Wills, Trusts & Estates Prof Blog

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

Monday, September 24, 2018

States Continue to Bury Testimony From the Grave, but Many Dead Man’s Statutes Remain Alive and Well

DeadmenWisconsin became the thirtieth state to repeal their state's form of the dead man's statute. The term “dead man’s statute” is defined generally as “[a] law prohibiting the admission of a decedent’s statement in certain circumstances, as when an opposing party or witness seeks to use the statement to support a claim against the decedent’s estate.”

Many states that continue to uphold similar statutes may have broader definitions and could potentially bar any evidence for any matter that occurred before the death of a party. Proponents of the statutes claim that they defend the rights of the deceased as they cannot defend themselves, but opponents argue that they ignore the rights of the living.

Thirty states, including California, Florida, Alaska, Delaware, Nevada and South Dakota, do not currently have dead man’s statutes. Some of these states have special hearsay rules that allow a court to exclude out-of-court statements made by a decedent when circumstances indicate that the statements are untrustworthy. 20 states and the District of Columbia retain a form of the dead man's statute, and all of them are subject to one or more legislatively created or judicially recognized exceptions.

See Monica S. Asher & Joseph V. Viviano, States Continue to Bury Testimony From the Grave, but Many Dead Man’s Statutes Remain Alive and Well, MWE.com, September 20, 2018.

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

September 24, 2018 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Article on Wayfair: Substantial Nexus and Undue Burden

WayfairAdam B. Thimmesch, Darien Shanske, & David Gamage recently published an Article entitled, Wayfair: Substantial Nexus and Undue Burden, Tax Law: Tax Law & Policy eJournal (2018). Provided below is an abstract of the Article.

This is the first of a series of essays wherein we analyze the U.S. Supreme Court’s decision in South Dakota v. Wayfair. In this essay, we tackle some of the more immediate interpretive questions raised by the Wayfair opinion, such as how a state should approach substantial nexus. As part of our analysis, we offer advice to state governments. Specifically, we recommend that states take note of the features of South Dakota’s law that appealed to the Court and replicate or improve on these to the extent possible. We advise states to consider simplifying their sales tax systems (and potentially joining the Streamlined Sales and Use Tax Agreement if they have not already done so), offering full and adequate reimbursement for compliance costs (especially for smaller vendors), and offering free compliance software and immunity for vendors who properly rely on such software.

September 24, 2018 in Articles, Estate Planning - Generally, New Cases | Permalink | Comments (0)

What Every Spouse Needs to Know About Inheriting IRAs

IraInheriting an individual retirement account (IRA) can have some unforeseen pitfalls, and a few of the potential mistakes (and steps to avoid them) depend on if the beneficiary is a surviving spouse or another type of beneficiary. There are several solutions to this problem, depending on the tax or retirement goals of the individual inheriting the IRA.

An often unattractive option from a tax planning perspective, a person can distribute all of the IRA assets within five years of the original IRA owner’s death. The distributions will be included in gross income and taxed in the same way they would have been to the original owner, but if there is a need for cash, it needs to be considered.

A more appealing option for some is that of establishing an inherited IRA. This is accomplished by changing the legal name of the IRA and having the title include the name of the original owner, the fact that the original owner is deceased, "for the benefit of," and the name of the inherited owner. Each custodian may have its own particular wording, so be aware. For non-spousal beneficiaries, the required minimum distributions (RMDs) must begin by December 31 of the year following the original IRA owner’s death. For spouses, it can wait until the deceased spouse would have turned 70 1/2, or the surviving spouse can use their life expectancy.

Surviving spouses have the option of using the spousal rollover. In essence the spouse can distribute all of the assets of the deceased spouse's IRA into their own IRA or a new IRA for that purpose. The IRA is treated as if the surviving spouse was the original owner.

See Bob Carlson, What Every Spouse Needs to Know About Inheriting IRAs, Forbes, September 18, 2018.

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

September 24, 2018 in Estate Planning - Generally, Income Tax, Non-Probate Assets | Permalink | Comments (0)

Sunday, September 23, 2018

5 Ways to Know you Need a Guardianship for Mom (or Dad)

GuardianshipMany adult children see that once their parents reach a certain age, their roles may reverse. The child may be taking care of the parent more and more. But when does the child know that it is time to take the drastic step of establishing a guardianship for their mom or dad? Here are 5 ways that may indicate their your beloved parent may need a court's intervention to protect them and their assets.

  1. Refusal to sign a power of attorney.
    • If your parent either refuses to sign anything in front of them, or you have the frightening feeling that they would sign anything in front of them, a guardianship may be necessary.
  2. Real property or investments have to be sold.
    • Depending on the laws of your state, you may have to have a guardian appointed in order to sell their home or other investments if you have been appointed with power of attorney.
  3. Disagreement over nursing home.
    • If you feel that your parent would be healthier (and safer) in a nursing home and they refused, you may need to petition to be named as guardian.
  4. Medical intervention beyond the health care proxy.
    • If your parent cannot give informed consent anymore because of dementia or Alzheimer's, being appointed as a guardian can give you the authority to authorize medical treatment and certain medications.
  5. Decision-making is compromised in some areas.
    • A limited guardianship may be the best course of action if your parent retains the ability to make decisions in certain areas of their life but not in others, such as financial or investment decisions.

