Wills, Trusts & Estates Prof Blog

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

Tuesday, May 28, 2019

Does Your Estate Plan Fall Prey to 3 Big Tax Issues?

3Richard (Dick”) Oshins, Esquire from Las Vegas, Nevada, identified what he believes are three of the more sinister tax blunders that affect many estate plans. Upon your annual estate and financial plan review, it would be prudent to determine if it is effected by these three issues.

  • Not fixing Family Limited Partnerships (FLPs) and Limited Liability Companies (LLCs)
    • These types of entities were often formed to hold family investment or business assets for one of or more reasons, such as valuation discounts for estate and gift tax purposes. Another common purpose was to exert control, to hold family investments and, even after transferring interest, still retain that control over the entity. Lastly, these entities can provide must desired asset protection. 
    • But too often owners neglect proper maintenance and formalities with these entities, such as commingling personal funds with company funds or not having a properly signed governing instrument.
  • Not swapping out on irrevocable trusts
    • Irrevocable trusts are often used to remove assets from an estate to save on taxes, for asset protection, etc. If the trust is structured as a grantor trust, the income derived from the trust is reported on the income return of the grantor and not the trust itself. A common way to create a grantor trust is to give the settlor the power to swap or substitute personal assets for trust assets of equivalent value.
  • No selection of trust situs
    • Does your home state provide a good environment for your trust? If the tax system is harsher than others, you may be able to "rent" a better jurisdiction to reach your goals and avoid state income tax. When planning any new trust, discuss with your estate planning attorney the pros and cons of which state to use for the trust.

See Martin Shenkman, Does Your Estate Plan Fall Prey to 3 Big Tax Issues?, Forbes, May 27, 2019.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) and Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

May 28, 2019 in Current Affairs, Estate Administration, Estate Planning - Generally, Estate Tax, Gift Tax, Income Tax, Trusts | Permalink | Comments (0)

'Softer' Side of Planning More Important to Clients Than Documents

MoneyheartA recent survey by Age Wave Consulting asked Americans aged 45 years and older, “What’s most important to pass on to the next generation?” The lowest ranked answer was "financial assets or real estate," while the top answer - from 74% of respondents - was "values and life lessons." Knowing the emotional reasons for a client's transfer wishes can enhance an estate planner's ability to create the right plan.

Traditionally, legacy planning has focused on the legal documents and financial techniques needed to transfer tangible assets. But now place just as much value on the relationships within their family and the "softer" side of a person's legacy. A client may want the next generation to fully understand the reasons for a particular transfer, and a family meeting may be able to accomplish this goal. Given the possible sensitive topics that may come up, it’s a good idea to have the meeting at a location that is not loaded with emotion.

As an advisor and facilitator, one can encourage effective communication and provide the clients the opportunity to share their wishes with their loved ones. Discussing their intangible legacy can have a lasting impact and strengthen the relationship not just with the clients but their heirs as well, ensuring that you maintain your role at the center of your client’s wealth discussions.

See Kara Duckworth, 'Softer' Side of Planning More Important to Clients Than Documents, Think Advisor, May 24, 2019.

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

May 28, 2019 in Current Affairs, Current Events, Elder Law, Estate Administration, Estate Planning - Generally, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Monday, May 27, 2019

Article on Policy Forum: Is Accelerated Depreciation Good or Misguided Tax Policy?

TaxesPhilip Bazel & Jack Mintz recently published an Article entitled, Policy Forum: Is Accelerated Depreciation Good or Misguided Tax Policy?, Tax Law: Tax Law & Policy eJournal (2019). Provided below is an abstract of the Article.

The authors examine the implications of Canada's response to the 2017 US tax reform. Canada's focus on accelerated tax depreciation will achieve lower marginal effective tax rates on capital for taxpaying companies, well below the US levels achieved with the Tax Cuts and Jobs Act that came into effect on January 1, 2018. By ignoring neutrality, the government offsets some of the potential gains by reducing the tax burden on capital, thereby failing to maximize efficiency gains from a better corporate tax system. Further, Canada's approach fails to respond to competitiveness effects of US reforms on corporate tax base erosion in Canada as companies shift profits to the United States. The low US tax rate on intangible income will draw certain functions to the United States. A more comprehensive approach to corporate tax reform, including some reduction in corporate income tax rates, would have been a preferable response.

May 27, 2019 in Articles, Current Affairs, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

When Important People Die, He’s There

FuneralcarRobert M. Boetticher Sr. is the chief executive of a boutique death services firm that contracts with the federal government for state funerals. Most recently he was seen on television pushing the casket containing the late President George Bush into the back of a Cadillac at his memorial service. Surprisingly, the planning for such a service begins almost as soon as a president is elected. But the company, L.H.T. Consulting Group, a subsidiary of Service Corporation International, does not deal solely with presidents; Mr. Boetticher has also assisted at services for Senators John McCain and Edward M. Kennedy, as well as the Rev. Billy Graham and the actress Farrah Fawcett.

