Wills, Trusts & Estates Prof Blog

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

Thursday, October 11, 2018

Avoid Probate Court: Head to Your Bank Instead [Texas]

BankProbate court is expensive and time intensive, and the majority of accounts have beneficiary designations that allow them to be transferred outside of probate. With a trust, more assets can be transferred outside of a courtroom. Financial institutions are called upon to help a customer determine what type of account to use and, after death of the customer, review legal documents and carry out the transfer instructions.

There are other tools that can be utilized to avoid a formal probate process, such as a small estates affidavit in Texas for estates that have less than $75,000 in assets (excluding the homestead). If there is a will and there are no unpaid debts or a need for administration, the will can be admitted to probate under a unique Texas proceeding known as a “muniment of title.” No administrator will be assigned and banks will be presented with a certified copy of of either a a small estates affidavit or an order admitting a will to probate as a muniment of title to pay out the funds in the accounts.

Power of attorney (POA) can also avoid the complex issue of a guardianship, and under a new state statute passed in 2017, POAs in Texas have expanded powers. Due to this, financial institutes also have a statutory obligations to report alleged fraud or abuse of the elderly to the proper authorities.

Employees of financial institutes are finding themselves in position to answer difficult questions and find harder solutions. They may find themselves in more of an advisor role. They may need to become more knowledgeable about statutory changes and new estate planning options, especially self-help tools, that are available to customers and train their personnel accordingly.

See David B. West, Avoid Probate Court: Head to Your Bank Instead, Lexology, October 4, 2018.

October 11, 2018 in Current Affairs, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, New Legislation, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Podcast: Data Scraping

ACTEC_FoundationData Scraping sounds like something painful that you would have to experience at the dentist.  It is actually the term for aggregating information that is available on the internet and using it for research and even for commercial purposes  Listen to the latest ACTEC Trust and Estate Talk podcast to hear ACTEC Fellow Mark Parthemer of Palm Beach, Florida, discuss this timely topic.

October 11, 2018 in Technology | Permalink | Comments (0)

Podcast: The Uniform Guardianship, Conservatorship, and Other Protective Arrangements Act

ACTEC_FoundationLearn a little bit about the Uniform Guardianship, Conservatorship, and Other Protective Arrangements Act from ACTEC Fellow Professor David English of Columbia, Missouri, the subject of this recent ACTEC Trust & Estate podcast.

October 11, 2018 in Guardianship | Permalink | Comments (0)

Book on Cases and Materials on Gratuitous Transfers, Wills, Trusts, Gifts, Future Interests, and Taxation

Book2Mark L. Asher and Grayson MP McCouch recently published a Book entitled, Cases and Materials on Gratuitous Transfers, Wills, Trusts, Gifts, Future Interests, and Taxation (West Academic Publishing, 7th ed., 2018). Provided below is a brief summary of the book.

The new edition of Gratuitous Transfers incorporates developments in the law of wills, trusts and estates since 2013, including a new principal case involving beneficiary consent to trust accounting. The text also includes references to case law and literature relating to same-sex marriage, revocation by divorce, reformation of wills, directed trusts, trust decanting, and fiduciary access to digital assets, as well as statutory references to recent amendments to the Uniform Probate Code and Uniform Trust Code. The coverage has been thoroughly updated while maintaining continuity of organization and general approach with previous editions.

October 11, 2018 in Books, Books - For Practitioners, Books - For the Classroom, Estate Administration, Estate Planning - Generally, Estate Tax, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Wednesday, October 10, 2018

How Hurricane Michael Might Affect Your Taxes

HurricaneEric Smith, an IRS spokesman, said that amid natural disasters, the IRS often grants tax relief to affected residents, based on the Federal Emergency Management Agency’s declarations. As Hurricane Michael makes landfall so close to the extended deadline of October 15 to file their 2017 taxes, the deadline could be extended further or those that are affected by the storm. Last month, the IRS granted relief to those affected by Hurricane Florence and extended the deadline.

Be aware that the Tax Cuts and Jobs Act, the tax overhaul that went into effect this year, has changed the way you can claim personal casualty and theft losses. Prior to the Act, total of losses needed to exceed 10% of your adjusted gross income and could be duty to natural disasters, fires, thefts, etc. Now, casualty losses can only be claimed on your taxes in the case of a federally declared disaster, and is still subject to the 10% threshold.

Under both the old and new tax law, how much you can claim as a loss will be reduced based on the insurance payout you receive for your damages.

See Darla Mercado, How Hurricane Michael Might Affect Your Taxes, CNBC, October 10, 2018.