See Christine Fletcher, 5 Ways to Know you Need a Guardianship for Mom (or Dad), Forbes, September 13, 2018.

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

September 23, 2018 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Guardianship | Permalink | Comments (0)

Article on Arbitration Contracts Between Trustees and Their Investment Agents: a Warning Label

TrusteesCharles E. Rounds, Jr. recently published an Article entitled, Arbitration Contracts Between Trustees and Their Investment Agents: a Warning Label, 93 N.D. L. Rev. 263-275 (2018). Provided below is an abstract for the Article.

This Article considers whether arbitration clauses in contracts between trustees and their investment managers are binding on the trust beneficiares.Nowadays, it is default law that a trustee may delegate investment discretion to an investment manager (IM); provided the IM has been prudently selected by the trustee and the IM’s activities are prudently monitored on an ongoing basis by the trustee. The core relationship is one of agency, the trustee being the principal and the IM being the agent. The two, as well, are in a contractual relationship incident to the agency. The IM, however, also owes fiduciary duties that run directly to the trust beneficiaries, though the beneficiaries are parties neither to the agency nor the contract. These duties are imposed separately by equity. Assume the beneficiaries bring an action directly against the IM for breaching one or more of his or her equitable duties to them. Should the trust beneficiaries be bound at law by the arbitration clause in the contract between the trustee and the IM? The Article concludes that they should not be; but if they are then the trustee could well have been in breach of his or her equitable duty of undivided loyalty to the beneficiaries by having acquiesced to the clause’s insertion in the first place. And as to the IM, he or she, under general equitable principles, may well have a fiduciary duty to the beneficiaries to waive his or her rights at law to have the dispute arbitrated, at least to the extent that it is in the interests of the beneficiaries that he or she does so.

September 23, 2018 in Articles, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Saturday, September 22, 2018

CLE on Estate Planning for Farmers and Ranchers

CLEThe National Business Institute is holding a conference entitled, Estate Planning for Farmers and Ranchers, on Wednesday, November 14, 2018, at the Hilton Garden Inn North Little Rock in North Little Rock, Arkansas. Provided below is a description of the event:

Program Description

How to Protect Farm Assets and Transfer Them to Heirs

Estate planning for farms and ranches requires specialized knowledge and tools to ensure the best client representation. This legal course will give you the knowledge to preserve the farms and other assets your clients have worked their entire lives to acquire and build. Explore the challenges and opportunities unique to estate planning for farmers to help make good sense of difficult legal and financial policies. Learn what you need to know about estate taxes, wills, trusts, government programs, and other key elements. Help your clients take care of their estate planning needs and their family's future - register today!

  • Take full advantage of government farm programs and valuation discounts.
  • Explore the deciding factors in choosing the right business entity when planning ownership transfer.
  • Analyze the liquidity of farm assets and augment each plan accordingly.
  • Employ all available tools for transferring assets and preserving wealth.
  • Tackle harvest yield predictions and other unique factors of farm asset valuation.
  • Recognize when giving away the farm is the wisest financial decision and how to do it properly.

Who Should Attend

This basic-to-intermediate level seminar is designed for:

  • Attorneys
  • Estate and Financial Planners
  • Accountants and CPAs
  • Tax Preparers
  • Trust Officers
  • Paralegals

Course Content

  1. Business Structure Choice and Conversion - Including Sample Documents
  2. Income and Gift Tax Planning
  3. Medicaid (Long-Term) Planning for Farmers and Ranchers
  4. Planning for a Full or Partial Outright Sale or Gift
  5. Agricultural Use Valuation
  6. Planning for a Gradual Transfer Within the Family
  7. Transfers Upon Death: Key Estate Administration Concerns

Continuing Education Credit

Continuing Legal Education – CLE: 6.00

Financial Planners – Financial Planners: 7.00

National Association of State Boards of Accountancy – CPE for Accountants/NASBA: 7.00 *

* denotes specialty credits

September 22, 2018 in Conferences & CLE, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Trusts, Wills | Permalink | Comments (0)

Giant Firm Finds Proof is in the Principles

BibleRonald Blue Trust, a former registered investment advisor, converted to a trust company after joining Thrivent Trust Company, owned by Thrivent Financial, in 2017. Ronald Blue is based in Atlanta and has more than 8,000 clients, 13 office locations, and $8 billion in assets under advisement, and is based on socially responsible investment principles. The company steers away from tobacco, alcohol and gambling investments.

“We envision a world where Christians are more confident, content and living their God-given callings in service to one another, their churches and their communities,” according to Thrivent’s website. The firm’s principles-based framework has proven to be successful in helping clients achieve their goals over the long term, said Brian McClard, director of Ronald Blue Trust’s Investment Strategy Group.