Mr. Boetticher showed an aptitude to be funeral director after an exam at the young age of 18, and purchased his first funeral home in Wyoming after leaving the Army. He joined SCI in 1983 and eventually moved to the company’s headquarters in Houston. There he managed the development of a new embalming fluid and became president of S.C.I.’s museum of funeral history. He also advised on "Six Feet Under" and played an undertaker in a mini-series starring Sally Field.

But in 2002, he received the unique call to perform President Ronald Reagan's funeral. He helped the family select the solid mahogany Marsellus Masterpiece coffin and even pressed the American flag that was draped over it. He oversaw the embalming and the procession. It was “very humbling” to escort the president’s body, Mr. Boetticher said. Since then, he has been the man to call whenever a president is on the "brink of death," from Reagan to Ford to Bush. 

See Emily S. Rueb, When Important People Die, He’s There, New York Times, May 15, 2019.

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

May 27, 2019 in Current Events, Death Event Planning, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Sunday, May 26, 2019

Americans Delaying Plans for Life and Death

SurveyBetween February 26 and March 2, 2019, DHM Research asked 625 respondents nationwide questions pertaining to planning for their retirement and death. The research found that an alarming amount of people are putting off important intentions that should be performed earlier rather than later.

The results showed that only 19% of those surveyed had an advance directive, 26% had a will, 15% had a power of attorney, 30% had a general financial plan for the future, an astounding 44% said they did not have any of the above named items. More women had an advance directive, will, or power of attorney, and more men had a financial or life plan. As the age of the respondents increased, the likelihood of them having a will also increased.

The survey found that the better-educated the respondent, the more likely he or she had at least one or more plans for life, finances, health and death. This was also true if the respondent earned a higher income. Respondents earning $25,000 or less a year were only 16% likely to have a financial or life plan.

See Joyce Blay, Americans Delaying Plans for Life and Death, Financial Advisor, April 5, 2019.

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

May 26, 2019 in Current Affairs, Disability Planning - Property Management, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Saturday, May 25, 2019

Article on Equity is Not a Single Thing

HouseLionel Smith recently published an Article entitled, Equity is Not a Single Thing, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

In this paper, I ask what are the philosophical foundations of Equity as it was defined by Frederic Maitland: the body of rules and principles that were developed over the centuries by the Court of Chancery. My answer is that there is no single purpose, approach, philosophy or norm that characterizes Equity so defined. What is characteristic about Equity is a unique manner comprehending the juridical nature of some obligations, which grew out of Equity’s regulation of uses and trusts. This approach reveals three dimensions. First, Equity requires that one who owes such an obligation perform it, if necessary by substitution; there is no option of breaching and paying compensation for loss caused. Secondly, these obligations are understood by Equity in a manner that has the effect of depersonalizing the burden of these obligations. In the civil law tradition and in the common law (in the narrow sense that excludes Equity), an obligation is a bilateral relationship. Equity’s unique philosophy in relation to some obligations turned them into something like property rights and created the office of trusteeship. Finally, Equity understood some obligations not as freestanding particles but as elements of a particular kind of relationship, and this relationship is capable of itself generating new primary obligations. All these elements taken together facilitated the creation of an enduring conceptual toolkit for the juridical apprehension of relationships in which one person acts for and on behalf of another.

May 25, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

CLE on The Probate Process from Start to Finish

CLEThe National Business Institute is holding a conference entitled, The Probate Process from Start to Finish, on Wednesday, June 5, 2019 from 8:30 AM - 4:40 PM at the Hilton Garden Inn San Antonio Airport in San Antonio, Texas. Provided below is a description of the event.

Program Description

Handling Probate from Initial Notices through the Estate Closing

This "a through z" guide to probate is designed to take you from the first days of the estate timeline through all the steps of marshaling and valuing estate assets, locating and paying the creditors, paying the beneficiaries, and laying the estate to rest. You will receive the latest updates on the probate court procedure and tax laws, practical guidance from experienced probate attorneys on using spousal elective share and resolving estate disputes, and sample forms and checklists to speed up the administration process. Build a solid foundation for your probate practice - register today!

  • Learn the procedure, rules and practical steps to effectively administer a probate.
  • Determine what form of administration is appropriate for a specific probate case.
  • Clarify the order of inheritance for an estate when there is no will.
  • Locate assets and obtain ownership documents more easily with a list of local and online resources.
  • Get a complete view of the sequence of events that must happen before the estate can be closed.
  • Identify common actions that trigger malpractice liability and get tips for staying in the clear.
  • Get practical advice for honoring or contesting all claims against the estate.
  • Find new ways to resolve liquidity issues that delay estate closing and final distributions and payments.
  • Learn what common closing mistakes can allow the estate to be re-opened, and how to avoid them.