October 10, 2018 in Current Events, Estate Planning - Generally | Permalink | Comments (0)

Estate Planning and Your Pursuit of Happiness

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-10-10/f27c2961-7591-4cfb-b8bf-a20f455ab648.pngPhilosopher John Locke's original quotes was "life, liberty, and property," but Thomas Jefferson purposefully changed the word property to "pursuit of happiness." The debate remains of what those three words mean together, as happiness is subjective and cannot be measured numerically. Some think it could be as simple as owning property or possessing wealth, but both can be meaningless without purpose.

Your ”estate” is your property. Your “legacy,” on the other hand, is your life spent in pursuit of happiness. The wealth management industry is becoming more "goal-oriented," with the achievements being measured by life goals rather than digits and commas. Estate planners and lawyers, however, are still more interested in the transfer of property and tax avoidance than what makes the client happy in life. As a counselor of the law, the focus may need to be in part on the client's pursuit of happiness.

Recent studies show that traditional estate planning results in a 70% chance your wealth will be gone by the second generation and a 90% chance it will be gone by the third generation. This is because the estate planning attorney only focuses on your death, your property, and the taxes. The numbers could go down if the attorney would integrate the client's individuality into the plan, their goals beyond this life, and ultimately becoming legacy planners.

See Daniel Scott, Estate Planning and Your Pursuit of Happiness, Forbes, October 10, 2018.

October 10, 2018 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Income Tax, Trusts, Wills | Permalink | Comments (0)

CLE on LLCs in Asset Protection: Top Mistakes

CLEThe National Business Institute is holding a live webcast entitled, LLCs in Asset Protection: Top Mistakes, on Monday, November 26, 2018, at 9:00 a.m. - 4:00 p.m. Central. Provided below is a description of the event.

Program Description

Prevent Misuse of LLCs in Asset Protection

What simple mistakes can remove the protections LLCs are intended to provide and that may leave your clients vulnerable to creditors? Identify key weak points of the major elements of LLC structure, understand veil piercing, and prevent the changing regulatory and judicial environment from derailing your clients' asset protection plans. Register today!

  • Identify top mistakes that strip LLCs of their protections.
  • Prevent unintended tax consequences of entity choice.
  • Zero in on the weak spots of charging order protections of your clients' LLCs.
  • Explore the problems trusts as LLC members can create.
  • Maintain your professional reputation with a practical ethics primer.
  • Learn to counter common creditor tactics.

Who Should Attend

This focused legal guide is designed for attorneys. It may also be of benefit to trust officers, accountants, estate planners, and paralegals.

Course Content

  1. Plan Design: Avoiding the Wrong Course of Action from the Start
  2. Choice of Entity Mistakes
  3. Top Errors in Formation Documents and Operating Agreements That Jeopardize Asset Protection
  4. Charging Orders, Veil Piercing and Other Risks: The Weaknesses Often Exploited
  5. Ethical and Liability Issues
  6. Preventing and Correcting Mistakes: Case Studies

Continuing Education Credit

Continuing Legal Education

Credit Hrs State
CLE 6.00 -  AK*
CLE 6.00 -  AL*
CLE 6.00 -  AR*
CLE 6.00 -  AZ*
CLE 6.00 -  CA*
CLE 7.00 -  CO*
CLE 6.00 -  CT*
CLE 6.00 -  DE*
CLE 7.00 -  FL*
CLE 6.00 -  GA*
CLE 6.00 -  HI*
CLE 6.00 -  IA*
CLE 6.00 -  ID*
CLE 6.00 -  IL*
CLE 6.00 -  IN*
CLE 7.00 -  KS*
CLE 6.00 -  KY*
CLE 6.00 -  LA*
CLE 6.00 -  ME*
CLE 6.00 -  MN*
CLE 7.20 -  MO*
CLE 6.00 -  MP
CLE 6.00 -  MS*
CLE 6.00 -  MT*
CLE 6.00 -  NC*
CLE 6.00 -  ND*
CLE 6.00 -  NE*
CLE 6.00 -  NH*
CLE 7.20 -  NJ*
CLE 6.00 -  NM*
CLE 6.00 -  NV*
CLE 7.00 -  NY*
CLE 6.00 -  OH*
CLE 7.00 -  OK*
CLE 6.00 -  OR*
CLE 6.00 -  PA*
CLE 7.00 -  RI*
CLE 6.00 -  SC*
CLE 6.00 -  TN*
CLE 6.00 -  TX*
CLE 6.00 -  UT*
CLE 6.00 -  VA*
CLE 6.00 -  VT*
CLE 6.00 -  WA*
CLE 7.00 -  WI*
CLE 7.20 -  WV*
CLE 6.00 -  WY*

Continuing Professional Education for Accountants

Credit Hrs State
CPE for Accountants 7.00 -  AZ
CPE for Accountants 7.00 -  NY*
CPE for Accountants 7.00 -  WA
CPE for Accountants 7.00 -  WI

 * denotes specialty credits

October 10, 2018 in Conferences & CLE, Estate Planning - Generally | Permalink | Comments (0)

Article on The Use and Abuse of Governing-Law Clauses in Trusts: What Should the New Restatement Say?