The firm’s principle of uncertainty states that the future is uncertain; therefore planning, saving and investing are inherently important. The principle is guided by the belief that God created humans with the tools necessary to steward the world’s limited resources. Ron Blue Trust has partnered with Church Law & Tax, a publication of Christian Today, to provide content for ChurchSalary, a tool developed as a result of the National Initiative to Address Economic Challenges Facing Pastoral Leaders — an initiative to improve faith leaders’ financial confidence.

See Jadah Riley, Giant Firm Finds Proof is in the Principles, Financial Advisor, September 6, 2018.

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

September 22, 2018 in Current Affairs, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Friday, September 21, 2018

Frank Lloyd Wright Estate Owner Defends Weddings, Seeks Tax Break [California]

FranklloydThe homeowner of a Frank Lloyd Wright estate defended holding weddings on the property, calling the estate's neighbors' complaints "baseless." Gerald Shmavonian said in an interview that "there have been “no citations for illegal parking, no DUIs, no fights, no loud quarrels, no excessive noise citations.” He added there have been no traffic accidents and no injuries on the site.

But the Orinda Official Planning Director Drummond Buckley said Shmavonian was still in violation of the city’s zoning ordinance. Orinda bans commercial ventures in residential neighborhoods. The owner claims that he did not start hosting weddings at the estate until after the estate was featured in a Vogue magazine article, naming the house on its short list of unique, unforgettable wedding venues. "I didn’t even hold weddings at that time," he said in regards to the article.

Shmavonian also said he is seeking the $30,000 tax break through a state law called the Mills Act that Orinda denied him in 2015. The Mills Act was enacted in 1972 by the state to enable local jurisdictions “to enter into contracts with property owners of qualified historic properties who actively participate in the restoration and maintenance of their historic properties while receiving property tax relief.” He said that to maintain the property, which is on the National Register of Historic Places, the costs reach "tens of thousands" each year. But the city denied Shmavonian's petition, worried about the lost of revenue to the city.

See Jon Kawamoto, Frank Lloyd Wright Estate Owner Defends Weddings, Seeks Tax Break from Orinda, East Bay Times, September 14, 2018.

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

September 21, 2018 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Burt Reynolds Left His Only Son Out of His Will and Created a Trust for Him Instead

BurtquinnBurt Reynolds included a statement in his will stating that his son, Quinn, will not be receiving anything from his will. It read that, when it came to his son, “I intentionally omit him from this, my Last Will and Testament, as I have provided for him during my lifetime in my Declaration of Trust.”

Reynolds died earlier this month at age 82. Quinton, born in 1988, was the adopted son of Reynolds and his ex-wife Loni Anderson. At the time of his death, Reynolds was reportedly worth $5 million.

The will, which was signed in 2011, appoints Reynolds’ niece Nancy Lee Brown Hess as the personal representative of Reynolds’ estate. Hess said in a statement, “My uncle was not just a movie icon; he was a generous, passionate and sensitive man who was dedicated to his family, friends, fans and acting students.” She said that his death was highly unexpected, and that Reynolds "was looking forward to working with Quentin Tarantino (in Once Upon a Time in Hollywood) and the amazing cast that was assembled.”

See Emily Zauzmer, Burt Reynolds Left His Only Son Out of His Will and Created a Trust for Him Instead, People, September 18, 2018.

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

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

September 21, 2018 in Current Events, Estate Planning - Generally, Film, Television, Trusts, Wills | Permalink | Comments (0)

Clients Who Lose a Spouse Require Both Empathy and Skill

Calla-liliesAccording to a new Merrill Lynch/Age Wave Study, nationwide 53% of widows did not financially prepare for when their spouse passed away. Dan Lash, a partner at Vienna, Va.-based VLP Financial Advisors, advised calculating the value of marital property within six months of a spouse’s death. “An appraisal will determine what the gain is and set a new cost basis in the event you sell the home five years later,” said Lash.

Another study from Merrill Lynch found that among widows, four-in-10 of them found widowhood as a trigger to begin working with a financial advisor. “They are in their 70s and 80s and single again for the first time in years,” said Tom Balcom, a financial advisor at 1650 Wealth Management based in Lauderdale by the Sea, Florida.

Unlike older clients that have never been married or perpetual bachelors, widows and widowers are in mourning for their loved one. “The danger is for the widow to be overwhelmed with grief and to allow finances to take a backseat, which makes decisions even tougher to deal with later,” said Lisa Margeson, head of retirement client experience and communications at Bank of America Merrill Lynch.

“Widowed clients are often unsure and scared because they don’t want to be taken advantage of,” said Cary Carbonaro, managing director of United Capital of New York and New Jersey and 2014 CFP Board Ambassador.

See Juliette Fairley, Clients Who Lose a Spouse Require Both Empathy and Skill, Financial Advisor, September 11, 2018.

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

 

September 21, 2018 in Current Affairs, Death Event Planning, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)