 3.00 -  NV
CLE 3.50 -  NY*
CLE 3.00 -  OH
CLE 3.50 -  OK
CLE 3.00 -  OR
CLE 3.00 -  PA
CLE 3.50 -  RI
CLE 3.00 -  SC
CLE 3.00 -  TN
CLE 3.00 -  TX*
CLE 3.00 -  UT
CLE 3.00 -  VA
CLE 3.00 -  VT
CLE 3.00 -  WA
CLE 3.50 -  WI
CLE 3.60 -  WV
CLE 3.00 -  WY

Continuing Professional Education for Accountants

Credit Hrs State
CPE for Accountants 3.50 -  AZ
CPE for Accountants 3.50 -  NY*
CPE for Accountants 3.50 -  WA
CPE for Accountants 3.00 -  WI

 * denotes specialty credits

Article on Exonerated but Still Confined: Slayer Rules Present Extra Obstacles to Criminally Exonerated Individuals

Paige Foster recently published a Comment entitled, Exonerated but Still Confined: Slayer Rules Present Extra Obstacles to Criminally Exonerated Individuals, 10 Tex. Tech Est. Plan. & Cmty. Prop. L. J. 351-374 (Summer 2018). Provided below is an abstract of the Comment:

    In the early morning of June 5, 2005, Noura Jackson frantically called 911 to report that her mother, Jennifer, had been brutally murdered in her Memphis home. Four years later, a court convicted Noura of second-degree murder in connection with her mother's murder. In the interim of her mother's murder and her conviction, Noura's aunts and uncles sued her under Tennessee's "slayer statute" to prevent Noura from receiving her mother's $1.5 million estate. Noura was Jennifer's only child, and Noura's father had died years earlier, so Noura was entitled to the estate. Under Tennessee law, an interested party must show by a preponderance of the evidence that the "individual...feloniously and intentionally kill[ed] the decedent." A preponderance of the evidence standard requires the finder of fact to determine it is more likely than not that a fact is true.

    Tennessee law does not require a conviction to invoke the state's slayer statute, but Noura's second-degree murder conviction helped the relatives' case because it conclusively determined that she, in fact, killed her mother.

    In August of 2014, after spending nine years in prison, the Tennessee Supreme Court reversed Noura's conviction. Evidence of prosecutorial misconduct prompted a re-examination of her case, and Noura was exonerated of her mother's murder. After release from prison, Noura sued her family to recover some of the estate she lost during her murder trial. The parties settled in August 2017 for an undisclosed amount.

    This comment will address the hypothetical legal consequences exonerees face after release from prison but having lost their inheritances through civil suits. Often, the exonerees must sue the same families they want to re-connect with after prison. Many state compensation statutes for exonerees contain gaps and shortcomings and vary vastly from state to state. The first section of this comment with address the goals of the Innocence Project and the relief it provides for the wrongfully convicted. This section with specifically address exonerations for murder and what generally happens to property after incarceration. Next, an analysis of slayer statutes and requisite case law will demonstrate how each state addresses people who murder for inheritance. The wording of the statutes reflect a particular policy standpoint either in favor or against forfeiture of property. Each state approaches the treatment of slayers differently, including outright forfeiture, staying the proceeding, or prohibition of forfeiture altogether.  Some states provide for a constructive trust remedy rather than a slayer statute. Next, this comment will address the overlap of criminal exonerations and slayer statutes and the inevitable gaps that form when someone falls into both categories. Finally, five solutions provide alternative options for exoneree-beneficiaries.

Why Wealthy People Give to Charity During Life, but Not so Often at Death

The Urban Institute's recent study found that the vast majority of ultra-wealthy people donate to charity during their lifetimes rather than making a charitable donation at death. But those that choose to donate after death usually contribute a larger amount than they did in previous years.

The study of predates the the "Giving Pledge," which consists of 200 of the world's wealthiest individuals with hopes that they will donate the majority of their wealth to charity. Researchers used  estate tax returns matched to income tax returns to analyze charitable giving by wealthy individuals at the time of their death compared with giving over their last five years of life. The sample comprised people with wealth ranging from $2 million to well upward of $100 million.