RestatementThomas P. Gallanis recently published an Article entitled, The Use and Abuse of Governing-Law Clauses in Trusts: What Should the New Restatement Say?, Wlls, Trusts, & Estates Law eJournal (2018).

This Essay offers a novel solution to a thorny problem at the intersection of trust law and the conflict of laws: When should the settlor be able to choose a governing law other than the law of the jurisdiction with the most significant relationship to the trust? The law of the conflict of laws gives effect to a governing-law clause in a trust instrument except when contrary to the “strong public policy” of the jurisdiction with the most significant relationship to the matter at issue. But what is “strong public policy”? The answer should not depend on the size of the Chancellor’s foot. This Essay proposes, instead, that the answer should incorporate the well-established distinction between the default rules of trust law, which aim to effectuate the intention of the typical settlor but yield to a particular settlor’s contrary intention, and the mandatory rules of trust law, which apply without regard to intention for reasons of overriding public policy. This Essay proposes that a governing-law clause in a trust instrument should be effective unless contrary to the mandatory law of the jurisdiction with the most significant relationship to the matter at issue. The Essay urges the adoption of this approach by the Restatement (Third) of the Conflict of Laws, which is currently in the process of being drafted.

October 10, 2018 in Articles, Estate Planning - Generally, New Legislation, Trusts | Permalink | Comments (0)

Tuesday, October 9, 2018

Stormy Daniels’s Oral Will: Noncupative Wills Make for Risky Estate Planning

Stormy-Daniels-2-300x199Stormy Daniels's recently released memoir, Full Disclosure, was written over a period of 10 years and reveals several facets of the former adult-film stars life. At the forefront is the 2006 encounter with President Donald Trump at Lake Tahoe and the chaos that occurred after her execution of a Non-Disclosure Agreement prior to the 2016 election.

The final chapters of the memoir highlight the tremendous fear Daniels experienced after the Wall Street Journal story featuring the aforementioned Non-Disclosure Agreement and the lawsuit Daniels filed in federal court claiming that the document was invalid. Daniels claimed that she was intimidated by Trump's attorney, Michael Cohen, into signing the agreement as well as being threatened in a Las Vegas parking lot in 2011. By March, 2018, when she filed the suit and was interviewed on CBS's 60 Minutes, Daniels was receiving death threats - on her and her young daughter. This resulted in her having a friend record her directing the disposition of her estate in case any of the threats were carried out.

An oral will, such as a recorded will produced by Stormy Daniels, is known as a nuncupative will and is rarely enforceable, except for some specific exceptions. They are problematic because they raise questions as to authenticity and fraud. Even in our technological era, wills are still required to be signed and witnessed, and the witness are to testify to the person's ability and capacity to execute a will. A document containing a person's original signature must be filed to be entered into probate.

See Cori A. Robinson, Stormy Daniels’s Oral Will: Noncupative Wills Make for Risky Estate Planning, Above the Law, October 9, 2018.

Special thanks to Carissa Peterson (Hrbacek Law Firm, Sugar Land, Texas) for bringing this article to my attention.

October 9, 2018 in Books, Current Events, Estate Planning - Generally, Television, Wills | Permalink | Comments (0)

Michael Jordan's 56,000-Square-Foot Mansion has been on the Market for Six Years

JordanFamed basketball player Michael Jordan put his 56,000 square foot mansion in Chicago up for sale 6 years ago at a price of $29 million, and even though he has slashed the price in half to less than $15 million, it remains on the market. The "G.O.A.T." is still cashing out over $100,000 per year on the property for taxes, even though only staff members reside in it.

Experts say one reason the mansion hasn't sold is because the home is too customized. True, the amenities are amazing - wine cellar, stocked gym, piano room, outdoor pool, putting green, 9 bedrooms, 19 bathrooms, and a 3 bedroom guest house - but the feature of the house is a full-size basketball court. There was an attempt to sell the house to basketball crazed fans from China, but the mansion remains for sale. Another potential reason there is a lack of interest is that the house is not on Lake Michigan. Most homes within its price range are closer to the lake, which is a few miles east of the home.

But it is possible that Jordan thought he could sell the home at a premium because basically, it was his. But people do not always pay more for something just because a celebrity touched it or use to own it. "But you know who tends to think a property is worth more because a celebrity lived there? The celebrity trying to sell it," said Stephen Shapiro, of the Westside Agency, a Los Angeles-based luxury brokerage.

See Cork Gaines, Take a Tour of Michael Jordan's 56,000-Square-Foot House in Chicago, and Why it's Still on the Market After 6 Years, Business Insider, August 13, 2018.

October 9, 2018 in Current Events, Estate Planning - Generally, Sports | Permalink | Comments (0)