Who Should Attend

This basic level seminar is designed for professionals who want to be more effective in handling the probate process, including:

  • Attorneys
  • Paralegals
  • CPAs and Accountants
  • Financial Planners and Wealth Managers
  • Tax Professionals
  • Trust Officers

Course Content

  • Initial Filing in Probate Court and Estate Timeline
  • Law of Intestate Succession
  • Inventory and Appraisement
  • Probate Property vs. Non-Probate Assets
  • Handling Claims Against the Estate
  • Tax Reporting and Post-Mortem Tax Matters
  • Ethics
  • Sale of Property and Distributions
  • Final Accounting and Closing the Estate
  • Probate Disputes and Litigation

May 25, 2019 in Conferences & CLE, Current Affairs, Estate Administration, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, Intestate Succession, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Friday, May 24, 2019

ABA RPTE Conservation Easement Task Force Report: Recommendations Regarding Conseration Easements and Federal Tax Law

RpteThe ABA Conservation Easement Task Force published this Report, entitled, ABA RPTE Conservation Easement Task Force Report: Recommendations Regarding Conseration Easements and Federal Tax Law, Real Property, Trust and Estate Law Journal, Vol. 53, No. 2 (Fall 2018/Winter 2019). Provided below is the synopsis of the Report.

In October 2015, the American Bar Association's Real Property, Trust and Estate Law (RPTE) section convened a Conservation Easement Task Force. The objective of the Task Force was to provide recommendations regarding federal tax law as it relates to conservation easements. This Report is the culmination of the Task Force's work. Part I of the Report is an Executive Summary of the Task Force's recommendations. Part II provides the background necessary to understand the Task Force's recommendations. Part II briefly set forth the Task Force's comments of the Tax Cuts and Jobs Act of 2017 as it relates to charitable contributions in general and conservation easement donations in particular. In Part IV, the Task Force recommends that the Treasury publish safe harbor provisions that would be common to most conservation easements. Part V sets forth the Task Force's recommendations regarding amendments and discretionary consents, the inconsistent use regulations, and furthering transparency in conservation easement administration. Part VI discusses issues surrounding valuation of conservation easements. Part VII contains a brief comment on syndicated conservation easement transactions. Part VIII is the Task Force response to certain proposals the Treasury Department made (most recently in 2016) to change conservation easement law.

Appendix A sets forth the "perpetuity" requirements of § 170(h) and the Treasury Regulations. Appendix B offer specific language to facilitate the preparation of key safe harbor provisions.

May 24, 2019 in Articles, Current Affairs, Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Healthy Dog Euthanized for Burial with Owner in Virginia

SaddogAnita Callop-Thompson, 67, of Chesterfield County, Virginia, was found dead in her home on March 8, according to the police department. Her only remaining pet, a Shih Tzu mix by the name of Emma, was taken to the animal shelter to be held until the executor figured out what her owner had wanted.

Though Anita was "devoted to her four-legged friends," it appeared she did not wanted to be parted from them, even in death. Her will stipulated that her dog be interred with her. The executor of her estate picked Emma up on March 22, had her euthanized and then took the dog to a local pet cremation center. Under Virginia state law a pet cannot be "interred in the same grave, crypt, or niche" as a human, so an urn containing the dog's remains was given to the representative of Anita's estate.

Nothing the executor or the dog's owner did was illegal, though the public may see it as unethical. According to Matthew Liebman, director of litigation at the Animal Legal Defense Fund, pets are considered property, and, "As long as you're not violating cruelty law, you have a right to treat your property however you wish." However, Liebman noted that at four cases pertaining to this issue have ended up in the courts, and judges have decline to enforce such will provisions.

See N'dea Yancey-Bragg, Healthy Dog Euthanized for Burial with Owner in Virginia, USA Today, May 23, 2019.

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

May 24, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Thursday, May 23, 2019

Doris Day Rejected Lifetime Achievement Award

DorisdayThe legendary actress and singer Doris Day passed away on May 13 at the age of 97, and it was no surprise to her longtime publicist Charley Cullen Walters that she did clearly stated in her will that she did not want a funeral, memorial, or even a grave marker.

Many around the country took to social media to remember the icon and mention their confusion with the odd situation of a Hollywood star not wanting any time spent memorializing her death. “[It] was something a lot of people were surprised [by] — some people were even upset by it,” Walters explained. “I personally completely understand that having worked with her.”

Walters said Day did not start acting to become famous. “There’s nobody like her anymore. She was truly an egoless person who did not crave the spotlight. In fact, she shied away from it. For her, her acting and her music career were her jobs." In fact, she left Hollywood in 1973 and had no intentions of returning. In fact, the Academy of Motion Picture Arts and Sciences reportedly offered Day a Lifetime Achievement Award about six times — and all six times she turned them down.

See Stephanie Nolasco & Julius Young, Doris Day Rejected Lifetime Achievement Award About Six Times, says Publicist: 'Our Job was to Protect Her,' Fox News, May 21, 2019.

May 23, 2019 in Current Events, Estate Administration, Estate Planning - Generally, Film, Music, Wills | Permalink | Comments (0)