The analysis showed that most top wealth holders, no matter their marital status, were much likelier to give during their last years of life than at death. One explanation may be that health concerns are a top priority for high worth individuals, and another explanation could be that taxpayers can quickly consume any income-tax charitable deduction by giving away modest shares of their wealth.

Urban Institute said that however one rates the above explanations, the analysis shows that many people pay too little attention to the potential charitable opportunities their wealth provides.

See Michael Fischer, Why Wealthy People Give to Charity During Life, but Not so Often at Death, Think Advisor, September 24, 2018.

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

Cahill Case Sheds Light on Tax Court’s View of Intergenerational Split Dollar Agreements

An intergenerational split dollar agreement is intended to allow a grantor to make large premium payments on life insurance policies benefiting the grantor’s children without incurring excessive transfer taxes. It usually involves forming an irrevocable life insurance trust by the grantor, which then will purchases life insurance policies on the grantor's children. An agreement that involves the grantor paying premiums in return for the grantor's estate being repaid after the insured's death is struck, but the reality is that the insured (the child/children) will not likely pass away anytime soon.

The value of the receivable payment is then at a substantial discount, and the Internal Revenue Service becomes highly suspicious. In a prior case, the Tax Court upheld the taxpayer’s argument that the intergenerational split dollar agreement should be taxed under the economic benefit regime as opposed to the loan regime—resulting in the taxpayer being permitted to claim the larger discount afforded to the former regime.

In the current case of Estate of Richard Cahill, the Tax Court denied the taxpayer partial summary judgement while upholding the overall economic benefit regime. The Tax Court agreed with the Internal Revenue Service that rights were retained by the decedent in the context of Code Sections 2036 and 2038 and that the irrevocable life insurance trust's right to veto should be disregarded for valuation purposes under Code Section 2703. It also found that the agreements did not fit the definition of a "bona fide business arrangement."

See Michelle L. "Shelly" Harris, Cahill Case Sheds Light on Tax Court’s View of Intergenerational Split Dollar Agreements, Williams and Mullen, September 24, 2018.

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

Article on Standing and Error Correction in Probate

R. Kevin Spencer recently published an Article entitled, Standing and Error Correction in Probate, 10 Tex. Tech Est. Plan. & Cmty. Prop. L. J. 299-350 (Summer 2018). Provided below is an abstract of the Article.

Estate and guardianship proceeding are in rem and decisions are binding on the world, often without personal service or direct notice. Error correction in probate is essential because incorrect decisions can adversely affect administrations for years in the future. The Texas state legislature recognizes the importance of inheritance and guardianship and progressively expanded probate jurisdiction, including granting statutory probate courts exclusive jurisdiction over probate matters, and concurrent jurisdiction with district courts over trust and other matters. Statutory probate courts even have the power to transfer cases in other courts in other courts around the state to their own court when the proceeding affects a pending administration - the power affectionately known by practitioners as the "reach-out-and-grab" power. The legislature and courts recognize the difference between a "normal" lawsuit and an ongoing, continuing estate or guardianship administration and the need to accommodate the ability to correct errors well beyond the typical thirty days after an order is signed. The first analysis in every probate proceeding is to determine the parties who have standing in an estate. Persons with standing, i.e. "interest persons" may directly attack orders and judgement for up to two years after entry. Courts have dispensed with the "one-final judgement" rule and instead choose how and when judgements or orders in probate become final and subject to direct appeal to appellate courts. While normal finality and appellate rules apply, direct attack error correction procedures in probate are also allowed beyond the normal appellate timetables. Because probate proceedings can have such a profound impact on peoples' lives and property, judges presiding over probate matters carry a high burden to follow the required procedure, get their decisions right, and afforded a "do-over," if the error standards are met.

Book on The Advisor's Guide to Disability Insurance

Tamra L. Barraclough, Erik T. Reynolds, & R. David Watros recently published a book entitled, The Advisor's Guide to Disability Insurance, ABA Book Publishing (2018).Provided below is a summary of the book.

It may not be the first thing that comes to mind, but disability insurance may represent the most important financial product that individuals need during their working years. Generating an income from work is the foundation for all financial planning, allowing individuals to maintain their lifestyle as well as plan for future retirement. The Advisor’s Guide to Disability Insurance is a clear, concise, and approachable guide that helps attorneys and other financial professionals understand the opportunities and benefits of disability insurance for their clients as well as for themselves and their families.

This book presents information on disability insurance with a long-term duration until retirement, beginning with the basics and an overview of the different types of disability. Subsequent chapters address key topics in greater depth:

• Individual and group long-term disability
• Integrated group and individual plans
• Underwriting the disability risk
• Filing a claim under different policy types
• Employment/shareholder agreements
• Evaluating and selecting a disability insurance carrier
• Regulations and relevant benefit laws
• Income protection planning and how it will evolve in the future
• The role the advisor plays in planning
• Sample planning situations

Don’t Forget About Digital Assets in Your Estate Plan [Canada]

A recent poll found that only half of Canadians have wills and that only one-third of those wills are current. Because of these frightening statistics, it is even less likely that they have included their all-too-important digital assets.

The amount of digital assets that can be attributed to a person can be vast, and maybe larger than they believe because some of them may not be seen as normal "assets." Reward member points, social media log-in information, and email accounts are are designated as digital assets. Then there is the daunting of question on how to distribute them after the owner passes away. If you fail to include explicit instructions it can lead to headaches for your executor or loved ones later on.

Barry Corbin, an estate lawyer with Corbin Estates Law Professional Corp. in Toronto, says lawyers drawing up wills and powers of attorney should encourage clients to take stock of their digital assets and who they want to know about them. Many of these assets are treated differently than other items in a person's estate because they may lack monetary value, but be rich in sentimental value, such as digital family pictures on Facebook or Instagram.

Canadians are sitting on about $16-billion of unredeemed loyalty points, according to Bond Brand Loyalty. Television host and chef Anthony Bourdain brought bequeathing frequent flyer miles to the limelight when he left his considerable collections of miles to his estranged wife earlier this year.

See Brenda Bouw, Don’t Forget About Digital Assets in Your Estate Plan, The Globe and Mail, September 24, 2018.

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

Podcast: How to Sell a Law Practice

What happens when a lawyer retires?  What are the considerations for selling a law practice?

To learn more about this topic, listen to this ACTEC Trust & Estate Podcast featuring ACTEC Fellow Lou Nostro of Miami, Florida entitled How to Sell a Law Practice.

CLE on New Tax Basis Reporting Requirements in Estate Administration

The National Business Institute is holding a teleconference entitled, New Tax Basis Reporting Requirements in Estate Administration, on Wednesday, November 7, 2018, at 11:00 a.m. - 12:30 pm. Central. Provided below is a description of the event:

Program Description

Are You Following the New Tax Rules?

The way tax basis of assets is reported during estate administration has changed. Are you confident in your knowledge of the basis consistency rules to ensure every estate is administered correctly? Clarify the new rules and get practical tax-saving tips from experienced faculty - register today!

• Compare the new basis consistency rules and the old law.
• Adopt your tax planning and reporting practices to reflect the new requirements.
• Determine what asset valuation method to use for basis reporting purposes.

Who Should Attend

This tax law update is designed for attorneys. It will also benefit accountants and CPAs, estate planners, trust officers, and paralegals.

Course Content

• New Basis Consistency Rules vs. the Old Law
• What Executors/Personal Representatives Need to Know NOW
• New Information That Must be Included
• Valuation of the Assets for Basis Reporting Purposes
• Reporting to Beneficiaries

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 1.50 -  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 1.50 -  WI

Financial Planners – Financial Planners: 1.50

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

* denotes specialty credits

Podcast: Ethical Considerations in Representing Clients in Connection With Family Businesses

Who is the client in the context of representing clients in connection with the family business?

To learn more about this topic, listen to the latest ACTEC Trust & Estate Talk podcast with ACTEC Fellows John Rogers of Los Angeles and Lee Osborne of Roanoke, Virginia entitled Ethical Considerations in Representing Clients in Connection With Family Businesses.